Wednesday, March 24, 2010 

Tomorrow never comes until it's too late (or, the Budget).

Amidst the knockabout and the political dividing lines, there was a budget attempting to break out from Alistair Darling's speech. The one thing you can always depend upon is that those on both sides will respond with plenty of vitriol and very little on what they would do instead, as David Cameron did, in almost certainly one of his very weakest performances at the dispatch box. He, or almost certainly rather his writers probably thought that their football metaphor was clever while being easy to understand for all the plebs out there, describing the country as having gone from the top of the Premier League in 1997 to the Conference in 2010 after 13 wasted years. Supposedly meant to refer to Brown wanting to appear on Match of the Day, it instead just struck you as a politician resorting to hyperbole when he has absolutely nothing else to add, and which falls apart on first examination: was the country really in such fantastic shape in 97? Is it really so desperate now? What exactly would the Conservatives have done to make such a dramatic difference when in 2005 the spending pledges from the Conservatives were only £4 billion short of Labour's?

On the opposite side, you have the supposedly "non-partisan" Left Foot Forward doing the equivalent of trying to thrust their collective tongue down Darling's throat, celebrating almost every separate investment decision taken while downplaying the taking away with the other hand. Sally Hunt rather undermines the "welcome news" that the government will fund 200,00 "extra" university places when she notes that the £270m in extra funding doesn't even begin to make up for the cuts which have already been announced. She also doesn't mention that the government is to sell off the student loan book to the highest bidder, something you think might be of concern to the general secretary of the University and College Union.

Budgets tend to begin falling apart the following day or even the day after that once all the details have sunk in, the sums have been done by the likes of the Institute for Fiscal Studies and the Treasury red book has been thoroughly examined. It didn't even last that long when it came to the headline raising of the stamp duty threshold to £250,000 for first time buyers. The cost of doing so, heavily cheered by the Labour benches, is meant to be covered by raising the stamp duty on properties over a million from 4% to 5%, except it doesn't. It's estimated that will bring in £90m, while raising the threshold to £250k will cost £230m. Why bother to raise it by such a measly amount when it doesn't even begin to cover it? We're not talking about the so-called "squeezed middle" here, but the very well off who can comfortably afford to pay more. It is essentially a trick, used throughout the budget and especially by Brown since his ascension to prime minister: giving the appearance of soaking the rich while doing nothing of the sort. How much further Labour could have gone has been aptly illustrated by the one-off banker bonus tax: despite all the screams from the City, it raised more than double the predicted amount, helping to fund the "giveaways" which we had been told weren't going to happen.

Even if the real cuts are being postponed to after the election or until the next fiscal year, which is incidentally the right thing to do, we still have the cuts masquerading as "efficiency savings" which were announced afterwards. A staggering £4.3bn is apparently to be saved from the Department of Health budget, of which £555m is due to come by reducing "sickness absence", which translated means forcing nurses and doctors to go into work when they themselves are unwell, an idea with absolutely no drawbacks whatsoever. Another £100m will be saved from the disastrous IT programme, which even by this government's standards of waste has broken new records in terms of misuse of public money. Speaking of which, another £4bn is to be thrown into the spending chasm known as Afghanistan, a war without end and which only gets crazier as the years inexorably pass.

If the budget and the responses to it were designed to further cement the votes if not the themes on which the election campaign is going to be fought, then both could be classed as relative successes. Toby Helm describes it as anything but a boring budget, but I beg to differ, as I presume Darling himself would. The surprises were so few as to be non-existent, and away from the Ashcroft-bashing, this was hardly the budget on which any governing party would like to be going into an election. The deficit and borrowing figures prevented it being any sort of giveaway, but it also focused on the short-term at the expense of anything approaching a vision. We had a stamp duty cut for those who can already afford to buy, but nothing for those who can't or who can't even find anywhere to live. From both sides we were offered a continuation of the same old politics even when they supposedly thirst to offer everyone change, and a tomorrow which they deeply seem to hope will never come.

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3/24/2010 11:58:00 PM | | | links to this post

Wednesday, September 30, 2009 

Farce, then tragedy.

Last year, when Sarah Brown, clearly nervous, stood up in front of the Labour conference and introduced her husband's address, what was clearly an attempt to deflect criticism was viewed sympathetically, mainly as it was still by no means certain that he would be in the job for much longer after it. As it turned out, the speech, probably now best remembered for his put down of both Cameron and Miliband by saying it was "no time for a novice" was just about good enough to secure his leadership, at least until the disastrous local and European election results earlier this year where another major wobble took place.

This year, Sarah Brown's appearance before Brown's speech, far from performing the role it was meant to, simply exaggerated the extended tragedy which has been his reign. What other response could there possibly be to her description of Gordon as "her hero"? Again, she was intended to act as a prophylactic, protecting him from scathing criticism. You can get away with doing this once; do it twice and you start to look cowardly, and this from the man trying to ram books about "courage" down our necks.

You can though understand why they wanted history to repeat. If last year's speech by Brown did just enough, then this year's didn't even come close. You can't deny that Brown delivered it with plenty of brio, hardly falling into the stereotype of someone so depressed and flailing that he needs to be on archaic, strong medication, but it was the content that so bitterly let him down. To call it a speech would, like Nick Clegg's effort last week, probably be insulting the medium itself. There was no theme, no connection. One of the first things you're taught when it comes to writing essays is that they must have an introduction, a middle and a conclusion, something which applies equally to public speaking. The latest innovation it seems when it comes to speeches by political leaders is to throw such outdated notions out of the window: no one other than wonks is going to listen to or read the things in full anyway, so you might as well just talk about one thing after the other, regardless of any connection between them until you've finished. Brown goes from the economy to attacking the Conservatives to the greatness of those ubiquitous "hard-working families" to the public services to back to attacking the Conservatives again, all of it wholly unconvincing.

This conference, if it is about anything, seems to be a collective gnashing of teeth that they have ever saw fit to defenestrate Tony Blair. Yesterday we saw the party finally falling in love with Mandelson, the nearest it now has to the great man himself. Brown, knowing that the last thing he can be is Blair, instead decided to emulate his policies. All those things we thought we'd seen the last of, such as the pointless counter-productive populism on "anti-social behaviour" are suddenly back as if they never went away. Sure, there were a few bones here thrown in an attempt to buy off those who had hoped that Brown would lead the party left-wards, the most obvious and also best example being the great believer in free markets suddenly deciding that the "right wing fundamentalism that says you just leave everything to the market and says that free markets should not just be free but values free" was wrong, but no one believes for a second that Brown intends to act on what he says in this area. Most disturbing was what some have already monikered as "gulags for slags", the shared housing for pregnant 16 and 17-year-olds, rather than putting them up in a council flat. Not only does this buy into a myth, that all you need to do is get pregnant while a teenager and you'll be set up for a life, but that also accidentally becoming pregnant when you're over the age of consent but not yet 18 is something that you should be punished for, not to mention considered to be too stupid or feckless to be able to look after the child either on your own or with the help of your own family without the state barging in. This sense of false victimhood and resentment against those "who will talk about their rights, but never accept their responsibilities" permeated an entire section of the speech. This just illustrates how successful the tabloids have been as painting Labour as friends only of immigrants and single mothers, and how the incredible idea that it's now the white middle classes who are the most discriminated against has become mainstream.

