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Saturday, 25 September 2010

Europe's political class vs. the people of Europe

The European political class, that little social-democratic army of polyester suited Europhiles dragging little wheely bags around airports from Budapest to Barcelona with Brussels in between, is increasingly out of kilter with Europe's voters over immigration. The Europols like imigration; immigrants are atomised individuals with no inherent ties to European nation, place or community, people for whom the grey overhead of the Leviathan central State offers money, housing and healthcare, and therefore their affection. In contrast to we unreformed ingrates, who treat them with scorn, their manoeuvering for power and position with contempt, their blatant trickery and anti-democracy with ire. 

But the schism between Europe's political class and Europe's people over immigration is growing increasingly large. In Switzerland, Denmark, Sweden, the Netherlands, France, Italy, Hungary, Austria and even Belgium itself, voters are putting their crosses next to the anti-immigration parties. The petulant whining from Brussels in defence of the Roma, north African ghetto-makers, the African diaspora, criminal Somalis and Romanian pickpockets and baby-druggers is not finding many echoes.  

The difference between the original European idea of a single free market, of dismantling barriers to trade and movement of goods and people, of eroding the frictional costs of commerce and the Europe we have now has been likened to the difference between Marxism and Leninism. What natural progress failed to achieve quickly was brutally imposed by diktat. And once that power is tasted, once exercised, it becomes as hard to kick as crack cocaine.

Let's not forget that our own loathsome political class have more in common with their counterparts across Europe than with the people of Britain.   

Friday, 24 September 2010

Suffolk will gain by transferring cost, not risk

The public sector is crap at valuing risk, or rather crap at understanding how the private sector values risk. So whenever they seek to outsource a service, they seek to transfer all the risk with it - with the result that the service costs more, and the private sector makes a neat profit. 

Take a really simple FM function such as window cleaning. A council building manager has a budget that will pay for having the windows cleaned four times a year, and to make best use of it they wait until the panes become fogged before calling in the window cleaner. Some years they only have to spend out three times. When writing the outsource FM spec, however, they'll introduce a performance spec that imposes contract penalties if the glass ever falls below 99.5% light transmission due to dirt, with the result that the contractor prices for cleaning eight times a year, but will try to get away with only cleaning three times a year. Mostly they'll get away with it. 

They'd certainly gain more by letting a longer term contract for a bundle of buildings and retaining the risk of dirty windows themselves, but you just can't tell some people ...

A Quango cull doesn't dismantle the central State

As encouraging as the leaked news of the Quango cull is, it leaves intact the control structures of the central State, no power is devolved from the centre to the edges and nothing done to reinvigorate our democracy. Whitehall continues to hold its steely grip on the reins of power and the political class at the Metropolitan centre are undiminished. The Leviathan is just losing a bit of weight, not having its limbs hacked off. 

In fact, some abolitions will be retrograde - the functions of the Quango will return directly to Whitehall. Some have been reprieved outright; the test applied, you see, is whether the quango has been shown to perform a technical role that cannot be better discharged by government, or sufficiently demonstrated their independence from government, i.e. from tax funding. Not whether the technical role is necessary at all, or can better be discharged locally, or whether the function needs to be discharged at a national level.

Take the old Construction Industry Training Board. The problem that gave rise to it was that all construction firms wanted to hire skilled trades, but that if the costs of training were borne by firms voluntarily, there was nothing to stop 'free riders' gaining competitive advantage by not spending at all on training and poaching skilled trades from others. So a compulsory levy was introduced to pay for training with the benefits available equally to all. The option of skilled trades paying for their own training was disliked by both the central State, who liked the idea of manpower planning, and construction firms, who didn't want to create an independent cohort of skilled trades that could bargain for rewards. And so it remains today; unless a trainee gains a place with a construction firm, unless they demonstrate willingness to 'normalise', employment is barred to them. 

In fact, in a free market, firms would do better economically to offload the costs of training to the individual trades; ten thousand Polish brickies wouldn't disagree. 

