Category Archives: Alistair Darling

Nemo me lacessit impune

The motto of the Stewarts, then of the Order of the Thistle, then — by extension — of Scotland. If you don’t get it, try plucking thistles.

So to ninety minutes of street theatre, as seen the top of Edinburgh’s The Mound, with several thousand Orangemen (and women) parading for the “No” message. Let’s have no messing here: this lot aren’t into “Better Together”. Their message is the simple two letter one.

Nemo me lacessit impune

Look at them. You don’t have to agree with them, or like them. Once upon a time they were happily termed “the salt of the earth”.  Pluck at them, and like plucking thistles you’ll bleed.

My relationship to the Orange Order is distant, acquired by marriage into Ulster Protestantism.  Oddly enough, that worries British Civil Service interviewers less than a single attendance, about 1964, at a public meeting of the Wolfe Tone Bureau (yes … a Sinn Féin front) and a badge-carrying association with CND. I suppose in my entire life, on numerous visits to Northern Ireland, I have brushed with the  Orangemen on about three occasions.

Yet, I am reminded of Alan Coren’s magnificent line (on The New Quiz two days before the People’s Princess had a fling with Pillar 13 of the Paris expressway): “I don’t know anything about land mines or Princess Di, but I do know you’d be mad to poke either of them.”. In the same mood, one would be a fool to tangle with the Scots Orangemen.

And so to Jonathan Freedland in today’s Guardian:

Nigel Farage was in Glasgow today, about as welcome a sight for no campaigners as … the 10,000 members of the Grand Orange Lodge of Scotland, who are due to march in Edinburgh tomorrow. If you’d asked Alex Salmond to name the image of the United Kingdom he’d most like to stick in the minds of wavering Scottish voters in the final days before Thursday’s independence vote, he might have named either Ukip or the Orangemen. He’d surely not have pushed his luck by suggesting both – within 24 hours of each other.

Whatever the merits of the rest of Freedland’s piece, and accepting his disdain for the self-anointing Farridge, on the matter of the Orangemen, he is wrong, wrong, wrong.

Scotland is scarred by historical and ingrained sectarianism. Since Donald Dewar’s term  as Scottish First Minister, there has been a concerted effort to come to terms with the problem. My suspicion is “El Presidente” Salmond and the “Yes” Campaign have worsened matters seriously.

For why?

Well, the tone of “Yes” has been social division. The underprivileged have been promised copious quantities of jam tomorrow. An independent Scotland would run glutinously with milk and honey. The unwritten assumption is this would be paid for by the middle-classes. Rentagob Jim Sillars was the loudest:

 FORMER SNP deputy leader Jim Sillars has claimed there will be a “day of reckoning” for major Scottish employers such as Royal Bank of Scotland and Standard Life after a Yes vote.

Speaking from his campaign vehicle the “Margo Mobile”, Mr Sillars insisted that employers are “subverting Scotland’s democratic process” and vowed that oil giant BP would be nationalised in an independent Scotland…

He claimed there is talk of a “boycott” of John Lewis, banks to be split up, and new law to force Ryder Cup sponsor Standard Life to explain to unions its reasons for moving outside Scotland.

He said: “This referendum is about power, and when we get a Yes majority, we will use that power for a day of reckoning with BP and the banks.

“The heads of these companies are rich men, in cahoots with a rich English Tory Prime Minister, to keep Scotland’s poor, poorer through lies and distortions. The power they have now to subvert our democracy will come to an end with a Yes.”

He added: “BP, in an independent Scotland, will need to learn the meaning of nationalisation, in part or in whole, as it has in other countries who have not been as soft as we have forced to be. We will be the masters of the oil fields, not BP or any other of the majors.”

Mr Sillars, whose wife, MSP Margo MacDonald died earlier this year, said that under an independent Scotland, Standard Life would be required by new employment laws to give two years warning of any redundancies – and reveal to the trade unions its financial reasons for relocation to any country outside of Scotland.

“What kind of people do these companies think we are? They will find out,” he added.

