Wednesday, 31 March 2010

Death, Taxes & Deceits

There is nothing more exciting than an exhumation in a crime investigation. The dawning realisation that there is not just a real crisis in prospect in relation to the care of the aged but it is here already and has been up and running for several years now.

In some places it has been going on for rather longer. The manner in which some Labour councils handled their care for the old was both a disgrace and a crime in several respects. The way Government has gone about it since 1997 follows their example.

Strangely, it is Andy Burnham whose localities are amongst those who have behaved badly who is responsible for summoning the ghost of Lord William Beveridge, latter day Civil Servant, Master of University College, Oxford, and between 1919 and 1937 the Director of the London School of Economics where he tried to create in the Fabian Society mould an institution of study that now sends 30% of its graduates into financial and management services.

Originally, a lawyer and writer for the Morning Post, he was involved in social policy before 1914. He became a Civil Servant during WW1 dealing with manpower matters. The family heritage was that of the British Indian Civil Service at the height of The Raj and his father is said to be one of the Orientalist school, although this is the later version rather than the one of the late 18th and early 19th Centuries.

The 1942 Beveridge Report “Social Insurance and Allied Services” produced after some convoluted politics amongst the Labour leaders involved in the WW2 Coalition Government has long been regarded as almost a sacred text of social policy and Beveridge regarded as one of the saints of the socialist pantheon.

It had a key impact on the 1945 election and if anything could be regarded as a major piece of wartime propaganda. The creation of hope and a better life to stir people into making huge sacrifices and accepting the demands of the war was important at a time when it was going badly and it was clear it would be years before it ended. There was a hunger for certainty and security and for putting the problems of the past behind.

Moreover Beveridge was a firm believer in The State, in centralised direction and control and that power, decision, delivery and management should all be in the hands of those in Whitehall and their subordinates in local authorities. Given that the population were being told that vast State powers were a necessity in winning the war, the built in message was that it would be The State that would win the peace and only The State could deliver what people wanted. It was assumed that The State would educate and tell people what they wanted.

Is all this beginning to seem familiar? So here we are in the 21st Century in a world that has changed a great deal, yet what Labour and Burnham offer us is the vision of an early 20th Century Statist politician cum academic with a liking for eugenics and brought up in the traditions of the British Raj of the late 19th Century.

Meanwhile, here in the UK the old and vulnerable are faced with an expensive, unreliable, predatory system that delivers little care less certainty and a lot of insecurity. Sell a boy a gold fish and you have the forces of hell unleashed on you. But anyone who smashes their way into your house, reduces you to a physical wreck and a takes you for everything you have will get community service at worst or if it is done within Labour’s laws and Cronygarchy either honours or bail outs or both.

There are too many ways in which the implementation of Beveridge’s ideas were either compromised or botched or taken beyond reasonable conclusions to go into here. The recent story of how a single parent family can cost the taxpayer over £5 million over a lifetime is instructive enough.

What matters in relation to the old is that these days old age is a reality for many and almost taken for granted. In 1942 old age was an aspiration few would achieve and of those who did few would enjoy for long. The Grim Reaper used to get up a lot earlier those days.

Going back a hundred years or more, even amongst those who survived very few would be “pensioners”. The Census Returns commonly have a job listed for the old men and for the women they are usually in a situation where they would be doing a great deal either round the house or in other contexts.

The idea that people of greater age might do little or nothing or only things that amused them was alien. That there might be large numbers of such people who contributed little or nothing to their families and community and depended on a State service for their functioning would have seemed utterly crazy, if only because it would have been obvious that the costs would be beyond bearing.

Which brings us to the basic problem. The numbers involved in relation to the working population and its taxable capacity given other obligations are simply too great for the State to cope with financially and they are rising as the fiscal gap widens year by year.

I may scream about paying National Insurance all those many years, but this always worked on the running bathtub principle, that the tap of National Insurance payments would keep the water level high enough despite the loss through the pensions plughole. Only instead of the five inches or less decreed by the State for baths for the few that had them, as in the 1940’s, the water level needs to be much higher, because the plughole of liabilities has become much bigger.

The difficulty is that the tax element called “National Insurance” is not “insurance” at all. It is a tax, which amongst others, is a form of revenue for government spending, a great deal of it on health, social services and pensions. The political problem is that since the age of Beveridge the great majority of politicians have been untruthful and evasive about this and its implications.

The basic situation has worsened appreciably since the 1940’s. The increasing rates of divorce and this has become more common amongst older people allied to smaller families together with the rate of break up amongst families generally means there are far fewer people to give family support.

Moreover, the modern culture of individuality as opposed to a basis of either family or community means reduced willingness to give lives or even time to supporting and caring for their aged. Add to that at the extremes of age many of the family are pensioners themselves, especially with the numbers either taking early retirement or dumped out of jobs at or after 50 and increasingly 40.

Since 1997 the options for the old have been more and more restricted. Many of the former types of care home, residential quasi hotels specialising in pensioners, the convalescent homes are such have radically reduced in numbers. There is severe pressure on nursing home places. Care in the Community is for decreasing proportions of the elderly and largely means younger women buzzing quickly spending an hour or two here or there on basic duties.

Nutrition, hydration, medication, physical assistance, personal monitoring are all out of the question not only in their own homes but often in hospitals as well. What was the malnutrition figure for the NHS, 53,000? So where is the rest of it going to come from and how will it be paid for when there are so many other pressing needs?

One thing that is very different now from 1942 is that large numbers of the elderly own their own homes as opposed to renting or living in lodgings. Given the inflation in property prices many are asset rich and income poor. Much of this rise in theoretical wealth can be attributed directly to the boosting of the property market by the government and other forms of inflationary easing.

The Lord gave, and The Lord Hath taken away. What was it I said on Thursday 24th September 2009 “Property Tax – The Price Of Folly”? The past is coming back to haunt us and the bill is in the post.

Tuesday, 30 March 2010

An Italian Job

The news that Berlusconi has managed to succeed with an improved position after the elections in Italy will be heartening for Brown and Blair. The former because he is desperate to hang on to power; the latter because like his Italian friend he might face awkward legal situations.

There are also the familiar incentives of money and taking care of one’s fellow Cronygarchs. That Berlusconi managed it on reduced turnout would fit the bill for the pair of them.

