Monday, December 31, 2007

Important Advice For Healthy Living



Hey you!

Yes, you!

Now, pay attention! Here is some important advice for healthy living, brought to you by the Ministry of Healthy Living.

You must eat five portions of fruit and vegetables every day. Turnips are still plentiful and can be boiled overnight into a nourishing broth. Or why not enjoy them raw as a mid-morning snack? Pay no attention to any idle chit-chat you may hear in the ration queue about how the Ministry's Five-a-Day campaign has been a multi-million pound flop.

You must not become a teenage mother. You should ignore the fact that having a baby is a surefire way of getting a free council flat and state welfare. Also ignore any idle chit-chat you may hear outside the chippy to the effect that the Ministry's £150m safe-sex campaign has been a complete flop and has actually increased teenage pregnancies. While absolutely true, the Ministry's latest advice is to keep a small turnip clamped tightly between your knees at all times.

Finally, you must remember to keep breathing. This is very important, and early in the New Year, the Ministry will be mounting a major campaign to ensure everyone understands just how vital it is. Over the next five years we will be investing £150bn in a National Breathing Awareness Strategy for all primary school pupils at Key Stage 2.

PS Much of the money spent on these hopeless exhortation programmes is given to the advertising industry. They get over £150m pa, making the government Britain's third largest advertiser, behind only Unilever and Procter & Gamble.

PPS The porker advising Britons to eat less is Sir Benjamin Smith, Labour's Minister of Food in 1945.

Sunday, December 30, 2007

Recent Bonfires- 87


Which just leaves death and taxes

In the most unfestive news this year:

Outsourcing overruns cost £9bn- "Research by the European Services Strategy Unit shows that 105 outsourced public sector ICT contracts have significant cost overruns, delays and terminations. The unit examined large outsourcing contracts, PPPs, PFIs and strategic service delivery partnerships in central government, the health service, local authorities, public bodies and agencies over the last 10 years. It found that cost overruns amounted to £9bn for the 105 projects, with an average percentage cost overrun of 30.5 per cent. It also revealed that 30 per cent of contracts were terminated and more than half (57 per cent) had cost overruns." (Kablenet 24.12.07)

Mrs Martin blows £4,280 on cabs- "Michael Martin, the Commons Speaker, will be asked by MPs to explain why his wife has claimed about £1,000 a year in taxi expenses even though she is not employed by Parliament. Mary Martin claimed £4,280.20 for taxis since May 2004, which were “entirely in connection with household expenditure that supports the Speaker’s duties”. According to the Speaker’s spokesman, she needs to take taxis to shop for food for official functions... [but] a large Sainsbury’s is close to Parliament Square and the Oxford Street branch of Marks & Spencer will deliver food to the front door." (Times 29.12.07)

Scouse wedding already £20m in hock- "ON the eve of Liverpool’s year in the spotlight as European Capital of Culture 2008, the city has run up a £20m debt, leading the head of its arts programme to liken preparations to a “scouse wedding”. The deficit is so large - almost as big as the entire £22m budget for arts projects for the year - that Liverpool council has asked the government to bail it out." (Sunday Times 30.12.07)

£150m wasted on teenage sex campaign- "Every year, almost 50,000 girls under 18 fall pregnant, leading critics to claim that government-led efforts to encourage safer sex are backfiring. The number who conceive is at its highest level since a multi-million-pound teenage pregnancy crackdown almost a decade ago. As a result, Britain tops the league table of teenage mothers in western Europe, despite also having a record number of school-age abortions. This comes despite the Government investing more than £150 million in an attempt to stem the tide of conceptions - and pledging to cut teenage pregnancy rates by half by the end of this decade." (Sunday Telegraph 30.12.07)

£30m for wannabe pop stars- "More than £30 million of taxpayers' money has been spent on a government scheme to help aspiring pop stars to make it in the music industry. Since its launch in 1999, a total of 13,463 unemployed musicians have taken part. But new figures show only 3,880 of them went on to "sustained employment" in the industry. That works out at £7,731 for each job found. A further £269,000 has been spent on producing workbooks on subjects such as jobs in the music industry, recording, copy­right and performing. Critics last night dismissed the scheme as a "bureaucratic waste of money" and said Britain's booming music scene would have enabled most of the participants to find jobs without the Government's help." (S Telegraph 30.12.07)

Total for the season to be jolly- £9,200,004,280.20

Saturday, December 29, 2007

La Grande Waste


It's the ultimate government waste and too striking for BOM to miss. The Economist has reproduced that brilliant chart of Napoleon's invasion of Russia. It vividly depicts the appalling loss of men from the 422,000 who started out, through to the mere 10,000 who returned.

Grand illusions. Grand waste. But what a fantastically clever chart.

Oh, and one other thing.

Napoleon was 5 feet 6 inches tall. Sarko is an inch shorter.

Hmm.

Buggins Turn... No, Really


Honest Bob Walpole founded the Order of the Bath as an instrument of political patronage

As usual, the Major has been combing through the New Years Honours List. And as usual, they've unaccountably left him out.

But among the many thousands of people who have clearly served the nation beyond the call of duty (and payment), he has again picked out some real crackers (and we haven't made them up):

Mary Buggins, chairwoman, NHS West Midlands, services to healthcare - CBE (presumably not the same NHS West Midlands that has the country's highest number of hospital deaths from Clostridium Difficile)

John Ivan Tiner, lately chief executive, Financial Services Authority, services to the finance industry - CBE (presumably not the same FSA that presided over that catastrophic failure to regulate the Crock)

William Alexander Jeffrey permanent secretary, Ministry of Defence -Knight Commander of the Bath (presumably not the same MOD which has presided over disasters and cock-ups too numerous to list, and whose permanent secretary was mauled by the Public Accounts Committee this very month over its disgraceful and shambolic sale of QinetiQ)

John Richard Henderson, yeoman bed goer - Royal Victorian Medal (not sure about this one... possibly something to do with Sir Dick Fitztightly?).

Of course, for every thousand Buggins honours, there are one or two that leap off the page as being in a different league.

This year's outstanding recipient is someone who brought back a dearly beloved icon of Britishness after a long and painful absence in which it seemed to have been lost forever.

No, not Kylie's bottom.

Not even Parky's twinkly eyes.

It's Sir Stuart Rose, whose K was predicted by BOM last year, and who has given us something far more critical to Britishness than any number of Bottler edicts on the subject. Founded 120 years ago by a brilliant Polish-Lithuanian Jew, and later the pioneer of mass market Chicken Kiev, Marks and Sparks surely has a place in anyone's top ten bulwarks against losing our national identity. Yet before Sir Stu took the controls it was sinking fast. He was its undoubted saviour.

So what if he got £3.6m last year? So what if he's in line for a further £8m? He's worth every single penny. And the K to boot.

Across The Great Carbon Divide


The metro elite spends loads of our money on propaganda telling us to reduce our "carbon footprint" (eg see this blog on the entirely useless £103m pa Carbon Trust). But despite all the money, and despite 24/7 propaganda from the BBC and the rest of the lib media, they have never convinced voting taxpayers.

As if to underline this, Defra recently paid YouGov even more money to probe how all that scare propaganda is being received out in the real world.

It turns out to have been an abject failure: when asked about their New Year's resolution, 38% said "to lose weight", 31% to "get fit", but only 15% "to reduce my carbon footprint" (and remember, being an opinion poll, these answers weren't even what respondents really thought, but rather what they thought would be well received by the questioner).

Which is all a great result for common sense, and a terrible result for the commissars.