Were there to be a “Yes” vote, it would release the passions of extremists on both sides. Already Jim Murphy had to suspend campaigning because of concerted intimidation. Alastair Darling was talking, as far back as February, of businessmen and firms being coerced, and today:

Alistair Darling has urged Yes Scotland to curb a surge of “frankly unacceptable” attacks on the no campaign, including a spate of assaults and the destruction of pro-UK posters and billboards.

The former chancellor told the Guardian that the growing intimidation and targeting of the no campaign by a small minority of the yes camp had “crossed the acceptability line” and needed to be stopped.

“There has been dark aspects on this which need to have a light shone on them,” Darling said, accusing yes campaigners of systematically defacing or removing pro-UK placards and billboards in towns such as Inverness, and on major roads throughout Scotland.

And what after Thursday?

We have some handle, thanks to the Gordon Brown proposals, of how a “No” voter wouldd extend Devo Max as a palliative to the minority. It looks a sensible plan — in fact what the SNP were seeing as the end-game, before they found themselves hung by their own election promise.

What we don’t have — apart from the excesses of Jim Sillars — is any appreciation of how a “Yes” vote wouldd accommodate the other half of the population. Which includes those Orangemen. Like Princess Di or land-mines, you’d be nuts to mess with them.

And, if there’s anything more frightening than an aggravated Orangeman, try the female of the species — at least one lady who was marching several miles in her four-inch stilettos.

Daughters of the Somme

 

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Filed under Alistair Darling, Gordon Brown, Guardian, Northern Irish politics, Scotland, SNP, social class

The end of Swiveleyesation as we know it?

Another magnificent coinage by the great Steve Bell:

Steve Bell 21.05.2013

Yesterday Malcolm was attempting to find some kind of historical context — or, failing that, the comedy of errors — which has led to the present Great Tory Bad-Hair Day.

Today Benedict Brogan writes his Morning Briefing for the Telegraph blogs, and sweepingly assumes it’s all water down the sink. Happy Days are Hair Again. The skies above are clear again. So we’ll sing a song of cheer again:

Well, almost:

Cast your eyes along the waterfront this morning after the night before and you might conclude that things are fairly dire for Dave. He’s suffered another major rebellion (I know, I know it was a free vote, but he still failed to persuade his colleagues to follow his lead), there’s lashings of backbiting, and he’s been reduced to sending a pleading ‘Dear Mr Loon, I still love you’ letter to his members, something even American commentators have picked up on as a bad look. Nick Watt, a keen reader of Tory runes, spots a sea-change in attitudes to Dave among MPs and raises the prospect of a move against him in The Guardian, with more letters going in to Graham Brady. As I mention in my column, grown ups inside No10 realise that they are stuck with a number of what they refer to as ‘legacy issues’, from not winning the 2010 election to the gay marriage idea.

200px-Candide1759The rest of Brogan’s musings stretch for, but don’t quite reach a Panglossian optimum:

Much of what has excited us in recent weeks will have passed the voters by, and after tonight’s vote gay marriage will be on its way to becoming law, and passing out of the current political debate. With the economy slowly improving and Labour wallowing, the Tories surely should be able to claw themselves off the rocks. This will require a fair wind, and a commitment by Mr Cameron and those around him to sharpen up. It also means not surrendering to the bullying disguised as advice from those agitating against Dave, whether it’s David Davis or Lord Ashcroft. The recess starts today, a good opportunity for everyone to calm down and for the PM to have a think about how he organises himself from now on.

[For the record, Voltaire in 1759 is parodying Leibnitz of 1698: not many people know that.]

Legacy issues

Such was the vein into which history-mining Malcolm was driving his shaft with yesterday’s piece. Let us then consider what rich ore Brogan has found:

Gay marriage served as a stark reminder of just how far removed Dave’s world view often seems from his troops. As The Guardian notes, the inter-generational divisions in the Tory party were particularly stark. Sir Gerald Howarth, the former defence minister last year knighted on the PM’s advice, warned in yesterday’s debate of an “aggressive homosexual community” in the country. Edward Leigh lamented that the “outlandish views of the loony left of the 1980s” had become “embedded in high places”.

Really? Really! It’s all those gays? Hardly!

