Friday, March 30, 2007

Not For Profit Shambles


FA Chief Executive Brian Barwick when he was Controller of ITV Sport


As we struggle for solutions to the terminal decline of Big Government public services, one thing we frequently hear is that they must not under any circumstances be consigned to the barbarity of the profit driven free market. If we must have change, then not for profit organisations offer the only civilised way forward.

So it's instructive to look at existing not for profit operations for guidance and inspiration.

Operations such as the Football Association, which today did a deal with sssmooothhh operator Michael Grade and some Irish private equity guys to sell a bundle of TV rights for nearly half a billion quid. Nice.

But despite the deluge of TV money they've enjoyed over the last decade, the FA are also the same people who this week dished up yet more hair-ripping premature-aging wrist-slitting torture with the England football team.

Not to mention their regular tabloid dollops of revolving door low grade overpaid managers, revolving door low grade overpaid chief execs, wildly overspending capital projects, endemic bung disease, and serial shagging secretary cover-ups. If we want that, we can surely get all we need from the office of the Deputy PM.

The fact is that the not for profit FA positively glories in the cult of the unaccountable gentleman amateur (eg see this article). When in 2005 they commissioned ex-Treasury Permanent Secretary and QPR fan Lord Terry Burns to report on how they could improve things, he found a shambolic governance structure dominated by huge committees and literally hundreds of buggins turn blazers. Naturally his recommendations for streamlining were kicked high into the stands.

Contrast that with profit making organisations. They focus on the main priorities, make decisions, and get things done.

But of course, they do have a secret weapon to concentrate minds and get heads knocked together.

It's called making money. And we should remember that the next time some best-of-intentions innocent suggests not for profit is clearly the way forward.

PS Obviously the sale of footie rights to ITV was nothing to do with the fact that Barwick used to be controller of sport there. Or that Grade had only just gone there from the BBC. Cold hard cash was presumably the key. But with that amount of incest, it does make you think.

PPS I know we always say this, but what a shame Tesco don't run the England football team.

Tractor Production Industry Monitoring Industry Output Hits Record!


Records smashed!


More excellent news comrades!

The number of reports produced by the Healthcare Commission has hit a new all-time record!

According to the Commission's Glorious Hero of the Revolution website, this year's output has reached a staggering 652 separate reports (a summary and a full report for each of 326 NHS trusts), plus sundry press notices, overviews, and detailed Excel spreadsheets.

The Commissar and the entire Commissariate extend their heartfelt congratulations and thanks for an outstanding contribution to socialist healthcare!

And let it be a salutary lesson to those counter-revolutionary elements still present in NHS tractor factories themselves. The People's Paradise has no place for bourgeois thinking such as this:

"Fewer than half of NHS staff members would be happy to be a patient at their own hospital, according to an official survey by the health service regulator.

More than a quarter, 27 per cent, said they disagreed or strongly disagreed with the statement: "I would be happy with the standards of care provided if I was a patient in my trust".

How often must we repeat that it is everyone's patriotic duty to be treated in a state tractor factory, irrespective of their personal feelings.

Er, yes.

The Healthcare Commission is a classic instrument of Big Government control. Even its motto- proudly displayed on its website and all its reports- is the highly sinister "Inspecting, Informing, Improving". And according to many in the NHS, its corporate ethos is straight out of the NKVD procedures manual.

But as a taxpaying customer, that's not what bothers me.

What we have with the Healthcare Commission is yet another counterproductive paper factory. And it cost us £69m in 2005-06, an increase of no less than 22% on the previous year. Its 780 staff (fte) cost £44.8m, or £58,000 each, and the top earner got a very nice £156,000. It spent a further £15m on "consultancy, professional fees, etc".

What precisely am I meant to do with all this bumpf? Yes, it worries me that only 33% of the staff at my local hospital would be happy to be a patient there- of course it does- that's much worse even than the 42% national average. But what am I meant to do? True, a few other hospitals within say a day's hard drive do seem a little better, but not enough to make it certain I'd get much better care (you can look up your local hospital trust here- question 22f).

Sometimes when I go to a supermarket, and much to Mrs T's embarrassment and extreme irritation, I ask the check-out operator if he/she is happy working for the store. The answer is generally that Waitrose staff are delighted, Sainsbury staff are mixed, and Tesco staff are disgruntled (Asda staff I'm not sure about because they don't altogether speak the same version of English as me).

But does it affect where I shop? Not really. It might help me decide where to invest, but as for shopping, I choose on the basis of the overall service, not whether the staff are feeling good. That's a problem for Sir Terry to sort out.

The trouble with British healthcare is that unless you're rich enough to pay twice, you don't get a choice. Irrespective of how much paperwork these monitoring quangos spew out, it's the NHS or nothing.

This is yet another £70m pa we could save without even noticing the difference.

'High Quality Enabler' Seeks New Brain


Are you sure this thing's a healthcare expert?


Failed chip shop manager David Nicholson has been studying his copy of Teach Yourself ManagementSpeak. And he's found a new way to describe the doomed NHS "supercomputer". Apparently, it's “not fundamentally an IT programme, but a high quality enabler that will improve the way the NHS system operates."

Pretty straightforward stuff, so why on earth can't his dim NHS operatives grasp it? They obviously need to have it spelled out even more slowly:

“It is important that we do not just push the new structure of NPfIT onto healthcare staff, but we should try to ensure that those who use it understand its benefits and what the eventual scale of the project will be and bring this to them when it is completed. The overall benefit being [that] it will ensure that the right people are being seen at the right place by staff who are guaranteed to have the right way of thinking. It will have an enormous impact.”

Oh. Now we see.

But isn't there still a slight problemette? Not to put too fine a point on it, the thing doesn't actually work.

Ah, well, there's a new plan to deal with that minor technical hitch:

"NHS bosses charged with delivering the much-delayed IT upgrade to health trusts throughout England have launched a £100m-plus drive for "additional" IT suppliers to meet "immediate business needs". The decision... is a significant move away from the troubled NPfIT, which has been running for four years, mired in delays and software setbacks."

So that's another £100m blown on a desperate attempt to rustle up a brain that might actually work.

Meanwhile Mr Chipshop says:

“We are moving from a top-down monolithic system to a much more market-oriented system. It will completely change the relationship between patients and those who treat them and move the treatment of patients from purely the secondary acute sector to a more community oriented approach, revolving around primary care services.”

So this top-down-one-size-fits-all-biggest-most-expensive-IT-project-in-the-history-of-the-world, is actually a high quality enabler that will evolve us from our swampy pre-historic world of top-down monolithic healthcare to a new sunlit world of small furry mammals living in happy communities of tool-wielding nut gatherers.

Is it.

As a child I read a book about dinosaurs. One sentence has stayed with me:

"The dinosaur had a very small brain; it was so small, the giant reptile was only dimly aware it was alive."

Thursday, March 29, 2007

Specialist Waste Watchers Uncover Fresh Outrages


Unacceptable conduct in Ashford


Surely by now we're all clear that Kirk Douglas is the real Spartacus. Just as we're all clear that I'm the real Wat Tyler.

So imagine my surprise and confusion when I was contacted by Wat Tyler, drawing attention to his new site WATTYLER.com. Gave me quite a turn, I can tell you- thought I'd finally slipped the jolly old bonds of reality.

