Sunday, 30 January 2011

Lessons from the past!

This lot of numpties are still determined to go ahead with the cuts, so I would like to point out a few obvious lessons that appear to be forgotten.
The Conservative government elected in 1979 was determined to completely remove the power of the unions and set about privatising public services and changing the rules around unions. Speed was of the essence. It was key that the changes were made rapidly and that they were BIG changes. This would mean that the government could stand tall and say 'Look at what we have done!' by the next election.

As we find ourselves now - the intention is right but the execution is very wide of the mark.

The speed and depth of the changes in the early 80's resulted in large parts of the country and the economy being crippled, brought to it's knees because of the 'We know best' attitude. National bodies that were not ready for privatisation were sold off cheap in order to prove a point and the miners strike became the focal point for the Conservative agenda.
The problem was it was all or nothing. There was no 'Plan B' or second option and we are still paying for that failure now. A slow and gradual reduction in support for the mines would have allowed local economies to adjust and not go through the hardship and pain of an instant cut. A gradual preparation for privatisation and a correct assessment of suitability together with a correct valuation would have meant years of wrong decisions and corrections could have been avoided.

We are making the decisions now - too fast and too hard. It is panic politics at its worst. 'We need to do this quickly before we get voted out' is the leading thought in many Conservative MPs and voters and that leads to poor decision making.  The constant line of 'We must do this - we have no choice' wears thin very quickly when other economies are taking different choices and making them work.

There is a 'Plan B' if it is wanted. It would mean the Conservative government admitting they are wrong and taking a brave decision to change. I am fairly certain that will not happen. Arrogance and stubbornness will ensure that the present path is pursued until they are voted out. These changes are going to make this country more Conservative for a very long time and future governments will struggle to change the country for the better if they are not stopped before it is too late. We are handing control of the country to the money men who are responsible for ballsing it up in the first place and the rest of us are being told that this is good for us.

I am not going to stand for it and I encourage you also to do something about it - before it is too late.

Wednesday, 26 January 2011

Statistics and spin - Side by side!

It was all the snows fault! This actually makes a refreshing change from 'It is not our fault - it is the other lot!' as a reason for their under performance.
It is inevitable that the economy will actually recover - even if they sat back and did nothing. It is called an economic cycle and it runs for between eight and fourteen years depending on a few other factors. As we move through the cycle, the economy will expand, over heat, correct itself, start to contract and then bottom out as it finishes correcting itself. It takes a lot to affect an economy to a significant effect as there is very little that the government can actually control.
So this is my message to them: Stop taking the credit when it going well and then accept that you cannot do much when it is not. 
The snow reduced output by a little - it was not a 'significant impact' Mr Osbourne. The ONS report says that it is quite likely that the economy would have contracted without the snow and at best would have remained the same i.e. no growth.
Trying to blame everybody and everything else for this makes you look simple and extremely arrogant. STOP IT!

The economy is not expanding because people are still worried about the cuts that have not yet started.  Two months ago, Mr Cameron claimed that the growth in the economy was due to the cuts and measures that the ConDem government had made. Now that the figures are not so good Mr Osbourne has said that it is not the fault of the cuts as they have not started to take place yet. This is the kind of spin that governments usually fall down on after ten or twelve years in power, it is not the stuff that they do after 10 months.

Having said that it takes a lot to affect an economy, we have seen examples of this over the last few years. The Labour spending, undoubtedly propped up the economy and prevented a much deeper dip. However, the money that was given to the banks has mainly been invested in Futures, Oil and Commodities, which we are now paying much higher prices for.
The second impact is the promise of cuts. This has significantly reduced confidence and willingness of ordinary people to spend money - hence a contraction in growth.
Is it really that simple?
Probably not but that is the basic point that the government needs to get its head around. The financial power houses of this country are not the people who are going to get us back to a stable and comfortable economy - so stop listening and helping them. It is the ordinary person on the street - me and you - who ever reads this, that needs to helped and listened to. We are the people who will provide a strong and stable economy. We are the people who will buy goods, work more efficiently and generate more income. The finance castles will simply line their own pockets.

I urge you all to bombard the news stations through twitter and facebook, every time this lot, stand up and tell us what is good for us.  They know nothing and we need to find our voice and tell them. We need to tell them exactly how each and every one of us has a part to play in this economy and how we feel when we get pushed to one side because 'they know best'. We need to tell them that we don't believe them. Tell them how much we have to live on. Ask them to walk in our shoes and make them live up to their responsibilities.
If you read my previous posts you will see my ideas about de-centralisation and how you get real income down to lower levels and spread more (geographically) evenly.