Nevertheless the ever cheerful Armageddon dot org web site featured a story going the rounds of the pessimists and tremblers about a threat to Italy, a vulnerable geophysical zone. This is one of the less known volcanoes because it is under the sea and has been quiet during our brief period of recorded history.

Volcano & Tsunami Threaten Italy.

Europe's largest undersea volcano could disintegrate and unleash a tsunami that would engulf southern Italy "at any time", a prominent vulcanologist warned in an interview published Monday. The Marsili volcano, which is bursting with magma, has "fragile walls" that could collapse, Enzo Boschi told the leading daily Corriere della Sera.

"It could even happen tomorrow," said Boschi, president of the National Institute of Geophysics and Volcanology (INGV). "Our latest research shows that the volcano is not structurally solid, its walls are fragile, the magma chamber is of sizeable dimensions," he said. "All that tells us that the volcano is active and could begin erupting at any time."

The event would result in "a strong tsunami that could strike the coasts of Campania, Calabria and Sicily," Boschi said. The undersea Marsili, 3,000 meters (9,800 feet) tall and located some 150 kilometres (90 miles) southwest of Naples, has not erupted since the start of recorded history. It is 70 kilometres long and 30 kilometres wide, and its crater is some 450 metres below the surface of the Tyrrhenian Sea.

"A rupture of the walls would let loose millions of cubic metres of material capable of generating a very powerful wave," Boschi said. "While the indications that have been collected are precise, it is impossible to make predictions. The risk is real but hard to evaluate."

It’s good to have something to look forward to for a change. And there is Iceland on the go as well.

Sunday, 28 March 2010

Peerages Going Cheap

There is a report in the Sunday Mail, the journal of record for the celebrity classes to the effect that Mrs. Pauline Prescott wishes her husband, John Prescott of this Parish to assert his right to a Peerage. This comment is serious and not to make jokes on the line of "That's no lady, that's my wife" or such.
It is my recommendation that when he rightly gets his come uppance he should be dignified with the title of Lord of Prestatyn in the County of Clywd and of Little Weighton in the County of Yorkshire.
No explanation is necessary.

Saturday, 27 March 2010

Debt & Equity, Winners & Losers

In Humbugs and Tarts a couple of days ago, I nominated Geoff Hoon as my choice of the day in the meeting for money scandal unveiled by C4 and The Sunday Times. My reason was his cheerful willingness to use his NATO and EU contacts to help American Private Equity firms to buy up European defence companies.

The item below culled from the site of Tax Justice Network explains why. It means that when Brown and Labour are proclaiming their vision for all, necessarily to be paid for out of taxation, in reality they are happy to help the big boys, at a price and a cheap one, to set up schemes that will help them avoid UK tax.

As ever, they win, we lose, and we will pay more and more.

Thursday, March 25, 2010

On the tax treatment of debt.

In October 2009 we blogged on a major faultline in global capitalism: the relatively different tax treatments given to equity and debt. This issue, largely as a result of a ferocious lobbying offensive by private equity companies and others, has not been in politicians' sights - but it should.John Plender has an excellent article on this in the Financial Times, entitled It Is Time to Stop Punishing Prudence, which says many of the same things we said (and our last article quoted him, too.).
As Plender says:"The heated debate on the taxation of bank bonuses has distracted attention from a glaring omission in current policy proposals to put the financial system to rights. This is the tax bias that exists in favour of debt at the expense of equity in the US and UK, which are the countries that matter most for global financial stability. It is a bias that potentially undermines the thrust of regulatory efforts to strengthen bank balance sheets."Indeed.
So a private equity company, for instance, has its financing supplied from a zero-tax haven, and pays no tax on the interest income there, while getting tax deductions on the cost of this interest income from the higher-tax onshore jurisdiction. It is a simple, and routine, abuse.
There seem to be two main approaches to evening out the difference in the tax treatment of these very different forms of finance. The first would be to make the notional cost of equity finance deductible against tax.

The second, far better approach, would be to stop making interest payments on debt tax-deductible. This would allow governments to reduce headline rates while broadening the tax base.

Plender points out some of the pitfalls of the first approach: "The snag is that this reduces tax revenue and narrows the tax base – the assets and income available to be taxed. The switch to giving relief for equity finance is reckoned to have cost Croatia up to a third of corporate tax income.
Raising headline rates of corporation tax to compensate is politically difficult."Politicians need to wake up to this essential question. Stop this, and (among other things) a world of offshore abuse disappears.

Friday, 26 March 2010

Going Potty Over Potholes

Those who drive, some who walk, but especially those who ride bikes, manual or motor will have noticed that across the land potholes have been sprinkled over our roads like fairy dust upon a moonbeam. A representative of the Local Government Association, motto “Your money or your life” has been roundly blaming the utilities for their indiscriminate digging and delving activities that, I quote, “have wrecked the structure of the roads.”

Before you mob rush off with your pitchforks and cattle prods to put up stakes and pile on the brushwood, I have to tell you it is not as simple as that.

Why do the utilities dig up roads? Because in the last 150 years we have required a lot of services we regard as essential to be installed below the surface. It began with drains and water, then we had gas, then electricity, then telephones later complex telecommunications and lately cable TV and other things.

Now there is not only a lot more down there, but the pace of development and change entails more activity. In other countries some of these facilities are carried above ground at much less cost.

Add to this the older services were often installed at a time when less robust systems were the rule and are now past their effective life. During the mid to late 20th Century the maintenance budgets of the local authorities and other bodies were often insufficient to keep them all up to standard and were the first parts of the spending to suffer any cuts being made.

There are other factors. The insistence of the government on extensive high intensity building adds to the pressures on existing services and systems. Also, we forget the earth moves. Water tables can go up and down, subsidence is common in many areas, and tree growth can impact on sub surface structures. There are other things as well to add to the movement.

The trouble is that our local authorities have forgotten what they were created for in the first place. Governments have piled on so many new jobs, initiatives and notions about what they might do that councillors have been giving themselves all sorts of airs and graces uttered in modern management speak, garbage in garbage out.