The fact is that we have never had an open and honest public debate about climate change. For all the usual reasons, our Big Government elite grabbed at an idea which demands yet more government intervention in our lives, well before anyone understood the science or the economics. And with one or two notable exceptions, all we've had since then is one-sided propaganda.

It has certainly spawned a massive new tax-funded industry: ten thousand politicos, bureaucrats and eco correspondents attended the recent Bali bunfight. All dedicated to repeating the same apocalyptic message of DOOM and TINA.

Yet whatever the BBC and the rest of them may have decided about the "consensus" case being proven, and however much propaganda we're fed, it seems we peasants need to see some actual evidence.

After all, most of us moved on from primitive earth worship a millenium or two ago.

Friday, December 28, 2007

Plum Pullers


The Punches in happier times


As we sprawled semi-comatose in front of all those leftie Dickens adaptations, who should pop up on the festive BBC News interlude but our old friend Mr Punch.

He was in a highly distressed state. Tears welling in his eyes, he wailed that the rest of the public sector have now been given so much Labour dosh, his differentials have been squeezed most viciously. Paywise, he and fellow MPs have fallen way behind. In fact, they'd have done a whole lot better staying in their previous public sector jobs and never becoming MPs at all!

And it's not as if he's asking for much- all he wants is "fairness and some sort of reasonable attitude [rather than] everyone coming out of the woodwork and accusing MPs of having their snouts in the trough. I’ve never ever, in the time I’ve been an MP, done less than a 14-hour day. I think we work pretty damn hard for what we get.”

Now, don't simply say so what. Don't just say well, we never asked you to thrust yourself forward to rule over us in the first place, so stop whining, and anyway, loads of people have to do long hours, and anyway, you can't call what you do work, so shut up.

No, consider Mr Punch. Consider his pain. Because this is the very worst of pain- the pain of envious regret.

The pain of renouncing a totally chilled job heading a housing quango, for the roar of the Westminster greasepaint, and then seeing the current head of the self-same quango, a certain Mr Swiveller, rinsing a six figure basic. Ah, if only Mr Punch had listened to Mrs Punch, and stayed tucked up nice and snug in there! If only his head hadn't swelled up bigger than a giant poison puffball! If only Labour hadn't won so large in 1997 that even he'd got in!

But alas! The die is now cast. There is no six figure basic for the Punch family this Christmas. No certainty of employment beyond the Great Day of Reckoning (29th April 2010). Barefoot in the snow, they can only contemplate a future of destitution and misery. What in heaven's name will become of them?

And yet, even in the depths of their despair, all is not quite lost. Thanks to the unstinting goodness of a certain deranged Benefactor, the Punch family is not quite so destitute as it believes. Indeed, if they could but feel a little gratitude, their table veritably groans under an abundance of seasonal cheer.

Item: Mr P's basic salary £60,675 pa. Item: Mr P's 2006-07 expenses- £118,952. Item: Mr P's munificent pension- Britain's best final salary pension scheme, paying a two-thirds pension after just 26 years membership (1/40th accrual rate, index-linked, 26.8% annual employer contribution).

And all this in spite of the fact that Mr Punch makes no useful contribution to society whatsoever! Moreover, such are the egregious demands he routinely makes on his benefactor, he is fortunate the Benefactor hasn't thus far realised he is being played for a fool.

Take the latest fiscal gerrymandering news. While the Benefactor's attention is otherwise engaged, Mr P's party routinely doles out the Benefactor's money to its cronies and supporters. The object is to buy votes, and it now transpires that during Labour's decade in power, schools spending in Labour local authorities has increased much faster than in Tory ones:

"Almost all the local authorities that have seen the biggest increases in spending since 1997 are dominated by Labour councillors and MPs.

Middlesbrough - controlled by Labour for more than 10 years - has seen spending on schools jump by a record 54 per cent. In 1997/98 just £3,136 was spent on every pupil in the authority compared with £4,837 in 2005/6. By comparison, Conservative-controlled Bournemouth, one of the few local authorities to retain grammar schools, has seen its funding rise by just 27 per cent, from £3,147 to £3,991 per pupil."


This is systematic gerrymandering. And worse, it's by no means the first instance. The late Commissar Hewitt had those notorious "heat maps" so she could ensure NHS hospital closures were concentrated in Tory constituencies. And we later discovered 70% of both new hospitals and schools have been built in Labour areas.

And yet, somehow, despite the provocation, the Benefactor simply accepts it, and goes on meekly picking up the tab. How can that possibly be?

Let us recall the original Little Jack Horner. As you may know, he was steward to Richard Whiting, the Abbot of Glastonbury, during Tudor times. Responsible for collecting taxes and keeping the accounts, he helped himself wherever possible, really lucking out when he stuck his thumb into the famous Christmas pie, and pulled out the title deeds of not just the plum Somerset Manor of Mells, but also its lead mines. Nice.

Horner's final act of betrayal was to deliver up poor old Whiting to Henry VIII's murderous Reformation asset strippers. Whiting got hanged, drawn and quartered, while Horner lived out a comfortable retirement on his new estates.

But really, the old Abbot brought it on himself. WTF did he trust such a dodgy self-serving operator as Horner?

He must have been a real mug.

PS Many thanks to pedant2007 who pointed out a serious error in the original version of this post. In an unforgivable act of sloppiness, I'd made Richard Whiting the Bishop of Glastonbury, rather than the Abbot. My error was all the less forgivable because we Tylers once spent a day at Glastonbury wandering round the magnificent Abbey ruins. Fortunately pedant2007 has put us right.

Sunday, December 23, 2007

Xmas Greetings From Our Rulers


Seeing as it's Christmas, we thought BOM readers would like to watch a festive vid of our rulers burning another £0.5m of our money. That's what they've spent on nice Xmas decorations for themselves, including this tree in the heavily barricaded Downing Street.

Indeed, they're so pleased with themselves, 10DS has posted the vid on YouTube. To enjoy the full effect, press your nose firmly against the glass.

Happy Christmas to one and all.

Our One Instrument Of Civilisation



Time's Man of the Year 1938: a well known instrument of civilisation


The other morning, courtesy of the state broadcaster, I heard Pol telling us that "the state is our one instrument of civilisation". I nearly choked on my kedgeree.

Surely, I thought, surely Pol and the BBC must know something about world history. Surely they know that throughout the ages the state has been the enabling instrument of tyrants. That just in the last century, it was the state that allowed fascism and communism to impose death and destruction across the globe: millions slaughtered, and civilisation nearly dragged back into the abyss of a new Dark Age.

Surely they know that. Don't they?

And even if that's beyond them (after all, Pol failed her 11 plus and later dropped out of college), simply surveying the wreckage of Bottler's "government", ought to suggest that the state isn't quite what it's cracked up to be. How it's bloated and inefficient. How its commissars routinely lie about its achievements - not only to us, but to themselves. And how across a vast swathe of its activities, it actually ends up doing more harm than good.

Why can't they see that far from being our one instrument of civilisation, more often than not the state is the major roadblock to further progress?

The truth of course is that they don't want to see it, or even admit the possibility.

What they do see is that public confidence in Bottler has collapsed. And that worries them. Not so much because their government is now seen by all to be in the hands of spineless incompetents, but more because of the deeper message behind the meltdown: Big Government has once again failed.

Just like in the sixties, Big Government has been pumped up on huge doses of financial steroids, yet has proved incapable of even walking to the bus stop. Failing education, failing healthcare, failing social policies, failing police, failing... well, non-existent border controls, and an economy teetering on the edge.

What scares the living daylights out of Pol et al is that the voters may be about to grasp The Truth: Big Government isn't just hideously expensive and inefficient; in many areas of life- from schools to healthcare to street policing- it actually makes their lives worse.