Brogan concludes by passing us and the tar-baby onto Janan Ganesh in the Financial Times. Ganesh asserts it’s 2010 and All That:

… the election that should detain David Cameron is the last one. The prime minister’s estrangement from his party has many causes – the inexhaustibly vexed question of Europe, the same-sex marriage bill he takes to Parliament this week – but the rancour really set in with his failure to win in 2010. This original sin led to coalition with the Liberal Democrats, a political miscegenation that turns Tory stomachs, and broke the unspoken covenant that allows a leader to be as autocratic as he likes as long he delivers. Last week, a prime ministerial ally was reported to have disparaged the party’s grassroots as “swivel-eyed loons”. “Arrogant losers” tends to be the rejoinder.

Ganesh then reprises the course of the 2010 Tory election campaign, concluding:

For all the campaign’s haplessness, the Tories ended it with roughly the same poll lead over Labour as they began it. Mr Cameron was still preferred by voters to his party. The campaign was a non-event, as they usually are. The real reason for the Tories’ failure had more to do with the economic insecurity that nagged at voters when shown blueprints for austerity by a party they already mistrusted. That the economy was slithering out of recession at the same time hardened their risk aversion. Fiscal clarity made for bad short-term politics, and yet the blame has somehow gone to other, softer aspects of the Tory offering.

The Conservatives did not fail because they were seen as high-minded metropolitans, but because they were too redolent of the same old Tories. They had changed too little, not too much. The people who should have been vindicated by 2010 were the modernisers. But their chronic passivity, their lordly distaste for a fight, has allowed a misremembered version of that election to become the definitive history. This is undermining Mr Cameron and shaping a future in which only the ideologically orthodox can lead the Tories.

That is indeed the “high-quality journalism” that the FT prudently reminds low-life, thieving types (like Malcolm, shamelessly ripping of those extracts) needs paying for. [Again, for the record, Malcolm happily pays for the print edition, especially at weekends, if only to pre-empt what he knows the Sundays will regurgitate as original thought.]

Two small details (1):

Those televised debates (and Cameron’s foolish participation in televised debates that he flunked) really screwed up the opinion polls. In a different context (to which we may come in a moment), Malcolm was reviewing just how the 2010 polling went. The answer is not very well:

2010 polling

Got that? The main impact of the televised debates was to flatter the LibDem vote by anything between 3% and 6% (which amounts to gross “data artifact“), while under-rating Tory support just slightly, and Labour’s quite significantly. One might feel that Cameron & co. have been blinded by those errors ever since.

Two small details (2):

On their perception of the election result, and of the “reliability” of the LibDems, the Cameron & co. “modernisers” entered their Mephistophelean pact with Clegg & co. — two capitalist combines monopolising the market for their short-term profit. Let’s have another 18th-century great intellect’s view on that:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Adam Smith, Wealth of Nations (see page 111 in this e-text)

An alternative history

Wind back to Friday, 7th May, 2010, with the last of the 649 results coming in (the 650th, a safe Tory seat — Thirsk and Malton, was delayed by the death of a candidate). This is what we saw:

  • Tories: 305 (and bound to be 306);
  • Labour: 258, plus Caroline Lucas, the Green for Brighton Pavilion, and Sylvia Herman, likely to attend infrequently but then vote with Labour (so call it around 260);
  • Lib Dems: 57, plus Naomi Long for Alliance in East Belfast (so 58 at a pinch);
  • DUP: 8;
  • SNP: 6;
  • SDLP, Plaid Cymru: 3 apiece.

The Speaker is neutral, though votes for the government in a tie, and Sinn Féin are non-attenders (so, n=650-6). A cynical calculation is the cash-strapped sand bruised Labour and LibDem contingents aren’t too keen on a quick re-run; but, more to the point, there are at least a score of odds-and-sods turkeys there who can’t afford to vote for Christmas (sayn n=650-26). The most basic “working majority” would be, in practice, well short of the nominal 326 (the calculation above suggests 312 at most)— and Dave’s Tories are within a spit of just that.

