Bolitics The New Condem Government

[Juju]

Snowy old chap, I don't always agree with you, either in presentation or tone, but you did put this one splendidly on this occasion...

[Dodgyknees]

...stand up and do something about it.

Absolutely agree.

Just don't expect to find any salvation in a ballot box.

Nor do you dipping your hand in a bag of crisps.

[peterms]

Eh? I think Javris is a good man and said I was glad he'd been elected. I was just amused (and pleased) he beat the UNITE candidate to the nomination. That union is trying to parachute as many of its people as possible into the PLP ...

Incidentally the winner (Dan Jarvis) is a former Para Major

[Awol]

^

Britain at risk of another financial crisis, Bank of England chief warns

Britain risks suffering another financial crisis without reform of the country’s banks, the Governor of the Bank of England warns today.

In an interview with The Daily Telegraph, Mervyn King says that “imbalances” in the banking system remain and are “beginning to grow again”.

Mr King urges high street banks to take a better, longer term view towards their customers and to stop focusing on the need to “simply maximise profits next week”.

He accuses them of routinely exploiting their millions of customers. “If it’s possible [for financial services firms] to make money out of gullible or unsuspecting customers, particularly institutional customers, [they think] that is perfectly acceptable,” he says.

The Governor criticises the “weight put on the importance and value of takeovers” and raises concerns that companies with good reputations have been “destroyed” in the search for short-term profits.

Mr King expresses regret for not sounding a louder warning over his concerns before the last banking crisis.

The Governor’s remarks are a warning to George Osborne, the Chancellor, as a government commission considers whether to force high street banks to sell off their investment banking arms.

Mr Osborne is thought to be against such a plan, but Mr King is due to ultimately become responsible for banking regulation and his views are, therefore, critical.

In the interview, the Bank Governor says: “We allowed a [banking] system to build up which contained the seeds of its own destruction.

“We’ve not yet solved the 'too big to fail’ or, as I prefer to call it, the 'too important to fail’ problem.

“The concept of being too important to fail should have no place in a market economy.”

When asked whether there could be a repeat of the financial crisis, Mr King says: “Yes. The problem is still there. The search for yield goes on. Imbalances are beginning to grow again.”

Mr King, who rarely gives interviews, suggests that the culture of short-term profits and bonuses within the banks may ultimately be responsible for the problems.

He says that traditional manufacturing industries have a more “moral” way of operating.

“They care deeply about their workforce, about their customers and, above all, are proud of their products,” he says. “[With the banks] there isn’t that sense of longer term relationships.

“There’s a different attitude towards customers. Small and medium firms really notice this: they miss the people they know.”

The Governor adds that good businesses “keep a clear vision of who their customers are, and are run by people who don’t think they should simply maximise profits next week.” He says that the payment of bonuses is part of this cultural problem. “Why do banks in general want to pay bonuses?” Mr King asks. “It’s because they live in a 'too big to fail’ world in which the state will bail them out on the downside.”

Over the past 30 years, he says, “we changed Britain away from a sclerotic economy with inefficiencies and problems in labour relations. Everyone got to the point where we no longer expected government to bail us out.”

He says this changed with the banking crisis. 'But, surprise, surprise, the institutions bailed out were those at the heart of the crisis. Hedge funds were allowed to fail, 3,000 of them have gone, but banks weren’t,’ he says.

The comments will embarrass the Chancellor, who recently concluded a deal with the banks under which they would be able to resume the payment of bonuses in return for boosting lending.

Mr King does not back down from recent comments that appeared to back the Government’s strategy for reducing the deficit. Ed Balls, the shadow chancellor, recently accused the Governor of becoming too political.

Mr King said: “It is inconceivable that the Governor has no view on the size of the deficit and the need to reduce it. It would be a dereliction of duty for me not to warn. You need a credible plan to reduce it, over the lifetime of a Parliament. But it is for ministers, not for me, to say how this should be done.”

In the interview, the Governor gives little clue as to whether an interest rate rise is imminent.

