OK, What Was The Point ?

So HBOS was in the doo-doo. It was "too big to fail".

So it would have to be nationalised like Northern Rock.

But wait ! There was a better answer. Why not steer it into the arms of a bigger, financially sound bank - like Lloyds. OK, that would create a "much too big to fail" bank and breach all kinds of competition rules - but what the hell ?

There were obvious risks. But HMG were putting on pressure. And the lure of all that market share was just too much for Eric Daniels and Victor Blank.

So they did it. And now Lloyds is in the doo-doo too. And is now controlled by HMG.

But rather than nationalise (sans compensation, no golden parachutes for directors etc) a la Northern Crock, Gordon and Co are doing all they can to prevent the failed banks from being nationalised. They're handing over our cash in exchange for non-voting shares, they're organising asset protection insurance schemes with a tiny taxpayer upside and potentially massive downside - all to prevent nationalisation.

I'm not a great believer in nationalising anything outside natural monopolies - rail and road infrastructure, water, electricity generation and supply, maybe some telecomms infrastructure.

But HBOS and RBS have manifestly failed. I fail to see how they could have done a worse job.

And if the banks were 'too big to fail', shouldn't we be thinking, both here and in the States, of breaking them up into units which could be allowed to fail - with appropriate protections for depositors ? Instead we're creating even bigger banks.



I suppose they're looking towards all those non-exec directorships from grateful bankers when they're kicked out of office.

"basic Labour values"

Not long ago NuLab MP Tom Harris wrote a surprising post - surprising because I agreed with pretty much all of it (I do think bringing up children is itself a career - or a vocation - but then I'm a Sayyid Qutb disciple on some things. Everybody who can should get an education - it's a good in itself).

Teenage girls shouldn’t be having underage sex. Why? Because it’s wrong.

Teenage girls shouldn’t choose to have babies as an alternative to getting an education and a career. Why? Because it’s wrong.

Parents shouldn’t teach their children that a lifetime on benefits is attractive or even acceptable. Why? Because it’s wrong.

(Please assume all the usual caveats: some people have no choice but to claim benefits, lots of single parents do a great job, etc.)

Being accused of agreeing with the Daily Mail’s agenda is not the worst thing my critics can say about me. Being accused of accepting the current appalling state of affairs, of pretending that the concepts of right and wrong are meaningless - that is far worse than being accused of pandering to the right.

And, of course, it is a complete load of ******** to suggest that the ordinary working class people of Glasgow South and in hundreds of other constituencies throughout the country don’t agree with me. The most vociferous critics of the dependancy culture and of deliberate worklessness have always been those who live in the same communities, those who resent paying their taxes to help other people waste their lives.

Lancastrian Labour councillor Paul Cotterill wants him thrown out of the Labour Party - "on (the) basis that he is an objectionable fool and is out of keeping with basic Labour values, as evidenced by this post".






(The whiring sound you can hear is the late Ernest Bevin, rotating at 5,700 rpm)

Two blogs .. and a few links

The chap whose comments at Harry's I so admired (his follow-up was excellent too), William Gazy, has a blog.

I don't know why, but the title of A Progressive Viewpoint always made me cringe. Which is a pity, because it's really a rather good read.




The chap who set fire to himself in Westminster last week was apparently not a distressed pensioner, but a Sri Lankan.

It is believed he was attempting a self-immolation as a protest against the Sri Lankan security forces who are on the verge of defeating the (LTTE) terrorists.

Labour's racist education policies. Don't know why that's a surprise. Sion Simon said in Parliament only yesterday of the great curry chef shortage (no, I didn't know, either) "we'll help employers by funding the development and training of members of the ethnic communities to get to Level 3 - the equivalent of A-level standard - on courses run through a virtual strand of the new National Skills Academy for Hospitality". You can't get much more institutionally racist than that. I guess you actually have to be from Bangladesh or Mirpur to cook a decent balti.




Here's a real economic gloomer-and-doomer - Absolute Return Partners’ Niels Jensen, quoted at Credit Writedowns.

