Friday, 24 October 2014

By The By

A couple of hours ago, my friend Joanne Carr, the mother of two of my oldest friends, made a welcome return to local government, winning the by-election at Dipton and Burnopfield.

On a recount, the result was:

Labour 656
Independent 655
Conservative 86
Green 63

That's right. One vote. On a recount.

The Independents in these parts, who had previously held the seat quite comfortably, have been using purple as their colour for as long as I can remember. Most of their Councillors and the great majority of their voters will have voted UKIP at the European Elections.

Such phenomena are very much a feature of the North of England, and especially of its countryside. But none of them, please note, has joined UKIP. Most of them will still vote Conservative at next year's General Election.

Then there are those 86 True Blue Tories. "If they had voted for us, then we would have won," is not something that the Independents would ever say. They would leave that to the Home Counties interlopers from UKIP, who have no idea how the North works.

These 86 are people who will only ever vote for the Conservative Party candidate for anything. It is a matter of supreme indifference to them that that might hand victory to Labour. Any non-Conservative candidate is as unacceptable to them as any other non-Conservative candidate.

It would be no less ridiculous an observation than the above to remark that, "If they had voted Labour, then there would have been no need of a recount."

The Conservatives may have dropped from first to third place at the European Elections both in the North West and in Yorkshire and the Humber, as also in the West Midlands and in Wales. But they still managed to return MEPs from all four.

They still took 17.7 per cent of the vote, cast by more than one hundred thousand people, in the North East. They easily out-polled UKIP in Scotland. They out-polled Labour in the East Midlands; only just, but they did. Their Ulster Unionist allies retained a European seat in Northern Ireland.

Anyone who grew up in any of those places, or who has spent any length of time in any of them, will know exactly who these people are. The True Blueness can sometimes dim a little towards considering UKIP for European Elections, or Independents for the council. But not always.

And the bedrock of those who would never consider voting any way but Tory for the House of Commons is really quite large. The bedrock of those who would never consider voting any way but Tory for anything is far from negligible.

Meanwhile, what of that Green vote? It would once, not long ago, have been Lib Dem, if the Lib Dems had contested the seat, and certainly for Parliament. Labour took the seat, so it has not come from there. 

Labour's position in the North, including in rural areas such as this ward, much of which is also quite affluent even if much of it certainly is not, is growing even stronger than it already was. Local by-elections confirm that on a weekly basis.

The Greens are now the Official Opposition to Labour on Liverpool City Council, which the Lib Dems ran until 2010, but on which they now have only as many seats as the continuing Liberal Party.

A few hours ago, Question Time came from Liverpool. There was no Green on the panel. But there was someone from UKIP. The audience was a lot more impressed by Alex Salmond.

Thursday, 23 October 2014

The Lanchester Review: Simon Stevens, Unrealistic And Will Fall On Deaf Ears

Dr Clive Peedell on today's Stevens Report into the National Health Service.

The Immorality of American Exceptionalism

It is too long to post in full here, but David Bromwich's article is an absolute must-read.

A Self-Enriching Racket

With charts that I cannot seem to copy in, Luke Hildyard writes:

There are a number of difficult questions to grapple with when trying to establish whether or not the increasingly extraordinary sums of money paid to a super-rich elite in a handful of leading professions are ‘fair’.

Can one or two individuals really be responsible for the success of organisations employing thousands of people on multiple continents?

Are the markets for executives, lawyers, bankers and consultants completely transparent, open and functional?

Is there a limit beyond which we might consider the gap between rich and poor to be intolerable, grotesque or socially and economically destructive?

But each of these questions rests upon the assumption that those at the top are paid, at least ostensibly, in proportion to their success.

It may be that executives claim sole credit for the achievements of an entire company.

Perhaps their God-like genius is over-valued by uncritical remuneration committees and asset managers who have a vested interest in keeping top pay racing upwards.

There is considerable support for the idea that a more unequal society is divided, weak and unfair. But ultimately, the assumption is that pay is going up because performance is too.

In fact, this is far from the case.

New research carried out for the High Pay Centre by Income Data Services examined median pay increases for FTSE 350 directors compared to the increase in company performance, as measured by a series of metrics used by the corporations themselves to calculate executive bonuses and incentive payments.

The results are summarised in the chart below.

Most strikingly, total FTSE 350 directors pay increased more than twice as fast as the pre-tax profit and four times as fast as the market value of FTSE 350 companies.

Amazingly, the biggest discrepancy occurred between the biggest, supposed ‘performance-related’ components of pay – annual bonuses and gains from so-called ‘long-term incentive plans’ – and actual performance.

Bonuses are usually measured against some form of profitability, while LTIPs are linked to three year changes in ‘earnings per share’ (related to company income) and increases in ‘Total Shareholder Return’ (calculated using share price changes and dividend payments).

In each case, the increase in payment was totally disproportionate to the relevant metric. The relationship between bonus increases and profit growth was virtually non-existent.

The obvious conclusion is that pay at the top has become a self-enriching racket, with the remuneration committees that set pay happy for executives to enjoy a windfall when the economic going is good, then reducing targets so they can cash in during leaner times as well.

Company workers and shareholders are being ripped off as top bosses are lavishly rewarded while failing to grow the wages or savings of ordinary people.

The problem is that shareholders have thus far proved difficult to mobilise against top pay – partly because the holdings and voting rights on pay are controlled by wealthy fund managers – and the workforce have no say in the process.

Putting workers on remuneration committees might be one place that government could start reforming the culture of unjust rewards.

