The Taxpayers Alliance monitors job advertisements for posts in the tax-financed public sector. They publish the some advertised details regularly as "Non-job of the week".
This morning Conservative Home produced a list of ten of the most mind-blowing, including "Street Football Coordinator" at nearly £20,000, "Climate Change Manager" at up to £38,500 and "Parenting Coordinator" at up to nearly £30,000.
(These figures may be doubled when allowance is made for office, desk and other expenses, as well as both employer N.I and pension contributions. The appointees in due course will find reason to appoint underlings to do the actual work, as they build empires and spend much time in meetings.)
The above is a small sample of many such advertisements which guarantee the financial future of the Guardian newspaper. But there are many others, dealing with such things as equality, health and safety, political correctness, diversity and inclusiveness.
In some cases the local authorities concerned dreamed up their need to satisfy their own needs or ideologies. These tend to be the diminishing number Labour or Libdem controlled councils, but to their shame some are Conservative controlled. In the case of some jobs they are merely responding to burdens laid on them by central government.
At a time when recruitment to the civil service is increasing, local councils are also making their contribution to expanding the public sector. Is there any surprise that rates rise relentlessly and in excess of pensions and incomes?
Wednesday, 31 December 2008
The cost of it all
Sam Fleming, in the Daily Mail this morning, includes some estimates of the costs to people in this country of the downturn/recession.
He reports Capital Economics as producing the result that falling equity prices and plunging property values have reduced savings and assets by 18%. This is about £1.5 trillion, which exceeds the total output of the economy in 2008 and amounts to about an average of £60,000 per household.
The figure of £60,000 is an average, and pensioners or others living in small houses and with little savings will have suffered much less, while propertied families will have suffered much more. Virtually no-one has escaped, except possibly those living entirely on benefit and in rented accommodation.
Everyone with insurance backed mortgages, with private or company pensions or non-cash savings will be worse off, as capital values and incomes are reduced.
Fleming's final comment makes baleful reading as well, "Britons have continued to amass larger debts. Household borrowings have increased over the course of 2008 and now stand at more than £1.4 trillion." These debts have probably increased over the past fortnight, as shoppers had a final fling for Christmas, and took advantage of massive price reductions.
At the time when the government wants us to spend more, and borrow more, we have logically less reason to do so. Our assets are diminishing in value, our savings are worth less, we may be made redundant and we may lose our devalued home.
The government berating (probably unfairly) lenders for not increasing indebtedness rings a little hollow. We are the problem, in acting like rational economic man and trying to restore our financial stability, but who already massively in debt and with declining assets and expectations is going to increase their liabilities?
He reports Capital Economics as producing the result that falling equity prices and plunging property values have reduced savings and assets by 18%. This is about £1.5 trillion, which exceeds the total output of the economy in 2008 and amounts to about an average of £60,000 per household.
The figure of £60,000 is an average, and pensioners or others living in small houses and with little savings will have suffered much less, while propertied families will have suffered much more. Virtually no-one has escaped, except possibly those living entirely on benefit and in rented accommodation.
Everyone with insurance backed mortgages, with private or company pensions or non-cash savings will be worse off, as capital values and incomes are reduced.
Fleming's final comment makes baleful reading as well, "Britons have continued to amass larger debts. Household borrowings have increased over the course of 2008 and now stand at more than £1.4 trillion." These debts have probably increased over the past fortnight, as shoppers had a final fling for Christmas, and took advantage of massive price reductions.
At the time when the government wants us to spend more, and borrow more, we have logically less reason to do so. Our assets are diminishing in value, our savings are worth less, we may be made redundant and we may lose our devalued home.
The government berating (probably unfairly) lenders for not increasing indebtedness rings a little hollow. We are the problem, in acting like rational economic man and trying to restore our financial stability, but who already massively in debt and with declining assets and expectations is going to increase their liabilities?
Tuesday, 30 December 2008
Blindfolded feeding of Jelly
A party game in my youth saw two blindfolded contestants feeding each other with a spoon from a dish of jelly. The "food" inevitably was plastered in the hair, ears and neck, in fact virtually everywhere above the shoulders except in the mouth. The observers enjoyed it, and even the contestants.
Earlier this month guidelines were published which will make schools' admission practices rather like jelly feeding contestants.
Anything which discriminates against children from poor backgrounds is prohibited. So birth certificates are out, as are photographs, as well as interviewing parents. No supplementary information may be sought or given, nothing to identify the children or the parents, in case bias is introduced.
In fact there seems little point in applying for your child to join a particular school. This is just what the government wants, despite its talk of choice, and its encouragement of lotteries is part of the same.
Given that intelligence, measured by the IQ indicator, is normally distributed, with the familiar bell-shape, if selection is purely at random, then we would expect very few school classes to have more than one or two high IQ children, and the same number of very low IQ children.
The result will be what the government seems to want - the vast majority of school classes to have average children with a few advanced and very bright children and also a few who will struggle.
This is exactly what happens, - attention is concentrated on the large and average centre groups, and those with different needs will tend to be neglected.
The differences in very large schools can be accommodated by streaming, - putting together students of equal ability from across the whole school year. The cost of this is the size of school necessary to provide viable sized groups for all ability levels in all subjects.
Given the problems associated with size, the only real solution is selection.
The present policy, leaving aside catchment areas and "corruption" in intake, will answer the ideological need, but is likely to leave both the most able and least able frustrated and under-achieving, separate siblings and need over-large schools.
Earlier this month guidelines were published which will make schools' admission practices rather like jelly feeding contestants.
Anything which discriminates against children from poor backgrounds is prohibited. So birth certificates are out, as are photographs, as well as interviewing parents. No supplementary information may be sought or given, nothing to identify the children or the parents, in case bias is introduced.
In fact there seems little point in applying for your child to join a particular school. This is just what the government wants, despite its talk of choice, and its encouragement of lotteries is part of the same.
Given that intelligence, measured by the IQ indicator, is normally distributed, with the familiar bell-shape, if selection is purely at random, then we would expect very few school classes to have more than one or two high IQ children, and the same number of very low IQ children.
The result will be what the government seems to want - the vast majority of school classes to have average children with a few advanced and very bright children and also a few who will struggle.
This is exactly what happens, - attention is concentrated on the large and average centre groups, and those with different needs will tend to be neglected.
The differences in very large schools can be accommodated by streaming, - putting together students of equal ability from across the whole school year. The cost of this is the size of school necessary to provide viable sized groups for all ability levels in all subjects.
Given the problems associated with size, the only real solution is selection.
The present policy, leaving aside catchment areas and "corruption" in intake, will answer the ideological need, but is likely to leave both the most able and least able frustrated and under-achieving, separate siblings and need over-large schools.
Monday, 29 December 2008
Summary justice?
The Department for Transport recently advocated on-the-spot-fines and licence penalty points after road accidents.
In one way this is merely an extension of speed camera fines, except that there will presumably be no "objective evidence" but rather a policeman who arrives after the accident. Justice "on the spot" will thus depend on his judgement of the situation, and witnesses may have moved on when they saw that nobody was hurt. So a driver on his own is likely to fare worse than a driver who has three or four passenger friends with him at the time.
In the case of camera speeding fines, most drivers will feel that it is not worth contesting the case and opt for the cheapest way, of admitting guilt even if they do not feel it. What is likely to happen in the case of accidents?
Insurance companies instruct their clients not to admit responsibility, and many drivers have been relieved later to discover that their insurers have protected their clients' interests. Is this to be removed? The stakes here, with damage to two cars, no-claims bonus, and points on licence, could make a refusal to accept liability more likely. What happens then? Who will process the information, how long will it take and with what costs. This will presumably apply to all minor offences, including those which currently are satisfy both drivers by an assurance of an insurance claim.
How will the police, who have already withdrawn from consideration of much minor local crime because of limited time and resources, find the time for all this. Will PCSOs be given the power to impose summary justice?
Many will see the whole proposal as another stealth tax, as many are already convinced the speed cameras are. If the two drivers and their insurers are happy with any financial outcome, why should the state intervene by some ridiculous extension of a principle of careless driving?
Given that many cases are misjudgement or failure of thought or vision, which will not be deterred by the advent of this new legislation, what is it expected to achieve except extra revenue for the insatiable state?
( I forbear from mentioning a whole new range of offences which could be involved, such as turning on your car radio or even having an altercation with passengers. If it is the latter, make sure you argue or remonstrate with the wife very quietly, or you may be overheard by some passing police officer!)
In one way this is merely an extension of speed camera fines, except that there will presumably be no "objective evidence" but rather a policeman who arrives after the accident. Justice "on the spot" will thus depend on his judgement of the situation, and witnesses may have moved on when they saw that nobody was hurt. So a driver on his own is likely to fare worse than a driver who has three or four passenger friends with him at the time.
In the case of camera speeding fines, most drivers will feel that it is not worth contesting the case and opt for the cheapest way, of admitting guilt even if they do not feel it. What is likely to happen in the case of accidents?
Insurance companies instruct their clients not to admit responsibility, and many drivers have been relieved later to discover that their insurers have protected their clients' interests. Is this to be removed? The stakes here, with damage to two cars, no-claims bonus, and points on licence, could make a refusal to accept liability more likely. What happens then? Who will process the information, how long will it take and with what costs. This will presumably apply to all minor offences, including those which currently are satisfy both drivers by an assurance of an insurance claim.
How will the police, who have already withdrawn from consideration of much minor local crime because of limited time and resources, find the time for all this. Will PCSOs be given the power to impose summary justice?
Many will see the whole proposal as another stealth tax, as many are already convinced the speed cameras are. If the two drivers and their insurers are happy with any financial outcome, why should the state intervene by some ridiculous extension of a principle of careless driving?
Given that many cases are misjudgement or failure of thought or vision, which will not be deterred by the advent of this new legislation, what is it expected to achieve except extra revenue for the insatiable state?
( I forbear from mentioning a whole new range of offences which could be involved, such as turning on your car radio or even having an altercation with passengers. If it is the latter, make sure you argue or remonstrate with the wife very quietly, or you may be overheard by some passing police officer!)
Once we had a common law...
On of the country's leading legal figures, Baroness Butler-Schloss, head of the Family Division, has followed the Archbishop by advocating greater incorporation of Sharia Law into our legal system.
In a warning to judges to stop granting civil divorces to Muslim couples who are separating until the couples had been through a religious law, she was trying to protect women. Under Sharia law only men have the power to end marriages. The consequence was that unless the couple underwent a Sharia divorce, with its one-sidedness, the man could claim afterwards that they were still married, even if a civil divorce had been granted. The woman would then not be able to re-marry within the Muslim community. The man could, of course, add another wife under Sharia Law but would not be guilty of bigamy under civil law.
In fairness to the Baroness, an Act of 2002 has apparently already conceded the principle in the case of Jewish Law, and she was merely suggesting extending it to the Muslims.
One question was why it was granted to Jewish Law in the first place, and why not to Christian?
Roman Catholics after all do not recognise divorce, but they have not been granted this privilege.
The more important question is the failure to assert the common law principle, that all marriages however conducted must meet the requirements of the civil law and to be ended must meet the conditions of the same law. The problem exists for the Muslims only because of their discrimination against women, which ought to be illegal when once they become nationals here.
This all seems to stem from an alien politic which asserts that men have rights which women lack. Surely this is the way to treat the problem. If you live here, then national law is superior to sectarian law. The Human Rights Act doesn't hesitate to intervene in cases involving atheists or christians, why does it not act here?
In a warning to judges to stop granting civil divorces to Muslim couples who are separating until the couples had been through a religious law, she was trying to protect women. Under Sharia law only men have the power to end marriages. The consequence was that unless the couple underwent a Sharia divorce, with its one-sidedness, the man could claim afterwards that they were still married, even if a civil divorce had been granted. The woman would then not be able to re-marry within the Muslim community. The man could, of course, add another wife under Sharia Law but would not be guilty of bigamy under civil law.
In fairness to the Baroness, an Act of 2002 has apparently already conceded the principle in the case of Jewish Law, and she was merely suggesting extending it to the Muslims.
One question was why it was granted to Jewish Law in the first place, and why not to Christian?
Roman Catholics after all do not recognise divorce, but they have not been granted this privilege.
The more important question is the failure to assert the common law principle, that all marriages however conducted must meet the requirements of the civil law and to be ended must meet the conditions of the same law. The problem exists for the Muslims only because of their discrimination against women, which ought to be illegal when once they become nationals here.
This all seems to stem from an alien politic which asserts that men have rights which women lack. Surely this is the way to treat the problem. If you live here, then national law is superior to sectarian law. The Human Rights Act doesn't hesitate to intervene in cases involving atheists or christians, why does it not act here?
Emboldened by failure, they press on...
The government, it seems, are considering attaching a cinema-like classification to web sites. ( I am assuming that this is true, and not a hoax!)
Just about every important piece of regulation they have set up has failed in important respects, from (fox) hunting, to financial, to child care, to name but three, but undeterred they turn to a much harder nut to crack. You have to admire their (over) confidence.
The internet is difficult, even if all other countries were willing to join the scheme, as the classification would have be done in the country of location. If just one or two remained outside, and it is hard to see what sweeteners or sanctions could make them join, then "adult" or other socially unaccepted sites could quickly be routed there.
Even if all countries join, we could still have pirate, sea born sites which use convenient land connections. This would take us back to the days of pirate radio, with ships moored a few miles off our coasts and giving a two-fingered gesture to our intrepid government.
If our courageous government decided to "go it alone" then they would have to to monitor possibly millions of sites over thousands of internet service providers over 24 hours each day. This could be done by word-recognition software, but constant switching or names or locations would mean that there could be no let up at all.
All this seems to be attacking the problem from the wrong end. The police seem to have been relatively successful with child-pornography sites, to judge by convictions involving international cooperation.
Leaving these, and perhaps terrorist sites, which are not the concern of most of us, would not a more effective method be to support parents who monitor the history of sites visited by their children, perhaps by password-protected records and by publishing sites which should be of concern to parents, again preventing access by children?
This would not be perfect, but it would be a lot less expensive and invasive. Parents are, or should be, concerned about their children's internet activity. They should be enlisted as unpaid helpers in the battle.
Just about every important piece of regulation they have set up has failed in important respects, from (fox) hunting, to financial, to child care, to name but three, but undeterred they turn to a much harder nut to crack. You have to admire their (over) confidence.
The internet is difficult, even if all other countries were willing to join the scheme, as the classification would have be done in the country of location. If just one or two remained outside, and it is hard to see what sweeteners or sanctions could make them join, then "adult" or other socially unaccepted sites could quickly be routed there.
Even if all countries join, we could still have pirate, sea born sites which use convenient land connections. This would take us back to the days of pirate radio, with ships moored a few miles off our coasts and giving a two-fingered gesture to our intrepid government.
If our courageous government decided to "go it alone" then they would have to to monitor possibly millions of sites over thousands of internet service providers over 24 hours each day. This could be done by word-recognition software, but constant switching or names or locations would mean that there could be no let up at all.
All this seems to be attacking the problem from the wrong end. The police seem to have been relatively successful with child-pornography sites, to judge by convictions involving international cooperation.
Leaving these, and perhaps terrorist sites, which are not the concern of most of us, would not a more effective method be to support parents who monitor the history of sites visited by their children, perhaps by password-protected records and by publishing sites which should be of concern to parents, again preventing access by children?