So, in the short term, Dave’s Tories could talk the talk, cobble a “confidence and supply” arrangement with even the DUP (306+8=314), and walk the walk through until a second election in the autumn. By which moment Tory coffers, uniquely among the main operators, would be topped up by the grateful and expectant clique of bond-traders and hedge-funders.

A second election, please note, that could have been contrived by losing a vote of confidence on some populist issue (immigration?). A second election, too, in which the Tory economic record would be buffed up by the tail-end of Alistair Darling’s economics (it was only in the autumn of 2010, thanks to Osborne’s austerity, that the UK economy went into flat-lining).

In short, had Cameron done the right thing, the Tory thing, he would now likely be sitting on a secure Tory majority, and figuring his way to calling the next election at his choosing, on his terms, and not on those of the LibDem dictated Fixed-term Parliaments Act. He would also have enjoyed the benefits of a greater patronage for Tory backbench nonentities, not having to service the self-esteem of LibDem nonentities.

All the Tory back-benchers, and the wannabes out in the cold have done that math. The iron has entered their souls.

One last thing

We were looking there at how the polling companies had cocked it up. Enter the new-boy on the block, Survation. Ben Brogan (see above) gave that a nod in passing:
The fightback could just start here. Though from a low base if you believe a new Survation poll in The Guardian. It has the Tories down to 24 pc – just two points above Ukip.

Look closer, and we find The Guardian, doesn’t give Survation more than the time of day.

Andrew Sparrow counters with the YouGov/Sun numbers:

Last night Survation released a poll showing the Tories just two points ahead of Ukip.

Here are the figures.
Labour: 39% (down 1 from YouGov in the Sunday Times)
Conservatives: 31% (up 2)
Ukip: 14% (no change)
Lib Dems: 10% (up 1)
Labour lead: 8 points (down 3)
Government approval: -34 (up 5)

Finally, let’s hear it from Anthony Wells (whose shock-factor is also set to minimum):

Survation have put out a new poll, the topline voting intention figures are CON 24%(-5), LAB 35%(-1), LD 11%(-1), UKIP 22%(+6). The 22% for UKIP is the first poll to show them breaking the twenty percent mark.
In many ways the high UKIP score here shouldn’t come as a surprise, for methodological reasons Survation tend to show the highest levels of UKIP support so if ICM have them at 18% and ComRes at 19% I would have expected Survation to have them in the low twenties. Striking it may be, but the increase in UKIP support is actually in line with what weve seen elsewhere, just using a method that is kinder to UKIP.
More interesting is the drop in Tory support, down five points on Survation’s poll in April. The poll was conducted on Friday and Saturday so at least partially after the “swivel eyed loon” story broke (it came out in Saturday’s papers, so broke about 10pm on Friday night). All the usual caveats I apply to any poll showing sharp or unusual results apply. Sure, it might indicate a shift in support, but just as likely its a blip – wait to see if it is reflected in any other polling. As Twyman’s Law of market research says “anything surprising or interesting is probably wrong”.

As Wells implies, there, swallowing Survation might not produce the glorious summer the Kippers expect. More likely, “up like the rocket, and down like the stick”: UKIP is hardly the best-presented pyrotechnic in the box.

Swiveleyesation may endure yet.

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Westminster gas-works!

Once upon a happy time London buses were uniformly:

a London transport, diesel engine, ninety-seven horsepower omnibus.

The statutory cheery cockney (usually masquerading as a cheery Jamaican) conductor would, at the appropriate moment approaching Parliament Square, traditionally yell up the stairs:

Westminster gas works!

The double aim was to spread alarm and confusion among any tourists, and neatly put in its place the Mother of Parliaments.

Yeah! Result!

Meanwhile, back inside that den of thieves, cheats and liars, the thieving, cheating and lying continues unabated.

Here’s Cameron’s first effort from yesterday’s PMQs:

The Prime Minister: The economy has grown by 1.8% over the last year …

Let’s take that one a bit slower, and visually:

That’s from Stephanie Flanders’s web-blog for the BBC, and she rightly points out:

Not so long ago, many were hoping for a strong bounceback from the slowdown at the end of 2010. Instead, the figures suggest that the UK economy has barely grown at all since the summer.