Thursday, 23 September 2010

Capitalism and Free Markets

Conventional economic history has it that capitalism was a product of the sixteenth and seventeenth centuries, when the economic environment allowed the speculative investment of surplus money and the legal vehicles for joint enterprise became recognised. Long ago I debunked this in a paper that showed such investment and joint enterprise was flourishing as early as the thirteenth century - in charter boroughs. Boroughs such as Dunwich that lived outside the feudal system, governed by their merchants, developed an economy based on the exchange of money rather than on obligations of goods and labour. Sending a ship across the North Sea to trade was a risky business; the value of the ship, and of the goods she carried, was huge. So merchant ship owners spread the risk between them; they invested in their competitors, reducing their reward but also reducing their risk. In the words of Adam Smith, 'sober and frugal', and 'solid and profitable'. And the reason capitalism flourished in these little hothouses of commerce was that the charter boroughs operated free markets.

David Green in today's Telegraph defends Vince Cable's condemnation of the unacceptable face of capitalism ; Cable's comments were entirely in line with positions taken by both Hayek and Adam Smith. And he has a point. 

The banks and large institutional investors have been acting like irresponsible spendthrifts, greedy for the fast buck, utterly careless, morally feckless, drunk on zeros. A shipowner in Dunwich who spent his last penny loading his cog with his own trade goods to send across the North Sea, only to lose her to the waves, or pirates, lost all. He went overnight from affluence to penury, from merchant to beggar. Any suggestion that the  Town should bail him out, should maintain him in his former state, would be met with derision. Yet this is exactly what we've done for the banks. 

'Sober and frugal' and 'solid and profitable' are good for us all. The City spivs do us no favours; they destroy by their greed that which we have so painfully built. If they won't change, we must make them. 

Wednesday, 22 September 2010

Housekeeping - new blogger composer

The new blogger composer has one highly irritating output - the spacing between paragraphs is just too great, and text looks dissociated. 
If anyone knows what I'm doing wrong, or how to correct the effect and close up the white space above a bit, please let me know. 

Heffer on fixed term Parliaments

Heffer's condemnation of the risible notion of fixed term Parliaments in the Telegraph today says all I would wish about the nonsense of the proposal.

However, he misses the proximate driver for this change; the new rules on party spending in the year before an election. Make no mistake, the parties are pushing through this change not for reasons of improved democracy or better governance but solely for the convenience of better managing their electoral budgets.

As an example of fiddling with our democratic structures to suit the incumbent parties, it stinks. 

Pubs - the double whammy

Readers, you are right and I am remiss. Having blogged about the effect of the smoking ban on pub closures ever since the inception of the iniquitous Health Act 2006, I neglected to mention it in the post below. Quite rightly you've pulled me up on it. Of course it's the double whammy of the smoking ban and the rapacious pubcos and supermarkets that are robbing us of something that's been a fixture in our environments for centuries. 

I have a very great fondness for pubs and mourn their loss deeply. My earliest formative adult life was a period of great joy and discovery as I experienced Suffolk's pubs in all their diversity. As November approaches, one would anticipate the arrival of the new Winter Ale and the comfort of the settle by a blazing log fire in the grate. No more. 

In the 1920s and 1930s hundreds of ancient houses were pulled down by their impoverished owners; there was no 'listing', no protection. We look back now at the scale of destruction with disbelief that our forebears should have permitted it. Future generations will look back at the destruction of local pubs by the government with the same disbelief and horror. It's in Cameron's hands to halt the ruin and spoilation; let's not allow him to forget it. 

Tuesday, 21 September 2010

Trade Union is right on pubs

Imagine a meeting between a brewery chief exec and the beer buyer from Tesco. "How much Old Scrotum can you brew? 3m litres a year? Fine. We'll take 1m litres at 22p a litre, packaged in 330ml tins in 4-packs." The stunned Chief Exec, grateful for the contract and the guaranteed sales, will then work out how to make his margin on the remainder of his production by increasing charges to tenanted pubs, both rents and wholesale beer prices. The Tesco contract will lead directly to the closure of eleven village pubs. 

Few pub landlords are owners. Most are tenants. The tied house is still the norm rather than the exception. Becoming a pub landlord was also, like grammar schools, one of the highways of upward social mobility for the offspring of landlords; Jamie Oliver's dad was a publican. Landlords were also informal local leaders, from the local stream, of the local people, but embodying the upholding of the law; any criminal activity would lead to the magistrates refusing a licence and having to take down that statutory shingle above the front door. 