One of the basic duties was to enable people to move around on roads easily. Recently, it seems that many authorities are trying to make it as difficult as they can and as for keeping a reliable surface on the roads ours has certainly abandoned direct responsibility for that.

There are two other important matters. One is the practice of minimising reserve capability to deal with less common or rare events, such as a bad winter, or a wet summer. The other is the actual vehicles using the roads.

We do a fair amount of driving on the local minor roads and back roads often in the rural parts of our county. These are where the activities of the utilities is far less and there can be long stretches untouched by these organisations. But the numbers of potholes are not fewer, they are often more, and the increasing rate of breakup of the road surface as well as the degradation of the sides and verges is remarkable.

Why should this be? Because so many trucks and other vehicles are bigger, heavier, go much faster and give the road surface a real pounding. Also, there are a great many more of such larger vehicles using the roads for various reasons. So they are taking a great deal more heavy punishment. Not only are many of the lesser trunk roads deteriorating fast, but many of the minor roads and country lanes are in a very bad state.

The reason why the structure of these roads is being damaged is because that structure was never strong enough to take this sort of use.

The ugly truth is that if we wish to consume more and have more and need many more bigger and heavier vehicles to carry all this as well as ourselves on all the journeys we make then not only do we have to fill in the potholes, we are going to have to rebuild the basic structure of almost all our road system.

This will cost money and the local authorities are pretending that someone else should pay, notably the utilities so they can concentrate on their more airy fairy functions and prestige projects.

But may I ask, whose money is it that pays for the utilities?

Wednesday, 24 March 2010

Humbugs And Tarts

Watching politicians make fools of themselves on C4 Dispatches in Monday’s item on lobbying was instructive and predictable. Those of us who believe that the nation has been sold out to outfits with little or no interest in our actual welfare or futures will have had all our prejudices confirmed. Of a choice set of offerings I vote for Hoon The Hopeless cosying up to American Private Equity Companies to assist in their impending takeovers of European national defence champion firms.

Coming in the same week that the government announce that light tank production is to go to General Dynamics of the USA rather than BAE is intriguing. Does that mean that BAE is heading for the financial knacker’s yard and a sell off to Americans? Or is it to ensure that Gordon Brown gets to do a big TV interview with President Obama during the election campaign?

Hoon was rabbiting on about strategy. Has he any clue what it might actually mean or imply? If you want something serious on this I picked up on the Economic Road Map dot com web site called “When Giants Fall” (allied to Financial Armageddon) of Mark Panzner on March 20 an article “Peering Out To The Future” referring to a UK Ministry of Defence Document “Global Strategic Trends Out To 2040” available for download. It is 169 pages long and full of interesting comment.

So when we read all about it concerning politicians putting a price on their services, all I can do is give a weary sigh and ask what does one expect of politicians? When Parliament began under the feudal system the number of Lords was tiny and most either related or closely connected to the Crown.

They were the ruling House and the House of Commons was there to be consulted and informed. This was composed of the Knights of The Shires and even the Boroughs were represented by landed interests. The leading Knights were either related to or part of the network headed by the Lords. They were all in each others pockets.

By the time of the Tudors and Stewarts some of the Boroughs were sending leading merchants and burgesses into the House of Commons, but they in turn were linked through their trading and money dealings with the landed class. During the time of the Tudors and Stuarts anyone with enough money and clout could buy themselves a monopoly or get a Charter of Incorporation for control over some economic activity.

King James I of England and VI of Scotland was more careless than most. Selling off a key part of the wool trade to one City man wrecked one of the basic parts of the economy with the unintended consequence of triggering fiscal problems worsened by his high level of public spending. He might argue that Masques and Pensions acted as a stimulus but it did not work. The fall in the tax revenues and blunders in trying to correct it set off the long fuse that led to the Civil War.

By the 18th Century the political system had evolved further and then depended on a highly complex landed and monied City based Cronygarchy operating more openly but no more efficiently in the name of freedom. This was restricted to males in the richest five or so per cent of the population. The Reform Act of 1832 began to let in many more from finance and commerce to the House of Commons and some of the richest strayed up to the Lords.

This did not change the pattern of a lot of people still very much in each others pockets and this continued until 1914 by which time members of the House of Commons had gained a relatively small income essentially to cover basic London expenses. In the 1880’s running Egypt was handed over to a Baring to restore our lost investments. The Boer War was triggered by the gold and diamond mining interests and by this time the network was becoming looser, fractured and more complicated, the Marconi Scandal was a case in point.

In the 1920’s we had Maundy Gregory in action with peerages for sale and in the House of Commons constituencies could be often bought. By the 1930’s it was major industrial companies and the press barons that ruled with people like Rex Mottram of Evelyn Waugh’s “Brideshead Revisited” around. Money still talked and even Ramsay Macdonald was taken on the ride. By this time the growing Labour Party had developed its own networks in the Trade Unions and local parties.

In the 1950’s Big Tobacco ran the Tory party, between the Treasury revenues and marginal constituencies in Bristol and elsewhere the health people could go and whistle. Along with the bosses of the major industrial firms and the leading City firms the Tories went one way and the Labour Party went another. Unluckily under New Labour and its pressure to change everything the Tories lost the money men to Labour who let them off the leash and industry to the state Quangos.

So now we have an unholy mess and in many ways we are going back to 1603 with a Commons full of placemen, a Lords full of cronies, power given over to an elite of money and land and a Parliament under the thumb of a big spending dictatorial state that will allow no opposition or criticism.

Wandering through the concourse of Waterloo Station on Monday I saw something that at one time would have fulfilled one of the highest ambitions of life. It was a sales point devoted to selling humbugs and there were jars of them of all shapes and sizes. I had to pass it by, the remains of my teeth, never mind the digestive system, are no longer up to it.

The area around Waterloo Station had been one of the more downmarket areas for those looking for ladies described as “tarts” until the Butler reforms of the late 1950’s. The ladies in the vicinity were popularly known as “Tuppeny Uprights” available for servicemen in a hurry to catch a train. Economically this was a classic example of profiting on the basis of low price and high turnover.

There is a story of some American Airmen, rather better paid than our own, during The War making their way to Westminster Bridge, usually kept clear of such ladies and asking a constable where all the real “tarts” were. He put his thumb over his shoulder in the direction of the Palace of Westminster saying “There are all in there but they cost too much for you lot”.