Mandatory publication of company pay ratios, measures to strengthen trade unions and coercion or incentives designed to increase the prevalence of workforce-wide profit sharing would be good ways to follow this up.

Not A Done Deal

Tony Burke writes:

The row over TTIP (the Transatlantic Trade and Investment Partnership deal between the EU and the USA) and the inclusion of an ISDS (Investor State Dispute Settlement) mechanism is growing almost daily.

Followers of the progress of the TTIP talks will be aware of the twists and turns on policy in regard to ISDS which has resulted in the EU president having to clarify the EU’s position, over-rule his new trade commissioner and now ask his number two to sort it out.

The new trade commissioner Cecilia Malmström is having a torrid time.

Following her confirmation hearings, she sent Twitter messages about ISDS eventually clarifiyng that no investor-state dispute settlement mechanism would be part of that agreement – before stating they would be.

She said an old draft of here speech had been used at the confirmation hearings.

However it transpires that Martin Selmayr, the chief of staff for European Commission President Jean-Claude Juncker, had (alledgely) changed her written testimony, in the TTIP section, stating that ISDS was a non-runner.

This generated a row between the EU and the Canadian government, which thought that they had a done deal on the EU-Canadian Free Trade Agreement known as CETA.

Leaked copies of the speech carried Selmayr’s ‘track changes’ – created by Microsoft Office.

Judith Kirton-Darling, the Labour MEP for the North East said: “The document with the tracked changes was leaked. It was incredible. At that level nobody forgets to take it out. They wanted us to see it. It’s part of the politics.”

An article also appeared in the Dutch publication NRC Handelsblad which suggested that Juncker had decided to remove the ISDS from the TTIP negotiations following growing pressure across Europe from politicians, anti-TTIP groups, unions and the public.

Junker recently said: “My Commission will not accept that the jurisdiction of courts in the EU Member States be limited by special regimes for investor-to-state disputes. The rule of law and the principle of equality before the law must also apply in this context.”

He now has swiftly handed the problem to somebody else. He said: “I have asked Frans Timmermans, in his role as first vice-president in charge of the Rule of Law and the Charter of Fundamental Rights, to advise me on the matter. There will be no investor-to-state dispute clause in TTIP if Frans does not agree with it too.”

Timmermans is Junkers’s number two and a former Labour politician and a member of the S&D group in the European Parliament, which may help seal ISDS’s fate.

Junker’s decision also sidelined Sweden’s Cecilia Malmström, the trade commissioner who appears to be at odds with her president.

ISDS grants a companies the right to initiate dispute settlement proceedings against a foreign government, if the company or investor feels their interests (or profits) have been harmed.

Earlier this year, a public consultation the commission launched into ISDS inclusion in TTIP attracted 150,000 responses, with RU citizens fearing their governments could be sued by multinational corporations for loss of profit.

The first ISDS clause appeared in an agreement between Germany and Pakistan in 1959, with Germany seeking to protect its companies from loss of investment due to the volatile political and economic environment in Pakistan.

It appears that Germany that are now leading the opposition to ISDS in TTIP.

A good example of the how ISDS works is the Uruguayan government versus Philip Morris case.

The Swiss based tobacco giant accused Uruguay of violating the bilateral investment treaty between Switzerland and Uruguay, saying that anti-smoking legislation (such as Uruguay’s ‘single presentation’ ordinance and its requirement that health warnings cover 80 per cent of a cigarette pack) devalues its cigarette trademarks and investments. The company is seeking financial compensation.

And pressure is growing in the UK.

According to Kirton-Darling, at a meeting of MPs, MEPs and Lords recently she said that Conservative Lords were raising the same concerns as Labour and Liberal Democrat Lords:

“There are widespread concerns, not just on the left of the parliament, but also from voices in the Liberal Group and the Christian Democrat Group, which are raising issues about ISDS as a system. Conservative Lords were raising the same issues. It’s not cut and dry. The debate is there. It’s not a done deal,” she said.

Save UK Rail

The North East has a long and proud connection to the railways.

In 1825, George Stephenson’s engine – locomotion, became the world’s first steam locomotive to carry passengers, and the public railway was born.

In the years following thousands of miles of rail track were laid connecting every part of the UK, as the industrial revolution became driven by steam.

The railways today remain an essential part of our national infrastructure and their success or failure inevitably has an impact on the strength of our economy.

However, too many people have been priced out of rail, and those with no option but to commute by rail face excessive year on year fare rises, overcrowding and little sign of improvement despite billions of pounds in subsidies provided to the train operators.

According to the report Rebuilding Rail, the cost of a privatised railway has been £1.2 billion a year more, than had it remained in public ownership. 

The Northern Rail franchises (North Rail and Transpennine Express), serving a population of around 15 million people, are the latest to be put up for tender under the flawed franchise process.

However, prior to the bids, the Government conducted a consultation on how the service should be run. 

They set out various expectations, including the introduction of Driver Only Operation, whereby there will be no guards or conductors, undermining rail safety, “more modern ticket retailing”, a coded message for ticket office closure and staff redundancies, and an increase to fares, to help pay for better services, despite Government plans to remove existing provisions.

I have previously accused the Conservative Government of taking an ideological approach to railways as they reject any suggestion to return this vital service back into public ownership.

However, recent research shows that UK rail services are under state-ownership, they just happen to be the French, German and Dutch states.

Following the decision to award the Scotrail franchise to Dutch state-owned firm Abellio, research has shown that 20 of the UK’s 27 private rail services are owned by foreign state-owned or backed railways. 