This would not be perfect, but it would be a lot less expensive and invasive. Parents are, or should be, concerned about their children's internet activity. They should be enlisted as unpaid helpers in the battle.
Wednesday, 24 December 2008
Damien Green affair, again
It has now emerged that when the police went to arrange Damien Green some or all of them were wearing concealed recording equipment.
In criminal cases the police are required to inform accused that an interview is being recorded. Indeed, there is nothing clandestine at all, - the machine is operated in full view of the accused and his counsel.
The only occasion when secret recording is used is in cases involving national security, especially when arresting suspected terrorists. This seems to reinforce the impression given by using security officers and not "ordinary" police. It reinforces the impression that the police acted on the assumption that national security was involved.
Who informed and assured them that national security was involved, and that it was not yet another "leak "? Was the reference to national security made to persuade the police generally to act when they had become reluctant to investigate ordinary leaks?
If it was a senior civil servant acting on his own behalf, this would be serious. If he or she was acting on the instructions of a member of the government, then it would be very serious.
In criminal cases the police are required to inform accused that an interview is being recorded. Indeed, there is nothing clandestine at all, - the machine is operated in full view of the accused and his counsel.
The only occasion when secret recording is used is in cases involving national security, especially when arresting suspected terrorists. This seems to reinforce the impression given by using security officers and not "ordinary" police. It reinforces the impression that the police acted on the assumption that national security was involved.
Who informed and assured them that national security was involved, and that it was not yet another "leak "? Was the reference to national security made to persuade the police generally to act when they had become reluctant to investigate ordinary leaks?
If it was a senior civil servant acting on his own behalf, this would be serious. If he or she was acting on the instructions of a member of the government, then it would be very serious.
Are they committed?
News has emerged that David Cameron has been defeated in his intention to require all shadow cabinet members to divest themselves of second jobs, i.e. moonlighting. In fact, assuming that shadow ministers are paid an extra allowance for what can be quite demanding, we are really discussing giving up a third job.
Now the third job can take several forms, - writing a book at week-ends or during the long recess, sitting on a board of directors once a month, giving occasional paid lectures or acting as a consultant in an MP's own time. Many MPs engage in these occupations and others and manage to fit them in around dealing with constituency matters and presence in the chamber at Westminster.
What is different here is that shadow cabinet members have been selected by Cameron as being people of high calibre and commitment, the leaders of the Party at Westminster. What may be appropriate for rank and file MPs arguably is not for the shadow cabinet.
We are told that one or two have threatened to walk out if the measure is imposed on them. This really does question their commitment, and whether they ought to be in the job. If the Tories are successful in winning the next election, most shadow ministers would be expected to be equipped and experienced to be made full ministers. If they are part time for the moment, would this be true? Would they even want to be full ministers, given their other interests?
Cameron has been made to look weak, would he look any weaker if he called their bluff and made them walk away? In so far as some minor shadow cabinet members might leave, no great damage might result as there are others of ability ready to replace them. If, as is rumoured, one or two leading figures are involved, and William Hague has been mentioned, would it better to have the show-down now, well in advance of the election?
What is clear is that although some of these moonlighters do occasionally make a speech or write an article which impresses, do they really pull their weight? Cameron has been criticised for being a "one man band". This may in part reflect the fact that one or two other powerful figures are not pulling their weight. (I am conscious that William Hague was involved in re-building the Party in the North of England, certainly his name was regularly mentioned. Whether he should now be adopting a more active role nationally or in foreign affairs is a question which only he and Cameron can answer.)
Now the third job can take several forms, - writing a book at week-ends or during the long recess, sitting on a board of directors once a month, giving occasional paid lectures or acting as a consultant in an MP's own time. Many MPs engage in these occupations and others and manage to fit them in around dealing with constituency matters and presence in the chamber at Westminster.
What is different here is that shadow cabinet members have been selected by Cameron as being people of high calibre and commitment, the leaders of the Party at Westminster. What may be appropriate for rank and file MPs arguably is not for the shadow cabinet.
We are told that one or two have threatened to walk out if the measure is imposed on them. This really does question their commitment, and whether they ought to be in the job. If the Tories are successful in winning the next election, most shadow ministers would be expected to be equipped and experienced to be made full ministers. If they are part time for the moment, would this be true? Would they even want to be full ministers, given their other interests?
Cameron has been made to look weak, would he look any weaker if he called their bluff and made them walk away? In so far as some minor shadow cabinet members might leave, no great damage might result as there are others of ability ready to replace them. If, as is rumoured, one or two leading figures are involved, and William Hague has been mentioned, would it better to have the show-down now, well in advance of the election?
What is clear is that although some of these moonlighters do occasionally make a speech or write an article which impresses, do they really pull their weight? Cameron has been criticised for being a "one man band". This may in part reflect the fact that one or two other powerful figures are not pulling their weight. (I am conscious that William Hague was involved in re-building the Party in the North of England, certainly his name was regularly mentioned. Whether he should now be adopting a more active role nationally or in foreign affairs is a question which only he and Cameron can answer.)
Tuesday, 23 December 2008
The height or depth of hypocrisy?
For a year or two now NuLabour have been attacking large, gas-guzzling cars, whether through road tax or road charging. It has seemed almost like a class vendetta, but they claimed that they were protecting the environment.
Now they are contemplating financial help to a firm which makes two of the gas guzzlers - Jaguar and Land Rover. Should they be encouraging the assembly of such cars, given their professed concern about the environment? Even if the Jaguars and Land Rovers in the immediate future are likely to be exported, they will pollute the environment elsewhere, which will rebound on us.
It is very likely that other countries will subsidise their motor industries, in a kind of "beggar my neighbour" policy, so our government will feel the need to protect us against unfair competition.
Could I respectfully suggest that given their professed aim to remove gas guzzlers from our streets, Mandelson and Co. should give far more aid to what is left of our mass car production industries, even if they are entirely foreign owned, and much less to gas guzzling Jaguar, Land Rover, Aston Martin, et al?
I appreciate that my appeal will fall on deaf ears, and that actual aid given publicly will be given with fanfare to the areas with marginal labour seats!!
Now they are contemplating financial help to a firm which makes two of the gas guzzlers - Jaguar and Land Rover. Should they be encouraging the assembly of such cars, given their professed concern about the environment? Even if the Jaguars and Land Rovers in the immediate future are likely to be exported, they will pollute the environment elsewhere, which will rebound on us.
It is very likely that other countries will subsidise their motor industries, in a kind of "beggar my neighbour" policy, so our government will feel the need to protect us against unfair competition.
Could I respectfully suggest that given their professed aim to remove gas guzzlers from our streets, Mandelson and Co. should give far more aid to what is left of our mass car production industries, even if they are entirely foreign owned, and much less to gas guzzling Jaguar, Land Rover, Aston Martin, et al?
I appreciate that my appeal will fall on deaf ears, and that actual aid given publicly will be given with fanfare to the areas with marginal labour seats!!
Monday, 22 December 2008
Mr. Strauss-Khan changes his mind
At least twice over the past four years the IMF has warned the UK of the grave danger it was in as the result of the debt mountain it had created. (G.Brown ignored the IMF, as he knew better.)
Now the IMF in the person of Mr. Strauss-Khan wants the UK to build its debt mountain even higher, - it's no longer dangerous. This time G. Brown, who has not changed his mind, agrees.
What has changed?
The IMF feared that the mountain of debt might precipitate recession, which we all know is not caused by us but could be mysteriously imported, according to G. Brown. Now the recession is here, not caused by us but imported, it seems that we should borrow in a big way. The nostrum for over-indulgence is more over-indulgence.
The only problem is that this (crass) Keynesianism, which was worked out and never tested as the re-armaments for WWII did the trick, was for reversing mild downturns, and is more shaky on controlling inflation. There is no certainty that the Keynesian presciption will work in our present situation. It could even make the situtation worse and prolong the recovery period, as in the case of Japan.
It is indeed possible that some countries will recover by Keynesian means, as they do not have our level of indebtedness, and we shall pulled along by their coat-tails. It is possible that the public sector debt will crowd out private borrowing, that sterling will have depreciated to such an extent that our import prices rise so quickly that we return to our old enemy of the 1970s, - stagflation, but with major industries lost, - London finance, manufacturing and service industries.
It promises to be a long and painful business, whatever happens, even if we are the best placed to weather the storm!
Now the IMF in the person of Mr. Strauss-Khan wants the UK to build its debt mountain even higher, - it's no longer dangerous. This time G. Brown, who has not changed his mind, agrees.
What has changed?
The IMF feared that the mountain of debt might precipitate recession, which we all know is not caused by us but could be mysteriously imported, according to G. Brown. Now the recession is here, not caused by us but imported, it seems that we should borrow in a big way. The nostrum for over-indulgence is more over-indulgence.
The only problem is that this (crass) Keynesianism, which was worked out and never tested as the re-armaments for WWII did the trick, was for reversing mild downturns, and is more shaky on controlling inflation. There is no certainty that the Keynesian presciption will work in our present situation. It could even make the situtation worse and prolong the recovery period, as in the case of Japan.
It is indeed possible that some countries will recover by Keynesian means, as they do not have our level of indebtedness, and we shall pulled along by their coat-tails. It is possible that the public sector debt will crowd out private borrowing, that sterling will have depreciated to such an extent that our import prices rise so quickly that we return to our old enemy of the 1970s, - stagflation, but with major industries lost, - London finance, manufacturing and service industries.
It promises to be a long and painful business, whatever happens, even if we are the best placed to weather the storm!
Who really cares?
Gerald Warner, in his Telegraph Blog today, summarises findings on the relative generosity of what he calls Liberal Secularists with that of Christian conservatives.
It seems that the lefties like to talk, plan, agitate and command others to contribute to good causes, but when it comes to dipping into their own pockets they are not so forthcoming. Warner has evidence of this, especially from the USA, they they give much less personally than comparable people on the right, especially those of religious commitment.
(He also feels that the Liberal Secularists are not so warm-hearted or generous in spirit.)
If he is right on both scores, is there a reason?
Certainly among the chattering classes, the self-appointed guardians of the morality of others, there is often a conceit, in Hayek's term, which thinks that what the intelligentsia feels is somehow superior to other convictions and must therefore be imposed on lesser mortals.
There is a big pride on the part of those who will construct utopia, and who will broke no deviation or dissension. What is required of them, they have decided, is their intellectual superiority, rather than their personal concern with the "untermenschen". much less their contact with them.
You can have a fine game with committed socialists by suggesting that they set the whole business in motion with a little bit of practical socialism which issues in personal giving and living by their convictions. They will tie themselves in knots, as they try to justify living like the capitalists they despise and ignore the poor they pretend to champion.
It seems that the lefties like to talk, plan, agitate and command others to contribute to good causes, but when it comes to dipping into their own pockets they are not so forthcoming. Warner has evidence of this, especially from the USA, they they give much less personally than comparable people on the right, especially those of religious commitment.
(He also feels that the Liberal Secularists are not so warm-hearted or generous in spirit.)
If he is right on both scores, is there a reason?
Certainly among the chattering classes, the self-appointed guardians of the morality of others, there is often a conceit, in Hayek's term, which thinks that what the intelligentsia feels is somehow superior to other convictions and must therefore be imposed on lesser mortals.
There is a big pride on the part of those who will construct utopia, and who will broke no deviation or dissension. What is required of them, they have decided, is their intellectual superiority, rather than their personal concern with the "untermenschen". much less their contact with them.
You can have a fine game with committed socialists by suggesting that they set the whole business in motion with a little bit of practical socialism which issues in personal giving and living by their convictions. They will tie themselves in knots, as they try to justify living like the capitalists they despise and ignore the poor they pretend to champion.
Has she lost the plot?
Jacqui Smith seems strangely to fail to understand what is happening. In an interview with the Guardian about why she withdrew her half-baked proposal for elections to police supervisory boards, she displayed at best naivety and at worst dishonesty.
According to her the Tories are trying to turn policing into a politcised area, something we would all oppose, I imagine. She claimed that this was the reason why she had not succeeded in getting he proposals through.
Her evidence is firstly that the Tories have brought politics into policing over the Damien Green business. This is strange, as it was her party, the government, that prevented an immediate investigation into what occurred. If this investigation, with cross-party support had gone ahead, we could have known soon whether the Tories were right, that political considerations had dictated the police actions, or whether they were quite wrong, that there were genuine national security issues.
Given what we know already, the police were called in (and instructed to act?) over a national security issue by a senior civil servant acting, at least in broad terms under government instruction to deal with leaks. If there were genuine security issues, this could have been confirmed and an appropriate investigation held.
Secondly, her evidence consists in insisting that Boris Johnson sacked Sir Ian Blair. This in itself is not true, as he had no power to do so. He may have made his opinion clear to Blair, but in theory Blair could have carried on.
What her two points have in common is the concern of the petty tyrant that diktats are not being enforced, but more important it is the attempt to impugn others' motives over something the tyrant is probably guilty of herself. In other words, it is permissible for government to extend its powers in an extra-democratic way, to appoint cronies and scratch their backs or to use the police to threaten members of the opposition, but it is not right for opposition to engage in party politics.
And to be fair to her it does all tie in with he complaint about police reform, but not in the way she suggests. Some of us want democratic control of police, and we are suspicious of Home Office or government control over local forces. This is our chief complaint about the police, and the reason why we are losing respect for them, that they are behaving in a way laid down by London and by political correctness, rather than policing in a way which reflects local needs and wishes.
We would go further than her timid proposals. We would take control of the police away from the Home Secretary, and make the police responsible and accountable to local people. With election of commissioners coming round regularly to prevent politicisation. Above all we would remove control for distant and unknown regional politicians.
According to her the Tories are trying to turn policing into a politcised area, something we would all oppose, I imagine. She claimed that this was the reason why she had not succeeded in getting he proposals through.
Her evidence is firstly that the Tories have brought politics into policing over the Damien Green business. This is strange, as it was her party, the government, that prevented an immediate investigation into what occurred. If this investigation, with cross-party support had gone ahead, we could have known soon whether the Tories were right, that political considerations had dictated the police actions, or whether they were quite wrong, that there were genuine national security issues.
Given what we know already, the police were called in (and instructed to act?) over a national security issue by a senior civil servant acting, at least in broad terms under government instruction to deal with leaks. If there were genuine security issues, this could have been confirmed and an appropriate investigation held.
Secondly, her evidence consists in insisting that Boris Johnson sacked Sir Ian Blair. This in itself is not true, as he had no power to do so. He may have made his opinion clear to Blair, but in theory Blair could have carried on.
What her two points have in common is the concern of the petty tyrant that diktats are not being enforced, but more important it is the attempt to impugn others' motives over something the tyrant is probably guilty of herself. In other words, it is permissible for government to extend its powers in an extra-democratic way, to appoint cronies and scratch their backs or to use the police to threaten members of the opposition, but it is not right for opposition to engage in party politics.
And to be fair to her it does all tie in with he complaint about police reform, but not in the way she suggests. Some of us want democratic control of police, and we are suspicious of Home Office or government control over local forces. This is our chief complaint about the police, and the reason why we are losing respect for them, that they are behaving in a way laid down by London and by political correctness, rather than policing in a way which reflects local needs and wishes.
We would go further than her timid proposals. We would take control of the police away from the Home Secretary, and make the police responsible and accountable to local people. With election of commissioners coming round regularly to prevent politicisation. Above all we would remove control for distant and unknown regional politicians.