This could be a very old chestnut, one can imagine a clutch of Scots profiting from the accession of King James to the throne in 1603 wandering along London Bridge looking for company, not finding it then asking the Watchman where the “tarts” are and he points to the Globe and Rose theatres making much the same comment. It might explain why The Bard did so well from his enterprises.

One way or another the majority of our modern politicians are in essence “tarts”. They are very inefficient, rarely deliver what they promise and very expensive. If we want more open and better governance then we are going to have to change the system quite radically. This means a new constitution and new representative bodies. If you care to call it that, I mean a revolution.

All we are getting at the moment is humbug and more humbug by the jar. The latest row about naughty men and women making promises for money are almost beside the point. In the MoD publication referred to above on Page 91 in a chapter dealing with Strategic Shocks it refers to issues arising from the collapse of “Pivotal States”. It gives several possibilities.

The one it should mention and does not is the United Kingdom.

Monday, 22 March 2010

Spare A Copper, Guv?

Is it possible that there is now a real problem relating to the use of breathalyser devices to measure motorists to test for alcohol in their system, assumed to be from drinking one beverage or another?

In one old film the sneaky villain boasted that the coppers would never catch him because he could smell them coming. In that age he could have been right if his senses were sharp enough. When policemen were on the beat they carried with them the distinctive aroma of well worn feet in well worn socks in well worn boots. In the days of shortages and high cost clothing men might only change their linen once a week, at the time of the bath or more likely wash down at the kitchen sink.

The trouble today is that many police officers smell a great deal stronger than they ever used to due to the extensive use of spray male deodorants and related cosmetic products. They might also work in premises with “air freshener” devices, some of which are very strong and are made to cover wide areas. Moreover their vehicles might also have such devices and also will be contaminated from use.

It goes further than that in that nearly all the products of this kind today are chemically engineered to have high impact on the sense of smell; that is an immediate effect on the brain function. Additionally, they are made to carry long distances and to adhere indefinitely, with many of them once contamination occurs it is virtually impossible to wash out.

Recently, simply walking around town by polic officers or passing police cars parked I have caught a strong waft of one product or another. So as in the days of old you can smell them coming, only today it is not necessarily quite so distinctive.

But there is a problem. Many of these spray and freshener products contain ethanol. This is used as a bulking item, a carrier substance, an antibacterial, and an enhancer to the aromatics and adherence elements. Ethanol is a form of alcohol and a favoured biofuel. Also, despite the manufacturing processes involved as so much comes from corn crops it can be called “natural”.

In short many of our friendly neighbourhood police officers are personally heavily contaminated permanently with alcohol related substances. This will be on all their clothing, on their skins, possibly on their breath and necessarily on any of their items of equipment, notably the breathalysers.

To make it worse if a suspect is hauled off to the choky for blood samples he may well have to wait hours in a heavily polluted environment before the blood sample is taken, possibly by a medical officer who is just as contaminated.

When people claim not to have been drinking or drank many hours ago when their tests show a high level in the blood this is often put down to variations in the metabolic rates, the consumption of foods with alcohol content that the person was not aware of, or if it is some hours that they may have taken in more alcohol than they thought etc. etc.

It does not seem to have dawned on any defending solicitors or other legal authorities that if there are now high levels of ethanol pollution in the air and moreover not only police officers but their premises, gear and cars might now be impregnated with ethanol strong products there are issues arising.

Honest guv, the ten pints I had were all lemonade its me personal fragrance what done it.

Thursday, 18 March 2010

He Who Pays The Piper.....

“Private Eye” Number 1258 landed on the mat with a quiet flop. It is not what it used to be in the days long ago when it hounded Poulson and the like and is much more predictable and could we say “dated”? Here and there, apart from the media introversions, however there are often nuggets of interesting information that remind us of the reality of our rulers.

This week there were a couple of things that did catch my eye. One is a comment on Ann Widdecombe, soon to retire MP for Maidstone and The Weald, rather holier than thou these days having kept clear of the tawdriness of the expenses scandals. PE mentions her comment of “entirely inappropriate etc. etc.” regarding the candidature of Anna Arrowsmith, a Lib Dem, for Gravesham, the lady having been in the past a producer of films allegedly pornographic in content.

PE points out on Page 8 that Widdecombe currently banks £4583 a month from the Daily Express whose owner Richard Desmond is also owner of a number of TV channels dealing with the most basic instincts relating to personal conduct.

There is a piquancy in this item in that the editor of PE, Ian Hislop resides a few miles from Maidstone in the area of the Weald and not far at all from where Widdecombe used to live. I understand she has lately moved to Dartmoor which ought to tell us something. But one of my first school friends also moved to Dartmoor a long time ago. The local Assizes provided him with free board and lodging for a number of years.

On Page 9, however, there is something that set the alarm bells off in a piece on some of the interesting people who have been backing David Cameron. As a voter who cannot wait to see the back of the present government and all those who are linked to it the news was discouraging. For those who fear that a change of party will simply mean a change in the front men serving the current Cronygarchy there was one item there that might confirm the worst suspicions.

The item referred to the divorce of Vivian Imerman from Lisa Tchenquiz and its fall out one way or another. It was said that he was locked out of the offices he shared with Lisa’s brothers, Vincent and Robert Tchenquiz. These have been very rich people indeed in the recent past although at present there are questions over the scale and nature of their losses.

Lisa is said to have donated £100,000 to the Tories, more than enough for her to have the status of membership of their “Leaders Group” with lunches, dinners and receptions. Robert is said to have given £11,200 in 2008. What other support or donations may have been made is not known. Vincent’s contributions are not mentioned but there have been indications in the past that his money has helped some charitable interests of Labour Party leading lights.

Interesting that one side of the family appears to back the Tories and the other to back Labour. Given the existence of the Tchenquiz Family Trust that includes all three and supports the family and maintains their interests it is really quite sensible if such an active family and business group keeps its political options open. Perhaps these days they need all the political friends they can find.

At one time the brothers centred their joint interests in Rotch PLC that channelled their profits etc. into whatever offshore holdings they possessed. Perhaps Monaco was the most likely location where they maintained ocean going yachts, supporting tenders, a vintage car museum and properties on the Cote d’Azur. Then a few years ago these were divided for operational purposes into R20, run by Robert, a major investment and equity group and Consensus, run by Vincent, concentrating on a variety of property interests.