The UK suffers from some of the highest rail prices in Europe, with profits taken out of our railways subsidising lower fares and better services for European commuters.

It is time for Parliament to act, and we require an urgent inquiry into our railways and the dominance of foreign state owned companies providing these services.

The Labour Party have promised to take action calling for a UK state owned rail company allowing them to bid for rail franchises.

Currently, Directly Operated Railways, the UK publicly owned company which took over the East Coast Mainline when National Express abandoned their contract, have been banned from bidding for the franchise as the Government seeking to privatise the line.

However, failed operators, who let the public down and failed to honour their contact are not excluded from the process.

My preferred option would be to return our rail network into public ownership as the franchises expire.

I believe Directly Operated Railways can deliver a better service and value for the taxpayer as they have shown on the East Coast Mainline.

As with health, and energy, the railways are too important to fail due to the catastrophic effect failure would have on the public and our economy.

No matter how much or how often private companies fail in any of these sectors, the Government will always bail them out, as we have seen twice on the East Coast Mainline.

This is an example of the Government privatising the profits, and nationalising the risk.

As the home of the railways, I want a government who will strengthen services in the north not undermine them.

The franchise process fails the nation, but the Government’s rail strategy fails our region.

The importance of the railways as a driver for national growth is such that David Cameron is willing to commit at least £50 billion to High Speed Rail. However, the North East is not included, with high the speed line ending at Leeds.

In fact, a consultation document by HS2 and Network Rail suggests by 2033 journey times from Durham to London would be just 11 minutes faster; we are likely to lose direct services to London, and we can expect slower times to major Scottish cities, Aberdeen, Edinburgh and Glasgow as direct trains are replaced with stopping services.

On this basis, I cannot support HS2, which will be a waste of taxpayers money, fail to improve rail services in the North East, and are likely to contribute to exacerbating the economic imbalance between the North and the South.

The priorities should be to improve our connectivity to major lines and rail services, and we continue to work towards a new rail stop at Horden, Seaview.

I would like the Government to get behind these plans, which are a tiny fraction of the cost of HS2, but would see our communities connected to neighbouring cities, and the UK rail network, helping us to create new economic activity and opportunities for our former mining communities.

We need a national plan for rail to make it accessible and affordable to everyone.

A service which is run in the public interest, and does not subsidise commuters in Amsterdam, Paris and Berlin.

We need a rail service which supports efforts to rebalance the UK economy and does not exacerbate the economic divide.

The Downward Spiral

Ann Pettifor writes:

The Bank of England’s Andy Haldane is a fine economist. He occupies an ideology-free zone. This is highly unusual in central bank circles.

He made a particularly skilful and nuanced speech last week. Many gushed over it. Gillian Tett of the Financial Times suggested that it was good enough to qualify Haldane as a journalist.

But Haldane is not a journalist. He is a central banker. And that makes his Twin Peaks’ speech particularly ominous.

For while he bows to his political masters in the Treasury by acknowledging the growth in UK employment, his speech tilts definitively towards gloom.

Let’s analyse it more carefully than I was able to do in a brief BBC Newsnight interview (eleven minutes into the show).

First, as part of his positive ‘Peak’, Haldane notes that “consumer price inflation, at 1.2%” has reduced “the squeeze on households’ real disposable incomes”. That is questionable, given the ongoing squeeze on household incomes.

[Later in the speech he gives it to us straight: “average weekly earnings growth adjusted for consumer price inflation – is currently running at close to minus 1%” (My emphasis).]

He then goes on to make a remarkable “positive” statement. “According to financial markets inflation is expected to return and stay close to target over the medium term.”

That is in my view a highly unlikely trajectory.

And Haldane appears to agree, because later, in his conclusion he makes a tortured reference to disinflation as “the weak pipeline of inflationary pressures” – weak because of falling wages and commodity prices.

So the financial markets are likely to be wrong again. And all the while deflationary pressures intensify.

Note that he, a policy-maker at the Bank of England is not telling us what the Bank considers the future direction of inflation to be.

Instead he implies that the future direction of inflation is in the hands of markets, and not the central bank.

That is depressing, but right of course, because the Bank of England, like the Federal Reserve has done almost all that can be done to manage inflation, given that the committee of men and women who decide on policy, have only one, not very effective weapon or policy tool: the central bank rate of interest.

The current rate cannot reasonably fall much lower. Indeed the Bank can only maintain a 0% nominal rate – or as it is known, a Zero interest-rate policy (ZIRP).

What Haldane is saying here quite pointedly is this: the Bank of England can do no more.

The clear implication is that now its over to the UK’s coalition government and in particular the Treasury to act – as the downward spiral of wages, commodity prices intensifies and debt-deflation threatens.

The Treasury may still turn a deaf ear.

Treasury ministers have since 2010 effectively sat on their hands when it came to dealing with the grave and ongoing debt crisis of 2007-9.

Both Lib Dem and Conservative Treasury ministers have airily consigned responsibility for fixing the private finance system to ‘the market’.

They place on the private sector the responsibility to “fix” both the UK and the global financial system and in particular to manage, re-structure or de-leverage excessive private debt levels.

Ministers have instead concentrated, somewhat obsessively, on dismantling the state and cutting public sector jobs, spending and investment.

These policies have in turn led to falls in UK wages.

The result, as yesterday’s public debt and deficit numbers confirmed, is a predictable deterioration in the public finances – one we warned of in PRIME’s The Economic Consequences of Mr. Osborne.