Thursday, 18 December 2008
The plight of pensioners
The Daily Telegraph is conducting a campaign seeking to promote the interests of elderly savers.
This morning they released the details about savings incomes for pensioners. In 1996-97 pensioners on average enjoyed an income from savings and investments of £1,920. By 2006-07 this average had dropped to £1,798. (The article did not indicate whether these were before or after tax, nor whether they were constant money values comparisons.)
This may seem a small reduction, but it comes, as G. Brown liked to remind us, over a period of economic growth, when incomes of those in work rose every year.
It is also over a period when the state old age pension has not kept pace with the increases in prices of goods which pensioners buy - energy and food mainly, and well below the increase in council tax.
Recent reductions in base rate by the Bank of England, and expected future reduction, will mean that savings income will fall for most of us. These reductions will be savage for pensioners who have saved all their life to provide something to supplement a disgracefully low state pension.
The message is unfortunate, - do not think that saving will be enough and do not rely on your private or occupational pension as this has been ransacked by the government. We are not saving enough, and this situation will not inspire more saving.
By the way, Harriet Harridan said yesterday that pensioners should be grateful for what the government had done for them in extra fuel allowance. If she is serious, then the increase in fuel allowance does little more than fill the gap in savings income from the fall between 1997 and 2007. I touch my forelock in thanks, Harriet.
This morning they released the details about savings incomes for pensioners. In 1996-97 pensioners on average enjoyed an income from savings and investments of £1,920. By 2006-07 this average had dropped to £1,798. (The article did not indicate whether these were before or after tax, nor whether they were constant money values comparisons.)
This may seem a small reduction, but it comes, as G. Brown liked to remind us, over a period of economic growth, when incomes of those in work rose every year.
It is also over a period when the state old age pension has not kept pace with the increases in prices of goods which pensioners buy - energy and food mainly, and well below the increase in council tax.
Recent reductions in base rate by the Bank of England, and expected future reduction, will mean that savings income will fall for most of us. These reductions will be savage for pensioners who have saved all their life to provide something to supplement a disgracefully low state pension.
The message is unfortunate, - do not think that saving will be enough and do not rely on your private or occupational pension as this has been ransacked by the government. We are not saving enough, and this situation will not inspire more saving.
By the way, Harriet Harridan said yesterday that pensioners should be grateful for what the government had done for them in extra fuel allowance. If she is serious, then the increase in fuel allowance does little more than fill the gap in savings income from the fall between 1997 and 2007. I touch my forelock in thanks, Harriet.
Diktats in a democracy
Over the past few weeks, we have seen the prime-mentalist and cabinet ministers acting like petty dictators, publicly saying to banks and other companies, "If you do not do what we want we shall make you."
So much for a liberal democracy, where laws are generalised, and the government does not interfere in particular cases where there is no illegality!
The most recent case occurred yesterday, in Parliament, when Harriet Harridan declared that if energy companies did not cut their prices to consumers, and treat all customers equally, "..we will change the law to force them to do it."
Of course, it may be all posturing, grubbing a few more votes by trying to be the champion of the voters.
Making law for particular cases, concerning only small numbers of firms, will be bad law. It is yet more evidence that the executive (-the Government) is taking over parliament and acting in a partisan and intrusive way over private citizens. This sounds more like the Socialism of the Nazis or the Communists. We have control bodies who are armed with detailed knowledge about the individual companies they control. If the companies are using their monopoly power illegally, or colluding, it is the control bodies who should be acting, and the force of competition acting to push down prices.
It ill becomes a pumped up politician to threaten in ignorance, even in their own area of responsibility. We must hope that it is mere empty rhetoric, and not meant seriously. Otherwise we really have ceased to be a liberal democracy.
So much for a liberal democracy, where laws are generalised, and the government does not interfere in particular cases where there is no illegality!
The most recent case occurred yesterday, in Parliament, when Harriet Harridan declared that if energy companies did not cut their prices to consumers, and treat all customers equally, "..we will change the law to force them to do it."
Of course, it may be all posturing, grubbing a few more votes by trying to be the champion of the voters.
Making law for particular cases, concerning only small numbers of firms, will be bad law. It is yet more evidence that the executive (-the Government) is taking over parliament and acting in a partisan and intrusive way over private citizens. This sounds more like the Socialism of the Nazis or the Communists. We have control bodies who are armed with detailed knowledge about the individual companies they control. If the companies are using their monopoly power illegally, or colluding, it is the control bodies who should be acting, and the force of competition acting to push down prices.
It ill becomes a pumped up politician to threaten in ignorance, even in their own area of responsibility. We must hope that it is mere empty rhetoric, and not meant seriously. Otherwise we really have ceased to be a liberal democracy.
" We don't want politics in policing..."
Jacqui Smith has called off her plans to permit elections to local Police Boards. At the moment the people who are said to monitor police activities are a mixture of Council appointees (hardly non-political) plus a few outsiders who are mostly unknown to most electors.
The arguments adduced are varied, - that elections could allow political extremists such as the the BNP to have influence, that Boris Johnson showed how a "politician" could remove a police commissioner (appointed by another politician - Jacqui Smith or predecessor). The first argument is specious, we are talking about elections across police areas. If hundreds of thousands of electors permit a few thousand BNP supporters to out-vote them, then indeed our democracy is in a bad way.
Police chiefs are increasingly (party) political, none more so than Sir Ian Blair. Having heard our local chief come out with standard NuLabour speak, and heard something of instructions sent down from the Home Office, our system is politicised.
Who was it decided that police forces had to be reorganised, against the wish of local people, into bigger and more remote forces?Answer - London. Who decides what targets are set, what principles are employed, what resources will be devoted. Answer again, NuLabour.
It took me some time to agree with the Conservative proposals, that local police should be made accountable to those most affected by their activities, by electing a local commissioner for a fixed period before seeking re-election, mostly because it seemed so revolutionary, so American.
It does have the virtue of making everything open, and not hidden by central government, of making the commissioner and police reflect local priorities, and of making change if the commissioner fails.
We are reaching close to a national police force, controlled in London and producing such disappointing results that local people are having less and less respect for the police. This is a frightening prospect, wanted by no-one, but we are sleep walking towards it. If Jacqui Smith's timid proposals have been withdrawn, we need some other change quickly and the Tory proposals are tied and tested in other countries.
The arguments adduced are varied, - that elections could allow political extremists such as the the BNP to have influence, that Boris Johnson showed how a "politician" could remove a police commissioner (appointed by another politician - Jacqui Smith or predecessor). The first argument is specious, we are talking about elections across police areas. If hundreds of thousands of electors permit a few thousand BNP supporters to out-vote them, then indeed our democracy is in a bad way.
Police chiefs are increasingly (party) political, none more so than Sir Ian Blair. Having heard our local chief come out with standard NuLabour speak, and heard something of instructions sent down from the Home Office, our system is politicised.
Who was it decided that police forces had to be reorganised, against the wish of local people, into bigger and more remote forces?Answer - London. Who decides what targets are set, what principles are employed, what resources will be devoted. Answer again, NuLabour.
It took me some time to agree with the Conservative proposals, that local police should be made accountable to those most affected by their activities, by electing a local commissioner for a fixed period before seeking re-election, mostly because it seemed so revolutionary, so American.
It does have the virtue of making everything open, and not hidden by central government, of making the commissioner and police reflect local priorities, and of making change if the commissioner fails.
We are reaching close to a national police force, controlled in London and producing such disappointing results that local people are having less and less respect for the police. This is a frightening prospect, wanted by no-one, but we are sleep walking towards it. If Jacqui Smith's timid proposals have been withdrawn, we need some other change quickly and the Tory proposals are tied and tested in other countries.
There's an obvious solution, then
Figures just released show that in the three months to October the number of people unemployed rose by 137,000, compared with the previous three months.
Surprisingly, or perhaps not, while there were 128,000 fewer people working in the private sector, there were 14,000 more in the public sector. The Government and Councils are playing their part in a time of rising unemployment by mopping up a small part of those made unemployed.
(These are official figures, quoted by the Daily Telegraph, which I am not able to rationalise, at least without further information.)
I could be mischievous, were the subject not so serious, and suggest that the solution is to take all unemployed on to the public payroll, even if future debt would be enormous in extra pensions to be found and in borrowings to pay their salaries now, assuming that those who continue in work cannot or will not pay the extra taxes needed. I wonder if something like this may have crossed the mind of G. Brown as he wrestles with the problem of saving himself and the economy.
It is surprising that employment in the public sector continues to grow at nearly 5,000 per month. If the increase does not stop soon, we shall begin the suspect that G. Brown is going for broke and in the process adopting my light-hearted suggestion.
As a footnote, The Telegraph notes that the 75,000 new claimants for Jobseeker's Allowance in November increased government payments by about £17 million. We can begin to see why the chancellor in the PBR was forecasting huge budget deficits!
Surprisingly, or perhaps not, while there were 128,000 fewer people working in the private sector, there were 14,000 more in the public sector. The Government and Councils are playing their part in a time of rising unemployment by mopping up a small part of those made unemployed.
(These are official figures, quoted by the Daily Telegraph, which I am not able to rationalise, at least without further information.)
I could be mischievous, were the subject not so serious, and suggest that the solution is to take all unemployed on to the public payroll, even if future debt would be enormous in extra pensions to be found and in borrowings to pay their salaries now, assuming that those who continue in work cannot or will not pay the extra taxes needed. I wonder if something like this may have crossed the mind of G. Brown as he wrestles with the problem of saving himself and the economy.
It is surprising that employment in the public sector continues to grow at nearly 5,000 per month. If the increase does not stop soon, we shall begin the suspect that G. Brown is going for broke and in the process adopting my light-hearted suggestion.
As a footnote, The Telegraph notes that the 75,000 new claimants for Jobseeker's Allowance in November increased government payments by about £17 million. We can begin to see why the chancellor in the PBR was forecasting huge budget deficits!
It's in the post...
The government is of a mind to self part of Royal Mail to private (overseas) postal firms.
The Communication Workers Union are threatening to withdraw financial support of the Labour party. Well, I never....
One of the problems with nationalisation is that the unions involved will always have an influence over Labour governments. If strikes don't work, there is always the final sanction to get their way.
Royal Mail is a dinosaur. It may have been denied important investment (in the real sense of the word) over many years, but it is inefficient compared with other postal services, both public and private, its price is too high and its service is poor.
Recent changes have meant that our post arrives any time between 8.00 a.m. and 2.30 p.m.. Post boxes are emptied at times not declared, except the last one, and none on Sundays. The result is that if you miss the 11.00 a.m. collection on Saturday. you might as well wait until nearly tea-time on Monday, unless Monday is a bank holiday in which case you wait until Tuesday.
If it were not a monopoly, which is why it has avoided abolition for years, it would soon end if it did not join the 21st century. Many of us avoid using the service if we can, with e-mails, text messages, faxes and phone calls.
Just about its only argument for continuation is the single price everywhere. I do not share this reason. Why should an isolated hermit, a baron in his castle or someone living on a small remote island pay the same charge as someone who lives in a flat with 50 apartments and letter boxes for all of them at the front door? I think I recall that in some rural communities people have to come into the post office to collect their mail, in which case the principle is already broken - their petrol costs have made the delivery more expensive. The principle is ideological. The principle ought to be that there should be no subsidising of some consumers by others, especially in this case where arguably the poor are subsidising the rich.
The Communication Workers Union are threatening to withdraw financial support of the Labour party. Well, I never....
One of the problems with nationalisation is that the unions involved will always have an influence over Labour governments. If strikes don't work, there is always the final sanction to get their way.
Royal Mail is a dinosaur. It may have been denied important investment (in the real sense of the word) over many years, but it is inefficient compared with other postal services, both public and private, its price is too high and its service is poor.
Recent changes have meant that our post arrives any time between 8.00 a.m. and 2.30 p.m.. Post boxes are emptied at times not declared, except the last one, and none on Sundays. The result is that if you miss the 11.00 a.m. collection on Saturday. you might as well wait until nearly tea-time on Monday, unless Monday is a bank holiday in which case you wait until Tuesday.
If it were not a monopoly, which is why it has avoided abolition for years, it would soon end if it did not join the 21st century. Many of us avoid using the service if we can, with e-mails, text messages, faxes and phone calls.
Just about its only argument for continuation is the single price everywhere. I do not share this reason. Why should an isolated hermit, a baron in his castle or someone living on a small remote island pay the same charge as someone who lives in a flat with 50 apartments and letter boxes for all of them at the front door? I think I recall that in some rural communities people have to come into the post office to collect their mail, in which case the principle is already broken - their petrol costs have made the delivery more expensive. The principle is ideological. The principle ought to be that there should be no subsidising of some consumers by others, especially in this case where arguably the poor are subsidising the rich.
I'm no prophet.....
I knew nothing of the Mandelson talks with the owners of Tata/Jaguar when I argued yesterday against individual and selective intervention and aid to particular firms.
I do not change my mind. Jaguar and Land Rover are now foreign owned firms and hardly vital to the British economy as a whole. Why should they be helped when so many others are not being helped? Is it some kind of perverted national pride?
Or is it that government pride is at stake, or more likely that there are some marginal constituencies in the Birmingham area, where some money would not harm Labour's re-election chances? If I sound cynical, it is probably because Labour has form and such an advantage would be natural to them.
I do not change my mind. Jaguar and Land Rover are now foreign owned firms and hardly vital to the British economy as a whole. Why should they be helped when so many others are not being helped? Is it some kind of perverted national pride?
Or is it that government pride is at stake, or more likely that there are some marginal constituencies in the Birmingham area, where some money would not harm Labour's re-election chances? If I sound cynical, it is probably because Labour has form and such an advantage would be natural to them.
Wednesday, 17 December 2008
Falinge - an example of welfarism
A week ago the Daily Mail reported on the situation in Falinge, with a population of 4,500 and a former thriving mill "town" in the Rochdale area. In recent years it has seen an large influx of immigrants, mainly from Pakistan, and immigrants now make up more than 30% of families.
Falinge was singled out by the newspaper because of the worklessness, - only just over 250 of the inhabitants are gainfully employed, of 1,141 of working age.
Of those of working age 42.9 percent are receiving incapacity benefit, which pays up to £84.50 a week. This is inadequate, and may go some way to explaining why life expectancy in Falinge is 68, the sixth lowest in Britain.
Local employment was predominantly in the textile industry in Victorian times. When the industry went into structural decline earlier last century the are was blighted, but new employment possibilities came with Turner Bros. asbestos factory, which employed about 3,500 in Falinge. This industry failed in the 1980s and welfare dependency mushroomed.
This represents a failure of government in not encouraging new industry as it did in some areas such as Corby and South Wales, and a willingness to allow hundreds to languish on benefit.
There may be other areas with more on incapacity benefit, with low self worth as well as poor health, but Falinge has a high proportion of such potential workers. (It should be said that nationally, according to Ian Duncan Smith, of working age council tenants only about a third have a full time job.)
This is the challenge for the future, to somehow restore some of these people to the dignity and relative wealth of work. It will not be easy in the middle of a recession, despite the government's posturing, but it is urgent. The longer people have been accustomed to a benefit based life, the more difficult and challenging it will be for them to accept the discipline of working.
It will of course also save government expenditure, and therefore taxes levied. The national expenditure on incapacity benefit could be as much as £7 billion a year, which could be very useful in a future destined to be heavy in government debt for many years.
