We Shall Not Look Upon Her Like Again

Ken Livingstone summed her up well, although he had a lot more negative things to say about her :

Ken Livingstone, Labour’s former London Mayor who clashed with Lady Thatcher during his time running the Greater London Council in the 1980s, said her personal “courage and drive” made her “the most admirable prime minister of modern times”.

“She didn’t worry about focus groups, she didn’t read the newspapers,” he said.

“There was real courage.”

However, Mr Livingstone said it had been “a tragedy for Britain” that her policies had been so badly flawed.

The Thatcher years were the start of the world we live in today. Her Premiership saw:

a) The start of the debt-fuelled culture which crashed in 2008 - remember "takes the waiting out of wanting" ?
b) The rise of the UK underclass, bastardy and drug use
c) The rise of the deregulated financial “economy” and decline of manufacturing
d) The rise in house prices
e) a collapse in the birth rate as
f) more women participated in the workforce (so they could afford a house!)
g) a dramatic rise in crime – linked to b)
h) the sell-off of vital infrastructure – power generation and distribution being the most important

While winning her economic wars, she was defeated in the culture wars – I’m not sure she even realised she was fighting one, let alone that she was losing. At any event, the Britain of 1990 was a lot further from Alderman Roberts’ Grantham than the Britain of 1979.

But the thing is – every government since has overseen the continuation and perhaps intensification of all the baleful trends above – with the one glorious exception of the Blessed Michael Howard’s noble reversal of the previous 50 years penal policy.

And, of course, Blair added a few more baleful trends all of his very own - including massive immigration and stopping all nuclear development in 1998.

We see in the Thatcher years yet again the contrast between the post-68 left's total dominance of the social agenda and their defeats on the economic agenda. A former girlfriend was a trainee social worker in 1980 - those girls hated Thatcher, more for her conservative social beliefs and her personal style than her economics. Such a straight !

Thatcher’s small-town conservative social values were almost redundant by the end of her reign, with rocketing rates of crime, bastardy, drug use, STIs.

The 80s were when the 60s went mainstream – I can still remember finding a bunch of lager-drinking ‘lads’ from my local picking magic mushrooms one September – their counterparts of ten or fifteen years before would have avoided such things like the plague.

So why did Mrs Thatcher’s social agenda fail so dismally while her economic agenda – at least as regards crippling union power – succeed?

Because individual capitalists – especially in the financial sector – found that none of that made much difference to their profits. Some things, like the influx of women into the labour market, and a move from manufacturing to services, were a positive boon as far as reducing militancy and strikes were concerned. The destruction of the existing cultural landscape was no problem to people who didn’t particularly identify with it – like Rupert Murdoch.

Bastardy, crime and the underclass were much more of a problem for working class people than the elite, who didn’t have to live with it or send their kids to school with it. Not much anti-social behaviour in Roy Jenkins’ Oxfordshire village – plenty in the Valleys where he was born.

Sure, taxes were quite high to pay the benefits bill – but they were coming down, and compared to the 1960s they were massively reduced. And North Sea oil paid the bills and enabled us to keep the balance of payments deficit getting too outrageous – while the City tax take climbed ever higher. You can only take one step at a time – IIRC Mrs Thatcher’s share of state spending was around the same when she left as when she arrived – remarkable when you think what the state no longer did – steel, coal, gas, water, power.

It's arguable (I tend to agnosticism) that Mrs Thatcher's curbing of the unions may have been a good thing in a relatively closed society. But when that was combined with immigration on the scale of the Blair years, it was an invitation to capitalists to fill their boots, then grind them in the faces of the poor. The toxic synergy of capitalist economic ideas (up to a point - would Adam Smith have bailed out the banks?) and post-68 left social ideas have between them created the Britain we see today - and it's not a pretty sight.    

Told You So

This blog, two years ago :

"... the Gove option will mean that a lot of bright working or lower-middle class kids will look at a potential £60,000 debt and they won't bother - unless they're at Oxbridge or doing a course with a pretty much guaranteed career at the end of it. Outside this small subset of courses, university will be restricted to those whose parents can subsidise them - i.e. the very rich.

That's not all bad - I can see cultural studies departments being disbanded across England and Wales. Economic forces will cut away swathes of courses and institutions, correcting the insane growth of the last 25 years.

But at that kind of cost the idea of education as a good in itself will wither away. Who's going to do archaeology without a private income ?"

And lo, it comes to pass (pay link):

"Nearly one in five degree courses has been scrapped since the trebling of maximum tuition fees to £9,000 as universities concentrate on popular subjects and drop courses that have too few applicants or cost too much to run. Officials figures show a cull of more than 2,600 in the number of courses available to applicants planning to start their degrees in 2013. More than 5,200 courses had already been removed for students beginning this year, the first to face the higher fees.