In other words the natural elastic is there in the system, and it should be going Boing! It isn’t.

Since that “emergency budget” by Gids Osborne brought the Brown-induced electoral mini-boost to a shuddering halt, the economy is flat as a pan-cake: down 0.4% one quarter, up about the same the next. Subject to two further revisions.

So Cameron is largely claiming credit for the six-months leads-and-lags of the Brown era.

Or as LabourList succinctly depicts it:

Pathetic Sad, really.

Then, a bit later there’s Cameron dropping the other bollick:

Mr Ben Bradshaw (Exeter) (Lab): Given that our recovery has, in effect, stalled since he became Prime Minister, does the right hon. Gentleman stand by what he said to this House after his first Budget last June, which was that unemployment will fall “every year” in this Parliament?

The Prime Minister: I was quoting the Office for Budget Responsibility, but the fact is that 390,000 more people are in private sector jobs than there were a year ago. I would have thought with the economy growing, with exports up, with manufacturing up and with more people in work, the right hon. Gentleman should be welcoming that, instead of joining the doom-mongers on his Front Bench, who can only talk the economy down.

The selective use of non-statistics (that specious distinction between public and private employment when the modish trick is “out-sourcing”) cannot disguise the realities:

The jobless total rose by 27,000 to 2.53m in the three months to January, the worst figure since 1994. The unemployment rate was 8 per cent of the workforce, the highest since last spring, up from 7.9 per cent in the previous quarter.

Unemployment among 16 to 24-year-olds rose by 30,000 to 974,000, a rate of 20.6 per in that age group, the highest since comparable records began in 1992. However, one-third were full-time students looking for part-time work.

That, incidentally,  neatly coincides with all those “inspired” and concerted comments that the student population should be extracted from the statistics anyway. Moreover:

Most analysts still expect unemployment to rise in the coming months, largely because of public sector spending cuts implemented by the government, which are designed to bring down the UK’s budget deficit…

Economists suggest the economy would have to grow at an annual rate of about 2% for unemployment to fall.

In the final three months of last year, the economy shrank by 0.5%, and although many analysts expect a return to growth in the current quarter, few expect GDP to top 2% this year.

One never needs reminding that Cameron was a PR man:

Jeff Randall, writing in The Daily Telegraph where he is a senior executive, said he would not trust Mr Cameron “with my daughter’s pocket money”.

“To describe Cameron’s approach to corporate PR as unhelpful and evasive overstates by a widish margin the clarity and plain-speaking that he brought to the job of being Michael Green’s mouthpiece,” wrote the ex-BBC business editor.

“In my experience, Cameron never gave a straight answer when dissemblance was a plausible alternative, which probably makes him perfectly suited for the role he now seeks: the next Tony Blair,” Mr Randall wrote.

Sun business editor Ian King, recalling the same era, described Mr Cameron as a “poisonous, slippery individual”.

The “widish margin” of over-statement applies to that PMQ’s answer in another aspect: the blame-game of off-loading onto the OBR the promise of year-on-year employment growth. This is what Cameron said on 30th June last year, verbatim from Hansard:

Ms Harriet Harman (Camberwell and Peckham) (Lab): We were very concerned this morning to read reports that as a result of the right hon. Gentleman’s Budget, 1.3 million jobs will be lost. Can he confirm that this was an estimate produced by Treasury officials?

The Prime Minister: The right hon. and learned Lady should know- [Interruption.] I will give a surprisingly full answer if Opposition Members just sit patiently. This morning the Office for Budget Responsibility produced the full tables for the Budget for employment in the public and the private sector. That never happened under a Labour Government, right? As shown in the Budget, unemployment is forecast to fall every year under this Government, but the tables also show public sector employment. It is interesting that from the tables we can see the effect of Labour’s policy before the Budget and the effect of our policy after the Budget. What the figures show is that under Labour’s plans, next year there would be 70,000 fewer public sector jobs, and the year after that, there would be 150,000 fewer public sector jobs. We have had the courage to have a two-year pay freeze. I know we have all been watching the football, but that was a spectacular own goal.