If the idea of "gulags for slags" is chilling, in much the same way was Brown's declaration that "whenever and wherever there is antisocial behaviour, we will be there to fight it." It's worth remembering that the main indicator for so-called antisocial behaviour is not shouting at people on the street or the kind of low-level thuggery over an extended period which the Pilkingtons suffered, but teenagers daring to congregate together in public, doing nothing other than talking to each other. In some senses we've regressed past the Victorian dictum that children should be seen and not heard; now we don't want them even to be seen. Yet this war on childhood in general is, we are told, incredibly popular in focus groups, hence why it's back on the agenda. It doesn't matter that if you focus grouped bringing back capital punishment or permanently chipping sex offenders you'd also doubtless get an immensely favourable response, if a representative sample of the hoi polloi wants it, they'll get it. Or rather, they'll be told they're getting it, as that seems to be just as good as getting it.

On everything other than bringing back the Blair agenda, it was the tiniest most pathetic gestures which were the order of the day. ID cards won't then be made compulsory over the next parliament; MPs guilty of gross misconduct will be able to be recalled; and there'll be a commitment in the manifesto for a referendum on the alternative vote, the most piss-poor non-proportional system of voting other than first past the post. There was no vision here, no adjustment to the world as it is now is, just a repetition of past glories which the electorate are supposed to bask in and so reach the conclusion that the Conservatives would only mess it all up. This was exactly the stance they took in 1997: New Labour, New Danger, you can only be sure with the Conservatives. They were already doomed, but it doomed them even further. In line with that year, tomorrow the Sun declares that Labour has blown it, just as it switched support from the Tories back then. Marx it seems had it backwards: in this instance history is repeating itself, but as tragedy after farce.

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9/30/2009 12:30:00 AM | | | links to this post

Monday, September 28, 2009 

The spirit as weak as the flesh in Brighton

Far be it from me, an inhabitant of a concrete hell which culture seems to have passed by, to suggest that this nation's seaside towns tend to be inclement at best and downright depressing at worst during the autumn and winter months, but perhaps the weather in Brighton, especially at night, is in tune with the Labour party's collective mood. This is, after all, according to no less a person than Alistair Darling, a party that seems to have lost the will to live, which no longer has the fire in its belly, and for which everyone from the top to the bottom, has a responsibility.

This theme, that the party is sleepwalking to a defeat next year which could finish it as an electoral force, has become so familiar that it's almost beginning to border on the cliche, and it's one which this blog has not exactly challenged. It is one however that the opinion polls are hardly contradicting, the latest showing Labour equal pegging with the Liberal Democrats on a shockingly low 23%. It's still worth remembering that Labour took 27% of the vote in 1983, the year incidentally in which both Blair and Brown were elected to parliament. The "longest suicide note in history", although one which deserves reappraisal, delivered a higher percentage of support than Labour would currently receive. Only those most in loathe with the last 12 years would suggest that's all that the party currently deserves.

No one seriously expects that Labour will be fighting with the Liberal Democrats for third largest party status in 12 months time. The threat is however that the party could be reduced to its long established bases of support, but even these, on an extremely pessimistic reading of the runes, seem to be in trouble. Wales, the historic bedrock of Labour support, seems to be within the grasp of the Conservatives. According to a Financial Times poll last week, the Tories have a 4 point lead in the north, while in Scotland the party is instead struggling with a Scottish National Party that despite the al-Megrahi backlash only seems to be growing stronger. This is coupled with as Dave Osler has identified, the party's loss of a generation. Amazing and frightening as it seems, those children and only just teenagers who were marching against the Iraq war alongside those of us who had only just gained the right to vote in 2003 will next year themselves be taking part in their first general election, and if they fight off the apathy, it seems doubtful they'll be putting an x in the box alongside the Labour candidate, nor will they in the years to come. Just as we promised ourselves we would never vote for the Tories, so they will have promised never to vote Labour. This poses a challenge which no one in either the Conservatives or Labour has even began to consider, let alone broach.

Looking at the hall in Brighton, many of the seats empty, even during Alistair Darling's speech (although that perhaps might be half the reason), the clapping lukewarm at best, it's hard not to infer that many don't have the stomach to even turn up, like at a Christmas party for a company that's shutting down in the new year. Then again, when the best that Darling could pull out of his hat was a "Fiscal Responsibility Act", designed to put in legal terms how the government intends to reduce the deficit, you do wonder whether involuntary euthanasia wouldn't be kinder for all involved. It really does sum New Labour up: its mania for legislation where none is necessary, that it is so shorn of trust that it has to do so to make sure that the public believes what it says while also no doubt being an attempt to tie the Tories' hands should they want to put certain areas of spending off limits.

Just when you think that things can't get any more absurd, up pops the former Prince of Darkness, who could now more appropriately be known as the Grand Wizard of Sunlight. Mandelson does not have a natural charisma, but what he does have, along with the self-regard, is the ability to reassure, which is what his role was today. In a way, his speech was about precisely nothing, even though he did announce an extension to the car scrappage scheme, but rather about enthusing those resigned with the unannounced theme of the conference, fighting back. Mandelson might have made the most ultimate of comebacks, but even his bounce back ability is hardly likely to infect the party as a whole. He has though made Brown's task tomorrow even more difficult. Brown's speech of 2003, his "Real Labour" opus, is now little more than the tiniest of memories. To go by the leaks, that Brown intends to go on the attack on crime and promises that most piss-weak of political battles, a live debate or debates with Cameron prior to the election, it seems that even Brown and his speech writers have given up the ghost. No longer is even the spirit willing, seeming to be just as weak as the flesh.

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9/28/2009 09:43:00 PM | | | links to this post

Tuesday, January 20, 2009 

Are we about to become utterly fucked?

It's understandable that a lot of people are getting terribly excited about someone who isn't a Bush ascending to the presidency of the United States of America, but left behind has been a major lack of any real substantive comment on the latest bail out of the banks, or rather, as it's beginning to already look, the further throwing of money at a lost cause.

Even if you opposed the original bail out, few were so dismissive of Brown and Darling to claim that they didn't know what they were doing; quite the opposite in fact. While they may have been authoratitive then, they were left looking anything but yesterday morning. They're not helped by the fact that no one, including them, has any idea of just how much effectively providing insurance to the banks for their losses in exchange for them to return to lending is going to cost, for the simple reason that no one it seems, Brown and Darling included, still has any idea of just how much the banks have lost through the collapse of the sub-prime market. This is part of the reason why the City has took such fright and been getting out of Royal Bank of Scotland as quickly as it can - when a bank that is over 70% owned by the state is still not potentially revealing the true nature of its losses, already estimated at £28bn, the idea that RBS is in fact bankrupt and has only been propped up the taxpayer quickly gains traction.

To give an indication of just how quickly we might be moving from another bail-out to full nationalisation of most, if not all of the banks, John McFall, chairman of the Treasury select committee and regarded as close to Gordon Brown, is already calling for both RBS and Lloyds to be fully nationalised, in what could well be a softening up exercise. The implications of such a move should not be understated - taking RBS alone into the public sector would put more than a year's GDP onto the already massive and continually growing national debt. With this fast becoming an increasingly ominous prospect, there's already talk that this could result, inevitably, in a sovereign debt crisis, where the buyers of the debt refuse to take any more, leaving us to go cap in hand to the IMF and also probably the EU.

