Wednesday, 19 March 2008
The first Darling Budget
It's ironic because the roots of our problems actually go back to Maggie rather than Tony and Gordon. I posted recently on this when I discussed Northern Rock, but in the light of the Bear Stearns collapse and now the news that HBOS could be in trouble there's a far bigger picture to consider.
The broad chronology goes like this:
The Thatcher government abandon controls on the selling of mortgages, saying that market forces should be the sole determinant of whether or not people get mortgages.
The building societies compete with each other, and with other providers, to lend large sums of money.
People obtain very large loans in order to buy property, regardless of ability to pay.
Because people are able to access these large sums of money, the price of property rises way beyond wage levels fuelling increases in the cost of living.
With property prices rising so fast, people who are financially stretched simply take out further loans, secured against the increased value of their homes.
Public housing is sold off on the cheap, which increases the demand for private rented property, so rent levels rise.
The returns are now so high that people start buying property 'to let'.
Governments start to live in fear of stopping property prices rising; not only do they risk upsetting 'home-owning' voters but they are aware that as soon as property prices stall the whole house of cards start falling down, as people with mortgages find themselves unable to meet their repayments. Many 'banks' (often de-mutualised building societies) are hopelessly overcommitted with high-risk mortgages, but market forces play no role at all by now as once banks start failing, they take the economy with them.
In all of this, it was the UK that led the way; the US, dazzled by our economic 'miracle', soon followed suit. And now we're both in the same boat, with property prices stalled or falling and mortgage defaults rising. Because of the general effect on the economy, the government can't conceivably allow banks to fail, so they find themselves pumping public money in and trying to bring interest rates down so that homeowners are under less financial pressure.
But we're going nowhere. We need an economy that supports higher interest rates and lower property prices. You can't continue to expand your economy on the basis of ever-increasing debt; it's the economics of the madhouse and Robert Mugabe; it can't be done.
Why do we need higher interest rates? Because it encourages investment, it encourages people to save, it provides the funding for our pensions (and god, don't we need that) and because it discourages financial institutions from reckless lending.
Why do we need lower property prices? Because it discourages speculation, it means businesses pay less rent so they don't have to charge such high prices, because it supports a thriving rural economy, because it makes it realistic for people to take a first step on the property ladder without being saddled with unrealistic debt.
Sooner or later, what goes up comes down, and property prices are no exception. Eventually it will happen, and at the moment it looks as though it will be sooner rather than later. Rather than hoping the problem will disappear, or better still that the collapse will come after the opposition have gained power, an effective chancellor would manage that process so that the worst pain is avoided, at the same time reducing the vast debt that is rife throughout our society.
We have, and have had, no economic miracle in this country. We do have a long period of apparent economic growth, financed not by hard work but by credit. We're past the point now where the government needs to call 'Time'. Not put a few pence on the price of a pint.
Thursday, 6 March 2008
That lot over the channel (aka the Treaty of Lisbon)
It's difficult to know who's worse; the government for reneging on an unequivocal commitment, the Tories for their smugness when they weren't able to put the Maastrict treaty up for a referendum last time around, or the Lib Dems for tying themselves into knots because they've decided it would be better if we went right back to the beginning.
It might surprise Nick Clegg to learn that we had a referendum in 1975 to decide whether we wanted to be in Europe or not. All three parties recommended that we vote 'yes' and they got two-thirds of the vote as a result. We can't keep going round in circles, endlessly revisiting that decision.
In 1975 I voted to come out, but I wouldn't do so today. Not because I've changed my mind (we made the wrong decision back then) but because the world has changed since; if we came out now we'd have no economy left whatever. Only the most rabid Eurosceptic would claim otherwise. I think we should go in the other direction entirely, commit entirely to the EU, join the Eurozone, and stop seeking to maintain a halfway presence which leaves us with no influence and few of the long-term gains that accumulate with full and enthusiastic participation. By the time we join the Euro, and sooner or later we will, as surely as night follows day, it will inevitably be on less favourable terms than if we'd been in from day one. And they'll have us over a barrel into the bargain.
Sadly the politicians who run this country are a gutless bunch; scared of committing to anything if they think it might be anything less than universally popular with their electorate. They should be out there making the case but they aren't. They're too busy getting their snouts back in the trough, happy to line their own pockets regardless of any public opprobrium when they get caught. A plague on all their houses!
Thursday, 21 February 2008
Northern Granite
The fiasco of Northern Rock exposes not only the foolishness of allowing banks to operate in a manner that is to all intents and purposes unregulated, but also the poor grasp of financial reality at the Treasury.