Some of the courses have been dumped by universities even after prospectuses went online earlier this year, and in some cases after applications had begun. The scrapped courses range from archeology at Birmingham to languages at Salford and London Metropolitan. The number of courses listed by UCAS has fallen from 43,360 to 35,501 in two years"

In all respects (you can read this one) ...

"Students beginning university next year will be only the second cohort to pay at the higher rate of tuition fees, which were increased to a maximum of £9,000 per annum last year – almost treble the previous limit. The fees increase led to a sharp drop in applications last year, but hopes that this was a temporary dip will have been hit by today's figures, which show an even greater proportional fall at this stage compared with last year among British school leavers.

In total 145,000 applications were received for all courses at UK universities by November 19 this year. This compares with more than 180,000 at the same stage in 2010, the year before the introduction of the new fees regime."

I think the new fees have also concentrated some people's minds when it comes to the value of a degree, which was sold to prospective students as "Graduates earn £15K more then non-grads ! You know it makes sense !". Alas, those figures, while true, failed to point out that those figures were based on the relative scarcity back of graduates back in the day, compared to a world where maybe 40% of their age cohort would be grads. It also failed to point out that in a few-graduates world, those grads were likely to be at the top of the intelligence range - and maybe that's why they were high earners. In a many-grads world, average grad intelligence will be lower.

But even for bright people the jobs market is tough. I know people with 2-1s from Russell Group uni's who are working in call centres at £6 an hour.


UPDATE - obviously, the solution to all these woes is to bring in more graduates from overseas. 

More Dreadful Tax Antics By Foreigners - The Government Acts

We've seen the dodgy deeds of various swarthy chaps documented in HMRCs Most Wanted.

But one should remember that if you want a decent job done, call a professional. All bar the top two or three of HMRC's bad-boys were six-figure tax dodgers or less.

If you want to keep nine, ten, eleven or even twelve figure sums out of the Revenue's sticky grasp and also get a Guardian column to argue how the other guy's tax money should be spent, or be appointed to a Government business task force, it's best to forgo concepts like "carousel fraud" and the "long firm", and think about ordering a Dutch Sandwich with a Double Irish to go.

You'll note the absence from HMRC's list of Starbucks, Google (whose execs have the brass neck to pontificate in the Guardian about how more kids should be taught programming in UK schools), Amazon (whose Luxembourgeois variant involves some interesting VAT shenanigans with the publishers),  Apple and a whole host of famous names. They avoid paying the corporation tax that unimportant sectors like manufacturing stump up - because their UK businesses make hardly any profit. Yet strangely, they don't want to close these loss-making enterprises - far from it. They're very profitable - but the profits are elsewhere.

Now most of these techniques involve vesting the company's "intellectual property" (IP) in some tax haven then levying a hefty transaction fee for use thereof, one which renders the business activity taking pace in a taxable jurisdiction (as it might be the UK) only marginally profitable or even loss-making. You'd see how it might be possible with software, where IP is all (how much does it cost to copy a disk?), but apparently a there's more intellectual property than coffee in Starbucks, for example :

"accounts filed for its UK, German and French units, which make up 90pc of European sales, showed an apparent loss of $60m, but Starbucks told investors its European business was profit-making...

Starbucks said that although it had paid no corporation tax in three of its “largest and most important markets” last year, it had paid value-added tax, social security costs and business rates...The coffee giant uses a range of measures to mitigate the impact of tax. For example, the European unit is required to pay a royalty rate of 6pc of sales to Starbucks for using its intellectual property. Starbucks, which has a complex financial structure..."

A paragraph back I mooted that IP was valuable stuff compared with the price of producing a CD. Well, yes and no - not if you're the biggest software company in the world.

 Steve Sailer on Microsoft :

"Microsoft has over 40,000 employees in the state of Washington in the United States. But they don't actually physically burn on to disks the software they develop. Instead, Microsoft, has a manufacturing plant in Puerto Rico employing 185 people that gets credited in Microsoft's books with a lion's share of Microsoft's Western hemisphere revenue and profits. It's making disks that's the really important thing that Microsoft does.

Despite all you've heard about Microsoft being a software company, they are actually a manufacturing company, at least for tax accounting purposes. To the IRS, Microsoft is basically a Puerto Rican, Irish and Singaporean industrial goliath with a money-losing R&D outpost in Redmond, WA."