Mr Jensen is obviously a chap with the root of the matter in him :

It is pathetic to watch our prime minister attacking the bonus arrangements of our banks when the UK Treasury, on his watch, spent £27 million pounds on bonuses last year as reward for delivering a public spending deficit of 4.5% of GDP at the peak of the economic cycle. Even my old mother understands that governments must deliver budget surpluses in good times, allowing them more flexibility to stimulate when the economy hits the wall. What Gordon Brown has done to UK public finances in recent years is nothing short of criminal.

He points out that in many ways, European banks are deeper in the doo-doo than the Septics :

For the true horror to emerge, we need to turn to Eastern Europe for a minute or two. Nowhere has the credit boom been more pronounced than in Eastern Europe. And nowhere is the pain felt more now that credit has all but dried up. One measure of the credit fuelled bonanza is the deterioration of the current account across the region. Credit Suisse has calculated that in four short years, from 2004 to 2008, Eastern Europe’s current account went from +6% to -6% of GDP². That is a frightening development and is likely to cause all sorts of problems over the next few years.

Meanwhile Western European banks, eager to milk the opportunities in the East after the iron curtain came down, have acquired many of the region’s banks. Now, with many Eastern European countries in free fall, ownership could prove disastrous for an already weakened banking industry in the West.

Do go on ...

On the 11th February the Daily Telegraph’s Brussels correspondent Bruno Waterfield wrote an article under the header: “European banks may need £16.3 trillion bail out, EC document warns.” In the article, the reporter revealed that he has seen a secret document produced by the EU Commission which briefed the union’s finance ministers on the true extent of the banking crisis. Less than 24 hours later, the article’s header was changed to “European bank bail-out could push EU into crisis” and two paragraphs had mysteriously disappeared. Here they are:

“European Commission officials have estimated that “impaired assets” may amount to 44pc of EU bank balance sheets. The Commission estimates that so-called financial instruments in the ‘trading book’ total £12.3 trillion (13.7 trillion euros), equivalent to about 33pc of EU bank balance sheets.

In addition, so-called ‘available for sale instruments’ worth £4trillion (4.5 trillion euros), or 11pc of balance sheets, are also added by the Commission to arrive at the headline figure of £16.3 trillion.”

Do yourself a favour - read those two paragraphs again. Newspaper editors do not change content light-heartedly. Did the Telegraph editor receive a call from Downing Street? Or Brussels? Did he have second thoughts about the avalanche that he could possibly instigate? I don’t know and I probably never will. But one thing is certain. If the EU Commission’s estimate of £16.3 trillion of impaired assets is correct, then the crisis is far worse than any of us could ever imagine. Not only would we have to get used to the prospects of a systemic meltdown of our banking system, but entire nations may go down as well.

Don't hold back - tell us the worst ...

Public debt will rise and rise. The official estimate for the UK for next year is already approaching 10% of GDP, an estimate which will almost certainly rise further. We probably have to get used to running 10-15% deficits for a few years, a fact which seriously undermines the notion of government bonds being next to risk-free.

He finishes on a really depressing note and one which reinforces all my fears. This stuff about deflation is just so much nagombi. As City Unslicker points out, food inflation is running at 9%.

The most obvious trick left in the book, therefore, is to inflate us out of this mess. With the enormous amounts of public debt being created at the moment, years of deflation a la Japan would be catastrophic. You will never get a central banker to admit to it, but a healthy dose of inflation is probably our best prospect of surviving this crisis.

Neils' idea of "healthy" might be different to mine. Even Ambrose Evans-Pritchard is calling for the presses to roll.

The Fed should swoop in to the market – armed with Ben Bernanke's "printing press" – and mop up enough Treasuries to force 10-year yields down to 1pc and mortgage rates to 2.5pc. Monetary shock and awe.

This remedy is fraught with risk, but all options are ghastly at this point. That is the legacy we have been left by the Greenspan doctrine. We are at the moment of extreme danger in Irving Fisher's "Debt Deflation Theory" (1933) where the ship fails to right itself by natural buoyancy, and capsizes instead.

From all accounts, the Fed was ready to launch its bond blitz in January. Something happened. Perhaps the hawks awoke in cold sweats at night, fretting about Weimar.