But it turns out that Mr T's brand new site is devoted entirely to "the scandalous profligacy and mismanagement in Kent local government". And it's an excellent addition to the growing number of waste watching sites springing up around Britain.

It's still in its first month, but it's already blown the lid off a porn and prostitutes scandal at Ashford council:

"Martin Bacon, the managing director of the council regeneration quango Ashford Future, has resigned after wattyler.com discovered that he had been given four weeks of ‘gardening leave’ after pornography and correspondence with prostitutes were found on his office computer at Charter House. We understand that Mr Bacon — who was paid in excess of £100,000 a year — had spent up to four hours a day viewing internet porn in his office and soliciting the services of prostitutes.

We further understand that rather than being summarily dismissed once his actions had been proven — as is standard procedure in local government and the private sector — Mr Bacon received a ‘ticking off’ from chief executive David Hill and council leader Paul Clokie. He was told to go home for a month to recover from the stress of the incident but was back at his desk last week … until wattyler.com contacted the council about the incident prompting his resignation."

That's all bad enough, but Wat also gives us some facts and figures on the quango, Ashford First. It sounds like a real humdinger, with fingers in all kinds of budget-busting white elephant projects.

Wat is still on the case, asking "What does the Ashford boss class have to do to get fired?", and surmising that council leader Paul Clokie's desperate efforts to get the lid back on may backfire badly.

It's a gripping, if teeth-grinding, read, which I strongly recommend. Especially if you live in Kent (the county, of course, whose council topped the TPA's Town Hall Rich List).

Meanwhile long-time BOM correspondent and British Council watcher David Blackie has some chapter and verse on how taxpayers' money really is being used directly to subsidise its supposedly self-supporting commercial arm:

"So there it is in black and white. The taxpayer is, through the British Council’s “grant-in-aid”, paying the fees of students at the British Council’s language school in Tripoli, and the evidence given to parliament by the British Council Director-General was the opposite of the truth.

Will the FCO / Parliament / “Establishment” break with 70 years of precedent and actually do something about this? Or is the British Council immune or exempt by virtue of some sort of parademocratic status? In any case should the rest of us be concerned at this further evidence of the organisation’s casual relationship with veracity? We should."

Casual relationship with veracity... I like that. Thank goodness the rest of government would never sink to that level.
We've blogged the Lord Kinnockio headed British Council many times (eg see here). It is an outrageous waste of half a billion of taxpayers' funds every year. Keep on their tails, David.
PS As you know, the other other Wat Tyler was born in Essex, but led his rebellion from Kent. This is all getting a bit confusing. I may need to lie down.

Extra Time Miracle!


Oh ye of little faith!

Sure, after 623 games without a goal, things looked a little "challenging". But just standing around jeering and chanting ‘You’re getting sacked in the morning’ and ‘Pat Hewitt is a w****r’ was most unhelpful.

And you'd altogether reckoned without midfield dynamo Davy Nicholson. His golden boot may have left it late, but what a result!

Little wonder the manager's job is now secure- according to a well-connected source in the dressing room, "the prospect of Patricia Hewitt having to fulfil a promise to resign was virtually eliminated yesterday as officials at the Department of Health became increasingly certain that the health service in England will be in surplus when the financial year ends on Saturday."

So what do you have to say for yourselves now?

In just a few months NHS Chief Executive Davy has somehow brought those pesky NHS trusts back from a combined deficit of £1.2bn to balance.

What a team!

What? Sorry... what was that?

All he did was close wards, cancel operations, and... what? Dollop out another £450m from his "contingency reserve" to balance the books?

But, but... where did that come from?

Who's paying for it?

WHAT!?!

We're paying for it?!?

What a wanker!

Cancel the victory parade.

Bring back Sven.

ITBA 14- Council Tax



The Bloke's latest vid is on Council Tax and the Lyons Inquiry into local government finance. It was made for last night's Your Money programme on 18 Doughty Street, featuring a discussion between Blair Gibbs of the Taxpayers' Alliance, Andrew Johnson- Deputy Mayor of Hammersmith and Fulham- and the Bloke (watch again here).

We blogged the Inquiry here, and last night there was agreement that despite its 600 pages of report and annexes, its prescriptions are pretty thin. Andrew describes it as a sticking plaster. At best.

A couple of charts that couldn't be fitted into a 5 min vid are worth remembering.

First, from Lyons, another summary of local authority funding mix across the world. It underlines just what an outlier we are in the UK, with a much higher level of fiscal centralisation than virtually any other western country. Whereas here only 16% of total LA revenue comes from local taxes, in most countries it's over 40%- in Sweden it's nearly 80%.

And as always, he who pays that piper, will insist on calling the tune.

Second, a chart showing the distribution of local funding across English local authorities. As we can see, the proportion raised locally ranges from a high of 60% in Chiltern, right down to 11% in Newham. The reason for this difference of course is that central government funding includes a huge element of redistribution away from affluent Tory and LibDem areas down south, to Labour areas in our big cities and up North. It's done through the entirely opaque statistical black box of the Revenue Support Grant allocation, although Labour have also added a lorry load of specific distributional grants for their pet schemes, such as the hopeless counter-productive Sure Start scheme (see this blog).

On a positive note, it was very interesting talking to Andrew Johnson, whose Conservative authority has recently announced a 3% cut in Council Tax for 2007-08.

Which just goes to show what you can achieve if you really try. Even if you're strapped into a top-down Big Government straightjacket like our local authority financing system.

We'll blog Hammersmith and Fulham in more detail when we've done some digging.

Power Without Responsibility... Or Competence


Incompetence personified- (2005 Defra team L to R) still in post, promoted to Schools Minister, promoted to Foreign Secretary, sacked (but still an unelected Lord ruling over us), sacked


We've blogged the fiasco at DEFRA's Rural Payments Agency many times (see all blogs gathered here). And the appalling wriggling of Margaret Pass-The-Buckett, who presided over the whole thing, but sidestepped all responsibility.

Now the Commons Environment, Food and Rural Affairs Committee has issued its own damning report. And most unusually, memebers have actually stepped up to the plate and placed the blame squarely on named individuals at the top:

"If accountability is to mean anything the position of others must now be seriously questioned.
When a department fails to deliver a key programme right at the heart of its fundamental responsibilities the ... secretary of state should not be rewarded with promotion but its reverse. New ministerial guidelines should now be drawn up to make it even clearer that if individuals are prepared to accept the glories that come with high office they also know what to do if departmental failure occurs."

It also calls for the head of Sir Brian Bender, then permanent secretary at Defra and now the senior civil servant at the Department of Trade and Industry. "If a failure to deliver on such a scale had occurred in a major plc, the chairman and the senior operating executives would have faced dismissal from post. With this in mind the committee continues to be astonished that Sir Brian Bender continues to hold the rank of permanent secretary. If he does not tender his resignation the head of the home civil service [Sir Gus O'Donnell] should explain why a failure such as this results in no penalty."

Here at BOM we believe in Tesco government (see this blog). Had such a shambles taken place at Tesco, it is inconceivable that shareholders would have allowed Sir Terry Leahy to continue. And his replacement would have carried the cull down further.

But of course, such shambles happen much less often in big successful private sector companies anyway. For one thing, people don't get to the top unless they've already proved they know what they're doing. And for another, there is never any question of power being divorced from responsibility.

This Committee's report underlines once again why we need Tesco government.