Mr King says there is a “perfectly reasonable case for doing it now” but he added that increasing rates too soon would be a “futile gesture”.

I wonder if Osborne will have the balls to take the decisions that the last lot wouldn't? I suspect not...

[drat01]

Justine Greening has just been in the BBC news trying, and woefully failing, to try and explain what this Gvmt were doing re the banks and this "new" scheme that Gideon will be announcing to the Welsh conference later.

The woman was way out of her depth, totally unable to give ny sort of credible and reasonable answers to the questions, and this was from Breakfast TV not Paxman. To smile and say that she once lived in Rotherham is not an answer you stupid woman, to a question on why this scheme - based on a previously failed one of Thatcher - would work. The billions that this gvmt have spent trying to claim that disbanding the system in place to replace it with a model that is proven to not work, shows that so many of these policies are based on a return to Thatcherism policy and thinking and bollox to the consequences.

To see her then totally waffle on the King comments, especially when they contradict Gideon's "Project Merlin", showed either a total incompetence on her part, on the part of the Gvmt or a lack of real belief in this "Project Merlin" - or more likely all 3

"Mervyn King's report will resonate with 2 groups: government and people".

:-)

[peterms]

I see that Mr C has bravely criticised the dark forces holding Britain back. Civil servants, town planners, and people who implement, er, UK and EU law on procurement.

These are the bloated bureaucrats we must strike down! Let us cast this despotic yoke from our neck! Onwards and upwards! Four legs good, two legs bad!

David Cameron has pledged to confront the "enemies of enterprise" in Whitehall and town halls across the country, attacking what he called the "mad" bureaucracy that holds back entrepreneurs.

The prime minister, who was criticised for failing to outline economic growth plans after last year's autumn spending review, moved to recover ground by promising to place the promotion of enterprise at the heart of the budget on 23 March.

In one of the strongest attacks by a prime minister on the civil service, Cameron yesterday made clear he shared the frustration of Tony Blair, who famously claimed in 1999 that he bore "scars on my back" from those opposed to his reforms.

The prime minister, who said that enterprise was about morals as well as markets, listed three "enemies of enterprise' in a speech at the Conservative spring forum in Cardiff:

• "The bureaucrats in government departments who concoct those ridiculous rules and regulations that make life impossible, particularly for small firms."

• "The town hall officials who take for ever with those planning decisions that can be make or break for a business – and the investment and jobs that go with it."

• "The public sector procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain's small- and medium-sized companies from a massive potential market."

The prime minister added: "Every regulator, every official, every bureaucrat in government has got to understand that we cannot afford to keep loading costs on to business because frankly they cannot take any more. And if I have to pull these people into my office to argue this out myself and get them off the backs of business then believe me, I will do it."

The chancellor, George Osborne, who used his speech on Saturday to announce the creation of 10 enterprise zones, will unveil changes in the budget to give small- and medium- sized firms opportunities to bid for large government contracts.

"We're throwing open the bidding process to every single business in our country – a massive boost for small businesses, because we want them to win at least a quarter of these deals," Cameron said.

The speech showed the influence of Andrew Cooper, Downing Street's new director of strategy, who starts his new job on Monday. Cooper is said to be drawing up a vision for the future to show that the government has plans that go beyond spending cuts.

The prime minister said he was optimistic about the future because Britain is the home of innovative entrepreneurs. He then launched a staunch defence of his recent trip to the Gulf, on which he was accompanied by 36 British business leaders, including eight from the defence and aerospace sector.

"I know some people are disdainful about [selling Britain to the world]," he said.

"They see me loading up a plane with businesspeople and say: 'That's not statesmanship, that's salesmanship'. I say this: attack all you want, but do you think the Germans and the French and the Americans are all sitting at home waiting for business to fall into their lap?"

[Gringo]

Justine Greening has just been in the BBC news trying, and woefully failing, to try and explain what this Gvmt were doing re the banks and this "new" scheme that Gideon will be announcing to the Welsh conference later

The "Merlin" project hey. This govt is full of pagan worshipping sheep slaughterers. Most of the sheep are lib dems, but what the heck.