Ms Harman: I know that the right hon. Gentleman has published some new figures today, but it is the figures that he has not published that I am asking about — the figures that show that 1.3 million jobs will be lost. Why will the Prime Minister not publish those Treasury documents? Why is he keeping them hidden?

The Prime Minister: The forecasts that are published now are independent from the Government. That is the whole point. [Interruption.] It is no good Opposition Members chuntering about that. They now support the Office for Budget Responsibility, completely independent of Government. The right hon. and learned Lady’s approach is extraordinary. Before the election the shadow Chancellor, the then Chancellor, was asked on BBC radio on 23 April 2010, and the transcript says:
“‘Will you acknowledge that public sector jobs will be cut?’
Darling: ‘It’s inevitable.’

Ms Harman: But even the OBR says that under the Prime Minister’s Budget, unemployment will be higher than it would otherwise have been. It says that on today’s figures and it said that on last week’s figures.

Can the right hon. Gentleman confirm that the secret Treasury analysis shows that under his Budget, 500,000 jobs will be lost in the public sector, but even more will be lost in the private sector?

The Prime Minister: The figures published today show 2 million more private sector jobs. They show 1.4 million more people in work at the end of this Parliament. They show unemployment falling every year. It is not really any surprise that the former Labour Minister, Digby Jones, after the Budget said- [ Interruption. ] Why not listen?

For comparison, here is Osborne in his budget statement of 22nd June:

Growth in the UK economy for the coming five years is estimated to be 1.2% this year and 2.3% next year; then 2.8% in 2012 followed by 2.9% in 2013; and then 2.7% in both 2014 and 2015. Consumer price inflation is expected to reach 2.7% by the end of the year before returning to target in the medium term, and let me take this opportunity to confirm that the inflation target remains at 2% as measured on the consumer prices index.

The unemployment rate is forecast by the OBR to peak this year at 8.1% and then fall for each of the next four years to reach 6.1% in 2015. Some have suggested that there is a choice between dealing with our debts and going for growth. That is a false choice. The crisis in the eurozone shows that unless we deal with our debts, there will be no growth. These forecasts demonstrate that a credible plan to cut our budget deficit goes hand in hand with a steady and sustained economic recovery, with low inflation and falling unemployment. What is more, the forecast shows a gradual rebalancing of the economy, with business investment and exports playing a greater role and Government spending and debt-fuelled consumption a smaller role-a sustainable private sector recovery built on a new model of economic growth, instead of pumping the debt bubble back up.

That elides the fact that the OBR then was (it is now conveniently round the corner at 20 Victoria Street) simply an office inside the Treasury, down the corridor from Osborne’s office, staffed by Treasury officials, commenting on Treasury figures — in effect, little more than a branch of the Central Office of Information, glossing government doings:

A Memorandum of Understanding has been agreed between the OBR and the departments it works with most closely in producing its analysis: the Treasury, the Department for Work & Pensions and HM Revenue & Customs.

In Cameroonie PR-speak, independence is a relative term.

A year on, everyone of those OBR/Osborne/Cameron numbers looks very wonky:

  • UK growth in 2010-11, 1.2%? See Stephanie above, but so far we’re arguing over tenths of a decimal point. Growth in the first half of 2010 (i.e. the period of that Brown-engineered mini-boom) was … 1.5%.
  • UK growth in 2011-12, 2.3%? The latest OECD number Malcolm recalls was 1.7%.
  • Consumer inflation around now, 2.7%. In fact, at 4%.
  • Unemployment 8.1%? Phew! Only 8% (again see above), but the trend up by around 25,000 a quarter, and the big redundancies in the public sector still to count.

There is one other Cameroon stuffed rabbit-out-of-the-hat there: 1.4 million more people in work at the end of this Parliament.

Whenever gross number “in employment” are bandied around, we should bear in mind population growth of 0.7% year-on-year, and the age profile of the work-force. As the pension-age is deferred, the number of persons in employment has to increase by more than the number in each cohort, else gross unemployment increases.

There were, at the last count, 870,000 over-65s employed in Britain: 3% of the workforce.