For the moment this is not yet a full-blown crisis - undoubtedly Ireland and the United States itself are in far more dire straits than we are - but the underlying cause remains the same. For all the talk from the government that this is an American problem imported here on the back of the collapse in the US housing market, it was the hubris of Brown in imagining that he had abolished bust while instituting a light-touch regulatory system which in fact turned out to be a no-touch regulatory system which allowed our own banks to get involved in the toxic loans in the first place. Undoubtedly, the main share of the blame should fall on the bankers themselves, especially the likes of "Sir" Fred Goodwin, who slashed jobs while devouring the likes of ABN Amaro in a truly disastrous predatory move. They were however encouraged by a government which had fallen completely for the mantra of neo-liberalism in the City whilst expanding the public sector too quickly. As ever, New Labour wanted results and it wanted them fast, and to be fair in certain areas it has shown - the NHS, despite the cynics, has been markedly improved. Less apparent are the advances in education, where the obsession with reform has created a gaggle of schools which to this blogger look nightmarish in their controlling tendencies, whilst failing to boost the results sufficiently to mitigate such policies.

The boast since the original bail out that the government had saved the banks has been accurate. Without the injection of funds, RBS and HBOS may well have gone bust, with all the implications that the letting of Lehman Brothers fail caused, not just here but around the world. The fear now must be that all the original bail out has succeeded in doing is postponing just that, with the state shortly to be forced to fully intervene. The jibes at the Tories that they are a do nothing party will look even hollower if it turns out that doing something was almost as bad as doing nothing. If the bank shares continue to fall tomorrow, things really might be about to get a whole lot worse.

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1/20/2009 11:59:00 PM | | | links to this post

Wednesday, November 26, 2008 

Advertising bombshells.


The problem with combining political strategy with advertising campaigns is that when the facts change you can be quickly left looking daft.

This is exactly the trap that the Conservatives have fallen into. Last week, when all we had was rumours and guesswork over what was going to be in the pre-budget report, but where the inkling was that the government was going to produce a stimulus package worth somewhere in the region of between £15bn and £30bn, the Tories thought they were being incredibly clever by bringing back their 1992 tax bombshell campaign. Cheap, effective and simple, and they tried something similar back in 2003. It's partly down to this campaign that Alistair Darling had to set out in such detail how he was going to pay for it, which he did to a fairly decent extent. As it turned out, this wasn't really a bombshell budget in tax terms; yes, the borrowing figures are frightening, but this was negated by the taxing of the rich, which was the distraction measure and sop to the left rather than the main revenue raiser. The real surprise was that national insurance would go up by 0.5%, the part that could be accurately described at least as a potentially painful tax rise.

Almost all of the Conservative fire was concentrated on the national debt. The drop in VAT was the distraction, until an apparently wrongly issued, uncorrected paper on the changes to the tax system still read that VAT was to rise by 1% after 2011, to 18.5%. It was a pretty obvious mistake, as the government quickly made clear, also admitting that they had discussed raising VAT but had decided in the event to raise national insurance instead. You can't however blame the Conservatives for seizing on it, and trying to make hay with the idea that this was a secret plan to raise VAT, with the government not being straight about it. Fair enough.

What you cannot then realistically say is that a 1% rise in VAT is going to be a bombshell, especially when you have been sniffy about a 2.5% drop in the first place. True enough, VAT is a regressive tax, which hits the low paid who don't save but instead spend far harder than it does anyone else. Raising it by 1% would hurt them; Daniel Davies estimates that the cut gives someone working 40 hours a week on the minimum wage £2 a week back, so it isn't outlandish to suggest that a 1% raise would cost them between £40 and £60, possibly more, a year. Not a major sum, but for someone struggling it can more than make a difference. It is not though by any stretch of the imagination a tax rise which is going to put someone into instant penury, especially the mythologised "hard-working families" which both parties so bend over to talk about and discuss. It's equally risible that the country is going bankrupt, as Cameron also claimed at prime minister's questions.

The problem for the Conservatives is getting the balance right between such potentially damaging statements as the country is going bankrupt, which scares people, and attacking the government's lackadaisical and potentially even more damaging plans. Likewise, their own proposals are both rightly and wrongly being lost in the mire, more rightly judging by Cameron's piss-poor examples of what they would do differently, their promised freezing of council tax being revenue neutral and the other two suggestions ones that the government is already doing. Technically, all they have to do is sit and wait and see if the cut in VAT has an effect: if it doesn't, they can claim that their stance was the right one all along. If not, they might be in further trouble. Even then, there's no accounting for whether the public then decide that the softening of a recession created more than in part by Brown means that they'll vote Labour. The Conservatives might still be floundering somewhat, but the end result is still far from certain.

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11/26/2008 11:54:00 PM | | | links to this post

Monday, November 24, 2008 

The pre-budget report.

The media can often be accused of overstating otherwise run of the mill events, both for effect and to try to put conflict into politics which has for some time not been there, but today at least it has both been right to describe the pre-budget report as a gamble and to point to it as at least the end of a 14-year long, if not 30-year long economic orthodoxy.

Let's not get too carried away with ourselves though. This isn't, as Pollyanna herself is promoting it, the end of New Labour and the beginning of social democracy, only a year after she declared that social democracy was dead, but rather a readjustment forced on New Labour by events of their own making. Keynes may have been taken out of the box, dusted down and decorated like a soon to be hauled out of the loft artificial Christmas tree, with Friedman, monetarism and supply-side economics placed on the naughty step, but this was still a cautious, as it had to be, reappraisal of what New Labour's economic policy would become when faced with recession. If anything it was far too cautious when it came to deciding that some of the stimulus package would be paid for by increasing the top rate of tax on those earning over £150,000 a year to 45% - raising a little over £2bn, a pitiful amount. They could have surely got away with making it 50p in the £1, and dropping it to those earning over £125,000, even £100,000, as the old Liberal Democrat policy was, raising a much more substantial amount.

Even if it it is timid, it's still the breaking of the Labour promise at the last three general elections not to increase income tax; the last major shift was 20 years ago when the rate was dropped to 40% by Nigel Lawson, causing uproar on the Labour benches. It is long overdue, an overt return to redistribution, previously carried out almost by stealth on tax credits, where the scheme is so complex that the costs of running it and frustration of those on it who often end up having to pay back that which they weren't supposed to take almost do more harm than good. It also leaves the Tories in a quandary: do they attack it as a tax on wealth creation, on hard work, or agree with the progressive thinking behind it in their new, caring, tough on bonus culture way? At the moment they seem to be uncertain.

As welcome as the shift to taxing the rich more was, the rest of the PBR was almost teeth-grindingly awful, not in the policy sense, but in the doom that pervaded it and which we have to look forward to. Darling, for his part, who I'm willing to suggest is a far more accomplished politician than he has ever been given credit for, did his best to offset this both in his familiar dull delivery, without bombast, and only a few party political jibes at the party opposite, the old style bank manager within him shining through, and in the very optimistic estimates for how quickly we will pull ourselves out of the mire. The Treasury forecast is that we will only be in negative growth for four quarters, the second of which we are currently in. Next year will see a fall in output of between 0.75% and 1.25%, which again seems highly optimistic, both by other forecasts and by the fact that the economy shrank last quarter alone by 0.5%. Equally hopeful is that savings can be found, yet again, within Whitehall which will help to lower overall borrowing, which Darling expects to reach 57% of GDP by 2013-14 - or about £500bn, which really will put us amongst the most indebted of the G7, if not the world.