It looks as if buying shares in these guys might be a sound move. How much more money are we going to throw at the banks ?

Ben Bernanke said the White House would have to consider increasing the scope of its $750bn banking rescue package, as well as readying further aggressive measures to shore up the world's biggest economy. His warning to Congress came as shares in London slid to a new six-year low amid disquiet about the stability of Britain's banks following Monday's cash calls from HSBC and AIG.

So my fantasy of October last year is coming true. Apart from the VAT reduction (I forecast an increase) it's all pretty much in line. The Dow hit 6,666 today. Doomed !

Dear Taxpayer,


The $800 billion US and $450 billion British bailouts have proved highly effective pilot projects, and in some cases have seen share prices fall less quickly or even on occasions rise.


However, as was always made plain, these were only trials of the technique. Following today's largest one-day Dow fall since 1987, and continuing weakness in London, it has been decided that the pilot phase is over, and that some real money is necessary.

A task force consisting of the most highly regarded tax lawyers have for several days examined the options for moving us forward, and there are three :



a) a massive reduction in government spending. Ridiculous. Only a strong state can protect the vulnerable at this critical time. And don't you feel just a little bit vulnerable ? Of course you do. You need to be protected, don't you ? And told what to do. Spending cuts would plunge the world into depression and a new Dark Age.



b) a massive increase in taxes. Not so ridiculous, but may impact upon the wealth creators who more than ever are vital to the economy. Could plunge the world into depression and a new Dark Age. Nonetheless, some taxes will rise. Value Added Tax will rise on November 1st by the value of the rate of inflation (measured by the new Energy Price Index - currently at 24%).



c) a further substantial increase in liquidity - the so-called "Mugabe Miracle" option in its Weimar variant. Would wipe out all debts in very short time and massively enrich "us"* all. While this option successfully restarted the German economy in the late 1920s, some worry that it led to the persecution of minorities. We have examined the British and American situations and are firmly convinced that persecution, if anything is likely this time to be the other way round. The only serious risk is of a shortage of wheelbarrows. It is this third option that has been decided upon as our - as your - best way forward in the continuing financial uncertainty.



You need do nothing at this moment. Stay indoors and listen to the radio. We thank you for your patience. Your vote is important to us. You are being held in a queue. Your call may be recorded - as may your email, browsing habits and text messages.




Best Regards



G.W. Bush

G. Brown



pp Ug, the Giant Lizard, Secret Ruler of the World

* ("us" i.e. not you)

The Economy (again)

David Pilling in the FT (registration may be required) reports that Japanese are looking back nostalgically to the Golden (and pre-industrial) Age before the arrival of Commodore Perry's squadron in 1852.

On a visit to Tokyo this week, on more than one occasion when I asked how Japan should tackle the economic crisis, my interlocutor turned with ninja-like alacrity to the topic of pre-Meiji Japan. The period before American warships forced the country open in the mid-19th century was regularly invoked as a prelapsarian idyll, a time when Japan did not have to deal with the grubby business of earning its crust in the world.

Eisuke Sakakibara, the former vice-finance minister indelibly branded Mr Yen, describes a country that was peaceful, orderly, unspoilt and friendly. “That was what pre-Meiji Japan was like. We should go back to that,” he says.

His invocation of a more innocent, pre-industrial age could easily be dismissed as idle chatter were it not for the fact that it keeps coming up. Asked about economic policy, one shadow cabinet minister finds himself pondering Edo Japan’s almost non-existent imports. (That is hardly surprising given Japan’s 200-year virtual ban on entering or leaving the country.) Japan started exporting, the politician says, only because it needed to build a military to defend itself. That decision has led inexorably to today’s over-dependence on supplying manufactured products to customers overseas.

Japan is a fascinating place - a country with Western-style demographic collapse which has set its face against mass immigration as a means of replacing those missing Japanese babies. In England the decision has been to replace missing English babies with babies of Third World ancestry, while skipping out on the integration process which (IMHO) alone would prevent problems on what's euphemistically called 'social cohesion'. The current result being that immigration is reported as the #1 issue for voters of all parties.