So while the government is failing to achieve its target of cutting public debt, and instead has applied policies that have worsened the public finances, the market has singularly failed to address and manage the vast overhang of private debt.

The UK’s private debt stands at 186% of GDP – more than double that of government debt – according to the recent 16th Geneva Report on the global economy: Deleveraging? What Deleveraging?

And as both private and public sector wages and incomes continue to fall, much of that private debt is unlikely to be repaid, further weakening the already shaky private banking sector.

Only a week ago, the UK Chancellor acknowledged that trouble is on the horizon – but slipped in a quick defence by blaming it on the Eurozone.

This is a critical moment for the British economy” he is quoted as saying.

The eurozone risks slipping back into crisis. Britain cannot be immune from that. It’s already having an impact on our manufacturing and our exports,” (9 October, 2014).

So Haldane’s “reasons to be fearful” are shared by the Chancellor.

But Haldane the central banker is more direct than the politician. He takes great care to stress how positively awful is the fall in real wages.
Growth in real wages has been negative for all bar three of the past 74 months.

The cumulative fall in real wages since their pre-recession peak is around 10%. As best we can tell, the length and depth of this fall is unprecedented since at least the mid 1800s.
Note also that Haldane made this speech on the eve of the TUC’s “Britain needs a Pay Rise” demonstration.

That cannot have been a coincidence, and in itself sends a clear message that wage falls are becoming intolerable – both for workers, for society, but also for the economy as a whole.

Haldane then tackles the thorny issue of productivity and concludes “that at 15% below its pre-crisis trend level…(it) has not flatlined for that long in any period since the 1880s….

It is our view here at PRIME that the UK government has made what it considers to be a politically convenient trade-off between productivity and wages.

The Coalition has a preference for low, and falling wages (as do many corporate bosses) and has been prepared to trade off low wages against productivity.

If the government had preferred higher levels of productivity, it would have stimulated the creation of high-skilled employment via public investment in e.g. green technology and sustainable transport, which would have in turn encouraged private investment and the creation of higher-skilled, higher-paid jobs in manufacturing and other skilled sectors.

Instead the Treasury has sat on its hands, and watched as wages and productivity have fallen precipitously.

As the recent cautiously drafted Geneva Report notes, and as the OBR confirmed in its 2014 Budget forecast, the savings rate of the UK’s household sector will continue to fall, while household debts are set to rise at a much faster rates.

This ongoing rise in private debt, at both national but also at global level, is “interacting in a vicious loop” with “a poisonous combination” of falling incomes and weak productivity.

Policy-makers in both Britain and the Eurozone are idly sitting on their hands and twiddling their thumbs as this vicious downward spiral intensifies.

Worse: they are cheering on austerity policies which repress incomes and weaken productivity and output further, while doing nothing about dangerously high levels of private debt.

So Andy Haldane is right to be gloomy.

Given the excessive caution of central bank speeches, we can go further and interpret his speech as sounding the alarm, and warning government that the monetary authorities have no more effective policy tools in their locker.

Government must act – before it is too late, and the economy is plunged into another destructive, financial crisis.

Wednesday, 22 October 2014

The Lanchester Review: To Speak The Truth To Those In Power

Dr Clive Peedell on the impending Stevens Report into the National Health Service.

Exiled To The Republic?

It says a very great deal indeed if that was, and quite conceivably still is, the IRA's view of the 26-County State. No spiritual home, that.

Did and do Loyalist paramilitaries, or Loyal Orders, or what have you, exile miscreants to Great Britain? That would ring no less true.

Northern Ireland is its own very special place, and neither side there is ultimately loyal to anywhere else.

The Evidence Is Their Silence

The evidence piles up that the private sector auditors of banks have manifestly failed in their duties.

All the major banks received unqualified audit opinions from Deloitte & Touche, PricewaterhouseCoopers, KPMG, and Ernst & Young. Private sector auditors have a history of silence and are immersed in too many conflicts of interest.

The evidence is their silence at Barings and Bank of Credit and Commerce International (BCCI), as well as at other debacles.

Accounting standards for banks are set by the International Accounting Standards Board, but astonishingly this is a private limited company in London funded by the Big 4 accounting firms who audit the banks and major corporations – a nice cushy cartel whereby the accountancy companies control by their funding the body that is supposed objectively to set their standards.

The rules have enabled banks to publish opaque annual accounts, and vast amounts of assets and liabilities have not been shown on their balance sheets.

Accounting firms have shown no concern for serving the public or the national interest. As a result many toxic assets have continued to be shown on bank balance sheets as good assets.

Despite the higher risks and falling credit-worthiness they have been able to inflate their profits with spurious adjustments such as debt valuation adjustments.

That means that markets, investors, savers and regulators have been misled, with serious consequences for the economy.

Clearly urgent reform is needed to ensure that accounting standards for banks are set by a body independent of the financial sector and the accounting industry.

The rules need to be set by the regulator and approved by the Commons Treasury Committee.

The audits of all banks should be carried out on a real-time basis either directly by the regulator or by a public agency specifically created for that purpose.

This would enhance the regulator’s knowledge base and capacity for timely interventions, since in the era of instant movement of money ex-post audits are of little use.

Banks will of course resist this, and have proved very adept at lobbying to resist legislation. Much of their lobbying power remains hidden from public scrutiny.

All banks should be required therefore to publish the names of the lobbyists used, the public officials lobbied, the precise details of the lobbying pursued, and the amounts spent on the lobbying.