Falinge was singled out by the newspaper because of the worklessness, - only just over 250 of the inhabitants are gainfully employed, of 1,141 of working age.
Of those of working age 42.9 percent are receiving incapacity benefit, which pays up to £84.50 a week. This is inadequate, and may go some way to explaining why life expectancy in Falinge is 68, the sixth lowest in Britain.
Local employment was predominantly in the textile industry in Victorian times. When the industry went into structural decline earlier last century the are was blighted, but new employment possibilities came with Turner Bros. asbestos factory, which employed about 3,500 in Falinge. This industry failed in the 1980s and welfare dependency mushroomed.
This represents a failure of government in not encouraging new industry as it did in some areas such as Corby and South Wales, and a willingness to allow hundreds to languish on benefit.
There may be other areas with more on incapacity benefit, with low self worth as well as poor health, but Falinge has a high proportion of such potential workers. (It should be said that nationally, according to Ian Duncan Smith, of working age council tenants only about a third have a full time job.)
This is the challenge for the future, to somehow restore some of these people to the dignity and relative wealth of work. It will not be easy in the middle of a recession, despite the government's posturing, but it is urgent. The longer people have been accustomed to a benefit based life, the more difficult and challenging it will be for them to accept the discipline of working.
It will of course also save government expenditure, and therefore taxes levied. The national expenditure on incapacity benefit could be as much as £7 billion a year, which could be very useful in a future destined to be heavy in government debt for many years.
Is bigger better?
The Daily Telegraph reported earlier this week, that the number of pupils studying in schools with more than 1,500 on their rolls had increased very rapidly under Zanulabour.
In fact the number attending these schools had increased from 230,66o in 1997 to 493,120 in 2007. This was revealed in a parliamentary answer to a question raised by the Tories. Schools with more than 2,000 pupils increased from just 6 in 1997 to 25 in 2007, and those with 1,500 to 1,999 increased from 132 to 263.
Earlier this year plans were produced for a school in Nottingham to accommodate 3,5000 pupils.
The reasons for these changes include, among others, licence given to successful schools to expand and also merging schools when one or both/all have empty classrooms or spaces, or poor staff-student ratios.
Should we be worried?
Parents seem to favour smaller schools, as less daunting for pupils, more personal in scale and more conducive to study and learning. American evidence suggests that exam performance is better in smaller schools.
There is evidence that behavioual difficulties are more likely in very large schools, because head teachers find it impossible to know all pupils. There is strong evidence that expulsions are proportionately higher, indeed that they declining in smaller schools and increasing in larger ones.
Is it inevitable? In a word, "Yes!" Even in the absence of adjustments because of declining numbers in some catchment areas or schools, and the "need" to merge schools because staff-student ratios are inefficient, the nature of education, especially at the secondary level, indicates that schools will become larger.
The commitment to comprehensive education, supported by the Labour party, and tacitly by the Conservatives in advocating academies, means that each secondary school will need to cater for all abilities and all interests.
Many large comprehensives are already having to hold classes outside the normal teaching day because the number of timetable slots in a week does not permit a full timetable with perhaps as many as 15 subjects in a year, and students being in different ability levels in their various subjects. Alternatively students may be required to travel to other schools to take subjects which cannot be offered ato them at their own school.
The raising of the school leaving age to 18, which is in the pipeline, and the addition of extra qualifications such as diplomas on top of academic qualifications and other vocational qualifications, will reinforce the tendency.
What is happening in some schools is that horizontal divisions are being made. Some were made specialised sixth form colleges, although this may be reversed with the school leaving age being raised. In other situations horizontal divisions are practiced, with upper, middle and lower schools under one roof or on different campuses.
Schools are rightly trying to cater for students of different abilities by vertical streaming, which has probably contributed to larger schools and will continue to do so with more subjects at more levels and qualifications.
The reason for the apparent greater success of grammar schools, against which all but parents seem to have turned, could well be their usually smaller size and greater homogeneity. The logical conclusion to some is that separation is the solutions to all the problems of size, but "selection" is the evil word. This may be because in the past selection was undertaken by a test or tests in the final year of junior school. This does not have to be the case. The Germans have operated a selective educational system that is not bi-polar as it was here. They have used weighted results of achievements throughout the junior school, rather than the single pass-or-fail eleven plus we used.
In fact the number attending these schools had increased from 230,66o in 1997 to 493,120 in 2007. This was revealed in a parliamentary answer to a question raised by the Tories. Schools with more than 2,000 pupils increased from just 6 in 1997 to 25 in 2007, and those with 1,500 to 1,999 increased from 132 to 263.
Earlier this year plans were produced for a school in Nottingham to accommodate 3,5000 pupils.
The reasons for these changes include, among others, licence given to successful schools to expand and also merging schools when one or both/all have empty classrooms or spaces, or poor staff-student ratios.
Should we be worried?
Parents seem to favour smaller schools, as less daunting for pupils, more personal in scale and more conducive to study and learning. American evidence suggests that exam performance is better in smaller schools.
There is evidence that behavioual difficulties are more likely in very large schools, because head teachers find it impossible to know all pupils. There is strong evidence that expulsions are proportionately higher, indeed that they declining in smaller schools and increasing in larger ones.
Is it inevitable? In a word, "Yes!" Even in the absence of adjustments because of declining numbers in some catchment areas or schools, and the "need" to merge schools because staff-student ratios are inefficient, the nature of education, especially at the secondary level, indicates that schools will become larger.
The commitment to comprehensive education, supported by the Labour party, and tacitly by the Conservatives in advocating academies, means that each secondary school will need to cater for all abilities and all interests.
Many large comprehensives are already having to hold classes outside the normal teaching day because the number of timetable slots in a week does not permit a full timetable with perhaps as many as 15 subjects in a year, and students being in different ability levels in their various subjects. Alternatively students may be required to travel to other schools to take subjects which cannot be offered ato them at their own school.
The raising of the school leaving age to 18, which is in the pipeline, and the addition of extra qualifications such as diplomas on top of academic qualifications and other vocational qualifications, will reinforce the tendency.
What is happening in some schools is that horizontal divisions are being made. Some were made specialised sixth form colleges, although this may be reversed with the school leaving age being raised. In other situations horizontal divisions are practiced, with upper, middle and lower schools under one roof or on different campuses.
Schools are rightly trying to cater for students of different abilities by vertical streaming, which has probably contributed to larger schools and will continue to do so with more subjects at more levels and qualifications.
The reason for the apparent greater success of grammar schools, against which all but parents seem to have turned, could well be their usually smaller size and greater homogeneity. The logical conclusion to some is that separation is the solutions to all the problems of size, but "selection" is the evil word. This may be because in the past selection was undertaken by a test or tests in the final year of junior school. This does not have to be the case. The Germans have operated a selective educational system that is not bi-polar as it was here. They have used weighted results of achievements throughout the junior school, rather than the single pass-or-fail eleven plus we used.
Picking winners
We have been told for a week or two that Lord Mandelson has been compiling a list of UK companies that must not be allowed to go under during the recession.
The pressure will be on, with all sorts of special pleading,- not least size of workforce involved, for the government to rescue particular industries or companies. The Trade Unions are already protesting about job losses at the Royal Mail, which is now so inefficient that the only way to keep it in the public sector is to sell a large part of it outside!
The US Senate vetoed a bail-out for the dying US motor industry which had been cobbled together by President and Congress. Are we to expect something here? Is there anyone who could veto such schemes?
There are a number of reasons for thinking that in the absence of genuinely special reasons, the government should think long and hard about this, to ignore the siren voices of unions and bosses. It is very tempting to think that promoting some and allowing others to die is a part of the their "lever-pulling", god-given responsibility.
1) "If you give it to some, others will want it" is an argument in the political and not economic sphere, and such considerations will be at best short term fixes with possible long term disasters.
2) Governments generally are very poor at picking winners and losers. The decisions will be made by ministers, civil servants and advisers who have often not been within a mile of the real world, let alone run a company. The past is littered liberally with failures promoted by the government - British Leyland, for instances, and others that got away - linear motors and hover trains, to name one out of hundreds.
3) The market is a delicate instrument, with all sorts of unpredictable consequences. It is also cruel, bringing death and destruction when buyers decide they no longer want to buy that product or brand. There is a "creative destruction", and to try beat the market will prevent the marketing adjusting resources in the right way. There is a mechanism, a little like natural selection in biology, whereby the weak fail and have to be re-born in some other form, both human and other resources. This is why nationalised industries become ossified in virtually every case, as they are insulated from the creative destruction. Woolworths could have been saved, and we shall miss it, but it had clearly lost its way, and other people should now be entrusted with the resources involved.
This is not to say that the government should do nothing, merely that individual and specific intervention and interference will often do more harm than good in the long run. By all means conduct policies which will be of benefit to all, but may not be sufficient for some, but to act "like God", is really beyond the competence of government.
4) To the extent that finance is found to bail-out the industries or companies favoured by Mandy or others, there will less available for other industries and they may go to the wall, for political rather than economic reasons. The will be "crowded out".
5) Bailing out could cause a "moral hazard" to result. If failures are rewarded by government support, then reckless behaviour and carelessness are rewarded. This is not the message to send out in avery competitive international world.
The pressure will be on, with all sorts of special pleading,- not least size of workforce involved, for the government to rescue particular industries or companies. The Trade Unions are already protesting about job losses at the Royal Mail, which is now so inefficient that the only way to keep it in the public sector is to sell a large part of it outside!
The US Senate vetoed a bail-out for the dying US motor industry which had been cobbled together by President and Congress. Are we to expect something here? Is there anyone who could veto such schemes?
There are a number of reasons for thinking that in the absence of genuinely special reasons, the government should think long and hard about this, to ignore the siren voices of unions and bosses. It is very tempting to think that promoting some and allowing others to die is a part of the their "lever-pulling", god-given responsibility.
1) "If you give it to some, others will want it" is an argument in the political and not economic sphere, and such considerations will be at best short term fixes with possible long term disasters.
2) Governments generally are very poor at picking winners and losers. The decisions will be made by ministers, civil servants and advisers who have often not been within a mile of the real world, let alone run a company. The past is littered liberally with failures promoted by the government - British Leyland, for instances, and others that got away - linear motors and hover trains, to name one out of hundreds.
3) The market is a delicate instrument, with all sorts of unpredictable consequences. It is also cruel, bringing death and destruction when buyers decide they no longer want to buy that product or brand. There is a "creative destruction", and to try beat the market will prevent the marketing adjusting resources in the right way. There is a mechanism, a little like natural selection in biology, whereby the weak fail and have to be re-born in some other form, both human and other resources. This is why nationalised industries become ossified in virtually every case, as they are insulated from the creative destruction. Woolworths could have been saved, and we shall miss it, but it had clearly lost its way, and other people should now be entrusted with the resources involved.
This is not to say that the government should do nothing, merely that individual and specific intervention and interference will often do more harm than good in the long run. By all means conduct policies which will be of benefit to all, but may not be sufficient for some, but to act "like God", is really beyond the competence of government.
4) To the extent that finance is found to bail-out the industries or companies favoured by Mandy or others, there will less available for other industries and they may go to the wall, for political rather than economic reasons. The will be "crowded out".
5) Bailing out could cause a "moral hazard" to result. If failures are rewarded by government support, then reckless behaviour and carelessness are rewarded. This is not the message to send out in avery competitive international world.
Saturday, 13 December 2008
Two for some, none for others
The Irish had a referendum on the Lisbon Constitution/Treaty, and they rejected it fairly dramatically. Now they are to be "allowed" to vote again, having been offered concessions not offered to the remaining 26 countries.
What happens if they say "No" again? Will they be offered more concessions, and will other countries demand the right to these concessions? Or is their "Yes", mostly by their politicians rather than the people themselves, final in the way the Irish "No" was not?
Most of all, how is it that the Irish can have two referenda, while we cannot even have one?
What happens if they say "No" again? Will they be offered more concessions, and will other countries demand the right to these concessions? Or is their "Yes", mostly by their politicians rather than the people themselves, final in the way the Irish "No" was not?
Most of all, how is it that the Irish can have two referenda, while we cannot even have one?
No time or no desire?
One of the amazing things about parliament recently is that apart from the PBR by the Chancellor, and PMQ by Cameron, there has been an almost complete absence of discussion in parliament about our economic predicament.
Why is this? The Prime Mentalist condemns others for not being bi-partisan in such important moments (- he doesn't really want them to be, he wants them to acquiesce in ideas which he and his henchmen have produced privately to save the world), and yet he denies them the opportunity to discuss the matters.
It's all the more strange when there is so much time available. MPs are soon to be on a 24 day recess, the Queen's Speech was short on new policies and they have already announced the shortest sitting year for a long time if not ever.
The executive seems to be working hard to come up with new wheezes (or usually half-baked versions of Tory policies) but ordinary MPs have little to occupy their time in Westminster.
Is the explanation that he needs the opposition to be identified with his policies in case they do not work, but he must have the credit if they succeed? He has staked everything on presenting himself as the economic wizard.
Why is this? The Prime Mentalist condemns others for not being bi-partisan in such important moments (- he doesn't really want them to be, he wants them to acquiesce in ideas which he and his henchmen have produced privately to save the world), and yet he denies them the opportunity to discuss the matters.
It's all the more strange when there is so much time available. MPs are soon to be on a 24 day recess, the Queen's Speech was short on new policies and they have already announced the shortest sitting year for a long time if not ever.
The executive seems to be working hard to come up with new wheezes (or usually half-baked versions of Tory policies) but ordinary MPs have little to occupy their time in Westminster.
Is the explanation that he needs the opposition to be identified with his policies in case they do not work, but he must have the credit if they succeed? He has staked everything on presenting himself as the economic wizard.
Friday, 12 December 2008
Confused? They are!
They here refers to the Saviour of the World and also the Council for Mortgage Lenders, although it is the confusion of the first which has caused confusion for the latter.
I quote the Director-General of the Council of Lenders:
"Current policy objectives are conflicting and incoherent. The Government needs to decide on its key priority."
You would think, from all the jumping up and down by the government that its central priority is to encourage greater lending to house owners/buyers and to business.
The Director-General explains. "To different degrees lenders are facing conflicting pressures to recapitalise against possible future losses, service government shareholdings at 12%, pay a premium to access the Bank of England Special Liquidity Scheme, show forbearance to borrowers in arrears, follow base rates down to help their existing customers, keep savings rates high in support of existing savers, and provide competitive rates to new borrowers and savers to maintain economic activity in a recession."
As if this were not enough, the D-G continues, "And they are supposed to ensure their long term financial stability to help the UK economy rebuild itself when we are out of the recession. "
The conclusion is, "The tug of war with lenders being pulled in every direction at once needs to end."
The complaint echoes the words of Angela Knight, the spokesperson for the Bankers, whom I referred to a week or two ago,
The government is desperate, having encouraged and created the mountain of private and public debt, dithered over Nothern Rock the fist apparent casualty, its failure stands ready to be revealed. Perhaps the plunge of sterling is a sign that foreigners recognize what the government cannot or will not admit.
In any event it is no good brow-beating the lenders for not lending enough, when they are already lending as much as they did in 2007, or cheaply enough after base rate cuts, when they have increased the banks costs.