If Cameron’s 1.4m additional employees by 2015 comes about, it will not even amount to the number anticipating increases in pensionable age.

Hold very tight, please! Ding! Ding!

In the days of those iconic Routemaster London buses, the gas-works of Britian were still producing poisonous coal-gas. That was Sylvia Plath‘s exit route of choice, and that of many others — conversion to natural gas alone accounted for the decline in suicides, particularly among women.

Now the toxin is Cameron’s poisonous, slippery use of pseudo-statistics, and his ability to invent one human shield after another (for the moment the OBR).

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Listen to what the man says!

On Wednesday Malcolm (who has a vested interest) heard Alistair Darling say the “basic state pension” would rise by 2.5% in April.

Now the BBC website has woken up to recognition that what Alistair Darling said was the “basic state pension” would rise by 2.5% in April!

D’oh!

But the dawn is breakin’, it’s early morn,
The taxi’s waitin’, he blowin’ his horn …

and the Lady in his Life and Malcolm have an appointment with the 07:53 Eurostar.

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Wirtschaftswunder? Now, I wonder …

It’s time to notice the green shoots of recovery.

Item:

Today the £ closed at €1.13980. That’s above its mid-point over the last twelve months.

Item:

The continuing improvement of sterling against the dollar is even more impressive:

208+GBP_USD+bbc-big_thick-line+one_month

Item:

Even the IMF, who (according to David Cameron’s Tories) were already booking tickets to come and inspect the books before the bankruptcy petition had to be filed, are cooing gently:

The UK government response to the global financial crisis has been “bold and wide-ranging,” the International Monetary Fund (IMF) has said.
It added that “aggressive action” by the government succeeded in containing the crisis and avoiding a breakdown.

Item:

Robert Lindsay, for the Murdoch Times, is noticing a change in the wind:

Sterling behaved like England’s cricketers — knocking the opposition for six — as it rose to its highest level against the dollar in five months. The knock-on effect was that London financial and mining stocks got back on their feet.

And that means the take it orf yer ‘ands cheap, guv? spivs are beginning  to suggest re-privatising the nationalised bank assets. Meanwhile,

Gilt futures ended in the red but managed to recoup some losses after softer than expected inflation data …

which means the cost of Government borrowing is slipping. Bad news for some, but only for some.

No wonder David Cameron and the Tories want to talk about anything, everything, other than the Government’s economic achievements.

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A Darling Revolution
(and the Gedankenexperiment)

Catching Alistair Darling on the morning news, yesterday, was an exercise in soft-soap and snake-oil. It was, indeed, so soothing that it took Malcolm a while to realise that a significant element of the Socialist dream had been achieved.

Early afternoon, Malcolm was engaged in something mind-bogglingly banal (OK: he was browsing the Tory blogspots. Confession over). Then a synapse made contact, and he recalled the days when the Irish Labour Party had a constitution red in tooth and claw. Was it Clause IX which made the British Labour Party’s Clause Four look wimpish and mealy-mouthed? In short, he recalled the commitment to nationalise banking and insurance.

And now, under ‘New Labour’, that has effectively come to pass in Britain!

Let the scarlet banner fly from Islington Town Hall once more! Comrades, the inevitable day of proletarian liberation is coming! Well, not quite yet, perhaps. Even so, what happened yesterday was as surreal (and inevitable) as Ted Heath nationalising Rolls-Royce back in 1971.

As he was working himself out of his morning torpor, that he might pronounce thus to the universe, Malcolm discover that the same thoughts had occurred to Simon Jenkins in the Guardian:

The first thing to remember about the collapse and de facto nationalisation of Northern Rock is that it was essentially about house prices.

Well, yes, that’s part, a large part, of the story, but it’s not the key plot device. Jenkins comes close to an analysis when he says:

Brown’s … priority was to make house purchase even easier. Ownership “must be open to all those wanting to get on to the housing ladder for the first time”. To this casual extravagance he added the meaningless statement that “one of the great causes of our time…is affordable housing for all”. The Conservatives and Liberal Democrats agreed with this flight from economic logic. Stamp duty should be reduced, first-time buyers subsidised and “affordability” extended.