All of which makes it all the more dark-eyebrow raising to see that £12.7bn of the £20bn stimulus package is to come by cutting VAT by 2.5%. Making it even less attractive is that the duty on tobacco, alcohol and petrol will rise to ensure that there is no overall difference, thus leaving the only things on which the cut will make any real difference expensive electronic goods, cars and furniture. You get the impression that they must somehow know something which we don't, as surely a far better way to have inspired spending would have been the American way of cutting income tax, directly sending cheques back out with the rebate instantly cashable. Unity argues that it will result ultimately in lower consumer prices even on zero-rated goods, which is what the government must also be hoping for. It will become quickly apparent if it has worked or not: if this Christmas is as bad as the retailers have been suggesting it might be, and their sales in January also fail to spark interest, the indication will be that it will have already failed.

The unsurprisingly unleaked other major change was that alongside the tax rises for the rich, national insurance will rise by 0.5% from 2011, which will directly hit the middle classes, and even the upper-working class, affecting those earning over £20,000 a year. With the average wage being somewhere around £24,000 a year, although if we face a far harsher recession than that forecast by the Treasury with deflation a major issue that could in fact drop, it's bound to further embitter those already fed up with Labour and who haven't benefited from the 10 years of relatively benign conditions. At least however they know what's coming: the government's spelling out of exactly what will have to rise to pay for the stimulus, as they had to do and also did to pre-empt the Tory shouts of a coming "tax bombshell" was for the most part well-handled.

George Osborne, for his part, was mostly dreadful in response. The only real hit he landed was that the gap between the stimulus ending and the tax rises kicking in signified that what they were really concerned with was the political cycle rather than the economic one, and it does indeed now look as though Brown will wait until the last moment to call the election, although any party in the same position would have almost certainly done the same thing. This was again though the blundering Conservative party which we have become accustomed to on economics over the past couple of years, decrying Labour while offering no substantive alternative, or indication of what they would do instead. Osborne gave no specifics whatsoever, surely a mistake, even if his anger may have struck a chord.

For all the talk of shifting back towards the comfortable ground on which both parties once stood, at best what they have done is take a few steps to the left in Labour's case and a few steps to the right in the Tories'. Unfamiliar to begin with, but easy to adapt back into. A far bigger change is that all three parties will go into the next election having to promise not tax cuts, or as it has been over the past three elections, the investment versus the status quo dichotomy, but instead tax rises. We will back to the biggest question being who you trust the most to run the economy. After 10 years of New Labour economics, if there is such a thing, the answer ought to be obvious. Yet whilst the Tories both fail to look convincing or offer anything even approaching an all encompassing policy, you'd still have to more than consider the odds on the devil we know. How deep the recession will turn out may will be the ultimate decider. Politics may not have just become interesting again, as per the cliché, but it certainly has, after years of economic consensus, suddenly got far more intriguing.

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11/24/2008 09:32:00 PM | | | links to this post

Wednesday, October 08, 2008 

They say, we pay.


In what is now a multimedia age, it's two newspaper front page headlines that still sum up a day's events: the Telegraph going with back from the brink, while the Guardian has staring into the abyss. If you believe both the politicians and the wider commentariat, all of whom seem to be in basic agreement that today's/yesterday's bailout was both on the whole a good package, and one to which there was, in the age old phrase now so hollow, no alternative, then what would have been considered hyperbole weeks ago is now wholly justified.

That very lack of dissent is what ought to worry us the most. Today's givens, or in Rumsfeldian, known knowns, are tomorrow's deepest regrets. It is even more telling that around the only two people who are objecting to the bailout as set out are on what would be considered the further reaches of both left and right: John McDonnell, who advocates a controlling stake in the banks that will apply for the immediate £50bn of funds being made available, and John Redwood, who appeared to oppose the sort of plan which has emerged on Monday but who now appears to have rowed back somewhat.

Perhaps a better example is in two more well-known economic thinkers. Reading Ruth Lea's whole-hearted welcome was enough for the alarm bells to really start ringing: her past is impeccable having both been chief UK economist at - who else - Lehman Brothers, and also director of the unashamedly Thatcherite Centre for Policy Studies. In much the same vein, Will Hutton, who's had a new lease of life thanks to the "credit crunch", sings the praises so profusely that you'd not be surprised to find he was sporting a huge erection while writing it; apparently the markets were too "shell-shocked" to assimilate the greatness of the Brown and Darling bailout, hence why the FTSE continued to drop like those who threw themselves off buildings in New York in 1929.

It would of course be ludicrous to judge the plan by how the market reacted to it, especially on a day on which the IMF produced a grim as it gets report on how the economy is likely to contract slightly next year, with most even thinking that at the moment is too optimistic. The Dow later plummeted after Paulson made clear that he believed institutions in the US would still fail despite their own bailout being passed and now slowly being put into place.

There are however more than legitimate reasons to be incredibly apprehensive about this plan, not least because unlike in America, our own legislators seem unlikely to even be offered a vote on whether it should be put into action or not. Partly this is because the problem is so urgent that something has to be done now, or so we're told, and it's also true that in the current, almost war-time consensus which has fallen upon both the media and the politicial classes it would be passed with hardly a single vote against, but that is besides the point. This is something far too serious, especially when it involves such vast sums which the taxpayer will be providing collatarel upon, to be decreed simply by a prime minister and his chancellor in agreement with the other very people who brought us into this mess.

This £50bn, or is it £500bn, is itself a hall of mirrors, as we don't have such sums in the coffers to instantly pay out. No, this money itself is to be borrowed, pumped into the banks in the form of the government taking a stake via preference shares. Of the four banks which are in the most relative trouble - HBOS, RBOS, Lloyds TSB and Barclays - three could be bought outright with that £50bn, while you could take a significant stake in the one left out. After all, as we're splashing money around, why not take control, wind down the businesses and put the deposits in one big bank? This is not to say that the government should be in the job of running banks when it can't so much as run its own departments properly, but could they really be any worse at just running them down than the current proprietors that got them into the situation today?

For taking this stake which will, if the plan works, in effect prop failing institutions up, with the eventual promise that there might be a profit in it for the taxpayer if they wait long enough and don't die in the mean time, the deals that the government has supposedly received in return are not worth the paper they aren't even written on. Banks will apparently have to cut to the bone their executive bonuses this year, shareholder dividends will similarly fall under the knife, while small businesses must be offered better rates than currently on their own borrowing. There is perhaps a tendency in such times to call for heads on sticks, as someone has already put it, but whilst there must be stability, surely those responsible at the executive level at these banks must at some point be shown the door, starting as Nils Pratley suggests with Sir Fred Goodwin. Again though, perhaps the reason why there has been far more carping from the Conservative side, with David Cameron demanding, almost Trot-like that no banker receive a bonus this Christmas, is that if the chief executives and others at the banks have to go, then surely also does this country's chief executive for his own role in the crisis. If they are to be treated as Justin suggests, like the benefit scroungers so demonised for their weekly pittance, then Brown and Darling and the rest of them should all be exposed to such penury and shame also.