How it will play out over there (and over here) remains to be seen, but I'm pretty sure the Japanese armed forces will neither be ordering extra tear gas nor considering the practicalities of shooting their own citizens should the forecast 'summer of rage' materialise.

It's true that one of the characteristics of this crisis is that the 'good guys' lose, both internationally and personally. The exporting nations - the Far East, Germany - are hardest hit by the drop in demand, just as all over the world individual savers are being punished for the sins of individual and corporate borrowers.

And, as I've blogged before, NuLab is about to hit savers and pensioners even harder, by printing money to inflate away the debt overhang (citing the IMHO non-existent threat of deflation)- great for the indebted, disaster for those on fixed incomes. There may be an interval before inflation kicks in, and if shares fall far enough fast enough there might be a small window of opportunity for those with savings to get back into equities when the FT100 is below 3000. But for those surviving on a pension alone the future looks bleak.

What did Neil Kinnock say ? "I warn you not to grow old ..."

It's Cognitive Dissonance Time ...

Those Martin Kelly dubs the Bought Priesthood ('the constellation of technocrats, columnists, pundits, university professors, public intellectuals, business lobbyists and so on who are said to benefit from the political status quo and use their position to defend and support it') are doubtless wholly supportive of spending £5m on a new youth centre for Nottingham at a time of economic crisis.

A £4.9m youth centre will aim to stop gang rivalry and unite young people in Nottingham.

The centre, which could be based in a building in Castle Gate in the city centre, will provide a neutral location for teenagers to meet.

Nottingham Youth Council member Aaron Reilly, 15, from Wollaton, said: ''This is so exciting for the city.

''It will bring people into town from different areas who don't usually come in and it's going to make a big difference.''

The 'NGY' project will involve the refurbishment and extension of the building over the next three years.

It is envisaged the centre will have a recording studio, a DVD production area, a dance studio, cafe and gym.

Coun Mick Newton, chairman of the Young Nottingham Select Committee, told the Evening Post: "Hopefully this will break down some of those territorial boundaries and young people will be able to gather on neutral turf.

"This wouldn't have been possible unless the young people themselves had put this together.

"The name NGY was suggested by young people because of postcode gangs and they wanted to get away from that."

Alas the taxpayers of the city, with one exception, don't seem so optimistic.

I liked Nick's comment :

The Saxon kings bought off the Vikings by paying Danegeld. This scheme has all the same hallmarks and should be called Duwaynegeld.

"A writer is always selling someone out"

Joan Didion's words of forty years ago : How true they are.


(and forty years on Joan is still at it; here's a review of the book she wrote after a year of family tragedy)

Allapu Update

Guilty.

I suppose it could have been a lot worse. The guy has a degree in industrial chemistry. Perhaps he got it at The University of Wiltshire (formerly Cricklade Garden Centre). He sounds a somewhat distrurbed chap. Maybe, like poor Martin James (but for different reasons) living in the White City area of Gloucester wasn't good for his mental health.

(see this post)

You said it ...

At Harry's there's a debate on the good old days of youthful leftie activism, and memories are solicited.

Don't know who William Gazy is, but this is spot-on :

The day Blair won in ’97 I was at Victoria Station at dawn, having come off a night shift. I bought a newspaper. I was very happy.

It all went downhill after that. It took until well after 9/11 and the start of Iraq for me to really wake up to how dismal, hypocritical, utterly flawed and contradictory the Labour Government was/is. This did not send me back to the Tories, but I went back and did the thing that youthful lefties never seem to do: examine both sides of the argument properly and fully. How many Guardian readers really understand what a Polly Toynbee-run country would be like? Or do they just like to be ‘rebels’? The expression ‘rightwing’ is now like a leper’s bell which can be promptly rung and all debate is hushed thereafter.