Meeting Patients’ Needs

Owen Jones writes:

There are two certainties about prime minister’s questions, that weekly screeching ritual that makes you makes you want to weep for those who fought for democracy in Britain.

First, David Cameron will at some point turn a shade of crimson; and second, when scrutinised over his government’s NHS record, he will immediately launch into a savage counter-attack on Welsh Labour’s handling of Wales’s NHS.

The state of the Welsh NHS “is a scandal”, bellows the prime minister; adding that the English border with Wales is the “line between life or death”; and – as his health secretary Jeremy Hunt puts it – the Welsh NHS is “second class”.

It makes perfect political sense, of course. It is “look over there” politics at its finest. Think we’re cocking up the NHS here? Check out what our critics are doing in Wales!

And it helps confront one of the only stubborn leads the Labour party has on any issue, which is the NHS. 

And so we stop considering the staggering fact that the Tories’ top-down privatisation – a policy voters weren’t consulted on, and which came with what Labour claims is a £3bn price tag to boot – has been disowned by the party’s senior figures as their biggest mistake in government.

Apparently they didn’t understand it: it was “unintelligible gobbledegook”. Alas, we all make mistakes: it’s only the institution keeping many of us alive, after all.

Competition laws created an expensive mess in the NHS, according to its former boss Sir David Nicholson. A million patients are now stuck waiting for more than four hours in A&E – a level unseen since 2003/4. 

The longest real-terms squeeze on NHS funding in its history, privatisation, an ageing population, cuts to local care budgets: all this is heaping more and more pressure on a creaking NHS.

It’s not just the Tories, though.

In the last few days, the Daily Mail has subjected the Welsh NHS to a relentless battering. There will be far more to come in the runup to May.

Picking on the Welsh NHS might seem a bit peculiar. Surveys show that 91% of Welsh citizens are satisfied with the last appointment they had at a NHS hospital.

According to a study by the Nuffield Trust earlier this year, none of the UK’s four countries were consistently ahead of each other in NHS performance.

The number of “avoidable deaths” in Wales was broadly the same as anywhere else.

Yes, Wales has more specific challenges than England which make a fair comparison hard: a population with more needs, including a higher proportion of older citizens, at a time of cuts to local care services.

There is the issue of cuts.

According to the King’s Fund last year, NHS spending in Wales was projected to have fallen by 8.6% between 2010-11 and 2013-14.

But Wales has been left with an extreme lack of room to manoeuvre.

The coalition has slashed the Welsh government’s budget by 10% or £1.5bn – since the government came to power.

Given that around 40% of the Welsh government budget goes on the NHS, in practical terms the NHS has been given relative protection, and now Cardiff is spending an extra £425m over two years. 

According to the Welsh government, Wales is still spending more per head on health than England is.

But the substance of the Daily Mail’s attack has received a strong counterblast from the Welsh government. 

The Mail’s claims that about half of Welsh cancer sufferers have to wait six weeks or more for many scans and tests, compared to less than 6% in England: not true, says Cardiff.

Some 87.4% of Welsh cancer patients on the “urgent suspected cancer route” received treatment within 62 days after a GP referral earlier this year, compared to 84.1% in England.

And 98.1% of newly diagnosed cancer patients “not via the urgent route” began treatment within 31 days, compared to 97.8% in England.

Rather than Welsh patients fleeing to English hospitals, in areas such as Powys, patients were simply using their local hospital provider, which is across the border.

Does that mean turning Wales’s NHS into some sort of glowing utopia, a privatisation-free idyll unlike a disintegrating English NHS?

No, and those of us who believe in the NHS should always advocate reform, as long as it is not a synonym for “privatisation” and “cuts”, but rather about meeting patients’ needs.

But while the Welsh NHS is certainly not perfect, the Tories cannot get away with using it to avoid being scrutinised over their own disastrous record.

See also here.

Tuesday, 21 October 2014

Radical At The Routes


Warmly welcomed by the next Secretary of State for Transport, Mary Creagh.

Good stuff.

Low Wages = No Tax Revenue

Who knew?

Well, the Chancellor of the Exchequer did not know, for a start.

Obama Is A Republican

As Bruce Bartlett explains, "He's the heir to Richard Nixon, not Saul Alinsky."

The Last Days of Telegraph Blogs

Even Daniel Hannan is now posting his important stuff somewhere else.

And the Twitter account no longer exists.

Not The Chiltern Hundred

A fascinating exchange today with an old associate who has gone on to greater things.

Among the topics covered were today's by-election to succeed Lord Methuen and today's ennoblement of Sir Andrew Green, of which latter I should disapprove strongly, were it not for the annoyance that it has caused to David Aaronovitch and Oliver Kamm.

According to my interlocutor, very serious consideration is being given to a scheme whereby the elected hereditary peers would be replaced with 100 members elected for six-year fixed terms by the members of the House of Commons.

Each of the Labour, Conservative, Liberal Democrat and other MPs would elect five Labour, five Conservative, five Liberal Democrat, five other party and five Crossbench Senators, or whatever they would be called.

The intention had been to use STV, and AV for by-elections, but I seem to have made the case quite well for voting for one candidate and the requisite number being elected at the end.

My friend and I have both counted STV elections the final results of which have been identical to those of the first preference count.

The eventual intention would be for this 100 to comprise the sole second chamber.

That is this week's word on the street, anyway.

Congress of the New Right, Indeed

An email from one of my friends on the inside, concerning my long-running call for legislation to disapply in the United Kingdom anything passed by the European Parliament but not by the majority of those MEPs who had been certified as politically acceptable by one or more seat-taking members of the House of Commons.