[ender4]

• "The bureaucrats in government departments who concoct those ridiculous rules and regulations that make life impossible, particularly for small firms."

• "The town hall officials who take for ever with those planning decisions that can be make or break for a business – and the investment and jobs that go with it."

• "The public sector procurement managers who think that the answer to everything is a big contract with a big business and who shut out millions of Britain's small- and medium-sized companies from a massive potential market."

The prime minister added: "Every regulator, every official, every bureaucrat in government has got to understand that we cannot afford to keep loading costs on to business because frankly they cannot take any more. And if I have to pull these people into my office to argue this out myself and get them off the backs of business then believe me, I will do it."

The chancellor, George Osborne, who used his speech on Saturday to announce the creation of 10 enterprise zones, will unveil changes in the budget to give small- and medium- sized firms opportunities to bid for large government contracts.

"We're throwing open the bidding process to every single business in our country – a massive boost for small businesses, because we want them to win at least a quarter of these deals," Cameron said.

Cameron makes a very good point.

It so annoying (even in the private sector) seeing the worst bid win a tender just because they are the biggest company.

and a lot less bureaucracy is needed, it drives me nuts, the amount of admin needed for the simplest thing. doing something which should cost peanuts, end up costing a small fortune in this country.

i can only imagine how much worse it is in the public sector.

[snowychap]

The prime minister added: "...And if I have to pull these people into my office to argue this out myself and get them off the backs of business then believe me, I will do it."

What an utter load of absolute claptrap.

I guess they'll be in the queue behind all of the ministers being told to 'go away and think again', eh, Dave? Deceitful little shit.

[peterms]

Cameron makes a very good point.

It so annoying (even in the private sector) seeing the worst bid win a tender just because they are the biggest company.

and a lot less bureaucracy is needed, it drives me nuts, the amount of admin needed for the simplest thing. doing something which should cost peanuts, end up costing a small fortune in this country.

i can only imagine how much worse it is in the public sector.

He says he will enable SMEs to bid for big contracts. They can already, of course, but they won't get them because people awarding big contracts, whether in the public or private sectors, take into account the capacity of the bidder to manage that size of contract.

I wonder what rules and regulations he plans to introduce to require tenderers not to take this into account. Or maybe he will require all contracts over a certain value to include a certain amount of sub-contracting? Or perhaps break all contracts into multiple smaller ones which are within the capacity of SMEs to manage, meaning a lot more administration, contract management and general bureaucracy? I look forward to seeing his cunning plan when it gets away from the soundbites and down to the tedious operational detail.

Usually, this talk of an assault on red tape comes down to looking at a few measures of employment protection and workers' rights. Let's see if this time will be any different.

[blandy]

Justine Greening has just been in the BBC news trying, and woefully failing, to try and explain what this Gvmt were doing .....based on a return to ...thinking

That's not what they've been doing. There's no "thinking" just instinct.

[chrisp65]

Perhaps one of the first things that can be done to level the playing field would be to drop the govt. lead requirement for crazy levels of insurance. Bidding for a job earning £3,200 in fees? No problem, of course you can bid, just send us a copy of your TEN MILLION POUND minimum insurance cover.

Before anybody blames one party or the other or inherited problems etc., the requirement was an equally absurd £5M up until six months ago.

[peterms]

Perhaps one of the first things that can be done to level the playing field would be to drop the govt. lead requirement for crazy levels of insurance. Bidding for a job earning £3,200 in fees? No problem, of course you can bid, just send us a copy of your TEN MILLION POUND minimum insurance cover.

Before anybody blames one party or the other or inherited problems etc., the requirement was an equally absurd £5M up until six months ago.

Not clear what you're thinking of here.

Current govt guidance for tendering, here, is specifically that public bodies should not insist on disproportionate levels of insurance cover.