They have both run into bother recently. Robert, involved with RBS and Kaupthing of Iceland has taken major losses and is being chased by creditors. Vincent, perhaps very ill served by his subordinates, has triggered an organised national revolt amongst his customers. The man in charge of Consensus was perhaps unwise to call his critics, mostly former professional men, “dribbling geriatrics”.

Unluckily as this is the style of management the company seems to have adopted relative to its customers it is not really surprising that some with long memories, entirely wrongly I am sure and altogether misplaced, are now making comparisons with the sort of property investors of the past that Old Labour saw as enemies of the people. But then Old Labour was based on its membership monies and not on the handouts of the rich and well connected.

The real question though is how stable and secure their finances are and where they are getting their support from. RBS and allied financial entities are the obvious ones, a bank now owned and propped up by the taxpayer. Vincent has been a player on the funds markets, and with highly leveraged investments. Their office in Mayfair was conveniently located within walking distance of the AIG subsidiary on Curzon Street alleged to have provided the trigger for the Great Crash we have just had.

These gentlemen have been very big in property and in dealing. Given the frantic need of the government to try to prop up the property markets and the remnants of the financial sector is the Tchenquiz brothers network of operations one of those that is “too big to fail” and amongst those who are really those being supported through the nationalised banks by political interests whose own financial investments and personal interests are critically involved?

We know the tune that Brown and Darling are trying to play, but what tune will David Cameron be playing? And just who will be paying?

Tuesday, 16 March 2010

Election 2010 - Jack Straw's Castle

The Labour Party is close to the bottom of the barrel. With fifty to sixty days to go before a general election the latest whizz bang notion is , wait for it, wait for it, Jack Straw to announce the reform of The Lords for the umpteenth time on The Ides of March. This time round there will no longer be Lords, so we can abandon all those personal fantasies we might have had. We will have a Senate. What, you may well ask?

On Wednesday 10 June 2009 last I posted on “The End Of The Peerage Show” and really do not need to add much to that except to reiterate that before reforming The Lords we should at least have some idea of what it is intended to do. Moreover, if it is to be elected then by what means and on what basis will it differ critically from the House of Commons? Once The Lords was called the Tory Party at prayer because of the political and religious background of most of its members; so what is any new Senate intended to be? The Labour Party at the trough?

The USA has a Senate and this numbers rather less than the proposed UK one. Also it has key and central constitutional functions. The UK one will have nearly three times more members and probably no such authority. It is unlikely to match other second chambers where they exist around the world unless somehow Labour now intends to transform the UK into a Federal State. But the EU is becoming a Federal State so how is a Federal State within a Federal State, both flawed in key respects going to work?

The answer is probably the same as the one that can be applied to virtually all of the reforms, reorganisations, initiatives, projects, modernisations, rationalisations, devolutions and goodness knows what of the last thirteen years. It will be one almighty, costly and damaging mess. It will add to the confusion, uncertainty, contradictions, complexity and opaqueness of our administration. It will be very expensive and a useless addition to the machinery of government.

The notion of Senates for the most part comes from the example of Ancient Rome and the history of that body is not entirely a happy one. On that note Jack Straw in his relation to Gordon Brown reminds me of Servilius Casca and Julius Caesar.

What might have Casca said not long before he struck with his dagger? “You’re doing a great job Caesar, we’re right behind you!”

Sunday, 14 March 2010

Mothers' Day - Government Announcement

The Department of Justice has announced that from 2011 onwards Mothering Sunday will become known as Smothering Sunday. A reorganisation of dates will occur whereby Fathers’ Day and Grandparents’ Day become merged into the new date. This is to eliminate any sexual or aged based bias or discrimination in a 21st Century modern form of annual celebration of age and connection.

The regulations for this event will be integrated with the guidance and new developments in Assisted Suicide, Self Determined Termination, Mercy Release and related schemes devoted to the readjustment of medical conditions and existing termination procedures. Guidance will be issued to assist Primary Care Trusts, Hospitals, Care Agencies and Carers and family members in carrying out the tasks. These will be accompanied by check lists and quality control features.

Terminations carried out under Smothering Sunday procedures will be subject to a ten per cent additional Stamp Duty on the estates of those released on declaration of probate. Payment of this Stamp Duty will release the smotherers from any legal liability or action that might arise and protect them from appeals against benefit from probate.

Wills and testaments made by smotherees immediately before release will not need to be accompanied by witness declarations or the signature of the person smothered. A simple signed statement submitted by the smotherer will suffice. This will enable quick and efficient turnover of estates and payment of the relevant Stamp Duty.

This facility is intended only for immediate families. Consistent with the requests made on behalf of those in multi-partner arrangements each person submitting applications for Smotherer status will be allowed only five parents and twenty five grandparents subject to personal declaration.

Members of the House of Commons and House of Lords will not be liable for Stamp Duty under the headings of Constituency Electoral Roll Management or holding directorial status in property and property management companies.

The government is certain that the new initiative will lead to increased GDP per head and an increase in the volume of wealth transmission to the benefit of all those who are restricted in the their patterns of consumption. It will also encourage a more active property market from which the whole economy will benefit.

Private Equity Companies responsible for the provision of undertaking services state that the new provisions will enable a major increase in leveraged borrowing and lending that will materially improve the financial figures.

Have a nice day.

Friday, 12 March 2010

Who Will Vote In May?

In all the debate about the impending election, especially over the state of the many and various polls, there is one matter less discussed. It is how many people might vote, that is what will the turnout be? The polls may not be a reliable guide to this since those who are involved in polls could be more likely to and it is the others beyond these figures who could be the ones that count.

Over the years the turnout has varied and to quite a degree. In 1847 for example, when the electorate might have amounted to only 10% or so of the adult population over 21 and all male, the turnout given is 53.4%. However, this was at a time of severe economic difficulties and the cost of travel to where the count was held could be significant.

The highest turnout given is in 1950 at 83.9% of the electorate at a time when far more of the population were actively engaged in and taking a real interest in both politics and current affairs. I can recall Clement Attlee speaking in a large hall to thousands who listened to every word. It was plain talk with no sound amplification and given in a down to earth undemonstrative manner.