Don't believe the spin or the stats that they give you. Challenge them and make them feel our pain every time you get a chance because if we don't, they will continue to move this country into a very uncomfortable position that we may not be able to truly recover from.

And lastly, (to quote a politician) 'It wasn't the snow - it was the economy - Stupid!'

Tuesday, 25 January 2011

Are the cuts a help or a hinderance?

Having read over my blog for today I need to add a point to the beginning - I am not a supporter of any political party and am not a political activist in any way - these are just thought and arguments that I feel should be discussed.
The general thrust of the current government is to accept the credit when things are going well and to blame the previous governments 'reckless spending' when it is not going their way. I am sorry but I am fed up with it and I fail to see how cuts (that had not even started) were leading to falling unemployment up to December, but when it started to rise again, this was somehow the fault of the previous government because they had not spent the money efficiently.
There is only so much of the 'blame the previous guy' that we can put up with and I believe it has been and gone. We are already in a situation where the tide has turned very sharply against the government and they tactic appears to be - keep a stiff upper lip and a straight bat - blame the riff raff and keep the fingers crossed. this government is starting to unravel already and the pace of this will accelerate rapidly over the coming year as more of the LibDem core voters are affected and some of the Tory 'swing voters' that won them the slimmest majority, start to question their decision.
So lets deal with the BIG question, the deficit!
My understanding is that the deficit is very close to where the Labour party took over from in 1997 in percentage terms. This was mainly due to the debacle surrounding the ERM and the loss in confidence in the Pound if my Economics degree is to be believed. Was there a need for 'Urgent Action' - in the end yes there was because the voices of spin worried the market traders (or chums as they are better known) to the point where they had to take action. If they had put a 5 year plan on the table for fiscal control and a gradual, sustainable tightening of government spending the effect would have been the same. The fact that they continue to spin this line about the biggest ever deficit in £'s, while failing to recognise that in % terms it is actually very manageable over a fiscal cycle (between 8 and 14 years) says to me that they know that will be caught out at some point and therefore they need to make some rapid changes before something stops them from making these changes e.g. commonsense.
These current cuts are politically driven and not financially driven and therein lies the problem.
If you or I need to pay off a credit card, we plan to pay it off gradually over a period of twelve months or longer. We don't decide to stop eating and putting petrol in the car for three months so we can pay it off sooner. If you eat a little less each month and drive a little less each month - you can pay it off in a much more comfortable way.  I don't need to tell you how this translates to the economy.
So the size of the cuts is unnecessary, while the speed of the cuts will damage the long term growth prospects of the country.
What is does do is make it easier for gamblers who play the stock market and international finance markets - I will call them 'bankerchums' to get hold of credit as the 'urgency' that was created has now subsided and we appear to be a better bet than before the cuts were announced.
So, rather than bleat on and on about how deceitful politicians are being around the deficit and how bad it all is - I will give you an alternative to mull over.
I am in favour of a much smaller government at the top level with much more power being moved to local council level. But this also means that the benefits also need to be moved down to the local level. If we take the example of a Power station, it is a decision made by national government, the negotiations and payments are made to national government. The local government then has to cope with the extra traffic and road repair, extra signage, often extra waste created by workers who are mainly 'shipped in' not local, which seems to me to be unfair. It is usually justified through ' local jobs' but local jobs are usually temporary with very few permanent well paid positions going to local people. The workers who are shipped in, often stay in rented accommodation which is quite often bought up by large companies so the money leaves the local economy.
Central government then takes the credit for the creation of new jobs etc and takes the tax from the power station back into central funds.  The local government is left with very little to show for it.
This will act to re-balance the economy as the urban areas which attract much of the development and investment - cannot also have large installations. Funds therefore start to re-distribute away from the centre.
As money and investment and therefore power, becomes less centralised, so the gap between top and bottom become smaller. Yes, this will mean that some of the very wealthy will not have things their own way and may feel like they are working hard to support others but to quote a current wealthy politician 'Everyone needs to do their bit!'