The most recent guidance on liability and insurance in Government contracts is included in the commentary on OGC's model conditions of contract for Services (condition G1). http://www.ogc.gov.uk/documents/Model_Services_Contract_050209.DOC This states that "Limitations of Liability should be considered on a case by case basis, and should reflect value for money. These issues must be considered at an early stage in the procurement process, and any exclusions or caps must be set before the issue of Invitations to Tender." There has been a tendency in previous years to insist on unlimited liability in many circumstances, regardless of the facts of the case. This is likely, in many cases, to have had an adverse impact on competition and value for money where, for example, suppliers have refused to take part or where tender prices have been increased to compensate for the insurance costs of meeting unlimited liability.

If you're thinking of employers' liability, that requirement exists whether you bid for contracts or not.

[drat01]

[Bazdavies79]

Ha ha, I saw that and pissed myself. I still can't tell whether it was a barbed parting question or it was a time filler question he quickly made up which came out all wrong. If it's the former, well done to the squeeky clean, mothers favourite ex blue Peter, Geordie.

[Dodgyknees]

Still against this idea

[drat01]

Dodgy there are so many things "wrong" that they are pushing through

- privatisation of B'ham jail - link

- The lies they told about only a few of the Universities to charge the max fees,when the reality is that the majority will

- The continued cuts in front line services such as the NHS and the Police, despite the lies about how they wouldn't

- The continued lies and deceit from Lansley

- The idiot that is Warsi and her ridiculous arguments in the AV debate

- Gideon showing that he has not got a clue about the massive tax hike that he put on fuel

- The stupidity of the big society idea, a complete and utter waste of time, effort and more importantly money

And that was just a few of the media comments from today. It's now a torrent of awful decisions that these idiots are imposing on us, trying to hide behind deceit and mis-truths and burying their heads in the sand to the impact these ideologically led cuts are making on any sort of recovery.

For a GVMT so short in to its term, something they also fiddled, to have such a deficit in the polls says something

[peterms]

Dodgy there are so many things "wrong" that they are pushing through

- privatisation of B'ham jail - link

- The lies they told about only a few of the Universities to charge the max fees,when the reality is that the majority will

- The continued cuts in front line services such as the NHS and the Police, despite the lies about how they wouldn't

- The continued lies and deceit from Lansley

- The idiot that is Warsi and her ridiculous arguments in the AV debate

- Gideon showing that he has not got a clue about the massive tax hike that he put on fuel

- The stupidity of the big society idea, a complete and utter waste of time, effort and more importantly money

And that was just a few of the media comments from today. It's now a torrent of awful decisions that these idiots are imposing on us, trying to hide behind deceit and mis-truths and burying their heads in the sand to the impact these ideologically led cuts are making on any sort of recovery.

For a GVMT so short in to its term, something they also fiddled, to have such a deficit in the polls says something

That's all true, but at the same time I think it's all pretty minor.

The big thing, the one that underpins it all, is the big lie told in the following terms:

We have a frightening and unprecedented level of national debt (no, we don't)

Government budget deficits are bad (no, they are a consequence of whether the private sector saves or invests, and they are neither good nor bad)

If we have a deficit, we have to issue debt, in the form of bonds (no, we don't, we can issue money instead, same effect except that bondholders don't get a free lunch at 5% for the next x years)

Because of this, our national economic policy must reflect what bondholders prefer (no, **** them, their only interest is their own short-term profit, not our national well-being).

Therefore we must make cuts (the exact opposite is true; we should be spending, to counteract the recession).

Cutting the public sector will prompt growth in the private sector (utter bullshit, a self-serving lie by those who want more privatisation opportunities to filch some public assets for their own gain).

Wealth is created only in the private sector, and anything in the public sector is done using "our" money (wealth is created by the production of useful things, like farming, manufacturing, building infrastructure, educating people and preserving their health; activities like claiming farm subsidies, being a bond trader, and selling mortgages don't create wealth, though they seem to create the outward appearance of wealth. Wealth creation happens in both the public and private spheres, as does wealth destruction, as does the maintenance of superfluous people adding nothing to the health or wealth of our nation).