The myth is that Attlee was a poor speaker. He wasn’t, people listened and many preferred his way as opposed to the posing and theatricalities of some of his colleagues. Also he told it as it was unlike, say Morrison, one of the shiftiest, nastiest and most evasive I have heard.

By the 1970’s and 1980’s turnout was down in the 70-80% area with 1992 seeing 77.7%. By 2001, however, we had slipped to 59.4% but moving up to 61.4% in 2005. Five years on and what could happen?

It is said that there is widespread disenchantment about our politicians for reasons we all know about. There is doubt that any party can deliver effective government for the UK, especially now that so much authority has been passed up to Brussels and down to a litter of NGO’s, Agencies and mortgaged to financial interests.

The elderly make continue to vote, more or less, although some of their postal votes may not be for the candidate intended. A number of adults in the middling ages may vote, if only because they have done so in the past. For the young it may be another matter. They have grown up in a world where politicians matter little, real political debate even less and force fed by the media and BBC to believe that real life revolves around an elite celebrity class.

Indeed they vote often enough, the figures for voting in TV spectaculars, text responses and some online efforts seem robust enough. As for Parliament having to choose between a Unite union shoe-in or former PR rep’, or a former researcher cum dogsbody to somebody important, or an unknown representative of this or that lobby is not an exciting prospect and not enough to tear them away from either MTV or the social networking sites to some dismal polling station dry because all the local pubs have closed.

What could happen? Let us assume, perhaps in fantasy, that the turnout goes to 50%, broken down to 19% Labour, 19% Conservative and 12% to Lib’ Dem’s and others. Given the loading of the electoral system unless the BNP hits Labour hard in its old core areas the Brown could be back with a small majority. Even if Cameron is 22 or 23% with Labour lower if the Lib’ Dem’s do a 1974 then he will be back and not as a positive vote but because people are beyond caring about politics.

On Monday 6 July last in a post on “Elections, Summits and Spin” I recalled how Harold Macmillan managed to turn round a government seemed destined to collapse in February 1957 to a major win in October 1959. In that election, Labour blew its chances as much as Macmillan earned his. This time round Brown could be back with either a working majority or leading an alliance with others. Do not forget that the BNP is a socialist party.

In 1959 I was at the count in my local town wondering how Macmillan had done it. This time I think I will just go to bed and maybe go online to see the results after I have looked at the cartoons, the earthquakes and the archaeology listings at around lunchtime.

Wednesday, 10 March 2010

Are Your Food Bills Rising?

The item below came from the Zero Hedge site posted by mad hedge fund trader on 10th March. This refers to the corn belt of the USA, one of the bread baskets of the world that in the past has provided so much for famine relief and international food supplies. Quote:
"One of my biggest disappointments with Obama so far is his continued support of the ethanol boondoggle. The program was ramped up by the Bush administration to achieve energy independence by subsidizing the production of alcohol from domestically grown corn.

Add clean burning moonshine (yes, it’s the same alcohol—C2H5OH), whose combustion products are carbon dioxide (CO2) and water (H2O), to gasoline and emissions also go down.

The irony is that if you include all the upstream and downstream inputs, the process consumes far more energy than it produces. It also demands massive quantities of fresh water, which someday will become more valuable than the oil the ethanol is supposed to replace, turning it into toxic waste.

Few consumers are aware of how big the ethanol industry has grown in such a short period. Ethanol consumption of corn has soared from 1.6 billion bushels in 2006 to an anticipated 4.3 billion bushels this year. Ethanol’s share of our total corn crop has skyrocketed from 14% to 33% during the same period. Corn grown for ethanol now occupies 10% of the total arable land in the US.

Ethanol’s impact on food prices has been huge. It is the sole reason why corn is trading at the $4 handle, instead of $2, and soybeans is trading at $10, instead of $4. You also have to add in the inflationary effects on downstream grain consumers, like the food manufacturers and the cattle industry. While spendthrift, obese Americans burn food so they can drive chrome wheeled black Hummers to Wal-Mart, much of Africa and Asia starve. A global food crisis is not that far off.

This ignores the reality that Brazil, the world’s largest ethanol producer, can ferment all the ethanol it wants at one third our cost because they make it from much more efficient sugarcane, which has five times the caloric content of corn. They also have ideal weather. However, protective import quotas and tariffs prevent meaningful quantities of foreign ethanol imports.

Bush financed all of this wasteful pork, because Iowa has an early primary, giving it an outsized influence in selecting presidential candidates, and has two crucial Senate seats as well. Well, it turns out that Obama needs Iowa even more than Bush, where the Democrats are ahead 3-2 in the House, and have a tie in the Senate (1-1), so the ethanol program not only lives on, it is prospering.

Ethanol has become such of big industry that it now commands a fairly large footprint in Washington, fielding armies of lobbyists to keep the subsidies and tax breaks flowing from the appropriate agricultural committees. The problem for the rest of this is that once these lobbies become entrenched they are almost impossible to get rid of. Think of an advanced case of scabies.

Remember the tobacco lobby? Shame, and double shame. Better to drink ethanol than burn it, I say." Unquote.
Budget? Start worrying about the price of your food.

Tuesday, 9 March 2010

IBS - A Pregnant Pause

For those who may have felt that I was being a tad cynical when I suggested last Thursday, 4th March re Gordon’s Guts, that doctors were too ready to cry “IBS” when asked about bother in the belly this is the story to cap it all, from the Daily Mail of today.

“A hairdresser gave birth to a baby girl - just three hours after being told she was pregnant by doctors who initially diagnosed her with Irritable Bowel Syndrome. Belinda Waite, 21, had been to her local hospital several times during the past nine months and was told she had a severe case of IBS and gout.

In fact she was pregnant with a healthy baby girl who arrived a month ago.
Not realising she was expecting a baby, Miss Waite didn't take life easy during her pregnancy. She said: ‘I went on rollercoasters at Alton Towers, on water slides in Spain. I probably ate all the wrong foods - and was knocked down by a car.