So I think Paul Kenny of the GMB has the right of it when he says to the Indie today:
"A warning from BBPA on pub closures is like another instance of Jesse James warning the people of the Wild West to beware of train robbers. BBPA is the last body anyone interested in thriving pubs should listen to.
"It is the artificially high rents and high wholesale prices charged by BBPA pubco members to tied pub tenants that has led to artificially high prices for drinks in pubs and led to drinkers deserting rural and urban pubs in droves.
"Drinkers are refusing to pay an additional pound per drink needed to pay interest to offshore bondholders of the pubcos. This has been a major factor in the spate of pub closures and the low income for the pub tenants in recent years.
"This week GMB published data which shows that by 2009 alcohol sales in the on trade were 25% down on 2002 levels. In contrast by 2008 alcohol sales from supermarkets and off licences were up by 21.1% on 2002 levels. In recent times the recession has impacted but off sales are still over 12% higher than in 2002. Retail prices are what are driving this change. Wetherspoons have thrived over this same period which bears out this point.
"Rural campaigners who want to save village pubs should help GMB get rid of the 'tie' and the high prices that follow it."

Monday, 20 September 2010

Scots, Irish and, er, Indians are drunks - official

That Indians drink as heavily as Irish people is something of an eye-opener, I must admit. I've spent many happy hours in the company of intoxicated Celts but none I'm sorry to say in the company of Indians. 

The Glasgow Herald publishes evidence that drinking may have a genetic basis, with those on the Celtic fringes of our archipelago most vulnerable to the old C2H2O5. And Indians. 

Professor Raj McBhopal of Edinburgh University said "If we can better understand which ethnic groups have greater susceptibility then we can target alcohol-prevention strategies where they are most needed." 

Perverse rewards for public sector fat cats will rebound

Under Labour, the ratio between the pay of a mean admin grade in the public sector and the top dogs has widened from about six times to about twelve times, even in organisations that are not in themselves massive. The boss grades, stimulated and encouraged by both the Audit Commission and the KPMGs and PWCs into pretending to be equivalent to the private sector, have thrust their snouts deeply into the tax trough to create a compliant and politically skewed senior tier increasingly remote from the mass of the organisations they manage. 

This has several effects. During organisational downsizing, this tier will be alien from their own workforces, engendering resentment and IR conflict, bereft of the natural support of the next tier down who earn only half as much. Any public sector body serious about implementing cuts will have to carry out a mass cull of the fat cats first. 

Secondly, from January many public sector bodies are being forced to 'name and shame' all those earning over £58k. Local papers are even now assembling face pics to put together their rogues galleries. The public will be posed with the stark choice; cut twelve nurses or one chief executive? Tough call. Again, a mass cull will be needed. 

Panorama tonight (BBC1, 8.30) will reveal 9,000 fat cats earning more than the PM and 38,000 earning more than £100k. This will start the pressure on the public sector that is set to continue into the new year. 

There's one lesson that needs to be repeated over and over during the next few months; this is what happens when you let the central State and the political class determine how public services are provided; this is what happens when you allow Labour to govern; this is what happens when you lose control of your taxes. 

The nation has little sympathy for the public sector fat cats right now, and any defence of their rewards sounds hollow. They've had their days in the Sun.  

Sunday, 19 September 2010

I'm a tax mitigator, you're a tax avoider, he's a tax evader

So Danny Alexander is to crack down on 'tax avoiders and tax evaders' is he? Many of you will now be mumbling that tax avoidance is quite legal, whilst tax evasion is the naughty thing, and how exactly is he to crack down on tax avoidance. Well, it seems as though avoidance is legal but - note this carefully - is a course of conduct designed to subvert or defeat the evident intention of Parliament. As opposed to tax mitigation, which exploits tax advantages foreseen by Parliament.

Legislation against tax avoidance may also, and sometimes has been, retroactive.