Once that particular cat escapes the bag, the left will find things much more difficult: they will no longer be able to promise the earth without having the faintest shred of an idea how to deliver it. And we might finally start to have a serious debate about downsizing our bumbling corrosive state.

PS Yes, we know Polly Toynbee and the rest of the left don't want to be evil. We know why they want Big Government: it's for the very best of reasons. They think that people can't be trusted to behave properly towards either themselves or others. Often they don't even understand their own best interests, or they lack the discipline to pursue them. The state can step in to make everything better- a force for good. Yes, we know all that. But the problem is that we live in the real world. (check out the Commanding Heights vid of Keith Joseph where he explains why even he once favoured Big Government, because he saw it as a "Shortcut to Utopia").

Friday, December 21, 2007

TV Documentary On Brown Cabinet

There won't be time to blog today, but we thought BOM readers would want to set their vids for Michael Cockerell's Xmas documentary on Brown's cabinet- trailer above.

Of course, given their latest downwards lurch they may have been hoofed by the time the doc is aired.

It's classic cartoon capers all right- with explosions ripping through the superstucture and thick oily smoke pouring from below-decks, we particularly enjoyed today's line from Bugs Bunny: "The basic Labour product remains good - we just need to rethink our marketing division."

Thursday, December 20, 2007

A Beer Stained Lesson In Responsibility


You remember how the Met's Sir Bonkers Blair fought to keep his annual bonus even after his year of unmitigated disaster? You know how top public "servants" get bonuses irrespective of results (see this blog)?

They've all just been given a lesson in responsibility by James Cayne, the chief executive of investment bank Bear Stearns (aka Beer Stains). He has announced he will forgo his bonus in an acknowledgement of the bank's dire and possibly criminal performance in the American sub-prime mortgage crisis.

Yes, we know Cayne is already rolling in it (top 400 richest yanks), his bank was centrally involved in the sub-prime crisis (the DA is currently on the case), and as an investment banker he undoubtedly eats babies at the weekend. But this is a bonus to which he was contracturally entitled. He's waiving it to acknowledge his responsibility for the performance and possible misdeeds of those under him.

Compare and contrast with the public sector: weasely statements about how staff are not fit for purpose, how they've let the nation down, how a full review has been ordered, and how it was nothing to do with me guv.

PS Over at the Dragon's Pen, the Dragon says: "The story is that Jimmy Cayne was away at bridge tournaments without a cell phone or pager while the two internal Bear hedge funds blew up. I think what this shows you is that investment banks today are really indistinguishable from the hedge and private equity funds they claim are their ‘customers’, and that the CEOs of these organisations are now wholly the prisoners of the main position (risk) takers who generally sit one or two rungs down from the CEO level. Not saying this is a bad thing, necessarily, but it does mean that for shareholders it almost doesn’t matter what the CEOs do, they are figureheads only. Your capital is being punted in massive bets made by much lower profile people just where the shadows start." Just like your taxes and personal data are being chucked around by lower profile people who are beyond the control of our preening grandstanding politicos. Makes you think.

Wednesday, December 19, 2007

Shutting Doors


A properly designed bank regulatory regime

The Crock has already bolted, but there are plenty of other nervy colts standing up to their fetlocks in ordure in the same fetid financial stable. And if the government wasn't frozen to the spot, they wouldn't even be thinking about their Christmas hols until they'd got the door nailed firmly shut.

OK, enough tortured horse whispering metaphors. Let's just summarise a few key points from the last 36 hours of statements and leaks:

1. The Crock has definitely had it as an independent going concern- without the taxpayer loans and 100% guarantees, the shareholder stake is worthless- at the current 91p per share, this is an entirely false market

2. Taxpayers are at considerable risk of losing money- quite possibly a lot of money

3. The shareholders are getting in the way of extricating taxpayers- despite the fact that their stake now only has value because of our support, they are pursuing solutions that maximise value for them, not for us

4. In the (appalling) circs, nationalisation looks like the least worst option for us, but...

5. Hedge funds have increased their stake in recent days, reflecting legal advice that nationalisation will require taxpayers buying out shareholders at around £4 per share (NR's supposed book value); but that would cost us getting on for £2bn, and no way should taxpayers be forced to fold to such an outrageous demand- repeat: without taxpayer support, the shareholder stake is worthless

6. The alternative is to put the Crock into administration first (ie follow the normal insolvency process), and then for HMT to buy it from the administrators for a nominal £1 (the Kaletsky plan- eg see this blog); this may be the only realistic solution, but the problem is that administration can be very messy and protracted- legal action could continue for years

7. The authorities' hands are tied because unlike every other G7 country we have no "special resolution regime" for busted banks; such arrangements allow the authorities to call time on a bank without buying out shareholders, to pay out depositors immediately, and then sell off the bank's assets in an orderly manner over a period; we don't have any of that, making the whole situation much more difficult... and costly.

Of course, everyone can now see what needs to be done- we need to legislate those "industry standard" arrangements pdq. And hopefully before too many more painful months have passed, Darling might even get round to doing it, along with that uprated guarantee scheme for retail deposits.

But we should not be distracted from a key point- when Brown and Balls instituted their much vaunted plan for Bank of England independence, and split responsibility for bank regulation (FSA) away from responsibility for financial stability (BoE), they somehow ignored some essential elements of international standard practice.

Of course, there is another way- the old way. Back in the old days, pre-Brown, problems like this could often be headed off behind closed doors at Threadneedle Street. Things could be stitched up well away from the media spotlight before they got out of hand.

For example, we know from King's testimony before the Treasury Committee yesterday, that long before this August, the Bank was concerned about go-go operations like the Crock over-reaching themselves and running into possible funding problems.

In the old days, the Rock's Chairman would have been summoned to lunch and cards would have been clearly marked. Regulations might have been quietly tightened.

In Brown/Balls world, that wasn't possible. All the Bank could do was to attend a Tripartite meeting with the Treasury (Balls) and the FSA (Callum McCarthy) late last year and suggest that the Treasury do some work on changing some of the rules. Surprise, surprise, nothing happened.

Tinkering and meddling is the very hallmark of Brown-style socialism. And as we see every day, most of it is half-baked and ill-informed. Often, it just creates more layers of useless bureaucracy. But here it's produced a disaster.

Which could get a lot worse.

PS We've never been very confident about the quality of the Crock's mortgage book: are they really all "prime" as claimed? For a brilliant and scary insight into how sub-prime mortgages work in the US, see here (HTP A Reader).

Northern Rock Guarantee- How Much?


Wrecked on Granite

As already blogged, yesterday's Treasury statement on the extended Northern Rock guarantee suggested taxpayers are now on the hook for all of the Crock's borrowings, except for a few billion of subordinated debt: ie we are guaranteeing around £100bn.

Yet most of today's headlines say the guarantee "only" covers around £56bn. So what's going on?

The HMT press release yesterday morning said the guarantee covers retail deposits, wholesale deposits, unsecured borrowing, secured borrowing where the security actually turns out to be insufficient, collateralised and uncollaterised derivatives, onshore and offshore. Which is pretty well everything- hence the £100bn.

But when, a little later in the morning, the Bank of England Governor and Deputy Governor appeared before the Treasury Select Committee, they told a slightly different story:

"Essentially, this does widen the scope of the guarantee to pretty much the whole balance sheet excluding the capital and the Granite securitisation. All that guarantee is secured against the asset value of the company."

Mervyn King, governor of the Bank of England, said about 40 per cent of Northern Rock's £114bn ($229bn) balance sheet related to the Granite programme, with a third covered by the extended guarantee.