The banks, if they are to avoid becoming illiquid again, must build up reserves, pay extortionately to service debts to the government and also repay the debts, and all this at a time when private deposits are inadequate to cover lending and interbank lending is still hesitant through fear of more off-balance sheet rubbish assets. The shareholders, including pension funds, who are innocent and in many cases rely on dividend income, must suffer and wait. There is no government sympathy for them.
Superman must decide what he wants the banks to do. He has made the mess by throwing confusion into the regulatory system and running up great debts in prosperous times. Making the lenders jump through conflicting hoops really does not help very much.
Unless his objective is to pass the buck and claim that someone else is really the guilty party?
I quote the Director-General of the Council of Lenders:
"Current policy objectives are conflicting and incoherent. The Government needs to decide on its key priority."
You would think, from all the jumping up and down by the government that its central priority is to encourage greater lending to house owners/buyers and to business.
The Director-General explains. "To different degrees lenders are facing conflicting pressures to recapitalise against possible future losses, service government shareholdings at 12%, pay a premium to access the Bank of England Special Liquidity Scheme, show forbearance to borrowers in arrears, follow base rates down to help their existing customers, keep savings rates high in support of existing savers, and provide competitive rates to new borrowers and savers to maintain economic activity in a recession."
As if this were not enough, the D-G continues, "And they are supposed to ensure their long term financial stability to help the UK economy rebuild itself when we are out of the recession. "
The conclusion is, "The tug of war with lenders being pulled in every direction at once needs to end."
The complaint echoes the words of Angela Knight, the spokesperson for the Bankers, whom I referred to a week or two ago,
The government is desperate, having encouraged and created the mountain of private and public debt, dithered over Nothern Rock the fist apparent casualty, its failure stands ready to be revealed. Perhaps the plunge of sterling is a sign that foreigners recognize what the government cannot or will not admit.
In any event it is no good brow-beating the lenders for not lending enough, when they are already lending as much as they did in 2007, or cheaply enough after base rate cuts, when they have increased the banks costs.
The banks, if they are to avoid becoming illiquid again, must build up reserves, pay extortionately to service debts to the government and also repay the debts, and all this at a time when private deposits are inadequate to cover lending and interbank lending is still hesitant through fear of more off-balance sheet rubbish assets. The shareholders, including pension funds, who are innocent and in many cases rely on dividend income, must suffer and wait. There is no government sympathy for them.
Superman must decide what he wants the banks to do. He has made the mess by throwing confusion into the regulatory system and running up great debts in prosperous times. Making the lenders jump through conflicting hoops really does not help very much.
Unless his objective is to pass the buck and claim that someone else is really the guilty party?
Thursday, 11 December 2008
Purnell, just the latest
He has not just pinched the Tories' policy, apparently, but James Purnell is getting tough!
Those on benefit who could work, must work, or benefit will be withheld.
It differs from the Tory policy in being merely older policies, with stick but no real insight. How are people, who have followed their workless parents and even grandparents, supposed to seek jobs or improve themselves? David Green of Civitas suspects that they will quickly learn to go through the motions and re-jig their CVs. In the main they are unqualified, totally unacquainted with the working situation and not used to having colleagues.
If they find work, and it is hard, how long will they survive?
The Tory policy did at least offer the prospect of mentoring, - personal contact to help and encourage possible applicants from their starting position. It will be hard and time consuming, but they need more than a simple stick with which to beat them.
There is a problem, which everybody admits, and it's good to see Nulabour at last throwing away cherished beliefs and confronting the problem. My major doubt is about a lack of ideas to deal with long and deep-seated problems. The policy needs to be part of a long-term solution which includes also the effectiveness fo schooling to make sure that another generation does not find itself on the scrapheap.
Nor is the present time a good one to be pushing them to look for work, when hundreds of thousands of newly unemployed will also be looking for work, any work, to keep their home and family together, and when there will be virtually no jobs available for unskilled people. (They will not be up to being "Equality Officers" or "Policy Processing Officers", or thousands of other non-jobs which used to be advertised weekly in the Guardian.
So is the announcement now merely window dressing, likely the equally ineffective VAT reduction or the minuscule loan guarantee fund, with an election in prospect. Or is James Purnell being groomed to be the next leader?
Those on benefit who could work, must work, or benefit will be withheld.
It differs from the Tory policy in being merely older policies, with stick but no real insight. How are people, who have followed their workless parents and even grandparents, supposed to seek jobs or improve themselves? David Green of Civitas suspects that they will quickly learn to go through the motions and re-jig their CVs. In the main they are unqualified, totally unacquainted with the working situation and not used to having colleagues.
If they find work, and it is hard, how long will they survive?
The Tory policy did at least offer the prospect of mentoring, - personal contact to help and encourage possible applicants from their starting position. It will be hard and time consuming, but they need more than a simple stick with which to beat them.
There is a problem, which everybody admits, and it's good to see Nulabour at last throwing away cherished beliefs and confronting the problem. My major doubt is about a lack of ideas to deal with long and deep-seated problems. The policy needs to be part of a long-term solution which includes also the effectiveness fo schooling to make sure that another generation does not find itself on the scrapheap.
Nor is the present time a good one to be pushing them to look for work, when hundreds of thousands of newly unemployed will also be looking for work, any work, to keep their home and family together, and when there will be virtually no jobs available for unskilled people. (They will not be up to being "Equality Officers" or "Policy Processing Officers", or thousands of other non-jobs which used to be advertised weekly in the Guardian.
So is the announcement now merely window dressing, likely the equally ineffective VAT reduction or the minuscule loan guarantee fund, with an election in prospect. Or is James Purnell being groomed to be the next leader?
Wednesday, 10 December 2008
The cradle of democracy
Greece is having its turmoils. The young, who regard as a rite of passage, are revolting in the streets. The anarchists are joining them with looting supporters.
On top of this the trade unions are calling a massive strike and demonstration.
The leader of the pan-hellenic socialists, whom the BBC seem to regard as some kind of saviour, at least in giving him lengthy periods to expound his thoughts and criticisms, is calling for the government to be brought down. He wants a new government, presumably run by him or one of his colleagues, to represent the people. He speaks of fraud and other failings of the government.
I do not support the government, mainly because I know nothing about them. On the other hand it is not democracy but anarchy to try to replace by direct action a democratically elected government which has not exceeded is term. The chief complaint seems to be that Greece is suffering from the recession, which according to Gordon Brown we must call global.
You can dress it up as you want, call it "the people" acting, but there are more democratic means at the disposal of the electorate, including exposure and legal redress if there has been fraud.
The essence of democracy is that the government reflects the wish of majority, not the noisiest or most troublesome section, and that the total electorate has the power to oust them because of failure when next there is an election.
Rabble-rousers and even opposition leaders who have a vested interest in harming the sitting government can easily claim to speak for the people when there has been no election. Democracy relies on all accepting the results of properly conducted elections, and not trying to undo the result because they do not like what the government does. Their time will come after a few years when the next election is held, always supposing that they can persuade enough electors to support their cause.
On top of this the trade unions are calling a massive strike and demonstration.
The leader of the pan-hellenic socialists, whom the BBC seem to regard as some kind of saviour, at least in giving him lengthy periods to expound his thoughts and criticisms, is calling for the government to be brought down. He wants a new government, presumably run by him or one of his colleagues, to represent the people. He speaks of fraud and other failings of the government.
I do not support the government, mainly because I know nothing about them. On the other hand it is not democracy but anarchy to try to replace by direct action a democratically elected government which has not exceeded is term. The chief complaint seems to be that Greece is suffering from the recession, which according to Gordon Brown we must call global.
You can dress it up as you want, call it "the people" acting, but there are more democratic means at the disposal of the electorate, including exposure and legal redress if there has been fraud.
The essence of democracy is that the government reflects the wish of majority, not the noisiest or most troublesome section, and that the total electorate has the power to oust them because of failure when next there is an election.
Rabble-rousers and even opposition leaders who have a vested interest in harming the sitting government can easily claim to speak for the people when there has been no election. Democracy relies on all accepting the results of properly conducted elections, and not trying to undo the result because they do not like what the government does. Their time will come after a few years when the next election is held, always supposing that they can persuade enough electors to support their cause.
Tuesday, 9 December 2008
The whips, the whips
Yesterday again we saw the elective dictatorship at work again, reinforced by the activity of the government whips.
Large parts of the government benches were empty during the debate, as far as it was a debate, only for labour members to reappear dutifully and vote as instructed when it was put to the vote.
Despite the fact that the issue was for parliamentarians generally and not apparently for the government, and that such arguments offered by the government were generally demolished, the whips effectively won the situation for the government. It took great courage by the 37 labour rebels to defy their whips.
What was at issue was the rights of all MPs, including putting into writing many rights which have been assumed from tradition. We can only assume that the government in its attempt to prevent this has something to conceal, and think ill of them for this.
Large parts of the government benches were empty during the debate, as far as it was a debate, only for labour members to reappear dutifully and vote as instructed when it was put to the vote.
Despite the fact that the issue was for parliamentarians generally and not apparently for the government, and that such arguments offered by the government were generally demolished, the whips effectively won the situation for the government. It took great courage by the 37 labour rebels to defy their whips.
What was at issue was the rights of all MPs, including putting into writing many rights which have been assumed from tradition. We can only assume that the government in its attempt to prevent this has something to conceal, and think ill of them for this.
Parliament v Government
Yesterday's debate on the Damien Green affair was intended by the government to achieve three things:
1) Avoid a discussion of the speaker and his failings - the government does not want a by-election in Glasgow at the present time, as he would have to be "kicked upstairs".
2) Limit discussion to three hours, to minimise embarrassment
3) Head off a free, not government-controlled investigation and not one under the Speaker's chairmanship. By this means they could control the agenda and progress, and cover up what they want concealed. Most important, they could delay almost indefinitely until the whole affair was forgotten by most members.
In the event they achieved the first two completely, - the opposition parties even "soft soaping" the speaker in complementing him on his original proposals. The third objective they also seemed to have achieved narrowly, with 37 labour MPs voting against their whips instructions. If the Ulster Unionists of various kinds and LibDems had been fully present the government would have lost. But this is history now.
Subsequently two things have happened, however which snatch victory from the government.
a) The LibDems and Tories have stated that they will not take part in the mockery suggested by the government, so it is effectively dead.
b) The Home Affairs Committee under the chairmanship of Keith Vaz, - one of the Labour rebels yesterday, has decided to hold their own enquiry. There were murmurings about this before yesterday's travesty. It will have a labour majority and labour chairman, but it has power to summon people involved and put them under oath, - police, ministers, civil servants. They should be able to ask pertinent questions. If the government tries to stultify its progress, committee members from opposition parties will be able to publish a dissenting report or otherwise publicise shenanigans.
The end result is that we have a police investigation into the police under a chairman who is from the Met previously, (and who may be a candidate?). This will have a check via the findings of the public Affairs Committee. Not ideal but, given the government's concern to override the House of Commons, perhaps the best we could hope for.
1) Avoid a discussion of the speaker and his failings - the government does not want a by-election in Glasgow at the present time, as he would have to be "kicked upstairs".
2) Limit discussion to three hours, to minimise embarrassment
3) Head off a free, not government-controlled investigation and not one under the Speaker's chairmanship. By this means they could control the agenda and progress, and cover up what they want concealed. Most important, they could delay almost indefinitely until the whole affair was forgotten by most members.
In the event they achieved the first two completely, - the opposition parties even "soft soaping" the speaker in complementing him on his original proposals. The third objective they also seemed to have achieved narrowly, with 37 labour MPs voting against their whips instructions. If the Ulster Unionists of various kinds and LibDems had been fully present the government would have lost. But this is history now.
Subsequently two things have happened, however which snatch victory from the government.
a) The LibDems and Tories have stated that they will not take part in the mockery suggested by the government, so it is effectively dead.
b) The Home Affairs Committee under the chairmanship of Keith Vaz, - one of the Labour rebels yesterday, has decided to hold their own enquiry. There were murmurings about this before yesterday's travesty. It will have a labour majority and labour chairman, but it has power to summon people involved and put them under oath, - police, ministers, civil servants. They should be able to ask pertinent questions. If the government tries to stultify its progress, committee members from opposition parties will be able to publish a dissenting report or otherwise publicise shenanigans.
The end result is that we have a police investigation into the police under a chairman who is from the Met previously, (and who may be a candidate?). This will have a check via the findings of the public Affairs Committee. Not ideal but, given the government's concern to override the House of Commons, perhaps the best we could hope for.
An early election?
To judge from the statements today by Cameron and Spelman, the Conservatives are preparing for a general election early in the new year. The latter actually said today that they were ready, although as they have recently closed their Coleshill campaign centre, could this be bluff or gamesmanship?
Recently for reasons that I cannot explain Brown Central has considerably narrowed the gap in the polls, the reason being that voters seem to like the splurge-now, pay-later economic policies. (The rational explanation seems to be, "If I can save my home, my job or my business at the cost of everyone paying more tax, then I'll grasp it.")
The other reason for an early election is that things will probably get much worse before they get better, and there will be fewer people able to say "If I can save my home, my job or my business..." and more who will angrily say "He's cost me my home, job, business."
Cameron and company have effectively boxed themselves in, which may be right or wrong, but it means that Brown will be able to dance around offering all sorts of inducements as he goes for broke. Cameron may win the moral ground but not enough votes.
So it may be a race. If the polls continue to show Zanulabour close to or even in front of the Tories, then Brown will face the dilemma he faced in Autumn 2007 - should he go for an election which he could lose, or hang on in the hope that something will turn up? He is a ditherer, but those around him may point out what I have been saying, - "If you offer a few more goodies, enough people will buy them. Let the future look after itself. In the meantime the longer you delay an election the greater the number of repossessions and business failures and the higher the level of unemployment."
To judge from polls this autumn, people seem to prefer Brown to solve this crisis, but Cameron to put things right in the long run. This ambiguity may suggest that a hung parliament might result from an early election, whichever party wins the greatest number of seats. Some may feel that this is what we shall need to deal with the aftermath of the recession, with the elimination of policy excesses in any direction and consensual government resulting. This would be a new opportunity for politicians. Whether they would rise to it is another matter.
Recently for reasons that I cannot explain Brown Central has considerably narrowed the gap in the polls, the reason being that voters seem to like the splurge-now, pay-later economic policies. (The rational explanation seems to be, "If I can save my home, my job or my business at the cost of everyone paying more tax, then I'll grasp it.")
The other reason for an early election is that things will probably get much worse before they get better, and there will be fewer people able to say "If I can save my home, my job or my business..." and more who will angrily say "He's cost me my home, job, business."
Cameron and company have effectively boxed themselves in, which may be right or wrong, but it means that Brown will be able to dance around offering all sorts of inducements as he goes for broke. Cameron may win the moral ground but not enough votes.
So it may be a race. If the polls continue to show Zanulabour close to or even in front of the Tories, then Brown will face the dilemma he faced in Autumn 2007 - should he go for an election which he could lose, or hang on in the hope that something will turn up? He is a ditherer, but those around him may point out what I have been saying, - "If you offer a few more goodies, enough people will buy them. Let the future look after itself. In the meantime the longer you delay an election the greater the number of repossessions and business failures and the higher the level of unemployment."
To judge from polls this autumn, people seem to prefer Brown to solve this crisis, but Cameron to put things right in the long run. This ambiguity may suggest that a hung parliament might result from an early election, whichever party wins the greatest number of seats. Some may feel that this is what we shall need to deal with the aftermath of the recession, with the elimination of policy excesses in any direction and consensual government resulting. This would be a new opportunity for politicians. Whether they would rise to it is another matter.