As central government shrinks (along with the size of Parliament etc) so their role changes from one of controlling everything and everyone, to one of supporting the needy and reducing the gap between rich and poor. Think of it a bit like building a road - you take soil from the hills and use it to fill the valleys so that the road is easier for everyone to travel.
This change will be very difficult for local and national governments to understand - they will be giving away more power and accepting new roles, but it needs to be done and the sooner it gets done the better.

Saturday, 22 January 2011

NHS Reform

This is a difficult one. There are many different forms of the NHS around the world. Some work well, some don't. Some cost more, some don't.  There is no such thing as a perfect health service, if you want a better service you have to pay for it.
The USA spends twice the amount per head that we do in private insurance and has worse death rates in nearly every area (but they do have nicer teeth) while some of the Nordic countries spend twice the amount we do on their health services through direct payments and have some better and some worse results than we do.
My belief is simple. Our service tries to do too much and spreads itself too thinly. I believe that the NHS should concentrate on the core values and ensure they are delivered swiftly, professionally and free to all. However, in order to achieve this I believe that the private health care sector needs to expand to a stage where it can relieve the pressure from the NHS without substantially affecting its delivery of service.
The problem is 'What are the core values of the NHS?' Which areas are important to everyone and why?  I don't have the answer to this, I only have what is important to me, but if I knew exactly what was and was not provided by the NHS, I could make provision for the areas I needed through insurance or something similar.
How do we decide on the core values? 
Here is a novel idea - ask people. The current reforms aim to remove the 'top down' approach and give control to a group of people who have no experience of managing budgets or planning budgets at all. Doctors are great at making people better, politicians are great at lying but neither are very good at financial budgeting over a three year fiscal cycle. If anything giving control to GP's would open the system to corruption in an American style revolution - it would not create a British solution.
So why not ask the GP's, Doctors, Nurses and general public about their priorities. Lets find out exactly what we want and why we want it - lets ask the professionals (and I mean all of them - not just the ones that agree with politicians) for the best way to run the service and lets ask people with ideas for new solutions to old problems.
Then, when we have got an agreement on what we should aim for and how it should be run - this is the bit that will frighten politicians - take control of the NHS out of the hands of government and politicians. Get all main parties to sign up to a twenty year plan with a review of specific targets every five years (at least two years after an election) so that there is a consistent and supported plan with no danger of it being de-railed by political whim.
One final point, the inevitable expansion of the private sector needs to be more managed in line with the needs of the country than it is currently. Again the over centralisation of services only serves the needs of certain parts of the country and creates resentment and non cooperation from those parts not served. I would suggest that if a private hospital wants to be built in a very profitable area e.g. London - then a hospital of the same size and service level should be built in a more deprived area to compensate e.g. The Welsh Valleys. If the company wishes to make any changes to one they must change both and both must be open to a certain level of NHS services as well.

I hope I have generated a few points to ponder here - I genuinely don't believe that anyone group has the answer to the NHS - but I do believe that if everyone works together a much better solution can be found.
Your comments are always welcome.

Thursday, 20 January 2011

EMA reform

Once again, The ConDem government is failing to learn from history and are insisting on reforming everything they can, as quickly as they can. This is what they did in the early 80's. Instead of a gradual withdrawl of support for mines and maunfacturing, which would allow people to adjust, find new jobs, re-train and new businesses to start in a good economy - Thatcher and her chums, decided to do everything in one go and create a state of chaos.
 A generation of children grew up with one or both parents out of work, where the only aspiration they ever knew was 'Do what you need to get by'. Many fathers had to find work in other parts of the country or they had to work excessive hours in order to earn a wage.
How is this relevant?
The children that grew up under Thatcher and Major (for Cameron must accept some blame) are now parents themselves. the changes and support that came, came too late and these parents are now setting the same example to todays children. Some of these children need to be encouraged to stay in school at all costs, so that they do not perpetuate the lack of ambition in their children. To remove this payment now would tell these young people that we don't value their education - so why should they.
Many of us will be wishing that we had the chance to go back and re-live a couple of key moments in our education, such as that question in my maths paper that I know I got wrong and could have made it an A - or maybe I should have read 'Pursuation' before sitting my A level on it (I got bored after the first chapter and went rugby training - read the study guide about ten times though). I did not value my education back then - maybe something like an EMA would have helped me - not neccesarily with travel costs (I walked to school) but it would have made it important and that is my point.
Expecting children from the lower end of achievement to value their education is wrong. I agree these should be the people who value it most as it is their route to personal improvement - but believe me that is not a reality for a large section of society.
I would like to change it slightly however. I would like to see an element of effort and behaviour as well as attendance in order to receive the money. This may help to counter act some of the issues in schools today and give these young people a realisation that their education matters to everyone in society.  Without it and combined with the 'Change everything quick - before we get voted out again' attitude, will mean that we lose another generation of parents in ten or twenty years time and we will need to find another way to solve their problems.
These are the people who will pay for my retirement and I believe that they should be supported more and not less.