PS Let's hope somebody more competent than the horse lady is working on extracting our marines from Iran. If it's left to her, they'll still be there this time next year. Maybe we could swap her for them.

Wednesday, March 28, 2007

Poverty: Reality Bites


So poverty is increasing again. And judging from the hysteria on both C4 News and Newsnight last night, you'd have to think the world's very foundations are shaking.

Specifically, the annual Households Below Average Income report from the Department for Work and Pensions shows that in 2005-06 the incomes of some groups fell relative to the median. The IFS briefing summarises:
  • The number of people living below 60% of median income after taking into account housing costs (AHC) rose from 20.5% 0f the population to 22%, or 12.7 million

  • The number of people living below 60% of median income before taking into account housing costs (BHC) rose from 17% 0f the population to 18%, or 10.4 million

  • The number of children in relative poverty rose for the first time in six years, taking it further away from the Government’s targets. BUT "the increases in child poverty of 100,000 to 2.8 million BHC and 200,000 to 3.8 million AHC in 2005/06 are probably not statistically significant"

Er... what? Not statistically significant? That last bit somehow seems to have got lost in all the screaming from the likes of ex-but-I'm-not bitter-civil servant, Martin Narey, now head of Barnardos.

I've blogged before about how I grew up on a council estate in what would have been classed as poverty under current definitions, but it didn't feel like poverty because it was a loving supportive home. And anyway all our neighbours were in exactly the same position so we didn't feel disadvantaged relative to the people at the posh end of town who were in a completely separate realm. And there was a world of opportunity ahead of us. So I won't blog that again.

But a couple of other points do need picking up:

  • "The number of working-age adults without children in relative poverty is at its highest level since comparable records began in 1961"- childless working age people throughout the income distribution have lost out Big Time under Labour, and you sort of wonder why they still vote for it

  • "The increases in poverty seen during 2005/06 reflect weak income growth towards the bottom of the income distribution rather than rapid income growth in the middle"- and much of that has almost certainly been caused by the influx of cheap labour from Eastern Europe: it's the other side of the much vaunted inflation dividend.

In our famously globalised economy, trying to control the income distribution is like trying to control the weather. A classic socialist delusion.

And defining poverty in terms of a crude 60% financial Plimsoll line was always a gimmick, designed primarily as a "proof" that brave crusading Labour were eradicating the whole beastly business. As everybody surely knows, the real world is a much more difficult place, where money is usually the least of the problems.

Well, now it's blown up. And as always, there's nothing more rib-tickling than watching a bunch of scheming politicos hoist by their own petards.

Enjoy.

Tuesday, March 27, 2007

Mega-Projects Latest


New Bernard Matthews turkey shed takes shape


Latest news from the gee-wiz-that's-a-big-one-you've-got-there-vicar front:

Project One- "Construction on the £4.3 billion Heathrow Terminal 5 complex began in 2002. Since when, the project has successfully moved 9 million cubic metres of earth; erected the roof of UK's biggest free-standing building; transported the 900-tonne top cab of a new 87m high control tower 2km across the airfield; bored over 13km of tunnels for rail and baggage; diverted two rivers; and installed over 30,000 sq metres of glass facades. All T5's footprint is contained within a former sewage works at the western end of the existing airport, situated between the two runways, adjacent to the M25.

With 366 days to go (leap year in 2008), over 90% of construction-related work is complete and the project remains on time and on budget."

Project Two- The £800m Wembley stadium finally opened for business. It's nearly seven years since the last game at the old stadium. The project has been delivered a year late, and around £200m over budget (see full grisly timeline here)

Project Three- "THE organisers of London’s 2012 Olympics will this week reveal that knotweed has invaded the sites of two of the main arenas — leaving the games with a clear-up bill which experts predict could top £70m. Surveys of the site in Stratford, east London, have revealed a 10-acre swathe of Japanese knotweed under the proposed velodrome and aquatic centre. The plant spreads so aggressively that it could undermine stadium walls and crack concrete concourses unless every trace is removed. The full extent of the contamination of the site for the games, including unexploded bombs and toxic chemicals, is still being assessed.

The Olympic Delivery Authority (ODA) has already identified mercury, lead and petro-chemicals in the soil, as well as asbestos in derelict buildings. There are also as many as 60 unexploded bombs dropped by the German Luftwaffe during the second world war."

We still haven't been told why these problems were not identified before the project was undertaken- after all, locals knew about them. But we do know that the whole thing is already running four times over budget. And the clock is ticking ever more loudly.

PS I've just noticed there seems to be a difference between these projects: T5 is being built for a private sector customer that understands the value of money and time; Wembley was built for a quasi public-private partnership mumble, involving such notorious wastrels as Ken Livingstone, Bent Council, and the Dept of Culture Media and Sport (not to mention the appropriately named FA); and the Olympics is being built for a combination of... ohmygod... Ken, DCMS, and that hopeless woman. As we've noted many times before, it's little wonder that 90% of all public projects overrun.

Come The Revolution...


Look, I know it's the BBC. I know they're irretrievably hostile to business, and to high earners (BBC "stars" excepted, naturally). But surely having two separate union leaders on R4 Today for a rant within the space of just 40 minutes is pushing things a tad, even for them.

Just before 7 it was some Irish Liverpudlian docker guy from the 1960s ranting about Permira and private equity firms destroying jobs. Again.

And then at 7.40 it was someone from the Banking Union ranting about the mega-bucks paid to Bob Diamond at Barclays. Well, in truth, he was quite softly spoken and it was left to Sarah to prompt him into calling for "government action" to end this manifest and grotesque unfairness (soppy Sarah seemed blissfully unaware that Barclays is one of the very companies considering quitting Britain because of increasing regulation and uncompetitive tax).

Come the revolution, the BBC will be first up against the wall.

Pic: Fixing Australia

Monday, March 26, 2007

Northern Ireland- Good News For Taxpayers?


Right- let's talk about tax cuts

We seem to have had so many false starts, we're quite right to be wary about yet another carefully photo op'd "agreement". But the self-styled Big Man and the bearded one who "has never been a member of the IRA" have at least been observed sitting at the same table, albeit a bizarre diamond shape so neither was at the top.

We mainland taxpayers should keep our fingers crossed. The province may be small- only 1.7m people- but it consumes £5bn pa more in government spending than it pays in taxes. And that's on top of the ongoing cost of army security operations there.

And if we tot up what it's cost us since the troubles began in 1969- even setting aside the human toll- we're talking hundreds of billions.

Naturally we got fed up with the whole thing years ago, and have longed for it to be given back to the (southern) Irish. But as we discovered very early on, no way do they want it.

And even though the bombing seems to have stopped, they still don't want it. Because the Northern Ireland economy remains a basket case. Despite public spending at over 60% of GDP, it's still one of Britain's very poorest regions, with per capita GDP nearly 20% below the UK average.

And compared to the South, per capita GDP is around one-third lower: before the troubles it was one-third higher (for a good and punchy overview, see here). Why would the southern Irish want to shackle up to that? They saw only to clearly what happened to those affluent dynamic West Germans when they took on the Ossies.

Now, you and I know what needs to be done: Northern Ireland's dependence on the public sector needs to be slashed, and taxes need to be cut to southern Ireland levels. In particular, in order to attract a much bigger share of inward investment, NI needs to cut its Corporation Tax rate from its current 30%, not to Gordo's promised 28%, but to the Irish rate of 12.5%.