The utopia of socialism had to be taken on trust, and when I saw the first vestiges of its consequences – the Human Rights Bill; the emasculation of the police force; the weakening of educational standards through dumbing down; the chaos and casual murder in the inner cities (what was the teen murder rate in London before McPherson, what is it now?); the cultural Marxism enforced in all public institutions, the high-handed, semi-criminality of the Blair/Campbell/Mandelson years; the hostility to British culture and the pandering to minorities; the obsession with impotent bureaucracy, poster campaigns and ‘crackdowns’ that were forgotten about in five minutes; the ‘we know best’ bullying on smoking (while the public consumption of skunk soared – as did psychiatric admissions) the parallel reality offered by the politicians, their press officers and their friends in the media; the fat cat hypocrisy; the ludicrous wars; ministerial perks and insider dealing (see for example Patricia Hewitt; Mandy etc); the irresponsible immigration (which punished the working classes’ wages); the insane attitude toward the armed forces (Geoff Hoon lecturing the SAS on gender equality at the time of Iraq); the sheer incompetence and arrogance of it all – I started to rebel. It wasn’t so much that I took the Daily Mail’s view on everything – I don’t, but it has been the only effective opposition to New Labour – but the dawning realisation that the abstractions of the middle class left were disastrous for law-abiding, decent people of all colours and classes and a clear threat to civilised life. I think Mandelson’s comments about xenophobia to the striking workers recently shows the full, grave, arrogant folly of new Labour thinking. Or look at Livingstone’s blasé attitude to teen killings in London, once it became obvious that the new, ‘social democratic’ approach to policing meant that you lost control of the streets.

Most people I knew moved further Left. The never-to-be-seen utopia. A moral high ground all about carping, looking good and never engaging with reality. But I couldn’t swallow that Mao-loving old fool Benn (youth never thinks of youth murdered in China and the USSR, they tend to concentrate on the students who revolted against Hitler and were murdered. See John Savage’s book ‘Teenage’ for a classic example of the one-eyed moral outrage of the juvenile left).

Yes, I moved rightward on many issues, stayed left on others; but I can never resolve my dislike of the Tory Party. The Lib Dems are quite without an empirical bone. So, I land somewhere roughly where Orwell was with the Lion and Unicorn: hating inequality of resource and opportunity; hating abuse of power; but recognizing that without decency, real education, tradition, authority and morality the ‘revolution’ isn’t worth it. Orwell’s great fear (that the ‘fruit juice drinkers’ – the England-hating, chattering class useful idiots ((a good description of our current Establishment)) would denude ordinary people of their moral codes and thus deliver us from liberty into license and totalitarianism) is slowly coming about, willed by a credulous and degraded pop culture and denigration of the universities for ‘social engineering’ purposes.

I see no party or political movement fit to the task of stopping this. All that can follow now is mass ignorance, a precipitous decline in standards across the board, balkanization (the socialist sacred cow of multiculturalism-as-state-policy – as opposed to a multi-racial society – was a recipe for this). In Whitehall, a new generation reared on pluralism, ecstasy, Jeff Buckley and Bill Hicks will preside – in a non-judgmental fashion – over the pigsty; and collect fat pensions paid for by the private sector they so despise. And that is how socialism will have ended up.

Hate Site Hassle Update

Update to my original post re the site's classification as a 'hate site' on some work firewalls.

From Websense :

The site you submitted has been reviewed. We have found that it is best classified accordingly:

http://ukcommentators.blogspot.com/ - Message Boards and Forums

So out of all the classifiers I can find, only Secure Computing/McAfee are playing the giddy goat. But they're probably one of the biggest players in the market. No reply from them yet - we shall see.


UPDATE - I'm off the Secure Computing hatelist as well - now classified as - Politics/Opinion / - Blogs/Wiki which is much more like it. At OpenDNS the "hate site" and "pornography" tags are flagged as rejected and it's currently a 'Blog'. So inshallah the Labanic reputation is as the driven snow once more.

If anyone still finds me blocked, including the user of Worcestershire Libraries computers who got in touch, could they let me know via comments or email ? Many thanks.

Doom and Gloom ...

The FT finished on Friday only about 50 points above its November low, the Dow's just hanging on above 7000.

Yesterday it dropped another 5% to a new low for this crisis. But given that the 2003 bottom (3300-ish ?) was caused by evaporating dot-com illusions, whereas this one's more down to various major structural unpleasantnesses, I'd have thought shares have a way to go - say to 2500-ish ?