It is a common scenario that people who have difficulty meeting their credit card payments acquire new cards with which to service their existing ones. Or they remortgage their home, and remortgage, and remortgage.... Well that's what the board of the Northern Rock have been doing on a vast scale, and like the above individuals they have got caught; there's no more credit available and they've got to start making payments from their existing funds. What existing funds? That's it, isn't it, there aren't any; truth be told Northern Rock has gone bust. Fancy words may suggest that it merely short-term cashflow difficulty but it ain't; they're as bust as a busted flush can be.
Now you'd think that a bank that not so long ago was a building society would be ok given a bit of time. All those people with mortgages keep paying them back and providing they don't lend out any more they'll soon have a nice healthy balance again and everything will be hunky-dory. If only... because Northern Rock have been very reckless in who they lend money to, and a lot of their customers are going to have as much difficulty meeting their commitments as the bank does. Not only that, but far more problematically Northern Rock have been flogging off their 'safe' mortgages in order to fund the unsafe ones. They've been using a 'charitable' offshore trust called 'Granite' to do this; it's a 'charitable trust' for tax reasons, none of which are charitable, but in reality it's just another company. It's Granite who own the safe mortgages, and who have borrowed against them to service Northern Rock's indebtedness.
Just another company? Well, sort of. As far as the law are concerned they might as well be, but in truth Northern Rock and Granite are one and the same company, trading under different names both for tax reasons, and more cynically to keep profit and risk apart, with the risk being taken by those who have been foolish enough to deposit money in this ill-managed institution. So what is the government going to do about Granite when it nationalises Northern Rock? Remarkable as it might seem, nothing at all. It would have made more sense to do things the other way round; nationalise Granite and let Northern Rock go to the wall. Then, when the Granite mortgages come good, use those funds to repay the taxpayer and others who have been swindled by the Northern Rock board. Surely not nationalise the part that has irrecoverable debts, and leave the profitable bits to the crooks who ran the whole damned enterprise to start with.
The Northern Rock crisis impacts on everyone; not just the employees, nor the taxpayer. The lending of excessive money secured against property is the biggest factor in driving the price of property up, and that drags the cost of living with it. If affordable housing was regarded as a desirable objective, we would have been better served if Northern Rock had gone end up; since it hasn't been allowed to, the government must bring Granite into public ownership as soon as possible, without any recompense whatever to the financial leeches who operated such a cynical rip-off.
Wednesday, 20 February 2008
Diana: the inquest
It is almost impossible to conceive what Lord Justice Scott Baker is doing allowing the inquest on Princess Diana to become as farcical as has been for some time now. The enormous public expense is as nothing set against the wholly inappropriate trawling through Diana's private life; of interest to those of a voyeuristic disposition no doubt but a disgrace to a society that claims to have civilised values.
Rational people recognise that Diana died as a result of a car accident, in which an employee of Mohamed al Fayed who had been drinking was at the wheel of the car concerned and driving it at an excessive speed. The firing of a flashgun by a press photographer in front of the car in the Parisien tunnel may or may not have happened, and if it did it may have been a factor in the crash. All this could have been settled within, at an absolute maximum, two days. It is the verdict the jury will eventually return. But instead the whole conduct of the inquest has been at the behest of a delusional paranoiac who will, when the jury returns it's verdict, claim that the 12 of them along with the judge and everyone else is part of the same lunatic conspiracy.
It would have saved an awful lot of time if al Fayed had been asked at the outset whether he could identify anyone who wasn't involved in his labyrinthine 'conspiracy' , or even to provide one shred of proof for his absurd and irrational claims. But Diana and her family should have been treated with more dignity regardless of any other decisions as to how this wretched 'inquest' was to be conducted.
This is not of course the first time that Mohamed al Fayed has been in the public eye. The last time was when he was slipping bungs to corrupt Conservative MPs. The government was right to refuse him citizenship, the time is long past when they should have reviewed his residency status. And Lord Justice Scott Baker could usefully reflect on whether he should call time on his judicial career following this wretched and inexcusable performance.
Wednesday, 13 February 2008
Rowan Williams flags up the utter irrelevance of the C of E
More religion than politics, but when a member of the House of Lords proposes changing the law, it comes within the remit of this blog, I think.
I know he thought he was being reasonable but he certainly wasn't. This country is already awash with 'honour' killings and other less violent oppression of women in the name of religion. And Dr. Williams thinks that's ok, does he? Because he's lending legitimacy to just such behaviour, indeed he's wanting to give it the full backing of the law. It's as if he's never heard of the Enlightenment.