My sympathetic, and very well-placed, correspondent would like to know if this would mean that we should now be subject to the legislative will of Robert Iwaszkiewicz, thanks to a note to the Speaker from Douglas Carswell.


Not for nothing did Janusz Korwin-Mikke, the Holocaust-questioning opponent of women's suffrage (but admirer of Margaret Thatcher) and advocate of wife-beating who founded and leads Iwaszkiewicz's party, call that party the Congress of the New Right.

He was an underground translator and circulator of Friedrich Hayek's The Road to Serfdom and of Milton Friedman's Capitalism and Freedom. He met Friedman, who praised him in his memoirs. From such roots have grown the view that the public ought not to see the disabled on television. Of course.

Thanks to the EU, such people are our legislators. Thanks to UKIP, such people are our legislators with the support of at least one member of the House of Commons.

The Truth, Of Course

Owen Smith writes:

It may be an uncomfortable exercise, but brace yourself and try to imagine for a moment that you are Jeremy Hunt.
Now, in your new role ensconced behind a desk at the Department for Health, it’s not difficult to imagine the huge pressures that are heaped on your shoulders at the moment.
The English NHS is undergoing the worst year in A&E for a decade, with almost a million people waiting over 4 hours, elderly care is in crisis as budgets for social care have been slashed and people are finding it harder to see their GP since the Tories scrapped Labour’s 48-hr appointment guarantee.
You’ve even got senior cabinet members going around telling the press that the top-down health reforms are the Government’s biggest mistake – and let’s face it, there have been a few.

But given that the reforms cost £3bn, have caused “profound and intense” damage according to the BMA and proven deeply toxic with the public, you can see why NHS reforms top the list.

So what do you do if you’re Jeremy?  Do you roll your sleeves up and try to turn around the growing crisis in your own department, or do you desperately cast around for a diversion from it?

You only need to pick up this morning’s Daily Mail (or indeed yesterday’s or tomorrow’s or Thursday’s) to spot which option Jeremy plumped for.

Following the scurrilous lead set by the Prime Minister, who shamefully described Offa’s Dyke as a border ‘between life and death’, the Daily Mail has been peddling a series of half-truths and downright lies about the state of the NHS in Wales.

This campaign has diminished any standing they might have left as an objective observer, just as David Cameron destroyed his own as a Prime Minister for the whole of the UK.

Yesterday’s attack suggested that there were systemic failings in the quality of care in Welsh Hospitals – despite the fact that only a week ago an independent investigation into just such care found the opposite was the case.

Today, the Daily Mail warns, in typically understated terms, of an ‘exodus’ of patients from Wales to England, prompted, they say, by the differences in cancer care between the two countries.

They further allege, this time in direct collaboration with Jeremy Hunt, Minister for Misinformation, that the Welsh Government refuses to investigate their claims and is ducking a comparative study of healthcare in England and Wales.

The truth, of course, does not bear out these claims.

Firstly, it is not true to say, as the paper does, that 15,000 Welsh patients were treated for cancer in England last year. The real number is 2,000, as the Daily Mail/Tories have counted appointments not patients.

In fact 16,000 Welsh patients were treated for cancer last year, the majority within Wales, as you would expect.

Those who were treated in England are largely patients who live along the populous Welsh border (where 25% of the Welsh population and 5% of the entire English population live) and whose primary hospitals have traditionally been in England.

Some will have been treated in England because Wales, with under 3 million people and 17 major hospitals and one specialist cancer centre, does not have specialist clinicians in every field, unlike England with its 60 million population and 250+ hospitals.
Overall, the number of patients from Wales being treated in England is actually falling – but the number of patients crossing the border in the other direction is rising, with over 8,000 English men and women coming to Wales last year, up on previous periods.

Secondly, it is not true that cancer care in Wales is falling behind England.

The reality is that in Wales 87.4% of people start their cancer treatment within 62 days of a risk being flagged by their GP, while in England it’s just 84.1% (April to June 2014).

The Secretary of State for Health demeans his office by using groundless scaremongering on cancer in a bid to deflect from his own failings.

Thirdly, it is nonsense to suggest that the Welsh Government has evaded scrutiny on this issue. For a start, the Prime Minister himself has raised it over 30 times in the House of Commons.

But more importantly, Welsh Health Ministers have acted swiftly to institute investigation, review and reform in every instance where allegations of poor or dangerous care have been made.

Furthermore, there is a mandatory review of case notes for every death in Welsh hospitals – a level of scrutiny that does not even exist in England.

Nor does the Welsh Government fear comparative UK wide reviews. In fact, a detailed independent Nuffield Trust report found that across the UK’s four health systems no one country is consistently ahead of or behind the others.

Indeed, it found that that the performance gap between England and the rest had narrowed in recent years, with Wales, Scotland and Northern Ireland improving faster.

But the reality is the Tory Party and their cheerleaders at the Daily Mail aren’t interested in the facts of this debate.

We all know that you can’t trust the Tories with the NHS, now it’s clear you can’t even trust them to speak the truth about it either.

They have realised that their monumental mismanagement of the NHS, our most prized institution, will come back to bite them in May 2015 and in Wales that can’t come soon enough.

All good stuff. Again I say that no one cares tuppence, and that most people will never even find out, what the Conservative Party or the Daily Mail says about the NHS.

Trouble and Strife

At least Sir Nicholas Mostyn has initiated the debate.