Fundamentally, the current consensus cannot last, and nor should it. Despite the apparent undoubted Conservative part in the deregulation and the "age of irresponsibility", as well as how if they were in power they would be doing much the same, the resentment that today's payola will breed will likely be easily built on by Cameron and friends, even if they have been so woeful thus far. As we stumble into the recession, the bills will just keep mounting up, with the increases in welfare spending for those newly unemployed already starting to hit the Treasury. Make no mistake, despite everything that has happened, the poorest in society, the sick, the elderly, all will be hit the hardest as those very same bills are aimed to be kept by down by a government that has just bailed out the very richest with our own inheritance. Already the ridiculous one-off cases like the Afghan single mother supposedly living in a "mansion" for which the taxpayer pays out £170,000 a year are being highlighted, with the one direct aim of hitting the welfare state as a whole. How bitterly and cynical typical that it is one of the richest men in the world, with some of the most comparatively better off individuals in the country in tow that are doing such sniping now, and this is only likely to be the start of it.

New Labour could have prevented this. It was always going to win the 97 election, and it could have done so without the support of Rupert Murdoch, of the City, of the CBI, and everyone else that has directly contributed to the current crash. It could have properly regulated the City, rather than ticking boxes and slapping backs; it could have restrained the buy now pay later culture; and it could have condemned the bonuses which are now being criticised far earlier. None of the above though deserve the blame except for Labour themselves. We must not let them forget it, and we must fight to ensure that those blameless in all of this are not the ones held responsible any more than they already are.

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10/08/2008 11:59:00 PM | | | links to this post

Tuesday, October 07, 2008 

As the spiral continues downwards, are Labour's chances actually improving?


The economic crisis, which it can almost certainly now be justifiably called, has just entered a new and latest phase, quite plausibly the critical stage. After Darling's statement to the House on Monday went down in the City like a lead balloon, apparently leading to swift pleading overnight and today that something had to be done to stop the precipitous decline in the shares of HBOS, RBOS, Lloyds TSB and Barclays, even while the latter two of those organisations said they didn't need any handouts, by most accounts before the FTSE opens tomorrow morning up to £50bn will be used to take stakes in all of the mentioned institutions, with potentially more to follow if the fallout is is even more serious than now thought.

How much of this has been planned in advance and how much has been developed ad hoc is open to question, with Simon Jenkins in particular railing against the "dithering". The government's plan may well have been to deal with problems as they developed, but the biggest drop in the FTSE's history on Monday, followed by continuing to decline bank shares seems to have forced their hand fully now. However much criticism can be directed at the government for letting the banking crisis develop, through the "light touch" regulation to the promotion of easy credit, few can envy either Brown or Darling being at the very centre of a storm which is potentially far more serious than the withdrawal from the ERM was in 1992.

The mentioning of Black Wednesday is key because this could also now help further determine who the victors of the next election will be. If the "plan", such as it currently is succeeds, gets the banks lending again and restores liquidity, then it is still not too late for Labour's reputation to be if not restored, then vastly improved. For sure, there is going to be a recession, and Brown's abolition of boom and bust is going to do an awful lot of damage. If however the electorate gives the credit to the government for making the worst of a bad situation, and the recent polls have suggested that most actually have been favourable, if grudgingly of Brown and Darling's performance thus far, it could still with pushing by Labour prompt doubt in what the Tories would have done and how they would have coped. For all Cameron's claiming of being a "man with a plan", their contribution to the economic arguments has been pitiful. On Newsnight again tonight the best they could offer was Kenneth Clarke, whilst Vince Cable for the Lib Dems was again in evidence.

It might well be that the general public has had enough of Labour, end of, as the 10 to 12 point deficits in the polls even after the boost from the Labour conference suggest. While it looks increasingly bleak financially, Labour's chances will probably now depend on what happens over the next few weeks.

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10/07/2008 11:59:00 PM | | | links to this post

Wednesday, May 14, 2008 

Tax cuts and yet more almost irrelevant legislation.

For what most of the press have presented as a panic measure, yesterday's move by Alistair Darling, or rather Gordon Brown skilfully manipulating the chancellor's strings, to raise the personal allowance by £600 to £6,035, a tax cut in effect worth £2.7bn, was reasonably inspired and probably the best option to mostly end the 10p tax cut debacle. It was what plenty have been arguing for all along: a honest, transparent and simple move that takes more of the working poor out of paying tax altogether, whilst not penalising middle earners at the same time. This was the opposite of what Brown, the supposed champion of anti-poverty measures had done in his last budget, the about-turn performed by his weak puppet. If this is the sort of thing that weak chancellors do, then we could do with more of them.

This isn't to forget about the downsides of the move. Firstly it does to a degree show the government panicking over the possibility of losing the Crewe by-election, but it also shows them genuinely listening to people's concerns, as Brown and others less than convincingly promised. More important though was compensating those who have lost out who should never have done in the first place, and if it just so happens to be done prior to a by-election which has become almost a referendum on Brown's stewardship of the country, then so be it. Secondly is that it sadly won't be fully compensating everyone that did lose out, with up to 1.1 million only getting half back. More must be done for them come the pre-budget statement in the autumn, but the issue does now seem to have been firmly closed, something that previous attempts at buying off both the rebels and the country at large had failed to do. Thirdly it puts the government perilously close to breaking its 40% of GDP borrowing rule, the tax cut coming as it does through lending, but almost any other means of compensating would have been either seen through for the con it was, left many still feeling short-changed even if they hadn't been or taken the best part of two years to come through, something entirely unacceptable. It has the added bonus for Labour of shooting the Tories' faux-plight for those who lost out under original change stone-dead, with Cameron always making clear that he would make no promises to restore the 10p tax band. Darling hasn't done that either, but he's done something better that the Tories at no time suggested.

If that was part one of the planned fightback, then part two was today's announcement of the draft Queen's speech, and understandably it had none of the dramatic effect or chutzpah of yesterday's gamble. Instead we have an almost congealed gloop of left-over, stolen or back of the fag packet style bills that hardly present a coherent programme of government. That is to be somewhat expected half-way through a parliament, but when it's also meant to be kick-starting Labour's hopes of getting re-elected in two years' time, it was mostly a squib of the damp variety.

One of Labour's worst tendencies has been to legislate, legislate, legislate and reform, reform, reform then think of the consequences later. We can see this in the continuing attempt to force through longer detention without charge, the use of various parts of Home Office legislation for purposes which they were not intended, the hospitals and schools sick to the back teeth of new initiatives when they haven't gotten used to the last one, and most egregiously, the banning of demonstrating within a mile of parliament, now due to be repealed in the latest constitutional renewal bill. The best political idea of recent years was the Liberal Democrats' pledge to have a bonfire of the very worst illiberal legislation placed on the statute books, and both Nick Clegg and Vince Cable have been making the same argument again today on the quantity rather than the quality of new bills. Their list at the time of what to repeal would still be a great start today, although you can also add the now tragically passed "extreme pornography" sections of the last crime bill to the things to burn.