Wednesday, 19 January 2011

Reform of the House of Lords

This government is brilliant! It just keeps giving me things to write about - they are like a breath of stale air. I will cover Coastguards, The Thatcher legacy, EMA and NHS reform as well as the general direction that they are pursuing in future but today it is the turn of the House of Lords.
The original idea behind the Lords was 'We know the house of commons is corrupt - so we need to put someone there to keep them in check and make sure that the upper classes are not affected by their decisions'. This has worked well for the second part - they have protected the upper class and high earners for quite some time but corrupt MP's was too big for them (or maybe the second part overtook the first - who knows?).
I will save beating around the bush and simply state the HOL does not work.
So, here is my suggestion.
The House of Lords should be made up from the heads or leaders of local councils. When we elect local councils we would also elect a 'Figurehead' with whatever title it is given. This person would sit as a connection between local and national government and ensure that local people views are taken into account. This person would have an input into local government and act as a 'direction setter' as they will be elected (almost presidential style) directly by the people they serve (not parish by parish). They would also have the same input as MP's into video questions and conferences and then they will have two days of voting and direct questions. There would be no un-elected members of the HOL - every person in the UK would have access to two people who can impact upon government policy and make their voices heard.
This would maximise the role and actually make it a worthwhile position. The current system makes the role of 'Lord' a pointless title that simply looks good on paper. When you make these people elected - you put them on an even footing with MP's and you start to ensure that the policies that are passed are good for the whole country and that the people running the country are acting in the interest of the whole country.

As always your views are welcome and you are very welcome to share my blog through Facebook and Twitter etc - maybe one day somebody from 'on high' might act upon these ideas - stranger things have happened!

Tuesday, 18 January 2011

Just attacking the rich?

The sun newspaper is truly home once again. Most of its reader are suffering from the cuts, the vat and the petrol increase and how does the Sun report it? Attacking the rich does not help. It was a good job I was reading it in work where Helen could not hear my anger.
When you tax the 'Rich' you are trying to divert some of the funds in the economy from those who have plenty to those who needs more.
This is not wrong, it is hard for those who have plenty to see more of their money being taken than is taken from the less well off - but it is just hard - not wrong. Without the people at the bottom of the ladders on which the rich sit, the rich have no ladder to climb and therefore no way of increasing their wealth.
It has been proven that the 'Healthiest' economies are ones where the distance between the top and the bottom is less. Economies where the overwhelming majority of people feel comfortable in their situation are the most resilient to shocks and show a more consistent growth pattern and this is what we should be aiming for.
I would like to see a situation where the top earners can offset more of their taxes against charity donations. I believe we should have a system where if you donate £50,000 to a national charity fund you get to keep and extra 1% of your income (the numbers are irrelevant - that is for others to decide on - this is about the principle). The money should be paid into a national charity fund, along the lines of the Lottery fund only for charities such as help the aged etc. This would ensure the funds are spread evenly throughout the country and not just donated to the local brass band charity or something similar. It is vital that the mechanism moves the money around the country in the same way that a companies Head Office does the opposite i.e. if you buy a coffee in the north of Scotland, you will be supporting a HO in London with the profits made on the cup.
The HO also holds most of the high paid jobs and therefore a lot of the profits from that company will be spent locally rather than nationally, so the redistribution of this wealth plays an important part of the solution.
This (along with the moving of government offices) will help to smooth out the money across the country and will help to create a more even distributed economy. It is not the complete solution but it is part of it - it allows high earners to earn more and keep more while at the same time giving more to those who need it most.
One final thing, to return to my original point. This is not taxing the rich - it is taxing the greedy. I don't think anyone in society has a problem with some people earning more than others, provided it is deserved and they have worked for it and that they then re-pay some of it to society. The greedy are those who feel they should not contribute funds back into the economy and do everything they can to avoid helping others. This is why the Sun (see earlier posts regarding the over centralisation of political power) is wrong.