Never having needed to be consummated, civil partnerships ought not to be confined to unrelated same-sex couples, or even to unrelated couples generally.

Furthermore, any marrying couple should be entitled to register their marriage as bound by the law prior to 1969 with regard to grounds and procedures for divorce, and any religious organisation should be enabled to specify that any marriage that it conducted should be so bound, requiring it to counsel couples accordingly.

Statute should specify that the Church of England and the Church in Wales each be such a body unless, respectively, the General Synod and the Governing Body specifically resolved the contrary by a two-thirds majority in all three Houses.

There should be similar provision relating to the Methodist and United Reformed Churches, which also exist pursuant to Acts of Parliament, as well as by amendment to the legislation relating to the restoration of the Catholic hierarchy.

Entitlement upon divorce should be fixed by Statute at one per cent of the other party’s estate for each year of marriage, up to 50 per cent, with no entitlement for the petitioning party unless the other party’s fault were proved.

That would be a start, anyway.

This would all have passed, if anyone had bothered to propose it, as  part of the same-sex marriage legislation that was mandated by the outcome of the 2010 referendum on whether or not Gordon Brown ought to remain as Prime Minister. He had explicitly ruled out the introduction of any such legislation.

Whereas Cameron and Clegg both said that they would at least look at this, which could only have meant one thing. If you voted for either of what became the Coalition parties, then you voted for same-sex marriage. The Conservatives are already campaigning specifically as the party that introduced it.

As an aside, it was also UKIP policy at the time, as it is again now. But none of the above is, or ever has been.

Conservative Mainstream, Indeed

"Clear off to UKIP," says Ken Clarke.

"Why were you ever in the Conservative Party," say I?

Was it in order to get the Accession legislation through, in 1972? Was in order it to prevent a referendum, not once, but twice, in 1974?

Was it in order to campaign for a Yes vote, in 1975? Was it in order to campaign to stay in, in 1983, the second referendum on membership?

Was it for the free movement of goods, services capital and people negotiated and enacted by Margaret Thatcher in the teeth of unanimous Labour opposition?

Was it to keep the pro-euro Clarke as Chancellor of the Exchequer, rather than replace him with the anti-euro Gordon Brown, in 1997? That was the single currency referendum, in which I, for one, voted to save the pound. Did you?

Then why, exactly? Why did you ever even so much as join the Conservative Party? Why?

The Lay of the Land

It looks as if this silly recall business is not going to get anywhere.

But what if there really were to be these "lay members"?

We had thought that in this context, those were called MPs, just as in certain other contexts they were called jurors, or magistrates, for example.

If the MPs are the problem, then change the MPs.

But what if there were to be these others? Who should they be? How, and by whom, should they be chosen? And why?

Similarly, who should replace Fiona Woolf, and why?

On The World at One, Simon Danczuk stated the blatantly obvious: Leon Brittan is being protected. He might have added that Brittan was Nick Clegg's political godfather.

Was there anyone who was closely associated with Margaret Thatcher and who was not engaged in the sexual abuse of children?

Walking The Walk

A paralysed man is now walking following the transplantation into his spinal cord of cells from his nasal cavity.

By contrast, embryonic stem cell research has never yielded anything. Anything at all. Ever.

However, funding continues to be poured into it.

But science is what works.

Even if it does not annoy the Catholic Church for having dared to educate the practitioners, or the wrong sort, or both.

Healthy Politics

As for the Daily Mail's campaign against the NHS in Wales, no one believes a word of that.

As much as anything else, appearing in the Mail does not in itself affect the vote of anyone, or at least of anyone who might ever have considered voting Labour.

That paper wanted it, and wants it, to be taken up by the BBC. It hasn't been. It won't be.

Labour wins on the NHS simply by existing at all, simply by being the Labour Party. Likewise, the Tories lose on the NHS simply by existing at all, simply by being the Tories.

Them's the rules. Always have been. Always will be.

With the deficit up again, it is anyone's guess what, if anything, is the corresponding strong point for the Conservative Party. Frankly, there is not one.

Monday, 20 October 2014

Total Recall

Anyone who secured a recall election ought to be required to pay for it. Much better to have no such provision in the first place.

We most certainly do not need recall elections. Those would be nothing but a charter for nuisance. Mostly by Liberal Democrat activists, and these days possibly also UKIP and the SNP.

Although not exclusively so.

Think of the MPs who voted against DRIP. Think of the MPs who voted against war in Libya, and against the recent bombing of Iraq.

Party machines, quite possibly by means of each other, would mobilise to recall MPs like that. Having to pay for the elections would be no deterrent there.

We must not go down this road.


Time was when buying a record, or a book, or whatever, meant that you owned the copy to which someone else might have been listening, or that someone else might have been reading, or whatever.

The most offensive thing about Mike Read's UKIP calypso is that he has adopted an imitation Jamaican accent. Calypso is from Trinidad.

Harry Enfield and Paul Whitehouse know what they have to do. You Ain't Seen Nothing Yet for Christmas Number One, say I.

A Qualitative Difference

Kevin Meagher, who ought to be an MP and who may yet become one once the round of last minute retirements commences after Christmas, writes:

“When the facts change” John Maynard Keynes famously remarked, “I change my mind”.

No such intellectual pragmatism informs the thinking of outgoing EU Commission President, Jose Manuel Barroso.

He has been in valedictory mood, telling a gathering at Chatham House today that David Cameron’s wish to reform the EU’s provision for the free movement of people – partly responsible for Britain’s three million extra immigrants over the past decade or so – is “illegal”.