It strikes me that someone like myself - on a smallish pension but with a chunk of savings in the bank - has only one chance to preserve any value. I need the FT100 to get down to 2500 as quickly as possible (at which point I get out of cash and into shares) before Gordon's printing-presses render both pension and savings worthless.

Wednesday's meeting of the Monetary Policy Committee will be shown the letters and then King will be allowed to take the Bank into the unknown. Normally the nine members of the MPC discuss interest rates, but having cut them to just 1 per cent this month, they have almost reached the end of that road. Now, instead of debating the price of money, the MPC will concentrate on the amount of it.

Quantitative easing allows the Bank to buy gilt-edged securities or corporate bonds from City institutions or through the market. As the Bank will not itself borrow the £100bn or more necessary, it is in effect printing money.

"There will be blood" says Niall Ferguson :

“There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries. It will cause civil wars to break out, that have been dormant. It will topple governments that were moderate and bring in governments that are extreme. These things are pretty predictable. The question is whether the general destabilization, the return of, if you like, political risk, ultimately leads to something really big in the realm of geopolitics. That seems a less certain outcome. We've already talked about why China and the United States are in an embrace they don't dare end. If Russia is looking for trouble the way Mr. Putin seems to be, I still have some doubt as to whether it can really make this trouble, because of the weakness of the Russian economy. It's hard to imagine Russia invading Ukraine without weakening its economic plight. They're desperately trying to prevent the ruble from falling off a cliff. They're spending all their reserves to prop it up. It's hardly going to help if they do another Georgia.”

“I was more struck Putin's bluster than his potential to bite, when he spoke at Davos. But he made a really good point, which I keep coming back to. In his speech, he said crises like this will encourage governments to engage in foreign policy aggression. I don't think he was talking about himself, but he might have been. It's true, one of the things historically that we see, and also when we go back to 30s, but also to the depressions 1870s and 19980s, weak regimes will often resort to a more aggressive foreign policy, to try to bolster their position. It's legitimacy that you can gain without economic disparity – playing the nationalist card. I wouldn't be surprised to see some of that in the year ahead.

It's just that I don't see it producing anything comparable with 1914 or 1939. It's kind of hard to envisage a world war. Even when most pessimistic, I struggle to see how that would work, because the U.S., for all its difficulties in the financial world, is so overwhelmingly dominant in the military world.”

Nothing, to be honest, that thee or me couldn't speculate on. Everyone knows that you need "a grand theme to appeal to the masses" at such times. The question is, what will that be? I can't see the EU, or even Putin (at present) annexing the Ukraine. In the UK I think we'll see more reality TV shows as HMG desperately try to keep the circuses running.

But there will be political consequences nonetheless. I particularly admire the attempts of the 'Scottish Government' to raise political awareness (and boost Carlisle and Berwick supermarket sales) by raising the price of alcohol. In today's Britain, a sober man will be an angry man.

The Economist has noted, two years on, the Government's retreat (which I blogged here) from the policy of engagement with (i.e. state funding of) the Muslim Council of Britain.

Now that system, and its unspoken compromises, lies in ruins. It was jettisoned in the autumn of 2006, when the government downgraded existing ties with the Muslim Council of Britain (in which movements close to the Muslim Brotherhood and the Islamists of Pakistan were strongly represented) and tried to find different interlocutors.

They've also noted that they've found no suitable replacement.

Nearly three years on, the government’s biggest problem is that it is struggling with two big questions at once. One is the set of problems described under the catch-all term of “cohesion”—narrowing the social, economic and cultural gap between Muslims (especially in some poor urban areas of northern Britain) and the rest of society. The second is countering the threat from groups preparing to commit violence in Britain or elsewhere in the name of Islam.

Alas, as I've pointed out many a time, the govts attempts at 'cohesion' merely show modern British culture - or lack thereof - in all its threadbare shame - not exactly an enticing prospect. This story will run and run.

The mother of Henry Webster speaks out :

It was January 11, 2007, when Henry, then 15 and a ginger-haired star rugby player, popular with his class mates and with no history of being disciplined for poor behaviour, arrived at the tennis court at The Ridgeway School in Swindon to settle, "one on one", an argument with a fellow pupil. Only it was a baying mob and not a single opponent waiting for him.