We live in a country where people are allowed to choose their religion, or maybe none, their partner, their job, their home and all the other life choices that don't interfere with the same rights for others. And they're allowed to change their minds, to divorce, switch religions, and enjoy the freedoms of living in a liberal society.
Has there been a rush of Moslems praising Dr Williams proposal? No there hasn't, just voices raised against it. Moslem women who don't want to live in the sort of society espoused so foolishly by Dr Williams.
Even the odious George Carey has taken the opportunity to put the boot in. Odious and then some. I bumped into George Carey once, during the interval at the National Theatre. Well actually it was him who bumped into me. Rather heavily. It was the queue for the bar. Perhaps he thought that being Archbishop of Canterbury gave him prior rights to get at the alcohol; or perhaps he just needed it badly. He certainly looked as though he did.
No sooner have I written this than I find there's another one of them at it (no, not the drink this time, just sharing his political opinions). The portly Graham Dow has spoken out in his role as Bishop of Carlisle to tell us that he's taken a look at Gordon Brown's government and saw "a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the names of blasphemy."
"And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat and great authority."
"Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six."
Sometimes you wonder where they find them; and what on earth did
The sooner the C of E is disestablished and the bishopric fades into oblivion the better as far as I'm concerned.
Monday, 4 February 2008
Remember the Hamiltons?
Remember Neil and Christine? That's right, those two. Well, Derek Conway and his devoted wife are digging themselves further and further into exactly the same hole: We've done nothing in the least bit wrong, oh and by the way MPs are grossly underpaid...'
And now Nick and Ann are at it too. No, not that couple from TV AM all those years ago, but a singularly unpleasant pair of Tory MPs, who have some nice little tax-avoidance scheme up and running all funded through their parliamentary expenses. They're in the club too, the we've-done-nothing-wrong club.
What chance they'll start handing out MPs' expenses as cash stuffed in brown paper envelopes?
Actually the Winterton tax-dodge is something that needs addressing beyond the straitened circumstances our MPs seem to all be in these days. Inheritance tax is one of the few taxes that should enjoy widespread support; it should redistribute the excesses of the wealthy among the rest of us over a period of time. But the really well-off don't pay it. A good lawyer and accountant soon render it unnecessary. At the top end of the market, the royal family are a good example of how it works. The queen pays tax, or so we're told. But when she dies, you can be jolly sure that her private wealth won't trouble the taxman one iota, and exactly the same goes for the early retirement pension scheme her son belongs to (the Duchy of Cornwall, isn't it?). But you don't need that level of wealth to benefit from such wheezes, just the sort of sums a couple of MPs are able to winkle out of their pay and allowances over a few years.
There's only been one beneficiary of this latest bout of Tory sleaze, and it certainly isn't that cuddly Mr Cameron. So come on Gordon, take the initiative for once and act now - make these 'trusts' subject to the same tax rules as the rest of us; or better still, just make them illegal full-stop.
Thursday, 31 January 2008
Sentenced to death: Afghan who dared to read about women's rights
Sentenced to death: Afghan who dared to read about women's rights
By Kim Sengupta
Thursday, 31 January 2008
The fate of Sayed Pervez Kambaksh has led to domestic and international protests, and deepening concern about erosion of civil liberties in Afghanistan. He was accused of blasphemy after he downloaded a report from a Farsi website which stated that Muslim fundamentalists who claimed the Koran justified the oppression of women had misrepresented the views of the prophet Mohamed.
Mr Kambaksh, 23, distributed the tract to fellow students and teachers at Balkh University with the aim, he said, of provoking a debate on the matter. But a complaint was made against him and he was arrested, tried by religious judges without – say his friends and family – being allowed legal representation and sentenced to death.
The Independent is launching a campaign today to secure justice for Mr Kambaksh. The UN, human rights groups, journalists' organisations and Western diplomats have urged Mr Karzai's government to intervene and free him. But the Afghan Senate passed a motion yesterday confirming the death sentence.
The MP who proposed the ruling condemning Mr Kambaksh was Sibghatullah Mojaddedi, a key ally of Mr Karzai. The Senate also attacked the international community for putting pressure on the Afghan government and urged Mr Karzai not to be influenced by outside un-Islamic views.
The case of Mr Kambaksh, who also worked a s reporter for the Jahan-i-Naw (New World) newspaper, is seen in Afghanistan as yet another chapter in the escalation in the confrontation between Afghanistan and the West.
It comes in the wake of Mr Karzai accusing the British of actually worsening the situation in Helmand province by their actions and his subsequent blocking of the appointment of Lord Ashdown as the UN envoy and expelling a British and an Irish diplomat.