‘Luckily I do not smoke and I stopped drinking alcohol as it made me feel sick.’
Miss Waite, known as Billy, from Bampton, Devon, said: ‘You read about these stories in magazines but you never think they happen to real people and I certainly never thought it would happen to me.’

Billy was staying with her partner Wayne Boyles, 28, when she unexpectedly went into labour. Their baby daughter Louise Boyles, who was born at home weighing 8lb 14oz, was delivered by her grandmother, Sylvia Boyles. Miss Waite said: ‘It was obviously a huge shock for us all but you have to get on with these things and we are really enjoying it.’

She said she had not felt well for some months before the surprise birth.
‘I did feel like something was moving inside me as the months went on. But I never considered I was pregnant and it doesn't seem to have crossed the doctors' minds.’
She went to her local hospital in Tiverton and doctors said it was likely to be IBS.

On Christmas Day she was taken to hospital again after her hands and feet swelled up and doctors assured her she was suffering from gout or an allergy.
On February 6th - the night before Louise was born – Miss Waite again went to hospital with pains throughout her body.

At 10pm doctors confirmed finally she was pregnant – and had been for nine months. Louise arrived four and a half hours later at 2.30am. Miss Waite said: ‘I was really shocked. I don't think Wayne could believe it was happening.

We hardly had time to think about it. No one believed us when we told them we suddenly had a child.’ A spokesman for NHS Devon said: 'We are looking into the matter. In the meantime we would like to congratulate Ms Waite on the birth of a healthy baby girl.'”

I can only add my best wishes to Louise, Belinda, Sylvia and Wayne and pour a toast to their future.

Sunday, 7 March 2010

Trains Of Thought

This weekend we took the train to London and tried out the new HST service (High Speed Trains) on South Eastern Railways. It did not save us any time at all going in to London because to travel from the nearest HST station meant taking longer than the time advantage over a routine train journey from my local station. Returning did save a few minutes because we just scraped onto the train seconds before it pulled out.

There was more leg room, the air conditioning was vastly superior, the seats were better and it was much less noisy and bumpy. Sadly, for much of the trip there was not much of a view, it was more like an unusually well appointed London Tube that surfaces occasionally to present a vision of the back side of the local economy.

One reason this option made sense, despite the extra cost, was that our local services have been cut by 30% to provide the staff and financial resources for the HST. So the train service we would have used previously no longer exists and the other options have also suffered. However the HST cost now means a day out in London entails paying fares three times higher than a decade ago. Necessarily, this means that we have reduced our trips substantially.

The introduction of the HST meant some works at St. Pancras but is routed along the existing Eurostar lines so the actual cost was the introduction of a modest number of new train sets, foreign made of course. The number of extra staff required is minimal being covered by cuts in services elsewhere, a personal disaster for very many commuters and others needing specialist medical treatments in London.

South Eastern Railways receives a hefty subsidy so that means money has been directed into HST rather than other basic services. The ageing Networker stock that clatters up and down our local line and breaks done frequently is a penance against the pleasure of going out. That the new HST manages to serve the Labour held parts of the county whilst the other parts suffer the losses is just part of the great game.

I can see why so many people who do not have to pay their own fares, by and large, have such a liking for the idea of High Speed Trains, especially if the capital costs of construction and general works are to be met by taxpayers’ money either now or into the distant future. Quite where the notion of “cheap fares” comes from is a complete mystery.

They can be cheap only if vast subsidies are paid out on a permanent basis, and/or the capital costs written off, or the service has an added function that attracts good revenues, as did the railway companies of old that carried the mails, the parcels, lots of freight and the members of the armed forces.

To see both of the larger political parties making great promises about HST services to the North and Scotland can mean only one thing and that is that the London and Edinburgh Cronygarchy like the idea of using taxpayer money for their own benefit. Especially if it is a massive prestige project that will look pretty, be allegedly modern and ecological and have their minions in the media drooling with hyperbole.

What trains and services the rest of us will be left with is another question. The signs are far from good if swingeing cuts in public expenditure are in view. Your HST is my Ghost Train.

What did give me a jolt was that when the HST pulled into the newly built Ebbsfleet Station although in modern form it was eerily like the layout of the old Great Central Station of my youth in the 1950’s, one of the few places where I was usefully employed. The photograph above of an old GCR Station gives the shape of it and what was lost.

When I worked on the Great Central line, George the Foreman of the Parcels Office and Charlie, a former driver stood down to station staff when his eyesight worsened, told me that when the line opened the intention was for it to be a state of the art fast line taking expresses not just to London but to Dover and through a Channel Tunnel. When they had joined as boys before the First World War they had hoped to see trains to Paris, Rome and Berlin running through. The military scotched the tunnel idea and the busts of the City, which in any case preferred investing in the American bust and boom markets, did for the rest.

In the railways rationalisation of 1923, a hasty botched job of trying save companies broken by the First War emergencies by merging them with marginally sound others, the GCR was handed over to the LNER. The consequence was that like the Great Eastern and other lines they were starved of resources that were concentrated on the East Coast Main Line and their revenue earning freight workings used as a cash cow for the prestige trains.

The passenger services never recovered under British Rail and in the 1960’s financial crisis the Labour government took the view that any idea of competitive high speed running on the only line actually built for it, to continental loading gauge standards, never mind connections to Europe, were far too costly to think about. Also the freight traffic was declining rapidly. The GCR line was closed and only parts remain visible.

And now the two major parties want to rebuild an equivalent; regardless of cost.

Thursday, 4 March 2010

Gordon Brown - Has He The Guts For The Job?

A condition may have complex causes and each cause might have complex and variable effects. If a condition arises its effects, which may be variable, might become another causal factor. Consequently reactions that create a condition whilst appearing to be simple could interact in unexpected ways. There could be a chain reaction.

The human body and especially the brain are very complicated bits of kit and most of the parts are connected to the other in a way that is either essential to existence or to the reliable functioning of the whole. This being so is why I have always been resistant to easy and simple psychiatric or psychological interpretations of how a person behaves or reacts; especially in terms of neurology and body chemistry.

Which brings me back again to Gordon Brown to examine the flurry of argument about him, much of which concerns his mind games and function. What else could be going on that could have an impact that affects his behaviour?