There is no alternative (that phrase was well-known in the 80's, repeated nightly on tv as the inner cities burned. It was a lie then, it's a lie now).

[tonyh29]

Therefore we must make cuts (the exact opposite is true; we should be spending, to counteract the recession).

You are Gordon Brown and I claim my £5

True, National Debt isn't always a bad thing IF a government is borrowing to invest in infrastructure ..however we are currently borrowing to pay off debt which is doing nothing to encourage economic growth .. so in that regard the government have it right in trying to reduce the debt.. with the bank bailouts the debt is close to 150% of GDP ..that is way to high imo

[peterms]

Still against this idea

It's an interesting one.

The first thing that strikes me is that the story leads on the claim of saving £175k. There is no further consideration or analysis of this - it's taken entirely at face value. I wonder if anyone would be so uncritically accepting of a proposal that more directly affected them. I suspect they would be saying "Well what about...and when so-and-so happens, then what...and have you taken into account...". Maybe this was done in the full report to council, but in my experience this would be unusual.

The proposal will save £175k, in a full year, on the revenue budget of IOW, before allowing for any offsetting costs like redundancy, closing or mothballing the offices, loss of the asset value if they sell them, and so on.

It's beyond there that the effects become interesting. Let's briefly look at impacts on the tourist trade, and on the local economy.

If the 12 people employed had no positive effect whatever on the tourist trade, then you're well rid of them. However, from a purely personal and anecdotal perspective drawn from various locations, I know that such roles can be helpful in matching up buyers and sellers of accommodation, food and services. They can raise awareness of facilities and attractions that may otherwise remain unknown. They can make the tourist experience more simple to navigate, they can offer more choices, and by doing so they can add to the pleasure and value of the visit.

It's hard to cost that. It feeds through in things like comments on websites, recommendations to friends, possible return visits and so on. Because the effects are so hard to trace, they are impossible to cost. One up to the beancounters, then. Why not cut something that will show concrete savings this year, even if the long-term negative cost is far greater?

Then there's the direct effects on the economy. 12 people at £175k? I'm sure the quoted savings figure takes into account all the on-costs (since those making the savings are judged on the total quantity of savings, they will always make sure the on-costs are included, it makes it much easier to hit the target). That makes them all part-time, or maybe a couple full-time and the rest even more part-time. Let's say £120k wages, though it's probably a bit more.

So, that's £120k not available to be spent. Do these people spend it currently on local goods and services, or on ebay on things from China, save it for their grandkids, pay the mortgage, or hide it under the mattress?

As a total guess, I would say the likely profile would be a middle-aged woman whose salary provides a useful supplement to the household wage, and that it is used partly to pay down household debt, partly to save for future responsibilities or disasters (because we're probably talking about the generation that did this), with the rest being spent, mostly locally on car servicing, house maintenance and going out for a meal rather than on cruises in the Med or diamonds from South Africa. Just a guess.

If my assumption about the age and gender profile of the staff is correct, there's not likely to be an increase in signing-on rates or social security payouts when they lose their jobs. Of course if I'm wrong, the social cost can go in only one direction, upwards.

What is the impact on the local economy? That comes down to whether the lost spending and saving, the lost provision for future mishaps and next generations, the future impact of less good tourist guidance and support, all costs more or less than £175k.

One thing in all this I can say with absolute certainty. No **** even attempted to work this out before making the decision. Because why would they. Because all they have to show is savings, not a balanced economic assessment over a sensible time period.

Edit: on the point about spending locally, of course if the car dealers, greengrocers, fish and chip shops etc have money spent with them, it increases their capacity to spend, and so it goes on; the multiplier. That works extremely well.

Where it doesn't work is if some taxdodging thieving git extracts the money to some tax haven, spends it tax-free on helicopters made in Germany, then spends their "savings" on "lending" us bonds that we pay interest on. Like a pickpocket charging for lending you the taxi fare home.