What happened next, witnessed by more than 100 pupils – and even filmed by one on a mobile phone – was an ambush so vicious that, at the subsequent court case, the judge described it as a ''savage and sustained attack".

It was, said Judge Carol Hagen when she passed sentence on 13 boys and young men who set upon Henry, a ''miracle'' that Henry had survived.

Though the 13 Asian teenagers and young men who attacked Henry – all members of a gang who called themselves the ''Asian Invaders'' – were given sentences of between eight months and eight years for grievous bodily harm and conspiracy to commit GBH, no independent inquiry into how Henry was brutally assaulted, while at school, in an attack that was described in court as ''something out of a Quentin Tarantino film".

During the trial, Judge Hagen was highly critical of the school, asking why there were no staff present in the tennis courts at the end of the school day, since it was known there had been trouble earlier in the day.

For the past 14 months Henry's mother has battled for a full inquiry and, after gaining support from the Government, has now won the right to a Serious Case Review on the attack.

The inquiry, which does not seek to apportion blame but to investigate what happened and evaluate what lessons can be learned, is expected to last four months and will, for the first time, lift the lid on alleged racial tensions within a school.

''I've fought hard to find out all the facts,'' said Mrs Webster, who is also suing The Ridgeway School for neglect. ''And it's been an excruciating wait.

"The school might say otherwise but the fact is that the attack on my son was a racial one. The school knew there were tensions – there have been numerous similar attacks before but nothing was ever done.

"Everything was swept under the carpet. Neither Henry or I am racist. But I feel my son was badly failed by a school that believes racism is only ever something that is carried out by white pupils."

It took a sustained campaign before the review was instigated by Mr Balls, the Secretary of State for Children, Schools and Families.

After a meeting with Mrs Webster he wrote to her saying that it was ''unacceptable that there has not been any full investigation of such a serious incident which left your son with permanent injuries".

Henry was repeatedly kicked, punched and battered before being beaten on the head with a claw hammer, fracturing his skull in three places and leaving him with permanent brain damage.

The Swindon local authority referred the case to their Local Safeguarding of Children Board, which has now sanctioned the review.

The headteacher of The Ridgeway School, Mr Steven Colledge, has said that he welcomes the investigation.

The case has highlighted the extent of racist incidents in our schools and, in particular, the reluctance on the part of some to treat attacks as racist when they are carried out by minority cultures.

Mrs Webster was not aware that, when those who carried out the crime came to court, it was up to the prosecution to cite the attack as racist.

Had that been proved, the sentences meted out – especially to Wasif Khan, 19, described in court as ''the hammer man'' and who was jailed for eight years for wielding the weapon that fractured Henry's skull – may well have been much stiffer.

What is particularly worrying, however, for parents in Swindon, is the light the case has shed on the number of racists attacks in the city's schools and how such incidents escalate.

Between November 2006 and November 2008 police dealt with 337 crimes – 137 of them violent incidents – at Swindon schools.

The highest number of those attacks, some 58, occurred at Churchfields school while 52 were recorded at Ridgeway school.

In the past 12 months, admittedly, perimeter fences and bans on mobile phones has helped the school reduce its number of violent crimes.

Henry, bleeding heavily from his head, was taken to hospital and, within 35 minutes, police had rounded up several of the gang members. It was Joe, Henry's younger brother, who telephoned his mother.

He had been standing at a bus stop when a passing pupil told him Henry had been beaten up. ''You can't imagine how it feels to see your son soaked in blood,'' Mrs Webster said, tears threatening.

''I just couldn't believe that no one from the school had called me to say there had been trouble earlier. All the pupils knew something was going on.

"When I was with Henry at the local hospital's accident and emergency unit one of Henry's friends telephoned me to say the same thing had happened to him some time before but he had managed to get away.

"All the children knew that these 'Asian invaders' were terrorising white pupils.''

For Mrs Webster the Serious Case Review will, she hopes, give some insight into how such a violent attack happened on the school premises.