So will the resumption of power sharing do any of that? Would our Westminster politicos let them?

Hmmm... let me see...

No.

But at least they've stopped killing each other.

And at least they've agreed to work together.

The irony is that what seems to have finally knocked heads together was not bullets, nor the Almighty, nor even Tony Bliar. But a public outcry over new state water charges. Aka taxes.

Sunday, March 25, 2007

Reparations For Slavery


Reparations panel
This morning BBC R5 ran a three hour slavery special, giving yet further oxygen to the line that we whities should make amends for the slave trade. And the argument seems to be moving beyond the demand for a "formal apology"- whatever that might involve- towards a quite extraordinary demand for financial compensation.

The figure the campaigners seem to have in mind is £7,500,000,000,000- ie seven and a half thousand billion, or £7.5 trillion. And that's just from Britain.

To put £7.5 trillion in context, it's about six times our annual national income, and amounts to around £300,000 from every household. Or closer to £350,000 if we just levy it on white households.

Now let's take as read the following:
  • the slave trade and slavery were abominations, and cannot be justified by any modern day standard of morality

  • overall, Britain shipped about 3 million African slaves to the Americas, mainly the West Indies, and many then worked on British owned plantations

  • Britain was first to abolish the slave trade- hence the current celebrations

  • it all happened two centuries ago

  • we 2007 whities had nothing whatsoever to do with it

  • lots of other appalling things have happened throughout history, many of them to white Britons

Against that, I wanted to investigate the basis of such a humongous financial claim.

Although it seems to be embedded all round the black activist world as factually based and provable, its origin is actually quite recent. It comes from Dr Robert Beckford, who along with his panel of three "experts" (see pic), cobbled it together in 2005 for a C4 documentary "The Empire Pays Back". And for those that don't know him, Beckford is a controversial lecturer in African diasporan religions and cultures at the University of Birmingham, who has starred in a number of headline grabber TV docs.

Unfortunately I missed the programme, and I can't find the transcript online. So all we know is that he got to his £7.5 trillion by summing three components:

  • £4 trillion for the lost earnings of slaves

  • £2.5 trillion for unjust enrichment of the British economy from profits of the sugar trade

  • £1 trillion for wrongful imprisonment

Absent a transcript or supporting documentation, we can go no further. Except to say that given Beckford's track record in attention grabbing, the strong suspicion is that he originally meant his numbers to be no more than that.

But in any case, his figures are just the latest attempt to attach some financial numbers to slavery. And they all form part of a concerted effort to stick something cashable on us current day British taxpayers- the Big Claim.

The Big Claim is that although we 2007 white Brits may not have been responsible for slavery, we are still its beneficiaries. Because it was the mega-profits from slavery that funded the industrial revolution, thereby lifting Britain from agrarian poverty to the affluence we all now take for granted. So there is a very strong case indeed for paying back all those lost earnings.

You will immediately recognise the Grand Sweep of Marxist history- the Labour Theory of Value, where the exploited workers never get the full value of their output, and the surplus is either spent on baubles for the rich, or invested in yet more worker impoverishing machinery, with the workers made even poorer, the evil capitalists even richer, and the whole rotten edifice continuing in a spiral of grotesque wossname.

In 1944 the theory was specifically applied to slavery by West Indian politician Eric Williams in his influential book Capitalism and Slavery. According to this thesis, slaves are the ultimate exploited workers, so generated the ultimate surpluses for their capitalist owners. The capital was shipped back to Britain and invested in the new industries. Hey presto- Britain got rich and never looked back. And even when the slaves were ultimately "freed", they were left to rot on a capital starved malarial rubbish heap.

What's more, Britain only abolished the slave trade because profits were starting to plummet, and abolition allowed us to use our naval power (only two years after the decisive Battle of Trafalgar remember) to disrupt the trade of continental rivals.

Sort of idea.

The only problem is that Williams was writing before much serious work had been done on the finances of the eighteenth century slave trade. And when it was, it told a rather different story.

For while some slave traders made enormous profits, others did not. For one thing there were risks, and for another it was a competitive business- not least because the (black) African slave suppliers sold to the highest bidders just like any other businessmen. Overall, it seems that the return on capital was in the range 5-10%; perfectly acceptable, but hardly super-normal.

And while individual sugar producing plantation owners made healthy profits, they were not shared by the rest of Britain. Britain's definitive economic history textbook (Floud and McCloskey, since you ask) summarises the research findings thus:

"While sugar production with the acquisition of slaves was profitable to those settlers in the colonies, to the metropolis [ie Britain] the economic gains were considerably smaller, and possibly negative... First, there was the need to pay for defence and military purposes, items important given the great frequency of wars in the Caribbean... second, there was the impact on the prices paid for sugar by British consumers resulting from restrictions on sugar imports from the French islands to protect the sugar production of the British West Indies."

In other words, a big chunk of the profits of Britain's West Indian sugar planters actually came from artificially high prices in Britain rather than the use of slave labour per se. As a result of the government's agricultural support policies, the producers were feather bedded by British consumers (thank God that couldn't happen today).

On the Williams thesis, Floud and McCloskey concludes:

"The general magnitudes of profits or of the trade seem too small to account for those effects on Britain that he claimed."

(If you want more detail on all this, you need to read Floud and McCloskey, The Economic History of Britain Since 1700, Vol 1, Chapter 8; Cambridge University Press.)

The bottom line is that there is no compelling evidence that slavery laid the financial foundation of British prosperity. And arguments for reparations based on bogus calculations suggesting that there is should be given no credence.

So next time the BBC runs a 3 hour slavery guiltathon, maybe they'd point that out.


PS You can buy Floud and McCloskey at the BOM/Politicos bookstore. But be sure to get in early while stocks last- click image. You know it makes sense.

Recent Bonfires 58


Be afraid... be very afraid
In the news this week:

£46m pa on sickies in the sun- "THOUSANDS of Britons are receiving government sickness benefits while living abroad, many of them in holiday hotspots. More than 12,000 UK citizens receive a combined total of £46m a year in benefits while living in places such as Spain, Jamaica and Cyprus. A quarter of those claiming sickness benefit or incapacity benefit (IB) from outside Britain live in Spain, while 1,600 live in France, and hundreds more live in Malta, Jamaica, Italy and Cyprus." (Scotland on Sunday 25.03.07)

£93m pa for BBC tabloid telly- "MARK THOMPSON, the head of the BBC, is to be questioned by MPs over the “dubious” content of the corporation’s channel for young adults after commissioning a string of programmes with expletive-ridden titles. The latest offerings from BBC3 include F*** Off, I’m a Hairy Woman; F*** Off, I’m Ginger; and My Big Breasts and I. Other shows to be broadcast on the digital channel later this year include a £200,000 documentary, The History of the C-Word, and a programme about the size of men’s penises. The critics claim BBC3, which is aimed at the 16-34 age group and has an annual budget of £93m, is failing to meet the BBC’s public service remit and is a waste of licence payers’ money." (Sunday Times 25.3.07)
£10 to change BBC lightbulb- "With a few simple precautions, thousands manage it every day. Yet BBC staff have been stopped from replacing lightbulbs because of concerns for their health and safety. Instead, the corporation is paying up to £10 for each replacement bulb to be fitted... Three years ago it was calculated just how many people it does take to change a BBC lightbulb. The member of staff left in the dark would need to find a clerk to get a reference number so that the repair could be paid for, then report the fault to a helpline. An electrician would ask the store manager for the part and install the bulb, making a total of five people." (S Telegraph 25.3.07)

£20,000 for robo-falcons- "As the peregrine falcon is one of Britain's rarest birds, the chances of the average urban pigeon recognising it might be thought slim. Particularly when it is made of fibreglass, packed with electronics, and incapable of moving, apart from turning its head and flapping its wings. But Liverpool council is betting £20,000 that they will be fooled after buying a bizarre fleet of "robo-falcons" in the hope that they will instill fear into its winged pests. Costing £1,800 each - excluding optional 20ft pneumatic pole - they are capable of turning to face the wind, twisting their heads, flapping their wings and uttering a peregrine-style squawk." (Mail 16.3.07)
Total for week: £139,020,010

Saturday, March 24, 2007

Budget +3


Just a cotton-pickin' minute... let's have a closer look at that rabbit...