Monday, 8 December 2008
Give them credit for trying, but....
Ed Balls the children's minister has responded to disquiet over the Baby P and Shannon Matthew cases, among others, by arranging that people involved must undergo further training and/or experience.
So in future social workers will have to spend time in a school to see what dysfunctional children look like, and headteachers may have to travel in the other direction.
This could make a difference to school age children who are badly treated and who are not able to articulate to others what has happened to them, but will do little for pre-school children like Baby P.
What Balls and others do not notice, or are not willing to admit, is that these new policies are merely scratching the surface of the problem, mere gestures.
The real problems are two-fold:
1) There are many dysfunctional families, living in sink estates on benefit, and with a succession of fathers or none. These are the broken society to which Balls is applying a sticking plaster. The only real solution is much wider and deeper, as diagnosed by Ian Duncan Smith.
2) The fault is in the system, with overloaded social workers having to spend too much time in ticking boxes and back-covering, and the ideology which pervades the whole area and turns keen and well intentioned entrants into bureaucratic pawns. The system will be ineffective as long as it is subject to the politically correct, centrally controlled, ideologically driven bureaucracy it has become.
So in future social workers will have to spend time in a school to see what dysfunctional children look like, and headteachers may have to travel in the other direction.
This could make a difference to school age children who are badly treated and who are not able to articulate to others what has happened to them, but will do little for pre-school children like Baby P.
What Balls and others do not notice, or are not willing to admit, is that these new policies are merely scratching the surface of the problem, mere gestures.
The real problems are two-fold:
1) There are many dysfunctional families, living in sink estates on benefit, and with a succession of fathers or none. These are the broken society to which Balls is applying a sticking plaster. The only real solution is much wider and deeper, as diagnosed by Ian Duncan Smith.
2) The fault is in the system, with overloaded social workers having to spend too much time in ticking boxes and back-covering, and the ideology which pervades the whole area and turns keen and well intentioned entrants into bureaucratic pawns. The system will be ineffective as long as it is subject to the politically correct, centrally controlled, ideologically driven bureaucracy it has become.
Friday, 5 December 2008
What about us savers?
Yesterday's cut in base rate somewhat surprised bankers, who hadn't realised that discussions with the government were over and agreed. The response to the cut has been mixed, with some banks including those partly nationalised indicating that they will not be cutting their lending rates by the full 1% .
The difficulties facing the banks and other lenders are mainly twofold:
1) The bulk of their funds to back lending comes from the wholesale market, that is from other financial institutions. The problem here is that there is so much suspicion and mistrust that their rates (especially Libor) are well above base rate because of present circumstances. These rates are also obdurately refusing to go down with any speed. It is no good the government shouting at the banks and berating their failure to reduce rates greatly.
2) A major reason which has driven lenders into the wholesale market is that personal savings deposits have dried up. Traditionally mortgages have been composed of "small" deposits of many people bundled together to provide mortgages for relatively few. For many years the system worked well and lenders made their profit and covered their costs from the margin between the lower rate they paid depositors and the slightly higher rate they charged borrowers.
The problem has arisen because during the last 10 years we have saved progressively smaller and smaller amounts of our income. On the contrary, we have collectively overspent and accumulated large debts. At the beginning of the Brown/Blair reign the ratio of savings to income was approaching 10%. Now it is about 2%. The result is that progressively lenders have been driven into the wholesale market to borrow money to lend to customers. This was the undoing of Northern Rock.
We now have, to finally reach the title of this post, a situation where the necessary virtue of saving is not being helped, with rates of return at the moment well below the level of inflation in many cases after tax.
The cut in base rate, which the Tories had been advocating and which Brown has adopted, thus sends out an unfortunate message. It discourages saving at a time when it should be maintained or even increased. (Brown could argue, with some justification in the very short run possibly, that businesses which do not pass on his VAT reduction and consumers who receive the benefit from those which do, will discourage extra saving because of its poor return. Against this could be argued that much will merely be put to reducing debts.)
There is another factor. Many savers had put away savings over a number of years, in order to acquire a pot to bring them extra comforts in retirement. In some cases pensions are so poor that this savings pot is vital to supplement their pension. Now it is losing its real (after tax) value. Their pot is losing value and their regular withdrawals of interest will be worth less. They will have to tighten their belts even further, especially the elderly who have faced the highest effective inflation rate over the past 5 years.
So the question is, why should mortgagees be benefited, when they have in some cases gambled beyond their means in an expensive housing market, at the expense of savers? The latter may not lose their home, but many of them rely on savings income. They will be driven into state benefit or else reduce their spending wherever they can, neither of which will help the government's debt problem or recovery. It should be remembered that there are many more savers than borrowers, something like six times as many.
Brown got his headline, and may even succeed in bouncing the banks reluctantly into reducing their income. What effect this will all have in the desire to promote spending and recovery is very unclear.
The difficulties facing the banks and other lenders are mainly twofold:
1) The bulk of their funds to back lending comes from the wholesale market, that is from other financial institutions. The problem here is that there is so much suspicion and mistrust that their rates (especially Libor) are well above base rate because of present circumstances. These rates are also obdurately refusing to go down with any speed. It is no good the government shouting at the banks and berating their failure to reduce rates greatly.
2) A major reason which has driven lenders into the wholesale market is that personal savings deposits have dried up. Traditionally mortgages have been composed of "small" deposits of many people bundled together to provide mortgages for relatively few. For many years the system worked well and lenders made their profit and covered their costs from the margin between the lower rate they paid depositors and the slightly higher rate they charged borrowers.
The problem has arisen because during the last 10 years we have saved progressively smaller and smaller amounts of our income. On the contrary, we have collectively overspent and accumulated large debts. At the beginning of the Brown/Blair reign the ratio of savings to income was approaching 10%. Now it is about 2%. The result is that progressively lenders have been driven into the wholesale market to borrow money to lend to customers. This was the undoing of Northern Rock.
We now have, to finally reach the title of this post, a situation where the necessary virtue of saving is not being helped, with rates of return at the moment well below the level of inflation in many cases after tax.
The cut in base rate, which the Tories had been advocating and which Brown has adopted, thus sends out an unfortunate message. It discourages saving at a time when it should be maintained or even increased. (Brown could argue, with some justification in the very short run possibly, that businesses which do not pass on his VAT reduction and consumers who receive the benefit from those which do, will discourage extra saving because of its poor return. Against this could be argued that much will merely be put to reducing debts.)
There is another factor. Many savers had put away savings over a number of years, in order to acquire a pot to bring them extra comforts in retirement. In some cases pensions are so poor that this savings pot is vital to supplement their pension. Now it is losing its real (after tax) value. Their pot is losing value and their regular withdrawals of interest will be worth less. They will have to tighten their belts even further, especially the elderly who have faced the highest effective inflation rate over the past 5 years.
So the question is, why should mortgagees be benefited, when they have in some cases gambled beyond their means in an expensive housing market, at the expense of savers? The latter may not lose their home, but many of them rely on savings income. They will be driven into state benefit or else reduce their spending wherever they can, neither of which will help the government's debt problem or recovery. It should be remembered that there are many more savers than borrowers, something like six times as many.
Brown got his headline, and may even succeed in bouncing the banks reluctantly into reducing their income. What effect this will all have in the desire to promote spending and recovery is very unclear.
Thursday, 4 December 2008
Control versus openness
As if we do not have enough regulation already, it seems that all enterprises are to have more in the future. This applies especially to the banks, even after they have paid back the money they borrowed from the government.
There are two broad ways of preventing banking failure.
The first is to have a vast army of regulators with great powers clambering over every facet of the banks' activities. This may prevent (- it hasn't in the recent past) future banking lapses, but the costs are enormous, both on the regulator's side and on compliance by the banks. An unknown cost is the inefficiencies introduced and also the introduction of social objectives in place of commercial ones. Social policy is the area of government, efficient and profitable banking is the commercial objective. To confuse the two will probably mean that neither is well served.
In the view of many scholars, one of the main contributions to the present recession, the sub-prime mortgage market, arose from well-meaning US presidents Carter and Clinton, who pressurised lenders into lending to borrowers who had little prospect of repaying. The social prevailed over the commercial.
This is a kind of socialism by control and regulation, rather than ownership.
The second is to allow the market to work, but to insist that information is "free", full and honest, that it to have a great degree of openness. Another of the main causes of the recession has been the level of distrust, because other banks were suspected of hiding liabilities "off balance sheet". (Of course governments try this, but there is an openness which means that no-one is really deceived.)
There is still some suspicion that some actors in the wholesale mortgage market are still concealing items, so the level of inter-bank lending, and therefore mortgage finance, is not as great as it should be and the interest rates are not as low as they ought to be.
On this policy, certainly for financial institutions at least, full relevant details should be disclosed on pain of prosecution and severe penalty. The Bank of England could resume its traditional role of monitoring ratios, perhaps in conjunction with the company's auditors. The figures could be reported to the public and to other banks.
By this means savers could see where reckless lending was occurring, such as 125% mortgages, and the implication would be clear.
The force of knowledge and competition would bring reckless behaviour into question, as other financial actors vote with their feet. There could still be real competition, in service and product, but the forces of Demand and Supply would ensure that for the same product the cost was broadly the same everywhere.
Between the two approaches the first would obviously appeal to those who wish to bring everything under political control. This has failed in the present situation, and so its advocates and proposing still great control and strait-jackets.
The second should appeal to all who want efficiency and competition, who dislike deals done in secret between bankers and regulators who are too close, and who prefer to use the law as the ultimate sanction to produce honesty. The problem recently is not that there has been too little regulation, or that it has not been sufficiently intrusive, but rather that it has been badly applied and very confused.
There are two broad ways of preventing banking failure.
The first is to have a vast army of regulators with great powers clambering over every facet of the banks' activities. This may prevent (- it hasn't in the recent past) future banking lapses, but the costs are enormous, both on the regulator's side and on compliance by the banks. An unknown cost is the inefficiencies introduced and also the introduction of social objectives in place of commercial ones. Social policy is the area of government, efficient and profitable banking is the commercial objective. To confuse the two will probably mean that neither is well served.
In the view of many scholars, one of the main contributions to the present recession, the sub-prime mortgage market, arose from well-meaning US presidents Carter and Clinton, who pressurised lenders into lending to borrowers who had little prospect of repaying. The social prevailed over the commercial.
This is a kind of socialism by control and regulation, rather than ownership.
The second is to allow the market to work, but to insist that information is "free", full and honest, that it to have a great degree of openness. Another of the main causes of the recession has been the level of distrust, because other banks were suspected of hiding liabilities "off balance sheet". (Of course governments try this, but there is an openness which means that no-one is really deceived.)
There is still some suspicion that some actors in the wholesale mortgage market are still concealing items, so the level of inter-bank lending, and therefore mortgage finance, is not as great as it should be and the interest rates are not as low as they ought to be.
On this policy, certainly for financial institutions at least, full relevant details should be disclosed on pain of prosecution and severe penalty. The Bank of England could resume its traditional role of monitoring ratios, perhaps in conjunction with the company's auditors. The figures could be reported to the public and to other banks.
By this means savers could see where reckless lending was occurring, such as 125% mortgages, and the implication would be clear.
The force of knowledge and competition would bring reckless behaviour into question, as other financial actors vote with their feet. There could still be real competition, in service and product, but the forces of Demand and Supply would ensure that for the same product the cost was broadly the same everywhere.
Between the two approaches the first would obviously appeal to those who wish to bring everything under political control. This has failed in the present situation, and so its advocates and proposing still great control and strait-jackets.
The second should appeal to all who want efficiency and competition, who dislike deals done in secret between bankers and regulators who are too close, and who prefer to use the law as the ultimate sanction to produce honesty. The problem recently is not that there has been too little regulation, or that it has not been sufficiently intrusive, but rather that it has been badly applied and very confused.
Our ante just got a little larger
It seems that the bankers, who were surprised by Brown's announcement yesterday on guaranteeing mortgages, have estimated that the scheme will cost the taxpayer somewhere between £100 million and £1 billion. The difference partly reflects the optimism of the government as against the realism of the banks, and partly because all the details have not been worked out yet.
That the banks were bounced into it and have reservations (- for one thing it will add administrative costs to the banks), is a reflection of Brown's urgency. The expensive and generally derided VAT reduction seems unlikely to achieve much, so he has to have another grandstanding wheeze.
So our commitment as taxpayers has increased by anything up to £1 billion, as part of his gamble to get re-elected. The objective is political rather than economic or social. Give him credit for coming up with something else to enhance his messiahship.
That the banks were bounced into it and have reservations (- for one thing it will add administrative costs to the banks), is a reflection of Brown's urgency. The expensive and generally derided VAT reduction seems unlikely to achieve much, so he has to have another grandstanding wheeze.
So our commitment as taxpayers has increased by anything up to £1 billion, as part of his gamble to get re-elected. The objective is political rather than economic or social. Give him credit for coming up with something else to enhance his messiahship.
Tuesday, 2 December 2008
The Green affair
It seems that the government may hold some sort of enquiry, and the acting Commissioner of the Met. has already set up a quick review of the situation. We are told that many senior policemen are very concerned about elements of the arrest and detention.
It is difficult at the moment to know much about why things happened as they did. Perhaps, but don't count on it as every sort of politics is involved here, we shall know more in a week or two, after the police review.
In the meantime there are so many questions which are not being answered:
1) Why were the counter-terrorism police involved, especially at a time of heightened alert after the terrorism in India? Nobody, as afar as I know, has claimed that any offences would have national security aspects.
2) Why was Damien Green arrested under a catch-all little known 18th century law? Was the intention to frighten would-be leakers and recipients? Who decided on this charge, and why?
3) Why was it timed to take place in a parliamentary recess, when important "players" might have been absent from their offices? Was this to avoid parliamentary debate and protest?
4) Why did the police inform members of the opposition, Messrs. Johnson and Cameron, before the raid took place, but not vital members of the government, and especially Gordon Brown and Jacqui Smith?
5) Why did the senior Civil Servant who called in the police, as the result of leaks, not know, and if he did why did he not inform his boss Jacqui Smith? Did the police not keep him informed on such an important constitutional issue?
6) Why did the police tell that Sergeant at Arms that the raid on the Westminster office had been sanctioned by the Director of Public Prosecutions, when it had not? She contacted her line boss, who was satisfied by the mention of the DPP, but was unable to get a message of very great importance to the Speaker.
7) Why, on a Friday, when admittedly most MPs had left, could no-one contact the Speaker, the Prime Minister or the Home Secretary? Are there no emergency arrangments for contact?
8) With exception of Harriet Harman, who wrings her hands and talks about sovereignty while insisting on the independence of the police, no other leading member of the government has expressed any concern at what happened. There seems to be a set of back-protecting, "Not me, guv. I couldn't be reached. I was absent." This will doubtless be the Speaker's get-out tomorrow in his statement prepared by the gang meeting today to make sure they all tell the same story.
So far Brown and Smith have said little more than the careful and non-committal, "I was not aware of the actual raid until afterwards."
These are important issues, and some must be resolved before a new Police Commisioner is appointed. For the rest it might suit the government to try to bury the whole issue. If they are culpable, it looks possible that they have shot themselves in the foot. It may be that bad decisions were made by a number of persons or groups which they now regret.