In lieu of that happening, it has to be said that most of the bills at least have their heart somewhere in the right place. The problem with this pre-Queen's speech announcement is that at best we're given a very shady outline of what's actually going to be in the legislation once it reaches parliament, but on what we know the banking reform and saving gateway bills are steps in the right direction which seem unlikely to come across many hurdles. Of more concern and contentious are bound to be the equality bill, especially the part concerning the all-women shortlists which, despite having the right intention are not the way to achieve equality in parliament; the welfare reform bill, where it's not clear whether the government is "borrowing" the Conservatives idea of needlessly and wastefully re-assessing everyone on incapacity benefit but where they are forcing the long-term unemployed onto "training courses" they have most likely already taken; the policing and crime reduction bill which will introduce yet more crackdowns on "anti-social behaviour", binge-drinking and also "cut red tape", which might well mean the scrapping of the current stop and search mechanism; the Citizenship, immigration and borders bill which will likely toughen still further the steps towards citizenship; the communications data bill, introducing the EU's intrusive demands on data retention on ISPs and the like; and the coroners and death certification bill, where it's still not clear whether the government will relent on its much criticised changes to the coroner's system which mean the Home Secretary can order "sensitive" inquests to be held without a jury.

While this programme might have been intended to add detail to yesterday's decisiveness, it's certainly done nothing to curtail the Tories' spirits, and their response has been emblematic of that. Why, the government is so desperate that it's taking up to 12 of our ideas and putting them to good use was the cry from the opposition benches, and it's one that's not wholly unfounded. While such populist ideas as directly elected representatives that deal with the police can either work well or fail abysmally, there's little here that's immediately going to be opposed on ideological grounds alone, although the pledge to give agency workers the same rights as regular ones, which again needs to be fully fleshed out, might have the Tories pause for thought. There's the saving gateway bill and the social housing plan for government to put up equal amounts as the potential buyer to appeal to the Labour left, but the rest seems almost devoid of colour, limp, lifeless, dull and decent, as someone else suggests.

Some will argue perceptively that that's exactly what Labour needs to do at the moment, to abandon the high risk strategy of eye-catching new initiatives which the Blair years foisted on us time after time, and just concentrate on governing effectively and competently. The other side to the coin is that also suggests a government running on empty, with nothing new to offer, while the increasingly confident opposition only seems to building on its gains. As usual, the reality is split down the middle, with a party that neither knows whether to go all-out or to just carry on. It seems unlikely in the long-run that this latest programme will make any great difference: as before, the next election is now the Tories to lose, and with nothing left in either the kitty or the bag, Brown looks just as isolated and lonely as before.

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5/14/2008 11:34:00 PM | | | links to this post

Monday, February 18, 2008 

Gotta go back in time.

When you walked out the door this morning, did anything feel, slightly different? A bit greyer, perhaps? Was Radio 1 rather than Radio 2 strangely playing Yes? Come to mention it, wasn't the car itself slightly older than you remember it being when you parked it there on Saturday? Was the previously colourful area where you live apparently transformed into a faintly sinister Stalinist architectural hell-hole, indicative of the lack of investment that public ownership practised by a socialist government inevitably brings? And, most horrifying of all, was that person really wearing a waistcoat and flares?

Yes, we've gone back to the 70s in the Tory time machine! Whether a result of the tardis twirling through time commanded by Dr "Dave Cameron" Who, or due to the De Lorean driven by George "Doc" Osborne, we're back in the bad old days of the 70s, where the unions are strong, the 3-day-week is still a recent memory, the comedians are racist without calling it ironic or post-modern, and where Margaret Thatcher was still a threat of what was to come rather than a legacy surrounding us. Oh, and where the gap between rich and poor had yet to stretch further than the distance to the moon.

Perhaps then Gordon Brown and Alistair Darling did wake up this morning asking themselves whether they were mad, in a coma or back in time, but then again, Brown probably does that every morning anyway. Or maybe it was just a befuddled haze from the night before: "Urgh, did I really nationalise Northern Rock? What was I thinking?"

As you can tell from this hackneyed post, when the government decides that the best course of action is to nationalise a private company that has been technically insolvent for almost six months, it brings out the caricatures like a cartoon exhibition. The Tories still haven't quite chanced upon the best adjective to describe the desperate measure of nationalising Northern Rock, but they're keen on both catastrophe and disaster, when they're not doing their level best to try and suggest that New Labour, the party that took selling off its assets to such an extreme that HM Revenue and Customs, the department of government meant to combat the use of offshore tax havens, sold some of its properties to a company based in Bermuda, has dragged us all back to the 1970s with their cack-handed attempts to first sell Northern Rock to a bunch of chancers you wouldn't trust running a jumble sale, then finally giving in and accepting that Vince Cable had been right all along.

This is of course a matter of great and fundamental importance, seeing as every single one of us unfortunate taxpayers now has the equivalent of £3,500 of our own money in keeping Northern Wreck afloat before it is eventually returned to the private sector, but I'm more interested in just how opportunist and shameless the Conservative party can be. With both its leader and shadow chancellor never having to have wanted for anything, and with Dave's wonderful record of having been involved behind the scenes of the Treasury on Black Wednesday, you wouldn't think they'd have the slightest clue what to have done with Northern Rock, and you'd be right. All they know is that nationalisation is a scandal and an outrage, and despite having the best part of six months to come up with a solid policy on what they'd do or have done if they'd been in power, that's as far as they've come. Their wheeze today, presumably written on the back of Cameron's fag packet, was that the Bank of England run Northern Crock down, but as the inestimable Mr Cable has pointed out, this is just nationalisation by another name. For a party that screams, moans and gurgles if Labour so much as shows the slightest sign that its decisions might be influenced by dogma, "old-thinking" or ideology, the Conservatives have relied on their most base prejudice, that being that state ownership is always wrong and unacceptable regardless of the circumstances. Their allegiance to the tenets of neoliberalism, however badly it's been singed by the huge fallout from the sub-prime crisis, is absolute. Just to be awkward, and despite initially supporting the government in more or less whatever it did, they'll also vote against the emergency legislation being hurried through parliament authorising the nationalisation. When in opposition you can of course be as opportunist and shameless as you like in your thinking, but if there was a clear sign that under Cameron the Tories still haven't got the first clue of being able to govern, this was it.

There are two legitimate and damning criticisms of the government's response to Northern Rock's collapse, and the first is that the Financial Services Authority was never given enough teeth or powers in order to regulate the banks and their unsustainable, founded on pure greed business models in the first place. The light touch scheme so beloved of the City, which nevertheless complains bitterly about the slightest amount of bureaucracy or checks and talks darkly of business moving overseas if any more is imposed comprehensively failed. Again, the Conservatives have no answer to this and can't make anything out of it because John Redwood in his economic policy paper had recommended removing all the current red tape from mortgages entirely. Second is that it even bothered looking for a private-sector solution when it was obvious from the beginning that only those with very deep pockets looking to make a cheap buck would be interested in taking the liability on in the short-term. While the government dithered, hedge funds bought huge quantities of Northern Rock shares at rock bottom price, and are now going to be the first at the front of the queue demanding compensation. They don't deserve and are not entitled to a single penny. The "saviours" that did emerge were the private equity firms that would have stripped the bank to the bone, employees along with it in record time and far quicker than the government will. Oh, and there was Beardie, the grinning Cheshire cat of the piece, with Gordon Brown prostituting himself to the eternal Virgin, ignoring his tax-dodging, use of offshore havens and numerous failures and lesser offer than that of Olivant, purely because, well, he's Richard Branson!