Now we've had time to read the bumpf, one or two things have become clearer (see the excellent IFS analysis here).

The public finances have deteriorated- since the last budget, net of policy changes, spending is up and receipts down. So despite a fiscal tightening that by 2008-09 amounts to £3bn pa, he's still borrowing £5bn pa more (see here table C2). A key factor has been a £5.5bn pa slump in North Sea revenues, where at a time of booming world oil prices, he's managed to half strangle the Golden Goose by overtaxing it. Brilliant.

He's whacked small business (see previous blogs here and here). When we discussed this on 18 Doughty Street's Your Money Budget Special (here), we couldn't quite fathom why he'd done it. After all, he's constantly wittering on about how important small business is, and it doesn't actually raise that much cash (only £820m pa by 2008-09, even assuming his new £50,000 capital allowance is largely unclaimed- see here table A1).

Subsequent investigation and "words to the wise" suggest the whole thing was a cock-up. The shock 2p cut in the standard rate of income tax was decided very late in the day, and was for entirely political reasons. Obviously it had to be kept a very closely guarded secret, known only to a handful of trusted Treasury officials whose families were being held hostage surety somewhere up North. And the ordinary grunts crunching through all the tedious stuff down the corridor in HMRC were told nothing. They just carried on assuming the standard rate was staying at 22p.

An informed correspondent writes:

"My bet is that they had been working on the corporation tax changes for some time and decided to align the small business rate and the basic rate of income tax - they got badly burnt a few years back when all those window cleaners etc turned themselves into companies to exploit the 0% rate, and we do know that HMRC regard small traders as scum out to evade tax."

Sounds about right, and certainly makes sense of the puzzle. It also strongly suggests all those furious small businessmen like brother Tyler can get the whole thing revisited. They should definitely keep shouting, and also jump up and down a lot. We'll join in.

As for the rabbit-out-of-hat question, the post-Budget polls suggest Gordo may have outclassed himself. People ain't quite as dumb as previously assumed, and they can smell a con trick. As the IFS analysis shows, although his overall package of measures on income tax and National Insurance has left virtually everyone earning more than about £18k better off or unch, once you factor in changes to other taxes- especially the so-called green taxes- car driving air tripping middle and higher income groups are all worse off. Plus of course, although many poorer people will benefit from his additional tax credits, they will do so only by sinking even further into the nightmarish coils of means tested state dependency.

But amid all this post-match rethink, it's still important to remember the key message. Brown ditched his 50 years of socialist belief in hair shirt tax-and-spend redistribution because he's understood we punters are no longer convinced by all that stuff about the public services needing yet more cash. We're crying out for tax cuts.

Nixon in China? Maybe not quite that, but he's surely decontaminated the idea of tax cuts. And if even an old-time religion guy like Gordo is presenting himself as a tax-cutter, surely to Gawd, Dave and George could afford to show a little more spunk.

The Great Global Warming Swindle


Sunspots it is then...


I finally got round to watching the whole of C4's excellent documentary on global warming (you can see it here, albeit with a few sync gremlins).

It's well worth the hour and a quarter, if only to arm yourself against the BBC's next global warming scare story, or its reporting of the egregious polemics from the International Panel on Climate Change as fact, or even its everyday line that evil capitalists and 4x4 drivers are destroying the planet.

And the measured testimony of these real climate experts certainly underlines just how wild were the exaggerations of the Stern Report- even though they're still widely reported as fact (see previous blogs eg here and here).

Yes, of course it's almost certainly a lot more complicated than this doc suggests. But here we have a serious yet accessible counterweight to the uncritical hysteria we're constantly served up with elsewhere.

And we also get a fascinating insight into the economics of the multi-billion climate change industry itself: in the US alone it now attracts $4bn pa public funding. As several of the assembled profs observe, that's an awful lot of jobs riding on keeping the scare going.

I did Google around to find the widely trailed (by the BBC at least) refutations of the programme's "facts". All I could really come up with is this from the Independent, which starts boldly, but doesn't really deliver much.

Much more compelling is this refutation of the refutations written by the programme's director, Martin Durkin.

Friday, March 23, 2007

Employer Of Last Resort


Scottish Socialist Party (Serwotka's the one who's dozed off at the end)


According to Mark Serwotka, General Secretary of the Public and Commercial Services Union, it's the civil service that deserves the credit for "delivering the lowest unemployment in a generation".

We all knew civil service employment had gone up under Gordo, but BOM correspondent HJ is not alone in being stunned by this latest revelation.

We'd better take a closer look at the numbers...

PS Serwotka also boasts about how well his members have implemented the "complex tax credits policy". In his position, I'm not sure I'd be drawing attention to that notorious quagmire of fraud and error (£1.2bn pa recognised losses).

PPS For your futher illumination, here are the comrades singing the Internationale (no, really). Sadly young Mark seems to have been airbrushed out of this particular shot:



Tax Slavery: We Demand An Apology


Boony Boy Jasper


It is impossible to overstate the amount of hurt inflicted on the taxpaying community by Mr Lee Jasper.

This morning in the shower, the state broadcaster made me listen to yet another of his tirades, demanding I apologise for the slave trade (R4 Today just before 8).

The man's quite entitled to his odious and divisive views of course. But wtf should I pay for them?

According to the recent Taxpayers' Alliance Town Hall Rich List, Jasper is paid £117,882 pa- plus pension contributions and other on-costs, like a plush office at City Hall (shock vid here).

And as far as I can see, his entire career has been spent sponging off taxpayers. All the way from "advising" the Inner London Education Authority, through to "training" the Met police in "community issues" at £500 per day.

Well, we've had enough. We want this disgraceful and frankly disgusting trade abolished forthwith.

And we demand a full and grovelling apology from Mayor K Livingstone both for employing Jasper, and for other tax-funded outrages such as this.

Potholes Update


Potholes are expensive things. A few months ago we blogged the case of a Mr Tyler who got £400 compensation from his local council when he drove into one; and overall, councils pay out about £70m pa on such cases.

But today we hear that councils have an eleven year backlog in repairing holes. Which is despite filling in well over a million holes last year, at a cost of £74m (for hole enthusiasts, the average cost works out at £56; £72 in London).

The backlog results from the squeeze on LA finances. As always, maintenance spending gets cut first, with road repair work being delayed and/or done on a "patch and mend" bodge basis (see previous blog).