It ill becomes Zanu Labour to try to use the force of the law to prevent the very practice in which they indulged so profitably when in opposition, a practice which many people feel should not be punished if it reveals government incompetence or deceit, rather than security matters.
It is difficult at the moment to know much about why things happened as they did. Perhaps, but don't count on it as every sort of politics is involved here, we shall know more in a week or two, after the police review.
In the meantime there are so many questions which are not being answered:
1) Why were the counter-terrorism police involved, especially at a time of heightened alert after the terrorism in India? Nobody, as afar as I know, has claimed that any offences would have national security aspects.
2) Why was Damien Green arrested under a catch-all little known 18th century law? Was the intention to frighten would-be leakers and recipients? Who decided on this charge, and why?
3) Why was it timed to take place in a parliamentary recess, when important "players" might have been absent from their offices? Was this to avoid parliamentary debate and protest?
4) Why did the police inform members of the opposition, Messrs. Johnson and Cameron, before the raid took place, but not vital members of the government, and especially Gordon Brown and Jacqui Smith?
5) Why did the senior Civil Servant who called in the police, as the result of leaks, not know, and if he did why did he not inform his boss Jacqui Smith? Did the police not keep him informed on such an important constitutional issue?
6) Why did the police tell that Sergeant at Arms that the raid on the Westminster office had been sanctioned by the Director of Public Prosecutions, when it had not? She contacted her line boss, who was satisfied by the mention of the DPP, but was unable to get a message of very great importance to the Speaker.
7) Why, on a Friday, when admittedly most MPs had left, could no-one contact the Speaker, the Prime Minister or the Home Secretary? Are there no emergency arrangments for contact?
8) With exception of Harriet Harman, who wrings her hands and talks about sovereignty while insisting on the independence of the police, no other leading member of the government has expressed any concern at what happened. There seems to be a set of back-protecting, "Not me, guv. I couldn't be reached. I was absent." This will doubtless be the Speaker's get-out tomorrow in his statement prepared by the gang meeting today to make sure they all tell the same story.
So far Brown and Smith have said little more than the careful and non-committal, "I was not aware of the actual raid until afterwards."
These are important issues, and some must be resolved before a new Police Commisioner is appointed. For the rest it might suit the government to try to bury the whole issue. If they are culpable, it looks possible that they have shot themselves in the foot. It may be that bad decisions were made by a number of persons or groups which they now regret.
It ill becomes Zanu Labour to try to use the force of the law to prevent the very practice in which they indulged so profitably when in opposition, a practice which many people feel should not be punished if it reveals government incompetence or deceit, rather than security matters.
At a more micro level...
Further to the last post about the growth in public sector jobs over the past 10 years, the Daily Mail yesterday reported on academic work done on the concentration of public sector jobs at a more local level.
The percentages employed in the public sector in the most pronounced cases are:
Castle Morpeth 57.1%
Wansbeck 47.5%
Durham 46.7%
Hastings 43.7%
Cambridge 41.6%
Ceredigion 40.7%
Oxford 40.7%
Torfaen 40.4%
Inverclyde 40.0%
Stafford 40.0%
So what are all these people doing? Are these towns academic or health centres? No, but they are the location for much of the regional Government activity. Oxford and Cambridge clearly reflect the presence of the universities.
Some of these places also had higher than average percentages of people of working age who are on benefit, but these are in addition to the figures quoted above. In some, when both are included then as much as 60% of people of working age are dependent on the State for jobs or benefits It is little surprise that of the ten areas, eight have Labour sitting members of parliament, while two have LibDems.
These figures are of concern for at least two reasons:
1) We have local socialism, without a revolution, so cheer up, comrades. A few more years of Brown will bring us economic misery, but the new age may have dawned.
2) Many of the jobs, and especially those in controlling and regulating local business, will be a drain and a waste of resources which could be more productive in other employment.
The percentages employed in the public sector in the most pronounced cases are:
Castle Morpeth 57.1%
Wansbeck 47.5%
Durham 46.7%
Hastings 43.7%
Cambridge 41.6%
Ceredigion 40.7%
Oxford 40.7%
Torfaen 40.4%
Inverclyde 40.0%
Stafford 40.0%
So what are all these people doing? Are these towns academic or health centres? No, but they are the location for much of the regional Government activity. Oxford and Cambridge clearly reflect the presence of the universities.
Some of these places also had higher than average percentages of people of working age who are on benefit, but these are in addition to the figures quoted above. In some, when both are included then as much as 60% of people of working age are dependent on the State for jobs or benefits It is little surprise that of the ten areas, eight have Labour sitting members of parliament, while two have LibDems.
These figures are of concern for at least two reasons:
1) We have local socialism, without a revolution, so cheer up, comrades. A few more years of Brown will bring us economic misery, but the new age may have dawned.
2) Many of the jobs, and especially those in controlling and regulating local business, will be a drain and a waste of resources which could be more productive in other employment.
Thursday, 27 November 2008
Well, the socialists will be pleased!
On Tuesday the Sun newspaper commented on changes in the pattern of employment during the Brown years.
The source of the data and calculations is unknown, as is why the data finished in 2006. The figures are percentage changes, all positive, i.e. growth, except one.
The conclusions are:
1) Although public sector employment grew at a faster rate in all regions, it doesn't mean that there are now more people are employed in the public sector then in the private sector, merely that the rate of growth was (much) higher there.
2) The paper gives few absolute figures, except to record that over the period 2.2 million jobs were created. Of them 1.3 were in the public sector, or 59% Among women the public sector was even more of a magnet. Of 1.07 million extra jobs filled by women, 963,000, or 90%, were in the public sector. This last result may reflect the presence of extra nurses, child minders and teachers appointed during the Brown Splurge. Brown used to boast of how many jobs he had created. Now we know the pattern of employment.
3) It may be that extra jobs have been created in the private sector since 2006, but in 2008 in a contraction period 50,000 extra public sector jobs have been created.
The worrying feature is that the public sector jobs are part of Heffer's "Client State", that is the people who depend for work, income or benefits on the (Labour) government. These people are more inclined to vote for Brown as a consequence.
Public sector jobs are difficult to reduce, because of the votes, and because of the strength of unions there. The government has talked of "savings" of £10 billion. It is difficult to see where these will come from, given the extreme reluctance to make staff redundant. There is not much saving in using fewer paper clips!
The public sector jobs are not only more secure than those in the private sector, they also pay index-linked final salary pensions, with absolute security. This commitment means that the country in a difficult period has an added burden of paying for all the extra pensions. (This may be the reason why Cameron and company are now talking about the possibility of putting public sector pensions on the same basis as those in the private sector, where the pension is determined by the total amount contributed.)
All this, except the Cameron suggestion, must be very pleasant reading for the socialists, - a further heave in their direction without any revolution. The problem for the rest of us is that many of the jobs will not increase national wealth or output, - as monitors, pen-pushers and bureaucrats they may advance the socialist ideal but they do not produce marketable or exportable output. They may actually hinder it! We are ultimately impoverished by their appointment and activity.
The Sun newspaper, 25.11.08
The growth in purely private sector jobs, 1998-2006, and the growth in predominantly public sector jobs over the same period.
| Region | Growth in private sector jobs | Growth in public sector jobs |
| North East | 5% | 25% |
| Yorkshire & Humberside | 3% | 26% |
| | 2% | 18% |
| | 4% | 27% |
| | 3% | 19% |
| South East | 4% | 18% |
| South West | 8% | 29% |
| | 9% | 27% |
| | Minus 2% | 25% |
| | 3% | 22% |
The source of the data and calculations is unknown, as is why the data finished in 2006. The figures are percentage changes, all positive, i.e. growth, except one.
The conclusions are:
1) Although public sector employment grew at a faster rate in all regions, it doesn't mean that there are now more people are employed in the public sector then in the private sector, merely that the rate of growth was (much) higher there.
2) The paper gives few absolute figures, except to record that over the period 2.2 million jobs were created. Of them 1.3 were in the public sector, or 59% Among women the public sector was even more of a magnet. Of 1.07 million extra jobs filled by women, 963,000, or 90%, were in the public sector. This last result may reflect the presence of extra nurses, child minders and teachers appointed during the Brown Splurge. Brown used to boast of how many jobs he had created. Now we know the pattern of employment.
3) It may be that extra jobs have been created in the private sector since 2006, but in 2008 in a contraction period 50,000 extra public sector jobs have been created.
The worrying feature is that the public sector jobs are part of Heffer's "Client State", that is the people who depend for work, income or benefits on the (Labour) government. These people are more inclined to vote for Brown as a consequence.
Public sector jobs are difficult to reduce, because of the votes, and because of the strength of unions there. The government has talked of "savings" of £10 billion. It is difficult to see where these will come from, given the extreme reluctance to make staff redundant. There is not much saving in using fewer paper clips!
The public sector jobs are not only more secure than those in the private sector, they also pay index-linked final salary pensions, with absolute security. This commitment means that the country in a difficult period has an added burden of paying for all the extra pensions. (This may be the reason why Cameron and company are now talking about the possibility of putting public sector pensions on the same basis as those in the private sector, where the pension is determined by the total amount contributed.)
All this, except the Cameron suggestion, must be very pleasant reading for the socialists, - a further heave in their direction without any revolution. The problem for the rest of us is that many of the jobs will not increase national wealth or output, - as monitors, pen-pushers and bureaucrats they may advance the socialist ideal but they do not produce marketable or exportable output. They may actually hinder it! We are ultimately impoverished by their appointment and activity.
Wednesday, 26 November 2008
What we were not told
The dust has settled, and we have more or less got our heads round the size of the debts our government will have incurred. They are truly astronomical, and make us look like the banana republic we are beginning to seem.
How will they be repaid? This we were not told, merely that the size of successive deficits will diminish up to 2013. Whether they will continue after that and by what amount was not revealed.
No suggestion was made about repaying the debt, as sundry governments have tried to do at intervals. Even leaving out some liabilities such as guarantees to banks, PFI commitments on schools, hospitals and other infrastructure, as well as the truly enormous obligation to pay gold-plated public sector pensions, what remains is approaching £1 trillion.
This debt must be serviced, that is have interest paid. If the government is able to borrow at 5%, then we must pay £50 billion upwards each year in these interest payments, which is equivalent to over 10p on the standard rate of income tax!
The government has made a gesture.
We know about the restoration of the full 17.5% VAT rate after one year, and it seems certain from a published document that this would have been increased to 18.5% after the election.
We know that tax allowances will be frozen in 2011 for at least one year, which will bring many people into the 40% band.
We know that the government has been looking at what assets it could sell. There are not many left.
We know that National Insurance, a tax in all but name, will increase by 0.5%, which will not help much to promote employment, being a tax on employment.
These will not go far in reducing future budgetary deficits, even if all are taken together. If, in addition, the chancellor's forecasts are wrong, - he and Brown have underestimated recession and over-estimated growth on a regular basis, then the deficits will be larger and longer lived, and his so far announced attempts at financing them will prove even more inadequate.
The chancellor may be right, however, with recovery beginning next summer (third quarter). Most experts find it difficult to believe. If is is right and they are wrong, than we have at best 7 years of large budget deficits.
There is one further factor. The government has claimed to find possible savings, and factored these into their prescriptions. These are difficult, not least because they often involve making public sector workers redundant. The government this year, despite the difficulties, has appointed 50,000 additional civil servants, and made the Guardian newspaper prosperous in the process. The PBR presupposes that yet more will be required, to help lending to business and to deal with the growing army of unemployed.
It is difficult to see Brown & Co. making cuts among public sector workers, especially at a time of high unemployment. So they are left with freezing posts, not replacing those who retire, or transferring in others from elsewhere. They have not been very successful at this hitherto.
Sop the way is open for the Conservatives to show us something more positive, as they cannot go on merely criticising Brown indefinitely. It will be interesting to see what they come up with. Immediately they could release civil servants to replace retiring colleagues elsewhere, by abolishing many of the vast number of quangos, and especially the regional ones, by cancelling the ID card scheme and the national database, which are both enormous white elephants and suspected to be such by an increasing number of citizens.
In the medium term the Conservatives could engage in a full reformation of education and health, and ensure that services are not cut in any way but are performed more efficiently by removing a vast army of pen-pushers.The bureaucrats thus displaced could them be transferred elsewhere or allowed to leave for the private sector in the by then recovering economy.
So far we have the situation of temprorary tax cuts to be followed by tax rises which are permanent. We can see that the government has taken the opportunity to increase duties on fueld, tobacco and alcohol. We do not know what further "bombshells" await us, as clearly on the government's figures they have not covered the earlier deficits and any inability to pay interest out of taxation must perpetuate the period of deficit.
How will they be repaid? This we were not told, merely that the size of successive deficits will diminish up to 2013. Whether they will continue after that and by what amount was not revealed.
No suggestion was made about repaying the debt, as sundry governments have tried to do at intervals. Even leaving out some liabilities such as guarantees to banks, PFI commitments on schools, hospitals and other infrastructure, as well as the truly enormous obligation to pay gold-plated public sector pensions, what remains is approaching £1 trillion.
This debt must be serviced, that is have interest paid. If the government is able to borrow at 5%, then we must pay £50 billion upwards each year in these interest payments, which is equivalent to over 10p on the standard rate of income tax!
The government has made a gesture.
We know about the restoration of the full 17.5% VAT rate after one year, and it seems certain from a published document that this would have been increased to 18.5% after the election.
We know that tax allowances will be frozen in 2011 for at least one year, which will bring many people into the 40% band.
We know that the government has been looking at what assets it could sell. There are not many left.
We know that National Insurance, a tax in all but name, will increase by 0.5%, which will not help much to promote employment, being a tax on employment.
These will not go far in reducing future budgetary deficits, even if all are taken together. If, in addition, the chancellor's forecasts are wrong, - he and Brown have underestimated recession and over-estimated growth on a regular basis, then the deficits will be larger and longer lived, and his so far announced attempts at financing them will prove even more inadequate.
The chancellor may be right, however, with recovery beginning next summer (third quarter). Most experts find it difficult to believe. If is is right and they are wrong, than we have at best 7 years of large budget deficits.
There is one further factor. The government has claimed to find possible savings, and factored these into their prescriptions. These are difficult, not least because they often involve making public sector workers redundant. The government this year, despite the difficulties, has appointed 50,000 additional civil servants, and made the Guardian newspaper prosperous in the process. The PBR presupposes that yet more will be required, to help lending to business and to deal with the growing army of unemployed.
It is difficult to see Brown & Co. making cuts among public sector workers, especially at a time of high unemployment. So they are left with freezing posts, not replacing those who retire, or transferring in others from elsewhere. They have not been very successful at this hitherto.
Sop the way is open for the Conservatives to show us something more positive, as they cannot go on merely criticising Brown indefinitely. It will be interesting to see what they come up with. Immediately they could release civil servants to replace retiring colleagues elsewhere, by abolishing many of the vast number of quangos, and especially the regional ones, by cancelling the ID card scheme and the national database, which are both enormous white elephants and suspected to be such by an increasing number of citizens.
In the medium term the Conservatives could engage in a full reformation of education and health, and ensure that services are not cut in any way but are performed more efficiently by removing a vast army of pen-pushers.The bureaucrats thus displaced could them be transferred elsewhere or allowed to leave for the private sector in the by then recovering economy.