A further 25 per cent was Bank of England and Treasury loans, "leaving a very small residual that is essentially capital".

So in terms of money, that means we've now lent c £29bn directly to NR (equals 25% of £114bn), and guaranteed a further c £38bn (equals 33% of £114bn). Which totals c £67bn.

So the origin of that quoted £56bn is mysterious.

And taxpayers should also remember that while the c £45bn of NR's now notorious offshore Granite securitised borrowing is supposedly excluded from the guarantee, without it, Granite would soon unravel. That's because although the Granite borrowings are secured against specific pools of NR mortgages, the Rock has continuing obligations to maintain those pools- the programme is not "fire and forget".

What's more, Granite's borrowings are essentially short-term. It is constantly needing to "roll-over" its maturing debt- ie redeeming existing borrowings and replacing them with new. Once Granite's investors take fright at NR's capacity to perform, roll-overs get very difficult, and the whole programme could collapse. And what gives it urgency is that the Granite borrowings are maturing fast, with £1.5bn due in January alone.

We stick to our view: the reality is that taxpayers are on the hook for the whole lot. Which according to the BoE is well over £100bn.

Tuesday, December 18, 2007

Public Service Dickens



Everyone loves a good panto... don't they?

The BBC loves Dickens. Why wouldn't they? He was a big propagandist against laissez-faire capitalism, just like the BBC.

Still, for many years the BBC did used to serve up excellent Dickens adaptations for the nation's children, at teatime on Sundays. Jolly good they were too- given there were no computer games or digital footie to compete, and the shops were all closed.

The trouble is, these days things aren't so simple. The BBC is going through an identity crisis. As the excellent Janet D reminded us yesterday, it's finally been forced to abandon all those Reithian certainties about serving up the castor oil it knows the plebs must have. Yet it's also dimly aware that £3.2bn pa taxfunding needs at least some sketchy rationale. So it's desperately casting round for a some new role, beyond merely aping the commercial broadcasters in a quest for Big Brother ratings.

Maybe reshaping British society? No, don't titter- that's apparently what Chairman Lyons believes.

So what better than an improving Dickens adaptation for Christmas?

Thus it was, this very evening, with our chestnuts roasting on a open fire, and fully seized of the festive spirit, Mr and Mrs T settled down to watch the first episode of BBC1's brand new serialisation of Oliver Twist. Complete with Timothy Spall as Fagin. What joy!

But what's this?

Oh dear.

Oh dear, oh dear, oh dear.

An unredeemed pile of dush dush pop video, pantomime rubbish. We lasted just 15 minutes, and I doubt we were alone.

Yet however dire the reality, we know for certain this will be touted as an example of the Corporation's public service mandate in action. A reason for continued taxpayer support.

It will be fascinating to see the viewing figures. And the cost.

PS You may well object, saying that the classic David Lean film (above) was also pantomime. You may well say Dickens himself was pantomime too. And you may well be right. But there is of course one important difference from the BBC- neither Dickens nor Lean was tax-funded.

PPS On the subject of the festive BBC, a concerned citizen has contacted us with cost details of a BBC staff Xmas bunfight at Battersea Park. 2000 guests @ £38 per head = £76,000. And that was quite possibly just the catering. Who paid? You did, my friend. You did.

Taxpayers In The Crock Pit



Oh.

My.

God.

Today, Darling has extended the taxpayers' guarantee to virtually all Northern Rock's borrowings: retail deposits, wholesale deposits, unsecured borrowing, secured borrowing where the security actually turns out to be insufficient, collateralised and uncollaterised derivatives, onshore and offshore. The whole kit and caboodle.

Which totals c £100bn.

Or £4,000 for every household in Britain.

(yes, the HMT press release excludes subordinated debt, but that's only a few bill)

So now we're formally guaranteeing a bank that remains fully owned by shareholders. It requires a breathtaking disregard for taxpayers' interests to even contemplate such a situation. Our clothead rulers are giving us the worst of both worlds- we bear all the downside but any upside goes elsewhere.

As we've said before, nationalisation without compensation is the only realistic option left. And the sooner it's done the better.

PS They reckon no alligators were harmed during the filming of that fantastic stunt in Live and Let Die. If only taxpayers could be so lucky.

Pensions Black Holes


How a pensions black hole works

Yesterday our battered beleaguered rulers bunged £3.9bn more taxpayers' money into yet another pensions black hole.

Now, all of us sympathise with the 130,000 people who lost all or part of their pensions when their companies went bust up to 2003. And all of us can see that they were grossly misled by that stream of official assurances that their final salary pensions were safe (see here for Mail's campaign).

But as taxpayers, we need to be quite clear about one thing: once again we're being forced to pay for clearing up a pensions mess largely created by our rulers.

If the government had not issued all those incorrect and misleading assurances that final salary pensions were safe, these pension members and their trade unions would have had no basis for their legal case.

More fundamentally, if successive governments had squared up to the truth about final salary schemes, they'd have established an insurance scheme long before 2004.

The whole pensions universe abounds with hugely expensive black holes. And as we've blogged many times, successive governments are in denial about the looming crisis (eg see this blog). Despite a string of weighty reports (eg the Turner Commission- see this blog), they are still not gripping the real issues. Which are:
  • Pension age- increasing life expectancy means the State Pension Age (SPA) needs to be increased sharply; the current plan is to raise it to 68 by 2044: we reckon we need quicker action and that SPA needs to go to 70, which would save us about £15bn pa- c 1% of GDP (eg see this blog);
  • Public Sector pensions- the scandal of largely unfunded public sector pensions continues (eg see this blog); in the face of pressure from their union paymasters, Labour backed off increasing the retirement age from 60 (or even below in some cases), and the total cost to taxpayers is currently put at about £1 trillion- twice the officially declared National Debt.

As we've said many times, the combination of spineless politicos and our chequebook is not a happy one. And unless you want to spend your old age living on Value Buy pizza, we suggest you move your savings offshore and don't plan on retirement until 75. At which point you should emigrate.

PS The splendidly opulent pension arrangements enjoyed by the boys and girls in blue are once again highlighted by the case of Ian Johnston , who leads the British Transport Police (BTP) and is a national police spokesman on organised crime. It turns out he is the highest-paid officer in the country with an estimated pay-and-pension package of £260,000 a year. The reason? He retired from the Met at age 55 on his full £70 grand pension, and then promptly got himself a new job with the BTP on £195 grand pa. Plus of course, the usual generous police expenses (£6,964.40 last year). If only everyone had such a cushy pension deal.

Tax On Xmas- The Bloke Hits Page 3


The Bloke's course for weakling taxpayers


An Xmas treat for the ladies! The Bloke has finally achieved his lifelong ambition- he's appeared on page 3 of the Sun. And does he look great! Six-pack stomach, rippling biceps, well-oiled pecs... or are they the same thing?

Well, OK, it's not actually on page 3. And there's no photo, as such. But let's not split hairs. The main thing is that he's there- on page 2, cheek to cheek with Chanterelle from Basildon. And the story's even made the editorial.

It's all down to "The Tax on Christmas" (see here). After extensive and arduous research under the mistletoe (eg see this blog), the Bloke penned the report for the TaxPayers' Alliance, calculating that the average British family will shell out £225 tax on its festive spending.

That's a total Xmas tax bill of £5.65bn.

No wonder the Express- which gives the story even bigger coverage- has a picture of Bottler as Scrooge (I've sent Mrs T out to buy a dozen copies as Xmas gifts).


The Treasury's response?