Jim Crick says patch and mend is inefficient: "Left unchecked, this leads to the creation of potholes. The next level of deterioration would be structural damage and, ultimately, failure of the road.''

Who Mr Crick? Well, OK, he is Chairman of the Asphalt Industry Alliance, and may possibly have the teensiest axe. But the overall message is clear enough.

Stand by for more compensation payouts.

Tagging Fiasco


Pretentious chocolate money

The Home Office loves tagging criminals because it's cheap: much cheaper than their £40 grand a year prison places. We punters have have always had different priorities: we'd like dangerous thugs locked away so they can't commit "1,000 violent crimes including four manslaughters, one murder, 56 woundings and more than 700 assaults".

Now it turns out the whole scheme is even more of a fiasco than we'd feared. Group 4 Securicor, the main £45m pa contractor, has made a complete horlicks of the job: paedophiles unmonitored, equipment failures, unprofessional staff, etc, etc.

There are two familiar conclusions:


  • tagging puts the public at risk- the theory may sound attractive to some, but the practice is low-grade staff operating undependable technology, easily circumvented by any halfway competent villain

  • a government department has once again proved incapable of managing its subcontractors- this whole mess has been uncovered not by them- still less by G4S- but by an undercover reporter.

Guarding the guards is always tricky. But at least if they're all banged up behind twenty foot walls, we don't have to worry if it goes wrong.

Thursday, March 22, 2007

Selling The Silver


"First of all the Georgian silver goes. And then all that nice furniture that used to be in the salon. Then the Canalettos go."


Gordo updated us yesterday on the family silver sale. And he's found a whole new way of describing it:

"The focus of this new approach is the development of a unique Asset Management Strategy (AMS) for each department. These will be published following the conclusion of the 2007 Comprehensive Spending Review, increasing transparency and accountability in the management of the Government’s assets.
Departments’ AMS will demonstrate that they have in place an effective management framework, which actively maximises the value of their existing assets and provides a strategic context for future investments."

So much less vulgar than admitting you've blown the lot, and you're now so skint you're flogging grandmama's diamonds.
So what are the numbers?
In the pre-Budget report just three months ago, he was planning to raise £18bn between now and 2011. Now, that's quite literally doubled, to £36bn.
The reason is obvious: he's blown the lot and he's now so skint...
Let's remind ourselves how asset sales help him.
Obviously they raise money. Which he desperately needs because going forward, current expenditure is £5bn pa higher in this Budget compared to last year.
But they also do something else. Although an asset sale reduces the government's net wealth in exactly the same way as borrowing, it doesn't enter into the official calculation of the government's "net indebtedness". Which means that for the purposes of those infamous Golden Rules, they don't count against his "sustainable debt" target.
And yesterday he banged on again about how he is a paragon of fiscal virtue: "This contrasts with a debt level of 44 per cent when we came to power. But we have both kept debt low and at the same time more than doubled capital investment in our schools, hospitals and infrastructure from just £18 billion a year in 1997 to this year £43 billion." etc, etc, etc
But what we need to remember is not only does he have all those undeclared off-balance sheet debts (£100bn PFI debt etc), by selling the Canelettos he's making us just as poor as he would by borrowing more. There is no economically meaningful difference.
And there's another thing. As we know, when he borrows in the gilt market, he's getting money on the cheapest terms available. But when he borrows via PFI he pays a premium to cover the costs of various "intermediaries".
Our experience of asset sales is just as dismal. From the great utilities giveaways of the 1980s, through to the disgraceful loss of £300m on Qinetiq, taxpayers have generally lost out because cash pressed politicos have sold too cheap (it's the exact counterpart of simple shopping).
So we should look very carefully at the price we get for these sale items, such as the £6bn sale from the student loan book. We need to be given chapter and verse.
And yes, I am aware of that famous auction of 3G licences, when some game theoretic prof managed to cream the mobile phone companies on our behalf. But that was at the very height of the dot.com bubble: we're unlikely to strike that lucky again.
Indeed, over at the excellent Telebusillis , Keith McMahon points out that the extra spectrum Gordo is now planning to flog may not be nearly as valuable as he fondly imagines:
"Basically this is the refarming of spectrum used predominately by the MOD and other agencies, but the trouble is that this spectrum is not in "internationally" recognised bands and therefore will be worth a lot less than for instance: gsm, 3g, uhf, vhf, l-band spectrum."
Best guess is that to make the sales target Gordo's successor may need to bundle in the Rembrandts as well.
Which does not bode at all well for taxpayer value.

Your Right To Do As You're Told


Compare and contrast:

"As the Education Secretary will set out, by changing the education leaving age, we will, for the first time in our country's history, make education a right for every young person until 18." G Brown Budget speech, 21.03.07

"From 2015, young people should remain in education or training at least until their 18th birthday... Young people would be required to work towards accredited qualifications... Any enforcement process would be used only as a last resort if a young person refused to re-engage." A Johnson 22.03.07 (could this possibly be the same A Johnson who couldn't wait to leave school at 15 so he could join a rock band?)

As it happens, Tyler was training to be a teacher when the school leaving age was raised to 16 thirty years ago (a long story...). The politicos all said it was A GREAT IDEA. But curmudgeonly old teaching hands grumbled in the smoke-filled staff-room that forcing bolshie 15 year olds to stay on when they didn't want to would lead to a massive discipline crisis, deteriorating education for the kids who were staying on voluntarily, and large dollops of grief all-round.


Hmm.

Small Businesses RIP


We blogged Gordo's extrordinary attack on small businesses yesterday. And even now the dust has settled a bit, it looks no better.

Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountant says:

"This is a very surprising budget from a chancellor who claims to be a friend of enterprise. It seems to be a case of robbing small business Peter to pay big business Paul."

The chancellor presented the move as a crackdown on tax avoidance. He said the measure would discourage individuals from "artificially incorporating as small companies" by reducing the difference between small company rates of tax and the self-employed, who pay income tax. "I was bowled over by the wording of this," Mr Roy-Chowdhury said. "It is presented as a means to prevent tax avoidance. But it is a pure tax increase on small companies."

What on earth was Gordo playing at? The move will raise £0.8bn pa, but that's a mere speck in terms of his wobbly finances.

And what exactly was all that stuff about preventing tax avoidance? I've yet to understand how that's meant to work, given that he's increasing the small business rate to 22p at a time when the personal tax rate is being reduced to 20p. If anti-avoidance was the aim, wouldn't you have expected him simply to align the two?

And just when he's introducing highly desirable flat (er) tax simplification moves elsewhere (eg the cut in the Corporation Tax rate funded by abolishing various allowances), it makes absolutely no sense to be travelling in the opposite and wrong direction on small company taxation (ie a higher rate, supposedly offset by a complicated new system of capital allowances).
The teeth grinding conclusion must be that despite all his rhetoric about small business being the seedcorn of future prosperity etc, he really has no idea how it actually works, and doesn't really care. All he knows is that unlike those vociferous footlose BIG businesses, small businesses are most unlikely to move abroad. He figures they're at his mercy.

It is shameful and highly damaging to the economy and employment. And it's something even the timid Tories should surely oppose loudly. Perhaps the historically excellent Nick Herbert, who now happens to be brother Tyler's MP, could nudge George's elbow.

Right now.

This morning.

Tax Goes Dutch


Could it be spring again?

In case you missed it, the TaxPayers' Alliance initial budget analysis is here, and is well worth reading.