The question of deafness has been raised. Given the conventional attitude to the deaf it is understandable that a sufferer is often reticent about it. Indeed many men I have known who have had serious impairment have resolutely refused to admit to the problem or to do anything about it. Gordon Brown could be vulnerable.

This has its dangers. One is when the deaf person simply turns up the sound oblivious to the fact that the more sound the more damage occurs because it has physical impact on the hearing system and the brain. The other is that recent research based on scans suggests that people suffering from significant untreated hearing loss can suffer attrition of that part of the brain that deals with social interaction.

This is a large question, but I am moving from the brain to the belly. There are three possibilities. I have to deal with them separately for the sake of clarity but they can interact, see the first paragraph. They are gluten, intolerances, and flavours.

For gluten CoeliacUK and the Celiac Society (USA) have plenty of information and a trawl of the web will reveal much more. Gluten reaction can kick in at any age and at any time the immune system takes a bad hit either from substances or from a virus or other infection.

When it does in the UK it is rarely diagnosed early unless the sufferer is unusually lucky with their GP. As IBS is now so fashionable it is almost the default response. But IBS is not a disease or a cause it is a convenient description covering a number of symptoms on the basis of which a prescription may be issued and a box ticked.

The trouble is that the longer and worse the gluten problem continues the greater the damage done to the gut and to the mental health of the sufferer. The experts on this believe that the number of people currently experiencing gluten problems is much larger than is believed. They may well be right as not only are people today taking in much more gluten than in the past but the development of wheat grains has made many of them much stronger in gluten.

Next up is food intolerances and in this context I will stay with dairy & lactose. This is another field of reactions growing in number again probably because of the way our diets have changed. Add to that the amount of dairy based material in many packaged and other foods together with the increase in beef and products and it is not surprising that many more people are reacting to one degree or another. Again not much of this is ever diagnosed or realised. Hooray for IBS and all the pills and potions.

Last and far from least are the flavourings and flavour enhancers, notably MSG. It is now becoming more and more difficult to find processed or packaged foods that do not have a strong whack of something. They are so easy and cheap to use for the manufacturer and the skills of modern chemistry means that in terms of taste only they are difficult to spot. Also, they can appear in “natural” foods if the products have enough natural elements to justify that claim.

For those who do react, however, they are all too easy to spot, notably the bloating and wind an hour or so after the breakfast sausages and bacon or at other meals. That is if you know about them or realise that is what is doing it. Again these, although allegedly limited in quantity of bulk, have been engineered to have greater impact and to dominate the taste buds.

A dangerous feature of modern retailing is the high level of contamination of food products by polluting levels of the related synthetic fragrances in the air. The power, capacity for adherence and lasting features of these are now in the food chain. Do you really want a large dose of Lynx on your organic tomatoes?

So when we now take a close look at Gordon Brown’s entrails there could be things going on there that neither he nor his closest advisers expect. Unluckily, it is very likely that the doctors he talks to will not have the faintest idea that any of the above might be an issue and even less idea about their potential complexity. If they are giving him the usual stuff it might damp down the effects but they will do nothing to help his body and brain.

Alas, if history is any guide he will join a long list of UK Prime Ministers who had neither the brains nor the guts for the job.

Tuesday, 2 March 2010

Election 2010 - Hanging The Politicians

The prospect of a “hung parliament” is alleged to be spooking the markets as well as creating serious uncertainty about who will rule, how, and with what intent. Given the state of the economy and the international situation politically it could be equivalent of the London Smog of 1952. This occurred at another time of finely balanced politics in an uncertain world where we were fighting in faraway wars.

One of the conventional fictions of UK political theory is the idea of the Two Party System where power might be exercised by one of two major groups who lend powers of decision and political direction to the business of government. The story of our Parliament since the Civil War is far from this. It is a long story of political division and often chaos presided over by office holders from a House of Lords that is by definition unrepresentative and a House of Commons that has never yet been representative of the people as a whole.

Women under 30 did not vote until 1919, or at all until 1918. Until 1885 only a minority of adult males could vote, from 1867 a substantial minority, from 1832 to then a small minority, and before then even smaller numbers very unevenly distributed around the Shires and the Boroughs.

The political parties then and since have been based substantially on a constituency basis that in the 20th Century became single member with a simple majority of votes.
It is my view that this constituency system, which sometimes did allow a party a “working majority”, has in fact put power into the hands of two parties whose parliamentary representation in no way reflects either the electorate or many of those who vote for them.

I would like to go on at length at the way the geographical spread and basis of the Labour held seats have lead to gross imbalances which the national party has not been able to address. Similarly, the Conservative Party often has been ruled by narrow groups not only unrepresentative of their base, but dismissive of their needs.

There are three other problems. One is the concentration of political, financial, media, and economic power in London that has captured so many politicians and governments in the past, think of Ramsay MacDonald and the Duchesses. Another is that the parties have not been coherent within themselves, either in doctrine or policy, and the third the baneful effect of the “marginal constituency” factor in how elections might be won or lost.

All these together have meant that for too often in the past and increasingly in the present we are governed by a nasty form of dictatorial Cronygarchy which has both secrecy and falsity at the centre of the way it operates. The choice we have is between one type and another in other words voting for the least worst choice. The political debate more often resembles that of the exchanges between Laurel and Hardy as they stagger from one catastrophe to another.

One of the advantages cited about the constituency system was that it handed real choice to the local parties in the selection of candidates. In a time when parties had large local memberships who had effective debates this could have been true in many cases. In some, however, factionalism and deference might count for more and in others the need for compromise. Today, with local memberships having shrunk and with so many of them there for personal advantage we have all the disadvantages of the Party List method without the advantage of creating them.

Looking at the hapless crews of humanity that the party leaderships have with them when they venture out to speak in public it is not encouraging. The lot behind Cameron at Brighton looked as though they had strayed in from a lecture on dog walking or were attending a recruitment campaign for door to door detergent sales. Those with Brown looked as though the head doctors had been at them first with a large syringe full of happy juice.

We do not simply need a new government, we need a new constitution, a new electoral system, effective means of exercising choice, reliable access to sound information, breaking up the London Cronygarchies and the will not to change Hardy for Laurel but to radically reorder our chances to control our own futures.

Now where is the DVD for “Sons of the Desert”? Anything must be better than the BBC News.