"Treasury officials last night dismissed the TaxPayers’ Alliance calculations."

No reasons given, but we're presuming they're the same Treasury officials who reckon the economy's tickety, Britain's national debt is "only" £511.3 billion, HMRC works like a Swiss watch, and Northern Rock is a temporary liquidity problem.

Crock Latest

Darling's the one with the cap

Since we looked at Northern Rock last week, things have got even worse for taxpayers:


Bid progress... minimal

The two bids from Branson and Luqman Arnold are still out there, but are looking shakier by the day. Arnold has now been forced to promise more equity capital, but it's only £200m more- peanuts in the current situation. And his promised total equity injection is still less than Branson's. Against that, NR shareholders prefer Arnold, and reckon Branson's management team has been weighed and found wanting.

In terms of we taxpayers getting our money back, neither bid looks credible. A "City Expert" told the Sunday Times:

“The basic problem is that the banks don’t have a lot of money available, and both Branson and Arnold are finding it difficult to get support. The two bidders are pretty lightweight. Branson is the nearest thing in the business world to Princess Diana.”

The Treasury is so worried it's appointed Goldman Sachs to assemble a financing package that would be available to either bidder. Sounds like a long-shot, and taxpayers should also remember that super-smart Goldmans are not known for working on a charitable basis. Who will pay them, we wonder...


Finance... not available

With all major Western banks under the credit cosh, the chances of them stumping up even £10-15bn are diminishing. And for taxpayers, that's not enough anyway. We are in the hole for a loan now approaching £30bn.


Deposit guarantee... boxed in

Taxpayers are also currently on the hook for the Treasury's 100% NR deposit guarantee, and as we blogged previously, there's a real question over whether the Crock can survive without it- even after a sale. Last week we noted that Branson's presence had apparently stopped the haemorrhage of NR's retail deposit base, which was encouraging. But latest reports say that it's started again. Continuing the guarantee means taxpayers will be shoring up the new owner, just as much as with a continuing loan.


Mortgage assets... heading South

We were initially assured NR's £90bn mortgage loan book was of unimpeachable quality- as safe as houses. Now we know it's showing signs of "credit impairment" (eg see this blog), and the latest dire news on the housing market means it can only get worse. Much worse. Which of course is precisely why the commercial banks are wielding those 20 foot bargepoles so vigorously.


Non-mortgage assets... heading South

In September NR told us their £15bn of non-mortgage assets were all super-high quality:

"Northern Rock invests in high quality and well diversified assets... Northern Rock only has a £75 million direct exposure to the US sub-prime market which is all rated AAA, and a £200 million exposure to the US CDO market, within which there is indirect exposure to US sub-prime. Of the £275 million combined exposure, £193 million is rated AAA. We also have £325 million of investments in a number of Structured Investment Vehicles (SIVs)."

AAA huh? Just three months later we learn they've written down their SIVs by more than one-third (£118m) and their CDOs by two-thirds (£130m). Taxpayers- most of whose exposure is unsecured (see previous blogs)- should be alarmed.


Shareholders... demanding recompense from taxpayers

According to the Telegraph, the disappointed hedge funds that bought into the Crock in the hope of a quick killing, may now demand a direct payment from taxpayers:

"A nationalisation of the bank could force the Government to pay £1.7bn to Northern Rock's shareholders, including Rab Capital and SRM Global, the hedge funds that bought big stakes in the bank after its problems became apparent.

SRM's Jon Wood is understood to have received legal advice indicating that precedents across Europe suggest the Government would need to pay no less than £4.10 a share to nationalise the bank - equivalent to Northern Rock's book value."


Shark is as shark does. But who reckons we can depend on Bottler to defend us?


Decisive action... forget it

When we first blogged the Crock three months ago, we said:

"Darling has emerged from his hole to assure us there's no need to worry... We taxpayers should be anything but calm.

What if the collateral against which we're now lending to NR turns out to be worth less than NR claim? How confident can we be about the value of those highly geared mortgages in an environment of rising rates and (probably) falling house prices? What about their £15.4bn of other assets, including exposure to CDOs, SIVs, and SIV-lites (see this blog)- how secure are they? The answer is nobody knows- which is precisely why the money markets no longer want to lend to them.

Of course, there's no way NR can now maintain its independence... No doubt "the authorities" are right now frantically trying to strongarm someone into taking them over. And no doubt the possible buyers are saying they will need some form of government guarantee on that dodgy loan book. And maybe the authorities will offer some form of... what shall we say... douceur.

But there's one thing we must be absolutely insistent on. Before taxpayers are required to shell out a bean, the NR shareholders must lose everything. As we argued here, they've had the upside, and now they must pay the price."

We were wrong about only one thing: when we said "no doubt "the authorities" are right now frantically trying to strongarm someone into taking them over", we were being wildly optimistic. The "authorities" have been totally stymied by Bottler's crisis of morale. They are incapable of making decisions about anything that matters.

And as for Darling's sponge-brained idea that henceforth decisions on banking crises should be made by a Cobra-style committee headed by ministers, it would be hilarious in any other circumstances. Can anyone imagine that bunch of spineless twerps making decisions about difficult and risky stuff like this? Photo ops and wasting our money, sure. But sorting out a banking crisis?

I'd rather trust details of my name, rank, and bank account to Her Majesty's Revenue and Customs.

Monday, December 17, 2007

Down At The Nick

Why have three out front when none will do?


Worrying news from Cricklade:

"NORTH Wiltshire's top cop has warned residents in Cricklade they could be responsible for the closure of their own police station.

Cricklade Police Station, in High Street, no longer has a manned front desk due to cutbacks, but Chief Inspector Boland urged residents to use the station as much as possible.

When members of the public complained it was closed, Ch Insp Boland assured them it was manned and officers at the station would respond if they were not tied up.

"It is not closed but when the accountants come to review our expenses the first thing they will say is that it is perceived to be closed anyway' and they will close it," he warned."

Did you follow that?

Cricklade residents (aka the customers) are angry because their local police station is closed- ie if you go there you find nobody manning the front desk, and even if you shout, nobody comes. But rather than putting it right, North Wiltshire's top cop advises them to pretend the station's functioning properly as it is. Otherwise, he says, it will be perceived the residents perceive it's closed, and it will be closed. Even though in real world terms, it's closed already.

Only in Stalin's Russia is such madness possible.

And there's no doubt Stalin would have approved of the commissars' programme to streamline policing by closing stations. As he would have appreciated, manned stations open to the public are a huge distraction for the police. Far more efficient if they concentrate 100% on their core function, which is to carry out orders from above.

So all over the country, stations are closing. According to today's Sunday Telegraph, more than 600 have already closed since Big Government Labour came to power:

"Only one police station in eight is now open 24 hours a day and 18 out of 43 forces do not have a single station open around the clock."

It is true that new stations have opened, but these tend to be of a very different type, often closed to the general public altogether.

For example, in the Met area, the plan is to close local nicks and organise policing around out-of-town mega-bases. According to the Register:

"This gives a basic blueprint along the following lines. Most conventional policing, and most police, will be at the 'flexible warehouse' that isn't open to the public, but that is quite likely to occupy industrial estate sites. Visible policing (aside from the ones tearing around with flashing blue lights) will be in shop-style high street premises."

And the high street premises will be small kiosks in shops or libraries, manned by those Community Support Numpties in Yellow Jackets (see this blog), and only open 9-5. Need to see a cop outside office hours, and you'll have to take your chances on waiting for a blue light car to come available. Which wasn't good enough for 14 year old Jack Large who died earlier this month after being stabbed outside an unmanned station in Chigwell.