Eschewing shot foxes entirely, their soundbite comment was that "Gordon Brown has basically delivered George Osborne’s first Budget". It's been widely picked up in press coverage this morning.

Corin Taylor, TPA Head of Research, fingers the key point:

“Gordon Brown has established the principle that cuts in tax rates are possible. Never let it be said again that they will create damaging instability for the economy. Politically speaking, the pressure on the Conservatives could now mean that there will be a benign tax Dutch auction between the main parties ahead of the next election. The fiscal horizon of the United Kingdom looks very different this afternoon. This is not a tax cutting budget, it is not a tax raising budget, it is a post-dated cheque which will make most people better off in 13 months time.”

From stock markets to central banking to tulips, Britain has always benefited by learning from the Dutch.
PS The TPA note also includes a table showing how the income tax and National Insurance changes will impact across the income distribution. In summary, all but the lowest income groups gain, and by the time you're on £45,000, you're gaining £450 pa. Unless of course you're a small businessman.
PPS The TPA- along with guests including the Bloke- discussed the Budget on 18 Doughty Street's Your Money programme (a 1 hour special, just like Elvis in Las Vegas).

Wednesday, March 21, 2007

The Rewards Of Timidity


Horrible to watch


As you may possibly have guessed, Tyler has a dark secret: he spends unhealthy amounts of time thinking about how we can get our politicos to cut Britain's taxes. And he conspires with other like minded zealots to shake the bushes, as it were.

And whenever we zealots gather together, you can bet your last few untaxed pennies that sooner or later one of us will say "you know what," we'll say, "you know what- wouldn't it be great if Cameron's Conservatives were bold enough to propose tax cuts".

And another might say "yes", he might say,"yes, that would be great... but they're just too timid to do it."

"Well," adds a third, "what will happen is that sooner or later Gordo will outflank them altogether. He'll seize the high ground, and cut income tax. What would Dave and George do then? They might even find themselves voting against tax cuts."

When we first had that conversation, I scoffed. "Hah", I scoffed, "Gordo can't possibly do that because he can't afford it."

And he can't afford it. But why did I think that would stop him?

Sure, we fiscal sophisticates can see today's 2p cut is not a net tax cut, and shamefully he's had to whack up income tax on the poorest workers and increase National Insurance to pay for it. But hell, he's got the headlines.

And poor old George is left struggling horribly as he tries to explain himself (like just now on the BBC PM programme). Of course, he wants lower taxes, but... er... well, not like this... not... er.... the public finances just can't...

Oh.

My.

God.

Who was it who said fortune favours the tax cutter?

Gordo Slams Wealth Producers

Tyler has just had his small businessman brother on the phone. He could barely speak, having seen his income tax rate - known as the small business tax rate- increased from 19% to 22%.

So Gordo has slammed small business- the seed corn of wealth creation. They have been sacrified to help fund the headline grabbing cut in the basic rate of income tax, and the reduction in corporation tax rate- itself necessary to stop big footloose international companies like Barclays and HSBC upping sticks and moving abraod (an option that is not open to small businesses like my brother's).

Another group of Big losers are middle income earners- those hard working families who will be caught by the increase in the top National Insurance contribution threshold.

We need to look carefully at the numbers now. But it looks like G has surpassed even his own dismal record- the losers are the very people who drive Britain's prosperity.

Very Scary Video


Fiscal drag


99 Gordon Browns.

Horrible.

I've been trying to work out how to embed it here, but stupidity has got in the way. So you'll need to click here.

On the imminent Budget, you might also want to listen to this excellent FT discussion, featuring Martin Wolf and Nick Timmins. The only good things they can really dredge up in favour of Gordo's ahem "legacy" are BoE independence and stopping mad King Bliar taking us into the Euro.

Tuesday, March 20, 2007

Brown's Ten Year Tax Blag


Boning up for tomorrow's Budget, I came across this excellent update table from the Institute of Fiscal Studies Green Budget.

The headlines are:
  • Annual taxes are £40.5bn higher in real (2007-08) terms compared to when he first took over; that's 2.9% of national income, or around £1300 for every family in Britain
  • His overt tax measures are costing us a cumulative £27.5bn pa
  • Stealthy fiscal drag- ie his failure to raise tax thresholds in line with income and asset price inflation- is costing us a further £30.3bn pa
  • The £20.1bn reduction under "other factors" is not a Brown giveaway- it reflects weakness in the UK stock market and the declining profitability of financial firms

£40.5bn.

Every year.

And if the IFS says it, you know it's true: Gordo really has been the highest taxing Chancellor since the Sheriff of Nottingham.

PS The Bloke will be taking part in a Budget discussion on 18 Doughty Street's Your Money programme tomorrow at 8pm.

Don't Get Mad...


Not really a rattle chucker


In the don't get mad get even stakes, Lord Turnbull's whack at Gordo is top-flight. His Lordship says G takes a:

“very cynical view of mankind and his colleagues. He cannot allow them any serious discussion about priorities. His view is that it is just not worth it and ‘they will get what I decide’. And that is a very insulting process...

It has enhanced Treasury control, but at the expense of any government cohesion and any assessment of strategy. You can choose whether you are impressed or depressed by that, but you cannot help admire the sheer Stalinist ruthlessness of it all."

And Turnbull- a Treasury man through and through remember- repeats the mounting concerns about the unhealthy concentration of power there under Gordo (see this blog- it's almost as if Turnbull had spoken to Osborne...).

In particular, he cites the use of "celebrity policy reviews" (Wanless, Leitch et al), in place of getting policy departments to come up with their own ideas; the direct control over so much spending (eg the disastrous tax credit system); and the "denial of information as an instrument of power.”

Now Tyler remembers Turnbull from old-time Treasury days back in the 1700s or thereabouts. And a less likely chucker of rattles you couldn't hope to find. So we need to listen, especially given the fact that he served as HMT Perm Sec for four years under Gordo.

And the key message is that the Treasury has got so big and all-encompassing, it's actually lost its way. The power has not only corrupted, it's made the Treasury much less effective at its traditional and vital role of scrutinising public spending, and gripping the purse strings.

Thankfully, as we blogged here, George does seem "fully seized of the problem" (let's at least get back to authentic Sir Humphrey lingo). But he does need to spell out more detail on how he would actually go about stripping things back to basics. This interesting speech was a start in the right direction, but he needs to nail himself more securely: well before he inherits the kingdom and gets seduced by its baubles.

Monday, March 19, 2007

Toothless Lyons


It was about eleven o'clock in the morning, mid October, with the sun not shining and a look of hard wet rain in the clearness of the foothills. I was wearing my powder-blue suit, with dark blue shirt, tie, and display handkerchief, black brogues, black wool socks with dark blue clocks on them. I was neat, clean, shaved, and sober, and I didn't care who knew it. I was everything the well-dressed private detective ought to be. I was calling on four million dollars.


I collect bank statements. In fact I have a complete set of the Tyler statements going back to 1793. They take up much less space than you might imagine, and always make fascinating reading (Sorry, what do you mean? You spend your time going out and meeting people?)

For example, we've just received a bill for £2,743.02p. And my statements give me a fix on it straightaway.

The bill's from those nice people at the council, justified by the claim that "your pound transforms lives". Well, Council Tax certainly does that- next year it will transform ours to the tune of £2,743.02p.