''As far as I can see there was no control and no discipline,'' she says. ''Bullying and violence were rife when Henry was attacked and I want the school to admit that.''

Mr Colledge, the headteacher of The Ridgeway School, was unavailable for comment.

Dydd Dewi Sant

And never has the great man been more needed. Our ruling class follow the doctrines of Pelagius, with the inevitable outcomes. To quote from this post :

Thirty years ago I read Anthony Burgess’ novel The Wanting Seed, about an overpopulated globe where homosexuality was privileged in an attempt to reduce the birthrate. Governments only fell into two categories, Pelagian and Augustinian, and swung between the two forms.

Augustinian governments believe in Original Sin, that man is naturally given to vices which need to be checked. Tend to be hierarchical and militaristic.

Pelagian governments believe in Man’s perfectibility and innate goodness. As this fails to produce the perfect society, so do initially liberal Pelagians tend to turn towards coercion, more laws and greater police powers. Remind you of anything ?

‘’Pelagius is fond of police,
Augustine loves an army’’

And this one :

It is not without reason that Llan Ddewi Brefi has been called a place of old renown. In the fifth century, one of the most remarkable ecclesiastical convocations which the world has ever seen was held in this secluded spot. It was for the purpose of refuting certain doctrines, which had for some time past caused much agitation in the Church, and which originated with one Morgan, a native of North Wales, who left his country at an early age and repaired to Italy, where having adopted the appellation of Pelagius, which is a Latin translation of his own name Morgan, which signifies "by the seashore," he soon became noted as a theological writer. It is not necessary to enter into any detailed exposition of his opinions; it will, however, be as well to state that one of the points which he was chiefly anxious to inculcate was that it is possible for a man to lead a life entirely free from sin by obeying the dictates of his own reason without any assistance from the grace of God - a dogma certainly to the last degree delusive and dangerous. When the convocation met there were a great many sermons preached by various learned and eloquent divines, but nothing was produced which was pronounced by the general voice a satisfactory answer to the doctrines of the heresiarch. At length it was resolved to send for Dewi, a celebrated teacher of theology at Mynyw in Pembrokeshire, who from motives of humility had not appeared in the assembly. Messengers therefore were despatched to Dewi, who, after repeated entreaties, was induced to repair to the place of meeting, where after three days' labour in a cell he produced a treatise in writing in which the tenets of Morgan were so triumphantly overthrown that the convocation unanimously adopted it and sent it into the world with a testimony of approbation as an antidote to the heresy, and so great was its efficacy that from that moment the doctrines of Morgan fell gradually into disrepute.

The Pelagian heresy, that man is basically good and perfectible, is what Rousseau taught and what hippies and Guardianistas believe. (Rousseau was indeed so good and perfectible that he dumped his five children in an orphanage as soon as they were weaned.)

"How can I be a racist when I’m black?"

'Anti-racist' Lib Dem councillor blots her copybook. Her 'coconut' jibe is doubly offensive - to the (Asian) Conservative councillor at whom it was directed, and in its implication that white = bad. She's accusing Ms Jethra of being a traitor to her skin colour - an accusation that levelled by a white Lib Dem councillot at another white councillor would see them drummed out of the party once people had stopped laughing. Whatever happened to the colour of a man's skin being no more significant than the colour of his eyes ?

She's an ignorant woman too, arguing that whiteness is the reason why a councillor wouldn't be interested in commemorating slavery at taxpayer expense. Doesn't she know about the thousands of white slaves shipped from Bristol to the Viking kingdoms of Ireland after the Norman conquest, and the saintly bishop who fought against the trade ? As William of Malmesbury put it :

‘You might well groan to see the long rows of young men adn maidesn whose beauty and youth might move the pity of a savage, bound together with cords, and brought to market to be sold. It was a damnable sin, a piteous reproach, that men, worse than brute beasts, should sell into slavery their own lemans (sweehearts or lovers - LT), nay, their own blood.’

Eventually the saint’s preaching was so successful that not only did the people of Bristol abandon the trade and become ‘an example to all England’, but they blinded and drove out one slave trader who entered the city.