Regular BOM readers will already be aware of how this plays out in affluent areas. In places like Primrose Hill- part of LB Camden- local residents have given up on the police altogether, and hire private security guards to patrol the streets. That's despite the fact that Camden reportedly has 827 police officers, 169 police staff and 98 Community Support Officers.

What do they all do? You know the answer- six out of every seven hours is spent doing admin and taking meal breaks (eg see here).

In Primrose Hill, residents buy their way round the problem. As with the rest of our dire public services, everything's fine so long as you can afford to pay twice.

Of course, if you live in Chigwell or Cricklade and you can't afford to pay twice, you're stuffed.

Bring on those elected sheriffs. The ones that have to serve their local customers or they get slung out.

HTP: John B

Sunday, December 16, 2007

Election Expenses


Angry Trollope- spent a packet and still lost

What with our politicos constantly whining about how much it costs to run elections, and how they need more state funding, it's interesting to see the following chart of party election spending back to 1855. It was produced by Jack Straw when he was Home Secretary, and purports to show spending at constant 1997 prices. The corresponding figure for 2005 was £18-19m.


As we can see, modern elections are as cheap as chips.

When the novelist Anthony Trollope fought the corrupt Parliamentary election in Beverley in 1868, he reckoned each vote cost about £1, in drinks, food, and financial bribes for the voters. The equivalent today would be getting on for £1,000, which in a key marginal could easily tot up to millions.

I reckon today's politicos don't know they're born.

Stinky Snippets From The Sundays

A towering genius compared to Bottler



Jobs for the boys... and girls

After her triumphs at the Department of Health, Commissar Hewitt is mulling over which particular lucrative job offer she's going to accept in the commercial healthcare sector:

"Hewitt, who resigned in June, has been inundated with consultancy jobs since leaving the Department of Health. She is set to be the latest in a series of health ministers and senior officials to move into the private sector.

Lord Warner and Alan Milburn, both former health ministers, have also benefited, moving to healthcare jobs soon after leaving office. Liz Kendall, Hewitt’s former special adviser, is now a healthcare consultant to a number of organisations, including private sector companies.
Hewitt, who was health secretary from May 2005 but stood down when Gordon Brown took over as prime minister, is expected to take up her roles in the new year.


Warner’s jobs, revealed this month, include advisory roles for Xansa, a technology company in Reading, Berkshire, that has a partnership with the Department of Health to provide finance services to National Health Service bodies, and Byotrol, an antimicrobial company that sells products to the NHS.

Warner also has an advisory role with DLA Piper, which advised ministers on the NHS’s £12 billion IT programme. Warner was responsible for this while a health minister."

The stink is overpowering. But it will continue as long as the NHS exists. Roll on social insurance.

(Cf the long and dishonourable history of MOD ministers/civil servants snuffling their way to the defence industry trough- eg Snr Bus-stop).

Cash for access

"ONE of Britain’s biggest property developers gave more than £120,000 to the Labour party to help to gain access to ministers and key officials during a lobbying campaign for a new rail link.

Canary Wharf Group gave Labour the funds as part of its campaign for the £16 billion Crossrail scheme to link the City of London and the Isle of Dogs to Heathrow. The last donation, of £35,000, was made on September 29 this year, six days before Gordon Brown gave the project the go-ahead."

Now of course, nobody is suggesting CWG gave the cash as a straight bribe. No, no, no. As "a senior executive" explains quite matter of factly:

“You do find you get access to people to talk.

We are not saying we are making a donation and therefore Crossrail will come our way. We are saying we want to engage in the political process and to be seen to be engaged you have to make donations.

They are just human beings. If they are Labour and you say, ‘Can we talk?’ and they [say], ‘Yes, they’ve made a donation – perhaps we had better have a chat with them’. It just opens doors, no more than that.”

So that's all fine.

We blogged Crossrail here. Budgeted at £16bn, we reckon it will cost taxpayers £25-30bn. Still, could be worse- one of the junior Tylers now owns a flat down at the Wharf, so maybe he'll clean up and bung a few quid to his aging p's.


Big Swinging Dicks

High rolling Met Deputy Commissioner Andy Hayman (see this blog), finally forced to resign over his outrageous expense claims, was thought by colleagues to be "out of control":

“Andy’s behaviour was causing some concern. There was a pattern of activity that needed checking out.”

“These are the sorts of things that raise concerns. This is why we vet people in sensitive posts – because they might be vulnerable to blackmail.”

As BOM readers will know, Hayman thought it perfectly OK to spend our money touring the world with his lady... er, colleague, Heidi Tubby, and "to make 400 text messages and phone calls to Nikki Redmond, 36, who was working at the Independent Police Complaints Commission at the time it was investigating the shooting of Jean Charles de Menezes in Stockwell" (see this blog on the Arrogance of Power).

Rewarding failure

As we've blogged before (eg here) public sector bonuses are a bad joke. New figures from the TaxPayers' Alliance show that even after this year of unmitigated disaster, senior civil servants are still sharing a bonus pool of £120m.

"At HM Revenue & Customs, which recently lost two discs containing the details of 25m people, more than 350 top-grade staff are thought to have shared almost £2m, while bureaucrats at the Ministry of Defence have been given £44m and at the Treasury £21m.

Over the past six years, bonuses have almost doubled and the wages bill for senior civil servants has risen from £144m to £250m."


Garden of Eden

A few weeks back we suggested Bottler was turning into Anthony Eden. Apparently, the same thought has now swept through the ranks of those low-grade, demoralised Labour MPs. "A Member", who declined to be named, says:

"People are talking about Gordon as Labour's answer to Anthony Eden – a leader who may be gone before he has a chance to fight an Election."

Just one small point of historical fact- Eden did fight an Election (1955), which he won. In your dreams will Gord match that: 13 points behind, minus 26% personal rating, hopeless, bungling Bottler doesn't have a prayer.

Saturday, December 15, 2007

Crippen Does A Macca Shocker


They couldn't fool us- we knew the truth


Here at Tyler Towers we're in a state of shock.

Like billions of others, Mrs T and I can remember exactly where we were when we heard Paul McCartney had died.

It was in that car crash on Wednesday, 9 November 1966. Recording Sgt. Pepper's Lonely Hearts Club Band, he'd had one more flaming row with Lennon, stormed out, and promptly crashed his Austin-Healey. That was it. Good night St Johns Wood.

Of course, at the time we didn't find out. Freaked by the likely impact on profits, the evil capitalist barons at Parlophone records imposed a total news blackout, and held a secret X-Factor Macca lookalike contest. After a few surgical tweaks and intensive training in the back story, the winner was slotted into the band, and the Beatles carried on spinning gold. They even managed a final live performance, on that Get Back rooftop in early 1969. And because "Paul" was hidden behind a big bushy black beard, and most of the audience was kept down at street level, nobody could tell the truth.


Not the Fab Four


Obviously, the other Beatles didn't like it, but what could they do? They'd been brainwashed by that Yogi Bear bloke, and the barons had threatened to kill their children. When the Beatles manager Brian Epstein tried to speak out in 1967, the barons had him eliminated. Just like that.

All the band could think to do was to alert us fans by dropping subtle hints into their records and on their album covers.

But you know what- it worked. Despite the evil barons and their lies, we found out. By late 1969, we all knew. We knew that if you played Revolution Number 9 backwards, you could clearly hear "turn me on dead man". And the absolute clincher was a barefooted "Paul" out of step on the Abbey Road cover that same year.

We knew alright. And there was soon a flood of learned tomes supporting our case:


Now you may say, if he was dead, how come we had Wings, and Mull of Kintyre, and the Frogs Chorus?