But by turning up my bank statements I can get a much more useful perspective. Looking back to 1996-97, I see our bill on this same house was a mere £1,380. That means it's literally doubled under NuLabour. Whereas prices generally have gone up by... er... umm... can this be right... just 17% (yes, that is right- on the government's preferred CPI measure, prices really are up by only 17%- see here).

Now 80% is onehelluva difference, and you bet I'm complaining. But I'm also fully aware that we're the lucky ones. We can afford to pay. Some groups- especially cash poor, house rich pensioners- find it much more difficult. Indeed, we're heading once again into the jail season for 82 year old refusnik grannies (see The Unrepentant Council Tax Vicar for the prison blog of the Rev Alfred Ridley and his wife Una).

Unsurprising that polls consistently show Council Tax to be the most unpopular tax in Britain. Despite some pretty stiff competition.

The fact is that local government finance is a total mess. And the strain shows up in that highly visible annual Council Tax demand.

Council Tax may only account for 25% of local authority revenue, but it's the balancing residual- the difference between two much larger numbers. Council Tax is what has to bridge the financing gap between all those spending programmes laid down by Whitehall, and the miserly Revenue Support Grant paid by central government to fund them.

Hence the Lyons Inquiry, due to report alongside Wednesday's Budget. When it was set up by Gordo in 2004, the idea was that Sir Michael Lyons would go away, consult widely, and come up with the radical overhaul the system undoubtedly needs.

Well, no. The idea was that ex-local authority bureaucrat Sir Michael Lyons (pic above) would take the whole thorny issue off into the very longest stinging nettles, and not come back until Gordo was safely ensconced in No 10.

Because from the perspective of national politics, reforming LA finance is a real stinker.

To start off with, Westminster politicians like the current system. They like having control over the tax and spend decisions of LAs, without being directly in the firing line when things go wrong. Much much better to blame local politicos. It's called power without reponsibility.

Then there's the issue of winners and losers. Winners are easy, but any real world reform will also produce losers. And as the LibDems found to their cost with their local income tax proposals for Home Counties marginals in 2005, the losers tend not to vote for you.

And then there's the whole mind-crushing prospect of dismantling the current delicately spun web of financial allocation rules and replacing it with something nobody has really bottomed. Would those key Labour authorities still get the same generous helpings?

You appreciate the problem.

So instead, if reports are to be believed, Sir Michael will report back with nothing. Apart that is, from several hundred pages of guff, and a recommendation to add two ot three new top Council Tax bands. There will be a distinct absence of teeth.

Which will doubtless increase the bills Chez Tyler by some further multiple.
But more importantly, it will miss yet another opportunity to introduce the one reform local authorities so deperately need- fiscal decentralisation, starting with restoration of the business rate to local authority control.

PS Never trust a man in a powder-blue suit. Unless he's Philip Marlowe.

Psychiatric Journalism



Forget Citizen Journalism. Psychiatrist journalism gives us a whole new perspective.

Blogging Doctor Michelle Tempest reported live from the Doctors' March over the weekend (see here and here). And naturally as a psychiatrist, she reported from the horizontal couch position.

Brilliant stuff.

Which is more than can be said about the mess these thousands of docs were protesting about.

BOM Welcomes Another Waste Watcher


Getting his eye in

Yesterday we stumbled across a new waste watcher. And he's certainly picked up on all BOM's old "favorites": NHS cost inflation, simple shopping, the Supercomputer, tax credit fraud etc etc.

But he draws an interesting conclusion we'd missed- that many of these failings reflect the corruption of HM Treasury by its current boss.

In particular, Gordo has changed HMT's role in three key ways:


  • The Treasury has become the principal originator of government policy, rather than an evaluator of policy. Of course the Treasury has always taken a keen interest in policy — and the chancellor has always sat on the most important cabinet committees. However, the Treasury always saw its primary role as a stern critic of the policy ideas of others, rather than the source of the ideas. That way, the Treasury would remain the one ministry focused on value for money.

  • The Treasury [has been shifted] from scrutinising how public money was spent to micromanaging it. The Treasury not only uses its 1,000 targets to direct policy, it also determines exactly how the departments should meet them. So when a department is failing, it is difficult to tell whether the cause is the policy itself or its implementation. This has made it almost impossible for the Treasury to judge poor performance.

  • The Treasury has itself become one of the largest spending departments, with a budget of more than £20 billion a year — bigger than the Home Office. It now administers child tax credit, working family tax credit, child benefit and child trust funds. If scrutinising Treasury policies in other departments is tough, scrutinising Treasury policies administered by the Treasury has proved near impossible.

Our blogger also highlights the collapse of HMT staff morale, exemplified by soaring turnover (50% leave within two years).

It all sounds highly plausible, and you'd have to guess it's been based on input from disenchanted Treasury officials (or ex-officials).
Something should be done soonest.
Obviously it won't happen under Prime Minister Brown, who will presumably entrust HMT to a trusted puppet Chancellor, and carry on as is. But it must be gripped by the new regime in 2010.
Now.
George.
What you say sounds right on the money.
But what we need to know now is how precisely you are going to get HMT back to its vital core function of scrutiny and keeping the public purse strings tight.
And we do need to know before you actually get there.
Because you know as well as we do, that once you slip behind that Big Mahogany Desk and survey your marbled inheritance, it may just occur to you that there's no rush.
Which would be the road to an early bath. Because unlike Gordo, you won't have any money to spray around. Forgot the pain-free fantasy conjured up by "sharing the proceeds of growth"; the reality is that anything you want to spend- or even give back to long-suffering taxpayers- will have to be saved from existing programmes. And without a pack of uncompromised old-time Treasury waste bloodhounds at your side, you won't have a prayer.
So long before you get seduced by the mahogany and marble, you should nail yourself to a publically announced plan.

Sunday, March 18, 2007

Cost Ineffective Justice Update


Three days in March...

1. 3 fatal stabbings in Manchester- "Police yesterday launched separate murder inquiries after three men were stabbed to death during the course of a bloody night in Greater Manchester. The victims, aged 21, 24 and 30, were murdered in unrelated knife attacks."

2. Teenager stabbed to death in Newham- "Police are hunting two hooded men seen running from the spot where a 15-year-old boy was stabbed to death. The teenager, named as Adam Regis, was stabbed in the leg and died later in hospital."

3. Schoolboy killed by mob in Hammersmith- "Kodjo Yenga, 16, was battered and knifed by a 10-strong mob in school uniform, some of them as young as 13. His 15-year-old girlfriend said the yobs piled into the youngster with bats, blades and hammers as a bunch of vengeful young girls screamed: "Kill him, kill him!"

4. The reponse of our leaders- "David Cameron said the [slayings] showed that society was "broken" and needed to be rebuilt with stronger families and communities. Tony Blair disputed his claims, saying the crimes were shocking, but not typical of young people or wider society."

In an average week in Britain today, 17 people are murdered, compared to 6 forty years ago.

And short of that magic wand to mend a broken society, we're still waiting to hear precisely how our rulers propose to protect us.

We, along with two-thirds of the electorate, do have an idea, but that's ruled out on ethical grounds.

Absent a right to bear arms, all I can suggest is that you stay lucky.
PS Mrs T says the pic on this post has failed to come out properly. But as I'm sure you art lovers will realise, it's a pic of Black Square, Kasimir Malevich's celebrated Russian Suprematist work.