Demonstrations, organised by clerics, against the alleged foreign interference have been held in the northern city of Mazar-i-Sharif, where Mr Kambaksh was arrested. Aminuddin Muzafari, the first secretary of the houses of parliament, said: "People should realise that as we are representatives of an Islamic country therefore we can never tolerate insults to reverences of Islamic religion."
At a gathering in Takhar province, Maulavi Ghulam Rabbani Rahmani, the heads of the Ulema council, said: "We want the government and the courts to execute the court verdict on Kambaksh as soon as possible." In Parwan province, another senior cleric, Maulavi Muhammad Asif, said: "This decision is for disrespecting the holy Koran and the government should enforce the decision before it came under more pressure from foreigners."
UK officials say they are particularly concerned about such draconian action being taken against a journalist. The Foreign Office and Department for International Development has donated large sums to the training of media workers in the country. The Government funds the Institute for War and Peace Reporting (IWPR) in the Helmand capital, Lashkar Gar.
Mr Kambaksh's brother, Sayed Yaqub Ibrahimi, is also a journalist and has written articles for IWPR in which he accused senior public figures, including an MP, of atrocities, including murders. He said: "Of course we are all very worried about my brother. What has happened to him is very unjust. He has not committed blasphemy and he was not even allowed to have a legal defence. and what took place was a secret trial."
Qayoum Baabak, the editor of Jahan-i-Naw, said a senior prosecutor in Mazar-i-Sharif, Hafiz Khaliqyar, had warned journalists that they would be punished if they protested against the death sentence passed on Mr Kambaksh.
Jean MacKenzie, country director for IWPR, said: "We feel very strongly that this is designed to put pressure on Pervez's brother, Yaqub, who has done some of the hardest-hitting pieces outlining abuses by some very powerful commanders."
Rahimullah Samander, the president of the Afghan Independent Journalists' Association, said: "This is unfair, this is illegal. He just printed a copy of something and looked at it and read it. How can we believe in this 'democracy' if we can't even read, we can't even study? We are asking Mr Karzai to quash the death sentence before it is too late."
The circumstances surrounding the conviction of Mr Kambaksh are also being viewed as a further attempt to claw back the rights gained by women since the overthrow of the Taliban. The most prominent female MP, Malalai Joya, has been suspended after criticising her male colleagues.
Under the Afghan constitution, say legal experts, Mr Kambaksh has the right to appeal to the country's supreme court. Some senior clerics maintain, however, that since he has been convicted under religious laws, the supreme court should not bring secular interpretations to the case.
Mr Karzai has the right to intervene and pardon Mr Kambaksh. However, even if he is freed, it would be hard for the student to escape retribution in a country where fundamentalists and warlords are increasingly in the ascendancy.
How you can save Pervez
Sayed Pervez Kambaksh's imminent execution is an affront to civilised values. It is not, however, a foregone conclusion. If enough international pressure is brought to bear on President Karzai's government, his sentence may yet be overturned. Add your weight to the campaign by urging the Foreign Office to demand that his life be spared. Sign our e-petition by clicking here.
Alan Johnson vs. your GP
When he's not blaming the doctors themselves, he blames them collectively as the BMA. Family doctors are 'out of touch with patients' he tells us. Unlike politicians, that is. Still it could be worse, it could still be that Patricia Hewett harpie in charge; she made even Alan Johnson look competent. This government is not alone in not having a clue how to run the NHS.
The most important issue facing any government in it's management of the NHS is this: how do we continue to provide free healthcare for all when the range of treatments (and the age of the patients) is increasing so rapidly? Even if the government diverted it's entire income from taxation to the NHS there would not be enough. GPs working longer less social hours is a trivial irrelevance set against that. At some point soon we need a government with the guts to offer a real solution, rather than tinkering round the edges hoping it will all hold together until after the next election.
Wednesday, 30 January 2008
'Sir' Ronnie Flanagan
So what's happening now? Jacqui Smith appears to be about to accept the advice he gives in a report he drew up for the government. And his advice? That police should be allowed to stop and search anyone they like, whenever they like, and not have to complete any paperwork about it into the bargain. Why did he offer such a libertarian suggestion? As Mandy Rice-Davies so famously said, 'Well, he would, wouldn't he?'. And let's face it, it'll slot in nicely with the rush towards indefinite detention without trial that this government is so hell-bent on.
In the past ten years, has our Labour government once appointed a Home Secretary who begins to understand the notion of civil liberties? Sadly, no, and it hardly seems likely to do so. Desperate times indeed.