To which I say, pah! Don't make me laugh. Do you honestly think Paul would have produced such muzak?

And so, 40 years have passed.

Then, just a few days ago, some anonymous well wisher drew our attention to this:

"The doctor known as 'John' or 'Crippen' passed away in a road traffic accident mid-October."

It was a comment on Dr Crippen's excellent, one-and-only, industry leading NHS Blog Doctor.

We were shocked. We know Crippen, we know him well. I first met him the very year Abbey Road was released, and weddings, children, ups and downs, we've stayed in touch ever since. How on earth could his mid-October death have been kept from us?

Especially since- once I thought about it- I'd had contact with him since mid-October. And especially since he is still responding to emails. And especially since the original commenter has now admitted it was untrue.

And especially since by any normal standards the Doc is alive and well.

And then we remembered Macca.

How do we know Crippen is not now a Macca-style lookalike? How do we know?

How do we know the barons of the NHS, stung by his remorseless exposes of their wild incompetence, didn't arrange "a little accident"? They could easily have come up with a Stepford Doctors clone via a secret competition, or plastic surgery. They're the NHS for God's sake!

And the more we thought about it, the more likely it seemed. Consider the page banner on his site- it's almost Prussian Blue, the colour of Prussia. As we know, that's now part of Poland, home to all those plumbers. The symbolism is obvious.

And why does his cartoon character have a long white beard? Who else do you know with a long white beard? Exactly.

Then there are all the pointers and clues in his posts, far too numerous to summarise here.

The shocking truth is this. The Crippen we know- the man I've known since 1969- may be an automaton. Or a replicant like Harrison Ford in the new remastered version of Blade Runner.

Indeed, I've now come round to the sobering conclusion that Crippen may never have existed in the first place.

PS For more on conspiracy theories see here.

PS As we may have said before, back in the swingin' sixties Mrs T met Macca. At the age of 13, she and a friend used to hitchhike to St Georges Hill, Weybridge, where George Harrison had his mansion. They just used to go up to the front door, ring the bell, and hope to find him in. If he was, he used to let them in for a chat. And if they were really lucky, Macca or Lennon would drop round for tea. No funny business, just a bit of a star-struck chat. Can you imagine that? She assures me it's true and indeed has the snaps to prove it. A different world.

Friday, December 14, 2007

Yum Yum VAT

Senior HMRC Hobnob inspector at work

Following last week's post on the mysteries of VAT, it's worth noting the latest developments in the Great Chocolate Coating War:

"Confusion over the chocolate-covered teacake - a dome of marshmallow on a biscuit swathed in milk chocolate - could cost the British government £3.5m after an EU court adviser said the retailer Marks & Spencer should get a refund of the tax it paid during the decades that tax authorities insisted they were biscuits."

Never in the field of edible coatings has so much misery been caused by a sales tax.

Let's remind ourselves of the history.

When the French initially forced us to introduce their abominable tax system in 1973, they kindly permitted us a derogation so that food could be zero rated. But the question then became what is food?

Easy you say- food is stuff you eat.

Ah, such innocence.

You see, bread is food. We can all agree that. And following the famous Marie Antoinette ruling, so is cake. Eccles cake, Bath buns, Dundee cake- they're all food.

And biscuits? Are they food?

Well, yes, they are. Viennese whirls, garibaldi, bourbon creams- all traditional British grub, and all subject to zero VAT.

But what about Hobnobs?

Exactly. That's where the problems start. Because whereas your standard fare Hobnob is VAT free, first class chocolate Hobnobs (milk or plain) get treated very differently. Their chocolate coating lifts them from being mere "food" off up into the ambrosial realm of "luxury biscuits". And whereas everyday biscuits are zero rated, luxury biscuits are whacked for the full 17.5%.

The chocolate Hobnob's one chance of escape is to prove it's a cake. Because cakes get it easy. Cakes are allowed to be smothered in disgracefully thick lashings of the darkest most velvety Belgian chocolate, and nobody can touch 'em for it! They remain zero rated.

However, the Hobnob would find it pretty tough to prove cakeness. True, the chocolate covered teacake made it, and the Jaffa Cake successfully claimed cake nationality in a landmark 1991 case (see excellent summary at NiceCupOfTeaAndASitDown.com). But as you may have spotted, they both have "cake" in their name. Plus, according to the court, they both display other "cake-like characteristics" (eg not going soggy if you leave them out- although extensive experiments at Tyler Labs have cast doubt on that claim).

The whole distinction is of course entirely arbitrary, made even more absurd by the fact that if a biscuit's chockie is inside rather than outside, it's zero rated. NiceCupOfTeaAndASitDown.com provides detailed reviews of several excellent zero-rated inside chockie bickies, including the world leading Bahlsen PICK UP:

"It was somebody at Bahlsen who told me of some intricacies of VAT law concerning chocolate and its placement, and its my understanding that such an arrangement of biscuit and chocolate would be VAT free as inner chocolate is not considered 'Luxurious'...

...As you bite into this very solidly assembled biscuit your teeth which have made it through the crispy outer are suddenly arrested by the choc monolith forcing you to change into a lower gear and with a firm bite snap off a piece. This is a non standard biscuit eating experience."

Sounds like we might need to check them out.

Meanwhile, the definition of food has plenty of other grey areas.

Seeds and plants used to grow food are zero rated, whereas the same things bought for "ornamental effect" are taxed at 17.5%. But again, what's food? Nasturtians are taxed, but you can eat them. Asparagus, globe artichokes, and rosemary are all VAT free yet are widely used for ornamental planting.

And the man in Tyler's local garden centre reckons mistletoe is edible- "why do you think the druids ate it? It's hallucinogenic."

A bit like the VAT regs.

Police Pay - The Worst Of Both Worlds

Is this what you want?


So just let me make sure I've got this right. We're paying our policemen better than they've ever been paid, yet they're going on strike (or at least, intending to come down en masse with Blue Flu).

Having perused the stats, we can confirm they're certainly well paid. According to the Office for National Statistics, your typical copper at sergeant and below now earns £36,700 pa (ASHE April 2007; T 14.7a, full-time median). That compares with economy-wide median pay of £24,000 (ft median). So the cops get a premium of 50%.

Back in 1997, the same typical cop got about £24,000, so his pay has gone up by over 53%. Since prices have only increased by 17% (CPI), that means a 30% increase in real pay. And in 1997, the economy-wide median pay was £16,700, so the police premium was "only" 44% (ASHE 1997). With police pay up by 53% and average pay only up 44%, the relative position of the police has improved significantly. Here's the picture:

And on top of their cash in the hand pay, there's that gold plated pension. Whereas for most employees final salary pensions are now a distant pre-Labour dream, the police still enjoy index-linked final salary pensions and retirement at 50. These days that's worth at least 30% on top of declared salary (eg see this blog).

So I'd say Labour has done pretty well by the cops (and see here for Reform analysis).

Especially considering we taxpayers have done much less well. Despite all that extra cash, police efficiency levels have plumbed new depth (see this blog). According to the latest report into police funding from the Home Affairs Select Committee, since Labour took over, total police funding has increased by 40% in real terms. And although some crimes have fallen, the serious crimes we really worry about haven't. Moreover, much of the overall fall has had nothing to do with the police. As the Committee notes:

"In the case of both vehicle crime and burglary, improvements in security—far more than any government action—have probably been a significant contributor to overall falls... Excluding successes on burglary and vehicle theft, there has been a more mixed picture in tackling overall crime, particularly given the increase in resources available to the police. For example, between 2002–03 and 2005–06 violent crime as measured by the police recorded crime statistics showed a 21% increase..."