What has in fact always been the least worst move is now being portrayed as a complete and utter disaster. For this Labour has no one to blame for itself: Brown has been so desperate to avoid being portrayed by the Tories as the throwback to Old Labour that he has opened himself right up to their other similarly mostly idiotic charge, that he dithers. He certainly has dithered over Northern Rock, and for all the wrong reasons. The other truth of the matter is that New Labour has become so beholden to City that even the slightest move towards finally making it actually pay its dues have been watered down. £35,000 a year after seven years for non-doms who pay the same amount of tax as the cleaners of their buildings do? Scandalous! An 8% increase in capital gains tax even though Labour had cut it from 40% to 10% to begin with? A disaster for the aspirational! It's little wonder then that it spent so long looking for the private solution which was never to arrive. Anything less would have been unforgivable and an abuse of power. With it has gone any authority that Alistair Darling had as chancellor. If the previous chancellor was the most powerful and strongest in living memory, than Darling is certainly one of the weakest, but then whoever was given the job always had a poisoned chalice Whether Labour can recover its record for competence might depend on how quickly his services are dispensed with, pathetic Tory calls for his head or not.

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2/18/2008 07:23:00 PM | | | links to this post

Tuesday, November 20, 2007 

Oops, we did it again...

How worried should people be, asks the BBC? It is quite clearly time, as the Simpsons has long advised us, to crack open each other's heads and feast on the goo inside.

As I'm one of the 35million in the country not affected by this most monumental of fuck-ups, I'm sure you'll excuse me if I find the whole thing ever so slightly amusing. On the surface, while no politician can personally be blamed for a "junior" official losing two discs containing the entire child benefit database, what certainly can be attributed culpability is this government's insistence on empty managerialism in rhetoric while being completely hopeless about actually managing anything in its own departments. Why in the name of all that is fucking holy did a "junior" official even have access to the entire fucking database? What sort of even slightly large business would put all the personal information of its customers onto discs, when they can so easily be lost or fall into the wrong hands, especially when they contain such sensitive data? Why was anyone allowed to put such things through the internal mail, when they should have been delivered by hand if delivered at all in hard copy? Why couldn't the data be transferred across a secure network rather than on two discs? Why was the data on the disc not even slightly encrypted, apparently only passworded? You can ask numerous more questions and still not even get close to finding out just how dysfunctional some government departments might well be.

This is of course the same government that wants to set-up yet another huge database with the details of every child on it, although "celebrity" children and others whose detail is deemed more "sensitive" than others might be lucky enough to be excluded. There's the Spine, upon which the medical details of everyone whom uses the NHS is to be uploaded. Finally, there's the daddy of them all, the ID card database, which campaigners have long been arguing is far more insidious and dangerous than the ID cards themselves. The government couldn't have proved them more right if it had tried.

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11/20/2007 10:03:00 PM | | | links to this post

Tuesday, October 09, 2007 

Oh, Darling...

For the first time in years, the Conservatives tonight seem to be the ones defining the current political agenda, thanks to the panic-striken, knee-jerking antics of Darling and Brown. The idea behind stealing the policies or the ideas behind them of your political opponents is that you wait a favourable amount of time so that the general public forgets who came up with them first; only then can you take the credit, even if the pipsqueak that first mooted them then pipes up and complains.

The cliché says that a week is a long time in politics, and last week arguably proved the cliché, but it's an incredibly short time in the memory. For Alistair Darling in his first pre-budget report to announce an effective doubling of the inheritance tax threshold, even if it actually isn't that and is less generous than it looks on close inspection, not just smacks of desperation, it suggests that Labour now need the Conservatives, the party with no new ideas except soaking the rich and well-off while pounding the poor and sick to lead the way before they move. It's actually worse than that: as well as considering the Conservatives' uncosted, ludicrous inheritance tax policy as worth emulating, he also directly pinches the Liberal Democrats' proposal for taxing flights rather than passengers. That might be a sound idea as it stands, but this was meant to be the Brown government's first major chance to show both how it was going to be different to the 10 years of Blairism, but also to ridicule the Tories' spending plans and their lack of intellectual rigour.

What we got instead was reasonably solid, but disappointing in the extreme. The inheritance tax change is on much firmer economic ground than the Tories' laughable idea to charge non-domiciles £25,000 to pay for the raise to a threshold of £1 million, but just looks like a reaction to their hugely popular but spineless and indefensible new tax cut. Private equity bosses face an 80% rise in tax, but seeing as that they were only paying capital gains tax of 10% to begin with, a rise to 18% is hardly going to break their stuffed piggy banks. As Robert Peston also points out, this will not just affect them but also those who start up and sell their own small businesses, who pay capital gains tax when they do. That's a tax on aspiration, whilst inheritance tax is most certainly not.

As Chris says, this really ought to put the nail in the coffin of Labour as the party of the working class. About the only real reforms or changes in this report which affect them are that Darling's been kind enough to pledge an extra £30 million to go on tax credits, which have been notoriously badly managed. Larry Elliot explains that's only £970 million less than what Darling will be blowing on raising the IHT threshold. The amount of child maintenance a family can receive without it affecting their other benefits will also rise to £40 by 2010, while £4bn will be given to help those in what the BBC describe as "poor-quality" housing spruce up their dwellings. How very kind.

If this was going to be the statement which would have launched the election that never was, then for Labour's sake if no one else's it was for the best. It would have only showed how threadbare the ideas currently are on both sides of the so-called debate. Would those in the marginals, who went all weak-kneed at the chance of passing down their wealth and property without any being grabbed by the taxman have felt the same about Darling's proposals today? Why have the monkey when you can have the organ grinder? For all Brown's undisguised glee and grinning during Darling's statement, itself a horrible, frightening sight to behold, the Tories will be the ones left feeling delighted. They might have dropped their big, vote-winning policies in order to stave off an election, but now they've had that their decision to do that vindicated by Labour's instant response. With possibly two years to go until the next election, that's more than enough time for them to mold more dog-whistles to the middle classes, when Darling could have used today to start the argument against them. Brown's cowardice only shines through again.

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10/09/2007 09:05:00 PM | | | links to this post

Tuesday, September 18, 2007 

Put it under your bed in a Northern Sock.

As Mike Power also suggests, it's not often that I can find something to agree with the Scum on. Today's leader on Northern Rock, or at least the latter part, has it entirely right:

Here are the facts: Northern Rock will not collapse — the Bank of England will not let it. And now the Government has guaranteed all your savings.

So there you are. Whether you continue to panic is up to you.


The real threat to Northern Rock was not probably in actual fact from its temporary lack of liquidity, which the Bank of England provided help with on Thursday evening, but from its savers who rushed to take their money out at the first sight of banner headlines and and the 10 O'Clock News's exclusive. Who could possibly have blamed them though? It's very easy for those of us with little in our own bank accounts to point the figure and either laugh or imitate the crying of fire, but who could begrudge those with their life savings potentially under threat acting prudently, if not rationally? Many of those questioned why they didn't trust what Darling/Brown were saying mentioned Iraq, and again who could pass denunciation?

Speaking of prudence, there was very little of it on show when Alistair Darling made his statement that the government would underwrite not just the deposits of savers in Northern Rock, but any bank affected by the current "financial instability" kicked off by the sub-prime mortgage crisis in the United States. It was probably the right move in the circumstances, but was the equivalent of a kick in the face for those who lost their pensions whom the government have refused to reimburse, at far less the potential cost of bailing out NR or the other banks' if it comes to that. You could caricature it as a panicked reaction to err, a panicked reaction and you might have more than something of a point, but faced with rows of those most likely to vote Labour queuing outside their local branches (especially considering its base in the north) and that bastion of knee-jerkers, the city, losing their nerve in the usual fashion, there was little else they could have done, and the other political parties have been critical more over the time it took than it was done at all.