Moreover, an arbitrary cap on EU migrant workers coming to Britain “can never be accepted.”

Given all political change involves altering laws, he is technically correct on the legality point; but he’s also being obtuse.

For Eurocrats like Barroso, free movement is an inviolable principle and he will brook no dissent. His mind is closed to the possibility of change – and that there is even a problem to address at all. 

(Although I dare say it helps that he comes from a country like Portugal, not particularly noted as an economic powerhouse sucking in migrant workers).

It certainly used to be a benign enough principle, in the days when it meant handfuls of Belgian architects could go and work on French hydro-electric projects.

It was an affordable sop to Euro-integrationists in a union of 12 or 15 countries with economies that, while different, were not wildly so.

Not to the point where millions of people used to up-sticks and move countries to better their lot.

But in a union of 28 states, including many former Iron Curtain basket cases, the right to move and work anywhere within the EU is a cast-iron guarantee that millions will abandon the cold, prospect-less East and move West for a better life.

They can’t be blamed for doing so, especially when they get to access free healthcare, housing and social security payments, far beyond the standards of their countries of origin.

But Western Europe is now dealing with the consequences of failing to understand and respond to this overwhelming demand for self-improvement.

And Britain is more impacted than most.

Our (too) liberal economy, (over) generous welfare system and (relative) lack of racism – certainly compared to pretty much anywhere else in the EU – sees us bear the brunt of a policy now disastrously out of control.

Just like US gun nuts defending their “right to bear arms,” there is a qualitative difference between the original intention and the modern manifestation of this “freedom”.

Just as a single-shot musket is not the same thing as an automatic assault rifle, the pace and volume of migration in the EU over the last decade is not what the signatories of the Treaty of Rome and the Single European Act intended, or envisioned ever happening.

Our EU partners need to be reminded of this and David Cameron is absolutely right to seek to do so.

And a Labour government will face exactly the same dilemmas, so there is little for Ed Miliband to gain by seeing Cameron fail in his bid to restore some sanity to the free movement regime.

Of course, Cameron may be motivated because he feels Nigel Farage’s beery breath on his neck, but Labour should be concerned about defending the contributory principle on which our welfare state is based and about free movement underpinning a neo-liberal labour market that uses migrant workers to undercut our own.

Perhaps Senhor Barroso’s remaining time at the Commission would be better spent urging other Member States to improve the lot of their own people and offer them something more than life as a cheap export?

Around The Oversight of Responsible Lending

Carl Packman writes:

The payday loans industry has been on top of the news agenda again.

We have recently found out that the UK’s biggest payday lender,, had been in discussions with the regulator, the Financial Conduct Authority (FCA), to establish a debt write-off, affecting 330,000 of its customers, and a freeze on interest and charges for a further 46,000 other customers who with new rules on responsible lending would not have been given such an expensive form of credit.

In the same period had drawn a profit loss, going from a record high of £62.5 million in 2012, to a relatively modest though still enviable £39.7 million in 2013, while the Competition and Markets Authority (CMA) also announced it would bring greater transparency to the market by introducing a price comparison website to help consumers.

In short, while the industry will not become extinct in the UK, it will change rather dramatically – and for good reason.

Before the creation of the FCA, the consumer credit market was regulated by the Office of Fair Trading. While strict rules and regulations about responsible lending practices existed in print, they were rarely put to use.

Save for some ‘mystery shopper’ exercises and strong words in the media, the regulator simply did not have the adequate capacity to monitor the behaviour of a relatively small, but controversial new sector.

The FCA came in promising to show “teeth” with the industry, and regulate it properly. To a degree it has done this.

A cap on the cost of credit, which for the first time will set a price limit on how much a payday lender can charge per loan, will be introduced and a good deal more oversight will occur – the upshot of which is that firms will have to abide more closely to the rules on responsible lending, which does mean a number of lenders will leave the market (playing by the rules is not quite so profitable).

But if international evidence on payday lending is anything to go by, we know that industries such as payday lending that are very often wedded to predatory practices will find ways to circumvent regulatory strictures.

In my new book, Payday Lending: Global Growth of the High Cost Credit Market, I’ve highlighted what I call a lenders’ strategic interaction with national policy.

What I mean by this is the extent to which payday lenders internationally have been able to subtly run rings around the oversight of responsible lending.

In Australia for instance, when only a few states and territories had interest caps of 48 per cent, lenders in Queensland and New South Wales avoided state regulation by including contractual terms to avoid the statutory definition of a credit contract and requiring borrowers to purchase additional goods as a precondition to obtaining a loan. These included the obligation to purchase “financial literacy” DVDs.

In the US, research by Brian Melzer found that the number of shop locations is almost 20 per cent higher in zip codes close to payday-prohibiting states.

This suggests that lenders are opening shops on borders to serve borrowers in states where payday lending is prohibited. Further still, a significant proportion of online payday lenders in the US are partnering with tribes in order to benefit from tribal immunity, and in that way sidestepping existing state-level laws on lending.

Closer to home in some EU states, notably Poland and the Netherlands, there have been instances of lenders who would adhere to interest rate caps but recoup “lost earnings” by charging substantial fees and additional charges.

To a degree all of the above, the UK included, have been caught unaware by the potential reach of the payday lending industry.

It occupies a relatively small part of consumer finance, but contributes a large part of the financial harm felt by people who would be better served with a more responsible lender, like a community bank or a credit union.

What the UK regulator must ensure is that we don’t ignore the small gains of payday lending again, because extinction is not an option the industry will take lightly.