So if you were a cop, your best bet would be to think "thank you very much" and shut your gob. You certainly shouldn't be drawing attention to yourself by going down with a dose of Blue Flu. Because as the firefighters discovered, the public often have no idea what public employees get paid these days, and when they find out they can turn nasty.

But that aside, how is it possible for the police to have been paid all this money and still be pissed off? How on earth have we ended up the worst of both worlds?

No prizes for guessing the answer I'm afraid: this government has been unspeakably incompetent in managing public sector pay. Right across the public sector they've given us the classic boom-bust cycle: years of huge uplift, followed by a sudden halt.

From the nurses to the police, they ladled out great dollops of cash during the fat years, getting virtually nothing in return. And, who could possibly have guessed, the recipients got habitualised to it.

So now the cash has run out there's a real problem. Just like there was the last time we came to the fag end of a grand socialist feeding binge. That particular fag end came to be known as the 1970s, which not only gave us the three day week and Red Robbo, but also- less forgivably- the kipper tie, tank tops, and the Rollers. Is that what you want to see again?

When Tyler was involved in the nightmare of setting pay and bonuses for his co-workers, he soon discovered a Golden Rule: never give anyone so much in one year, that you may need to slash it again the following. Remember there are fat and lean years, and try to think longer-term. You ignore that at your peril: you can so easily end up with staff who are both highly paid and extremely pissed off at the same time.

So why hasn't the public sector discovered that?

And while you're at it, why can't those expensive pigs fly?

PS FYI, the median pay of senior police officers (inspector level and above) is now £52,925 pa (plus pension and, er, expenses). Back in 1997 it was £34,880, an increase of 52%. The latest salaries of the very top cops are listed here. EG:
Met Commisioner - £234,939
Met Deputy Commissioner - £193,959
Chief Constable of Greater Manchester - £163,908
And none of these guys are accountable to us taxpayers.

Thursday, December 13, 2007

Thames Gateway Lost In Heart Of Darkness

The hulk of the Gateway


"The sea-reach of the Thames stretched before us like the beginning of an interminable waterway. In the offing the sea and the sky were welded together without a joint, and in the luminous space the tanned sails of the barges drifting up with the tide seemed to stand still in red clusters of canvas sharply peaked, with gleams of varnished sprits. A haze rested on the low shores that ran out to sea in vanishing flatness. The air was dark above Gravesend, and farther back still seemed condensed into a mournful gloom, brooding motionless over the biggest, and the greatest, town on earth."

Dark air, mournful gloom, brooding motionless... Joseph Conrad may have been writing a century ago, but he captured the essence of the Thames Gateway project perfectly. The grandiose pipedream to regenerate 40 miles of Thames estuary has cost taxpayers hundreds of millions. But as night falls , it's sunk deep in the heart of darkness, the stinking slimey mud of Big Government incompetence.

The latest setback took place yesterday, when Judith Armitt, Chief Executive of the Thames Gateway Delivery Unit, was suddenly replaced. She'd only been in this brand new job for a year, and just a couple of weeks ago published her much anticipated Thames Gateway Delivery Plan.

It seems she was axed because she incurred the displeasure of Communities and Local Government Minister Yvette Cooper (aka Mistress Balls- in post since June). And it must have been a major bust-up, because Cooper's spin doctors immediately got to work describing Ms Armitt's work as "crap".

The job has already been given to DCLG 2001 recruit Joe Montgomery, a crony of Cooper's ("as far removed from the Yes, Minister Sir Humphrey stereotype as it is possible to be; he is more Armani than Saville Row, more Groucho Club than Athenaeum" Hmm). Behind him is Dr Tim Williams, long-time Labour insider, and, according to his official biog, "in 2003 named as the leading regeneration personality in the UK by a panel of his peers". Wow!

There's obviously a sea of blood soaking into the DCLG carpet, but much more important to taxpayers is the grotesque incompetence of the whole Gateway project.

Last month, the Public Accounts Committee published their report on it. And here's what the inestimable Chairman Leigh had to say:


The Department for Communities and Local Government is at present manifestly not up to the job of managing the enormously ambitious enterprise of regenerating the Thames Gateway region. Action must be taken now to prevent the enterprise ending in another public spending calamity.

It still amounts to little more than a group of disjointed projects which do not add up to a programme which is purposeful and moving forward. The Department has been incapable of taking the present rather insubstantial vision and galvanizing the multitude of central, regional and local partners in the scheme to work together to turn it into reality.

The Department has not yet established the basic arrangements for controlling the programme including - incredibly - a budget. It has failed so far to set clear and coordinated objectives and measures of progress. Crucial to the success of the enterprise will be a full and coordinated contribution by Whitehall departments but, like a small child clamouring for the attention of its bigger classmates, the Department does not have the influence to make this happen."

It doesn't get any worse than that. DCLG has spent £673m and produced a total shambles.

Just to recap, the Gateway project has been kicking around for most of Labour's time in office, and is currently supposed to regenerate 40 miles of riverside, from Canary Wharf to the mouth of the Thames:


In theory, that will include 160,000 new homes and 180,000 new jobs by 2016, with further development beyond. And in theory, most of the cash is supposed to come from the private sector.

The practice is rather different. As far as anyone can tell (which isn't very far because DCLG hasn't considered it necessary to collect any information), there's been very little private sector investment. Most investment so far has come from other bits of government:


"17. The Department estimates that the total capital spending in the region was £7 billion from 2003 and 2006 but it is unable to collect information on how this was spent and so does not know what proportion was part of the Thames Gateway programme. Much of the programme’s investment comes through other government departments or from the Department via other bodies such as English Partnerships and the Regional Development Agencies. Many projects are funded by a variety of partners that are, in turn, ultimately funded by the Department, making it difficult to monitor which projects are funded as a result of the programme and which are not."

And if that sounds like a large helping of government spaghetti, that's because it is. When the National Audit Office tried to unravel the giant knot of quangos and government departments involved, this is the best they could come up with:



Can you make sense of that? Neither can the 100 plus quangos, departments, local authorities and other assorted flotsam actually involved.

According to the PAC, there's no proper management, no clear objectives, no progress measurement, no coherent delivery chain, no meaningful budget, and no serious private sector involvement (despite the supposed imperative of attracting huge private sector investment).

And in case you lost count, that's a competence score of zero.

Needless to say, the Gateway's grand house building aspirations are failing to materialise. Here's what the PAC projects on present trends- a shortfall of 65,000 homes by 2016:



Two weeks ago, the private sector ripped into DCLG at the Thames Gateway Forum:

"Chelsfield Partners co-founder Sir Stuart Lipton, Lend Lease Europe chief executive Nigel Hugill and Jones Lang LaSalle’s head of professional services Andrew Gould... attacked the government for producing plans instead of acting on the Thames Gateway."

Plans instead of action.

Gathering darkness.

You know, that sounds a teensy bit familiar.

"Marlow ceased, and sat apart, indistinct and silent, in the pose of a meditating Buddha. Nobody moved for a time. "We have lost the first of the ebb," said the Director, suddenly. I raised my head. The offing was barred by a black bank of clouds, and the tranquil waterway leading to the uttermost ends of the earth flowed somber under an overcast sky--seemed to lead into the heart of an immense darkness."



PS To read the official account of that Thames Gateway Forum you'd never imagine it was the disaster attended by those private sector property moguls. In fact, you'd think it was a brilliant triumph. Above a video of Bottler's keynote address, the opening sentence on the official website reads "The Thames Gateway Forum 2007 was a huge success - the best yet!" God knows what the previous ones were like.