So far we have the situation of temprorary tax cuts to be followed by tax rises which are permanent. We can see that the government has taken the opportunity to increase duties on fueld, tobacco and alcohol. We do not know what further "bombshells" await us, as clearly on the government's figures they have not covered the earlier deficits and any inability to pay interest out of taxation must perpetuate the period of deficit.
Monday, 24 November 2008
The Pre Budget (p)Ropaganda
Any normal person would expect and hope that something as serious as the chancellor's autumn statement would be clear and open. It seems that we are wrong.
Its purpose is not to inform but to obscure, not to deal with the economic problems but to secure political advantage.
The statement will not take place until 3.30, and the press will not be given a copy until about 4.30. They then have to digest something which is deliberately constructed to be obscure and misleading in time for the press deadlines. This is very difficult - see the excellent posting by Fraser Nelson on the Coffee House Blog today. The same difficulty confronts the opposition.
This is built upon by two further ruses by the Government:
1) To relegate very important items and qualifications to hidden footnotes, to delay the discovery of the mendacity. The devil really is in the detail.
2) (Increasingly) to leak false trails, red herrings and the points which will receive prominence anyway, in the hope of deceiving press and opposition alike.
Of course, as in the case of the 10p debacle in 2007, Brown received momentary acclaim which was reduced within 24 hours when all the small print had been studied, but he had gained , until it all blew up in his face after a few weeks, when MPs and others realised that they had been conned.
So this evening, while press and opposition have time to concentrate on only the items which have been leaked in advance or fully displayed during the presentation in parliament, expect Brown to tour the TV studios basking in glory. The fact that the the full implications may take a few days to emerge, the deceit to be unravelled, and the idol shown to have feet of clay, does not matter so much. Brown will have gained a political advantage and bolstered his image as the world's saviour, and these may take some time to be reduced.
It's a sad reflection that a statement which is so serious for the nation's economic well being should become instead an attempt to gain narrow political advantage. It is all the more galling, because it is practiced by someone who is so quick to condemn his opponents on the shakiest grounds of doing the same.
Democracy in general and politicians in particular deserve something better.
Its purpose is not to inform but to obscure, not to deal with the economic problems but to secure political advantage.
The statement will not take place until 3.30, and the press will not be given a copy until about 4.30. They then have to digest something which is deliberately constructed to be obscure and misleading in time for the press deadlines. This is very difficult - see the excellent posting by Fraser Nelson on the Coffee House Blog today. The same difficulty confronts the opposition.
This is built upon by two further ruses by the Government:
1) To relegate very important items and qualifications to hidden footnotes, to delay the discovery of the mendacity. The devil really is in the detail.
2) (Increasingly) to leak false trails, red herrings and the points which will receive prominence anyway, in the hope of deceiving press and opposition alike.
Of course, as in the case of the 10p debacle in 2007, Brown received momentary acclaim which was reduced within 24 hours when all the small print had been studied, but he had gained , until it all blew up in his face after a few weeks, when MPs and others realised that they had been conned.
So this evening, while press and opposition have time to concentrate on only the items which have been leaked in advance or fully displayed during the presentation in parliament, expect Brown to tour the TV studios basking in glory. The fact that the the full implications may take a few days to emerge, the deceit to be unravelled, and the idol shown to have feet of clay, does not matter so much. Brown will have gained a political advantage and bolstered his image as the world's saviour, and these may take some time to be reduced.
It's a sad reflection that a statement which is so serious for the nation's economic well being should become instead an attempt to gain narrow political advantage. It is all the more galling, because it is practiced by someone who is so quick to condemn his opponents on the shakiest grounds of doing the same.
Democracy in general and politicians in particular deserve something better.
Sunday, 23 November 2008
...like a sieve
So many sources are coming forward with the assumption that in tomorrow's PBR there will be a temporary reduction in VAT from 17.5% to 15%, that you have to ask why the government is leaking like a sieve. It has to be a deliberate policy .
After all, it alerts and prepares the Tories. It's difficult to reply to the chancellor's statement, but to give advance notice makes it easier to prepare rebuttals. It seems that the proposal, which would raise about £12.5 billion on this one element out of supposedly £15 billion altogether, is the central plank.
Or is this a case of setting a trap, of sending the Tories off on the wrong track? Or are Labour trying to drive a wedge between Ken Clarke and others who proposed the VAT reduction and Cameron who has set his face against it? Or both, and perhaps other objectives as well?
Some comments on the VAT proposal.
I didn't consider the VAT proposal in a blog recently, for a number of reasons:
It will impose additional costs on retailers and others, as they have to re-set software and print new publicity and price labels.
As a consequence, some sellers may simply absorb the gain themselves, rather than increase their costs, or they may wait to see what happens.
Will the reduction have much effect? The declared aim is to put money into the hands of the poorest in society as they are more likely to spend it. However, much of their expenditure is on items which are either zero rated, - food, children's clothes, etc., or expenditure on items where VAT is 5%, - energy for example. In both cases there will be no change in price and no extra money left in the consumer's pocket. The major effect will be expensive luxury items where the small percentage change could amount to many pounds.
If this is right, than the policy seems likely to benefit wealthier members of society more, and they are more likely to save any advantage than poorer people are.
How great a stimulus? Since the reduction is of 2.5% on the pre-tax price, the price reduction facing a consumer will be much nearer 2% in the overall price facing him. If something would have been £100 in price before any tax, with a price of £117.5 including tax, then a reduction of £2.50 to £115, is actually a reduction of 2.1%. Given that retailers are already making sweeping reductions, of 30, 40 or even 50 percent, is a change of this magnitude going to add very much in attracting a purchase? Calculations on shopping baskets suggest that households could be better off by somewhere between £5 and £8 per week. This is welcome, but will not add very much. It could, however, add up over a month and make it slightly easier to make a monthly mortgage repayment. But this repayment is not what G. Brown wants, - he wants them to spend it.
If extra spending is generated, how much will be on imported goods, again defeating G. Brown?
There is a suspicion that much go on foreign wine or food, or on other luxury gifts which are in stock and cannot be expanded in output very soon.
Some goods which could enjoy a spur include one or two which are "bads" although good government revenue raisers. Among these are alcohol and tobacco products.
Leaving aside questions of how long the temporary reduction in VAT will be, and how much the increase will be afterwards, the general conclusion seems to be that the response could be muted for many of the reasons above, and slow. Most of all, this part of the PBR proposal will be of much more benefit to wealthier people than poor people, - very strange coming from Brown.
We can only assume, after all the thought by many experts over so many days, that the other parts of the PBR proposals will redress this effect, perhaps an increase in the various benefits, perhaps something for those who have still lost out over the 10p tax band fiasco, but not a general raising of the threshold tax level unless we have been mislead about the size of his fiscal stimulus.
After all, it alerts and prepares the Tories. It's difficult to reply to the chancellor's statement, but to give advance notice makes it easier to prepare rebuttals. It seems that the proposal, which would raise about £12.5 billion on this one element out of supposedly £15 billion altogether, is the central plank.
Or is this a case of setting a trap, of sending the Tories off on the wrong track? Or are Labour trying to drive a wedge between Ken Clarke and others who proposed the VAT reduction and Cameron who has set his face against it? Or both, and perhaps other objectives as well?
Some comments on the VAT proposal.
I didn't consider the VAT proposal in a blog recently, for a number of reasons:
It will impose additional costs on retailers and others, as they have to re-set software and print new publicity and price labels.
As a consequence, some sellers may simply absorb the gain themselves, rather than increase their costs, or they may wait to see what happens.
Will the reduction have much effect? The declared aim is to put money into the hands of the poorest in society as they are more likely to spend it. However, much of their expenditure is on items which are either zero rated, - food, children's clothes, etc., or expenditure on items where VAT is 5%, - energy for example. In both cases there will be no change in price and no extra money left in the consumer's pocket. The major effect will be expensive luxury items where the small percentage change could amount to many pounds.
If this is right, than the policy seems likely to benefit wealthier members of society more, and they are more likely to save any advantage than poorer people are.
How great a stimulus? Since the reduction is of 2.5% on the pre-tax price, the price reduction facing a consumer will be much nearer 2% in the overall price facing him. If something would have been £100 in price before any tax, with a price of £117.5 including tax, then a reduction of £2.50 to £115, is actually a reduction of 2.1%. Given that retailers are already making sweeping reductions, of 30, 40 or even 50 percent, is a change of this magnitude going to add very much in attracting a purchase? Calculations on shopping baskets suggest that households could be better off by somewhere between £5 and £8 per week. This is welcome, but will not add very much. It could, however, add up over a month and make it slightly easier to make a monthly mortgage repayment. But this repayment is not what G. Brown wants, - he wants them to spend it.
If extra spending is generated, how much will be on imported goods, again defeating G. Brown?
There is a suspicion that much go on foreign wine or food, or on other luxury gifts which are in stock and cannot be expanded in output very soon.
Some goods which could enjoy a spur include one or two which are "bads" although good government revenue raisers. Among these are alcohol and tobacco products.
Leaving aside questions of how long the temporary reduction in VAT will be, and how much the increase will be afterwards, the general conclusion seems to be that the response could be muted for many of the reasons above, and slow. Most of all, this part of the PBR proposal will be of much more benefit to wealthier people than poor people, - very strange coming from Brown.
We can only assume, after all the thought by many experts over so many days, that the other parts of the PBR proposals will redress this effect, perhaps an increase in the various benefits, perhaps something for those who have still lost out over the 10p tax band fiasco, but not a general raising of the threshold tax level unless we have been mislead about the size of his fiscal stimulus.
Saturday, 22 November 2008
What is Brown hoping to achieve?
The answer, of course, is re-election, or he faces virtual political oblivion because of failure.
What does he hope to achieve immediately?
He clearly needs some glimmer of recovery, which could be as little as the rate of increase of unemployment, re-possessions, or bankruptcies showing signs of diminishing. It could be very little indeed, "Unemployment increased by only 5,000 this month, so our policies are working."
You can imagine the Labour spin department switching from smearing the Tories to building a skyscraper on any small scrap of positive evidence.
So my guess is that he will be prepared for a June 4th, 2009 election, with the fall back for an autumn election. He will also be watching the opinion polls in the mean time. It is possible that if any rays of hope emerge before the end of 2008 he could even pencil in an election in the spring of next year.
How soon could we see the green shoots of a real or false new dawn?
Given the plans for staff reduction and mortgage and other arrears, much are already in the pipe line., not soon. There may be others not already firm, as lenders and companies wait until after the Christmas period to see if there is relent in the gloom.
If this scenario is right, then the following will probably happen.
1) He has dropped enough hints to suggest this his aim is to put money into the hands of poorer members of society, and possibly pensioners, before Christmas, in the belief that they will spend it all soon. It is unlikely to be by raising the tax threshold, as this will benefit all taxpayers and he will have to recoup this somewhere else, say by reducing the threshold at which the 40% rate kicks in. The problem here is that all those paying merely at standard rate, and there are still millions, will all benefit.
In the case of pensioners, some of them pay significant amounts of tax, so many would be better off but will not spend the money, which is his objective. The same applies to the (much easier and cheaper) change to the £10 Christmas bonus or the heating allowance.
He has a fondness for his own creatures such as pension or family credit. The trouble with these is that it would be difficult to overcome the slow grinding bureaucracy, and the money could well not be spent before Christmas, and many who would qualify do not claim either because of previous experience or natural pride.
Would he dare to pay welfare recipients a lump sum, with the warning that minute examination of their situations might require repayment? This is unlikely, partly because recipients might hang on to the money until it has been validated, and partly because repayments cause annoyance in a period leading up to an election.
2) Despite earlier talk 0f bringing forward large infrastructure projects, and Boris speaking of doing something similar in London, I would be surprised if much happened in this direction. They are slow to get off the ground, employ workers and disperse income. These could be more useful to achieve something late in 2009 and on into 2010, at the earliest.
He needs urgent, quick results to his policies, and these massive schemes would be delayed, and might not be of much benefit to his election hopes in 2010, even.
So what can we expect in the Pre-Budget Report on Monday? Darling knows that as a result of attacking past Tory policy prescriptions with the words "unfunded" or "can't be afforded", anything he proposes will be minutely examined, and he must show how the massive hike to borrowing will be re-paid.
As he wishes to get extra spending before Christmas, for presents and the sales afterwards, Brown/Darling will suggest only changes which are subject to ministerial adjustment and not debate in parliament, as the latter would eat into precious time. This would seem to rule out anything startlingly new. So expect increases in the various allowances, - pension, family, job-seekers, invalidity benefit, etc. But, then what do I know
What does he hope to achieve immediately?
He clearly needs some glimmer of recovery, which could be as little as the rate of increase of unemployment, re-possessions, or bankruptcies showing signs of diminishing. It could be very little indeed, "Unemployment increased by only 5,000 this month, so our policies are working."
You can imagine the Labour spin department switching from smearing the Tories to building a skyscraper on any small scrap of positive evidence.
So my guess is that he will be prepared for a June 4th, 2009 election, with the fall back for an autumn election. He will also be watching the opinion polls in the mean time. It is possible that if any rays of hope emerge before the end of 2008 he could even pencil in an election in the spring of next year.
How soon could we see the green shoots of a real or false new dawn?
Given the plans for staff reduction and mortgage and other arrears, much are already in the pipe line., not soon. There may be others not already firm, as lenders and companies wait until after the Christmas period to see if there is relent in the gloom.
If this scenario is right, then the following will probably happen.
1) He has dropped enough hints to suggest this his aim is to put money into the hands of poorer members of society, and possibly pensioners, before Christmas, in the belief that they will spend it all soon. It is unlikely to be by raising the tax threshold, as this will benefit all taxpayers and he will have to recoup this somewhere else, say by reducing the threshold at which the 40% rate kicks in. The problem here is that all those paying merely at standard rate, and there are still millions, will all benefit.
In the case of pensioners, some of them pay significant amounts of tax, so many would be better off but will not spend the money, which is his objective. The same applies to the (much easier and cheaper) change to the £10 Christmas bonus or the heating allowance.
He has a fondness for his own creatures such as pension or family credit. The trouble with these is that it would be difficult to overcome the slow grinding bureaucracy, and the money could well not be spent before Christmas, and many who would qualify do not claim either because of previous experience or natural pride.
Would he dare to pay welfare recipients a lump sum, with the warning that minute examination of their situations might require repayment? This is unlikely, partly because recipients might hang on to the money until it has been validated, and partly because repayments cause annoyance in a period leading up to an election.
2) Despite earlier talk 0f bringing forward large infrastructure projects, and Boris speaking of doing something similar in London, I would be surprised if much happened in this direction. They are slow to get off the ground, employ workers and disperse income. These could be more useful to achieve something late in 2009 and on into 2010, at the earliest.
He needs urgent, quick results to his policies, and these massive schemes would be delayed, and might not be of much benefit to his election hopes in 2010, even.
So what can we expect in the Pre-Budget Report on Monday? Darling knows that as a result of attacking past Tory policy prescriptions with the words "unfunded" or "can't be afforded", anything he proposes will be minutely examined, and he must show how the massive hike to borrowing will be re-paid.
As he wishes to get extra spending before Christmas, for presents and the sales afterwards, Brown/Darling will suggest only changes which are subject to ministerial adjustment and not debate in parliament, as the latter would eat into precious time. This would seem to rule out anything startlingly new. So expect increases in the various allowances, - pension, family, job-seekers, invalidity benefit, etc. But, then what do I know
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