While it's absolute nonsense that the last few days have been anything like "Black Wednesday", especially seeing that no one except shareholders in NR and those subsequently mugged/burgled of their money on the way home has lost anything at all, it's the first real major dent in Labour's previously uncrackable economic facade, and for what exactly? Essentially, what Labour has done is not just a sign a blank cheque, but informed the banking sector that they can continue to take on vast amounts of debt and that if it all falls apart, it'll be alright because the taxpayer will pick up the pieces for everyone affected, including chief executives paying themselves £1.4 million a year. We're not just living beyond our means environmentally, but also fundamentally economically as well. To come full circle, it's also not going to be very often that I agree with the Burning Our Money blog, but Wat Tyler's right: we're going to be the ones paying for it all.

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9/18/2007 09:02:00 PM | | | links to this post

Tuesday, February 27, 2007 

Scum-watch: Silence, torture and police grandstanding.

I'm unsure of what to make of the complete silence from the Sun over the decision by Alistair Darling to ask Ofcom to review whether Sky's purchase of a near 18% stake in ITV is in the public interest. As the Grauniad report makes clear, Sky executives and no doubt the Murdochs themselves must be furious. After nearly 10 years of complete sycophancy towards the Blair government from the Sun and the Times, the scratch our back and we'll scratch yours pact seems to have come slightly undone.

On one level, Darling's decision is incredibly inflammatory. For a government that has gone out of its way to try to keep the Murdoch tiger in check, such a snub which could potentially lead to Sky's acquisition of the shares being blocked is like a red rag to a bull. However much Murdoch has denied it, it's always been thought that he would at some point try to buy a stake in one of the terrestrial broadcasters, and most assumed it would be Channel 5. As Nils Pratley suggests, the 2003 Communications Act even seemed to prepare for this to happen. The surprise was that Murdoch instead went for ITV, with no warning that such a purchase was coming, and only very shortly after NTL (now Virgin Media) had attempted a takeover. Many justifiably saw this as Murdoch's attempt to stop Richard Branson from building his own rival empire, and it's most likely been the rage of Branson, however hypocritical and opportunistic it is, that has led to Darling ordering Ofcom to investigate.

The really interesting thing is that Darling has apparently come into agreement with Branson. Although Virgin is now ubiqitious, Branson simply cannot compete in the power stakes with Murdoch. This makes me wonder whether this is either a ploy or a backup plan by the Brownites (of whom Darling is certainly a member) in case Murdoch decides with the departure of Blair to switch allegiance back to the Tories. Brown has courted Wade and Murdoch, most recently at the conference in Davos where they sat side by side, but he would be wise to beware of the knife in the back. John Major believed that it was the Sun switching to Labour that was the final nail in the coffin for the Tories, and with Cameron racing ahead in the polls, Brown must be more than aware that Murdoch backs winners, not losers, however much he got it wrong over Iraq.

It's this that would lead me to expect some suitably outraged editorial or simply a report from today's Scum, making it clear to Labour where its bread is buttered. Instead, there's nothing, not even a report about Darling's decision to bring Ofcom into the equation. News International often doesn't cover things that are potentially embarrassing towards its masters, or that might provoke uncomfortable questions from newspaper readers, but the Times has covered the story. I've tried every search combination possible on the Scum website, and there's nothing there. For now, silence seems to be the order of the day to stop the issue from being further inflamed.

There is however a quite wonderful ranting leader about Abu Qatada (Qatada, Qutada, whatever):

VILE Abu Qatada has spent a third of his life enjoying the warm embrace of the democracy he wants to destroy.

Sadly our indulgence of him is not over yet.

His family scrounged hundreds of thousands of pounds in state handouts after he arrived here on a fake passport in 1993.

Surely took advantage of the welfare state like every other citizen can?
He was granted asylum despite a dossier detailing his extensive links with terrorists.

Taxpayers have since forked out £140,000 to keep him locked up and a scandalous £200,000 in Legal Aid for him to fight the deportation he obviously merits.

This despite £180,000 in cash being found at his home.

Well, if this £180,000 was his, it should be used to pay for his legal representation. If it isn't, there isn't much that can be done about it. Being a "terrorist suspect" does not and never should disqualify you from seeking legal aid. If the government had attempted to try him instead of simply getting rid of him, then he might well be now languishing in a cell like Abu Hamza.

This is the man whose sermons against the West inspired the 9/11 hijackers. How he must chuckle as a Western legal system continues to bend over backwards for him.

Or continues to treat him like anyone else would be. Whichever you prefer.

At least one obstacle to his exit is gone: Jordan, where he has already been convicted of terror attacks, has agreed not to torture him.

A pity, but we all have to compromise.

The Sun being witty about a man potentially being tortured? Who woulda thunk it?!

Elsewhere, the Sun reports on the judge rightly chastising the police for remanding in custody the teenager who so nearly shot dead dear old Dave Cameron with his converted fingers:

A JUDGE attacked cops yesterday for locking up a hoodie who pointed an imaginary gun at Tory leader David Cameron.

Judge Wendy Lloyd said she was “concerned” the yob, 17, had been kept in custody for possessing just £5 of cannabis.

She said: “I am extremely angry about this case. There are robbers and burglars at large. But if you make a silly gesture behind Mr Cameron’s back then you are remanded in custody.”

She fined the lout £25 and released him from custody, where he had been held since Saturday. He faces a burglary rap next week.

It's been a while since I last indulged, but back then an eighth was £10. If prices have stayed broadly the same, he had about a sixteenth of the drug, which is barely enough for a couple of spliffs. Cannabis is a Class C drug, and until recently possession of such a small amount as this young man had would not have been an arrestable offence, unless there were mitigating circumstances. It seems that his boasting was enough for the police to raid his house, and the tiny amount he possessed resulted in his appearance before the judge and being remanded in custody.

You can argue about the merits of the police going after casual drug users, yet there seems to have been little reason for him being kept in custody. He is as the police themselves recognise tagged and under curfew. For such a minor offence, there was no reason for keeping him in, other than to make an example of him.

But police were furious at the judge’s reprimand. A senior source said: “The comments are unbelievable. Maybe this lad will get sent on a holiday camp or skiing to show him the error of his ways.

“He’s already tagged for previous offences. It’s a case of another judge who doesn’t know the reality of life. We certainly hope for the judge’s sake that he doesn’t re-offend.

“We took proper guidance and it was completely correct that he was kept in custody.”

The fact that he's tagged for previous offences doesn't matter when he was arrested simply for possessing a tiny amount of a drug. The whole thing was a complete waste of time and effort on the police's part, and their petulance at being given a dressing down for seeking such publicity by arresting the kid in the first place, when they could have just confiscated his weed and gave him a caution is telling. This isn't to defend the boy for being a thick little prick, but the police ought to know when to leave something alone, and this was one of those cases. He'd already proved that he was a moron, and the police's interference has if anything victimised him for simply being an idle prat around a politician.

Not Saussure also made some good points surrounding the case and contempt of court, and although I haven't named him in this post, the whole issue is something of a grey area.

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