Sunday, 16 January 2011

Politicians drive me mad!

So there was a bi-election, one candidate got selected, yet all three parties claimed success. Two said, 'We were expecting a right kicking, We are surprised we got that much' and the winner said ' we won!'.
The fact is no one won - the public have lost out again. There is no separation between the parties other than who they would shaft the most in order to be in power. The fact is that the power behind the government lies in the lobbyists and the media. these are people with the financial power to make things happen and they sit on the lap of politicians with a knife pointed at their rather small genitalia (if they had more balls we would not be in this situation).
So, here is my next proposal for change:
Move the Houses of Parliament out of London. Move it to a part of the country that needs the investment. For two days of the week politicians would be able to debate and take part in committees via video conferencing, so they would only need to attend for the other two days. The building would be shared with a newly structured Lords, which would operate the same way. This would mean politicians would be in constituencies more than in Parliament. This then reduces the opportunity for lobby groups and financiers to intervene in the political process and would keep the politician in touch with reality a bit more.
Government offices would also be separated around the country (as was the process previously). This again ensures that the power of lobbyists and interest groups are diluted even more and a wider view of public opinion is heard.
The office of the Prime Minister would also be separated and located somewhere other than London and not next to Paliament.
I would also make a law that businesses should hold more meetings via video link as well. This would cut down on travel and increase the time that role models spend with their families (usually the father but not exclusively). I will expand on this on a different day.

As i mentioned above I would restructure the House of Lords but in a much more radical way than any of the national parties dare even suggest! This will be my next post! Your comments would be appreciated.

Friday, 14 January 2011

We have got this wrong.

Why do politicians think that they have all the answers? They don't, they have the answers to a few problems that affect themselves and nothing else. They are narrow minded and ineffective in finding effective solutions for anyone other than themselves and the people around them.
Our country is over centralised and over dependant on the financial whims of a few hundred guys in the city. This is not a way to operate a country and too many successive governments have pandered to them because if they don't then 'We will lose some of the best people' (as quoted frequently on SkyToryNews. These people are not the best people - they are a big part of the problem. The need to keep this tiny section of society comfortable often ensures that the rest of us are not!
So - rather than diessecting it issues in great detail, I am going to give my solutions to the problems. This is why I am not a politician and have no political leanings either way.

My first change would be to seperate Investment banking from Retail banking. Retail banks should be a safe way for everyone to store money for retreival as they wish. Investment banks should take funds that people are willing to risk losing and invest them on behalf of those individuals. Retail banks would be allowed to invest a maximum of 15% of their deposits with an investment bank, provided this has a guaranteed return greater than the value of the interest the bank is offering on those deposits e.g. If the retail bank is offering an interest rate of 1%, the Investment must have a guaranteed return of at least 1.1%.
Retail banks would not be allowed to invest customers deposits in any fund which does not have a guaranteed return - this includes the StockMarket.
This would protect peoples savings and deposits and protect Retail banks from the fluctuations and whims of the Stock Market and other volatile investments.

So, how would Retail banks make enough profit to ensure the doors stay open?
A lot of the big heavy costs of banking are actually in the Investment sections or they support the investment sections, so the removal of these costs would ensure it remains easier to run a Retail bank. Banks would be forced to make many through traditional lending and insurance products such as Mortgages, loans, car Insurance etc.

But they would not have enough money to lend! I hear you say.
I would also ensure that Pension Funds are not part of Investment banks. Investment banks would not be allowed to run Pension Funds as the funds invested need to be secure rather than volatile. Pension Funds would be allowed to invest in Retail banks (Retail Banks could offer their own Pension Funds) so that the return for Funds would be more consistent and Retail banks would then have the funds to lend responsibly to businesses and individuals.
I would also ensure that Investment banks have at least 10% of their overall balance, on loan to small businesses. As the value of Investments increase - through investment on World markets, so would the value of lending to small business.

These measures would mean that the money we deposit in a bank is used constructively to ensure the steady and sustainable growth of an economy. Yes we would lose the top end of high earners in Investment banking - they are very welcome to continue to destroy other countries economic prospects or work harder to earn the wage they do. More people would have access to loans and pensions, which would probably be at a higher rate than at present but they would be able to access it easier.

The next time a Politician, or a politicians friend (often referred to as Finance experts) says that the consequence of changes to the City would be disastrous - ask yourself this. Who would they be disastrous for and why? Then we can really start to make some changes.