Now, I choose to buy my cigarettes at £2.90 a packet including all taxes rather than at £6.50 a packet including taxes. As far as I'm concerned, I'm a tax mitigator. Parliament has made specific laws with conditions I must fulfil; I must be a personal shopper, and the cigarettes must be for my own consumption. HMRC have issued explicit guidance (after being faced with being dragged through the courts) that I may bring into the UK up to 3,200 cigarettes a time without having to justify why. So this is clearly tax mitigation, yes?

Good. Glad that's clear.

Dawkins the enemy of Freedom and Liberty

Stephen Fry's painfully disordered psyche won him the love and affection of the British public; here was a man fighting his demons in public and maintaining a stiff upper lip throughout. His comments on the Pope's visit will therefore have hurt many British Catholics who have extended to Mr Fry the same reverence they did to the Queen Mother. Richard Dawkins' life is altogether greyer and duller, and if he's connected with the popular consciousness at all it's as a scientist. But it's Dawkins who has resorted to the most puerile and unscientific vituperation against the Pope and the Catholic Church, terming the latter an 'evil, corrupt, organisation' and the former ' a leering old villain in a frock… a man who believes he is infallible and acts the part'.

Both Fry and Dawkins would do well to read Dignitatis Humanae, now forty-five years old, and promulgated not by the European Commission on Human Rights, the NCCL or the UN, but by the Catholic Church. In it the Church defends the right of all men to freedom of conscience in matters of faith; defends not only the rights of Catholics, but all Christians, and all Moslems, and all Jews, and all Buddhists, and even, one must suppose, the rights of Animists amongst some remote jungle tribe to worship a potato if that is what they believe in.

This Vatican Council declares that the human person has a right to religious freedom. This freedom means that all men are to be immune from coercion on the part of individuals or of social groups and of any human power, in such wise that no one is to be forced to act in a manner contrary to his own beliefs, whether privately or publicly, whether alone or in association with others, within due limits.

The council further declares that the right to religious freedom has its foundation in the very dignity of the human person as this dignity is known through the revealed word of God and by reason itself.(2) This right of the human person to religious freedom is to be recognized in the constitutional law whereby society is governed and thus it is to become a civil right.

It is in accordance with their dignity as persons-that is, beings endowed with reason and free will and therefore privileged to bear personal responsibility-that all men should be at once impelled by nature and also bound by a moral obligation to seek the truth, especially religious truth. They are also bound to adhere to the truth, once it is known, and to order their whole lives in accord with the demands of truth However, men cannot discharge these obligations in a manner in keeping with their own nature unless they enjoy immunity from external coercion as well as psychological freedom. Therefore the right to religious freedom has its foundation not in the subjective disposition of the person, but in his very nature. In consequence, the right to this immunity continues to exist even in those who do not live up to their obligation of seeking the truth and adhering to it and the exercise of this right is not to be impeded, provided that just public order be observed.

On the matter of how far religious freedom should go in civil society, and prescient in its anticipation of Islamic militants and the evil Jihadists, DH says;
The right to religious freedom is exercised in human society: hence its exercise is subject to certain regulatory norms. In the use of all freedoms the moral principle of personal and social responsibility is to be observed. In the exercise of their rights, individual men and social groups are bound by the moral law to have respect both for the rights of others and for their own duties toward others and for the common welfare of all. Men are to deal with their fellows in justice and civility.

Furthermore, society has the right to defend itself against possible abuses committed on the pretext of freedom of religion. It is the special duty of government to provide this protection. However, government is not to act in an arbitrary fashion or in an unfair spirit of partisanship. Its action is to be controlled by juridical norms which are in conformity with the objective moral order. These norms arise out of the need for the effective safeguard of the rights of all citizens and for the peaceful settlement of conflicts of rights, also out of the need for an adequate care of genuine public peace, which comes about when men live together in good order and in true justice, and finally out of the need for a proper guardianship of public morality.

Against the bigoted ranting of Mr Dawkins, the position of the Catholic Church is positively Libertarian. Dawkins is increasingly resembling the sandwich-board man who used to live on the steps of the old Mirror building in Holborn, a bit cracked. And this is good; for Dawkins, too, has the right to worship a potato, or Mammon, or whatever. What neither he nor Stephen Fry has the right to do is to organise coercion against the beliefs of Britain's Catholics, or deprive them of the rights of conscience.