Then he gets blinkered by his English Heritage (deputy-chairman’s stool-of-office, 1985-90) and Pevsnerist England’s 1,0o0 Best Whatever hats:

For half a century home ownership in Britain – termed a “right” by Brown – has been indulged beyond economic reason. It has sucked savings out of the productive sector. It has tied up pension money that should be helping the economy in the stock market. Its tax reliefs have immobilised young people who, in most countries, remain in the more fluid rented sector until later in life. It has led to mass hysteria with every price rise or fall. Housing sees the British, their rulers and their newspapers, at their most innumerate and irrational.
As a result Britons are the most wasteful users of Europe’s most precious resource – living space. In Britain 70% of housing is owner occupied, against 40% in Germany and less than half in most comparable countries.

Again, there is more than a grain of truth in that. Malcolm, however, doubts whether Sir Simon and the fragrant Lady Gayle (of whom wikipedia says: ‘During her brief Hollywood career, she was typecast as a brunette sexpot’), famed residents of Primrose Hill, confine themselves to a basement rented maisonette. Any more than the privileged lifestyles of bankers will be greatly cribbed, cabined or confined by this Northern Rock thing.

The larger picture is going to be found on the financial pages. Rumblings are already anticipating the earthquake to come. The last few days have shown that the rules and regulations of bank management will have to be reviewed and modernised in the next session of Parliament. And here the Financial Times is (quite literally) on the money:

The extraordinary spectacle of Alistair Darling, the chancellor, resorting to a verbal guarantee of all UK bank deposits, on national TV, shows that the old tools don’t work. The Bank had little power, legal or moral, to corral other lenders into a private sector rescue of Northern Rock…
The chancellor’s blanket guarantee was, therefore, necessary but takes moral hazard to a new level. Two remedies exist. First, a clear mechanism is needed, in the event of a crisis, to ringfence state-guaranteed deposits from the banks that gathered them. The improvised compromise whereby Northern Rock shareholders are beneficiaries of the government’s politically influenced objectives is deeply flawed. Second, if all deposits are state-guaranteed, there must be tighter supervision of banks by the Financial Services Authority, which may have taken its eye off the ball.

The FT starts its article by referring back to the last time we went through this:

According to one account, the UK’s banking crisis of 1973 was largely resolved at a secret, 90-minute meeting at the Bank of England. The City’s gathered great and good agreed to create a “lifeboat” fund, worth the equivalent of a third of the system’s capital, to offer credit to smaller lenders. A discreet statement the next day calmed markets, the Treasury was barely involved and the Bank’s financial commitment was contained.

That was then: this is now. The general public are no longer to be fobbed off by the persiflage of the great and the good on their way to a well-deserved City lunch. This one will have to go to the floor of the Commons, and Chancellor Darling will need a full blueprint of how he intends the new dispensation to work. It makes Malcolm recall John Strachey (What are We to Do?, 1938):

Sir Robert Peel in introducing the Bank Act of 1844 (one of the essential statutes completing the legal framework of British capitalism) to the House of Commons asked the famous question: “What is a pound?” Neither he nor any honourable member was able to provide an answer. … historically a pound sterling is a pound weight of silver. Peel, no doubt knew this perfectly well. But this piece of historical knowledge did not help him much in his bewilderment over this extraordinary thing, money, which his new Act was (he hoped) to regulate; this thing which was evidently a linch-pin [sic] in the economic life of society; which could dislocate that life catastrophically if it got out of control; this thing which everybody both used and worshipped, but which nobody understood.

So Malcolm hears many ghosts, among them Strachey and Morrison, Bevin and Stafford Cripps whispering from the shadows.

It may not be clean, but there are many ways, even a few socialist ones, to skin fat-cats. Now, Dr Schrödinger (another distinguished resident of Dublin, remember) may be able to help us on this one: if a fat-cat is put into a tight regulatory box, when does the mixed economy stop existing as a mixture of states and become one or the other?

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Filed under Alistair Darling, banking, John Strachey, Simon Jenkins, socialism.