Now call me naive, but I'm not sure how you can reasonably one day discover that all your intellectual property lives in an offshore haven. I thought Bill Gates set up shop in Washington State, and Steve Jobs worked out of a California garage. It's not as if they set up their firms in the Dutch Antilles or Caymans. I may be wrong, but I could have sworn that Facebook guy started at Harvard, not in Northern Cyprus.

Her Majesty's Revenue and Customs take a dim view of this sort of thing when done in the UK. I'm no tax lawyer (alas), but I understand the general rule is that if they consider a business arrangement to have been set up wholly or mainly as a tax avoidance measure, then they can knock it on the head, and Lord help you if you didn't put aside some of that money in case of an HMRC challenge.

Yet these rules don't seem to apply to multinationals. They seem able to extract the urine with impunity.

But wait ! What's this in the Telegraph ?

"New push on foreign firms’ tax"

"Political pressure to change the way foreign firms are taxed in Britain increased this weekend"

Lord Myners, the former City minister, and Margaret Hodge, the chairman of the PAC – which is carrying out its own inquiry into the issue – said the Government should look into a sales tax as a way of raising extra tax revenue from global companies.
Tomorrow the issue will again be in the public spotlight when Starbucks, Google and Amazon all give evidence on the issue to the PAC. The comments come in the wake of a string of disclosures surrounding the small amount of tax paid by large international companies.

The UK business of Starbucks, the coffee chain, reported sales of £398m and paid nothing in tax because it made a £32.9m loss. The online retailer Amazon paid no tax in the UK in 2010 despite generating sales of more than £3.3bn.

Lord Myners told The Sunday Telegraph that the current system for collecting corporation tax from multi-national companies (MNCs) is flawed. “Corporation tax for an MNC operating in the UK is close to being a voluntary payment,” he said. “The problem is that the tax environment many MNCs are interested in is a zero tax environment.”

Two points. First, is that this Margaret Hodge ?

"The Labour MP has been one of the fiercest critics of tax avoidance by companies such as Starbucks, Google and Amazon. However, she is likely to face questions over the limited tax paid by Stemcor, the steel trading company in which she owns shares and which was founded by her father and is run by her brother. Analysis of Stemcor’s latest accounts show that the business paid tax of just £163,000 on revenues of more than £2.1bn in 2011. However. it is not known whether the company – which made profits of £65m – used similar controversial tax avoidance measures criticised in the past by Mrs Hodge. Stemcor’s tax bill to the exchequer equates to just 0.01pc of the revenues it booked through its UK-based business. In accounts filed with Companies House, Stemcor revealed that despite generating about one third of its revenues in Britain, its UK tax contribution made up only 2.7pc of the tax the company paid globally. "

Now before Tim Worstall gets all cross, I know that taxes are levied on profits, not turnover, and that, for example, some capital investment or previous losses can be used to offset tax. But it doesn't look good. Be interesting to know how they do it.

The second point - if it's a sales/revenue tax they're proposing, how do they think they'll be able to impose it on Company A (notionally loss-making but remits vast sums to tax haven IP owner) but not on Company B (profitable although squeezed by Company A, pays its taxes) ?  Remember that Company A can probably hire brighter lawyers than HMRC.


I'd have thought the only long term solution was to stop the IP nonsense in its tracks i.e. for the law to adjust to todays business practices, treating IP more like a physical asset. If Microsoft made car parts at Redmond, then smuggled them out to a low-tax jurisdiction (as it might be Puerto Rico) to sell, senior guys would soon be doing eight-to-twenty-four stretches and everyone else doing the same would clean up their act.

The alternative is public and governmental pressure - a lot of it. Treat Amazon, Starbucks as if they were the late Jimmy Savile or the Medellin Cartel - or alternatively, the way the Obama administration treated BP and is about to treat HSBC and Barclays. Point out the Kobo as the ethical alternative to the Kindle, or that Amazon vouchers should be what South African sherry was in 1968. No cosy relationship with ministers, no invites to even a local Tory wine and cheese, let alone Chequers. Constant public reminders of what they're doing. No need to do a China (vis a vis Japan) and invite people to smash up their branches, just reiterate that they are not good corporate citizens - that, in short, they are Bad People. Most people want to be liked.

I'm not sure either party is capable of doing this, but you never know. Government has a lot of clout - if it wants to use it.

Last - I know it was originally published in 2010, but this was the strip on a colleagues Dilbert calendar on Wednesday.



        

Cameron vs Merkel

We've seen an interesting spectacle - Chancellor Merkel of Germany lambasting the Greeks and Italians for borrowing and spending too much, and preaching austerity to them.

But now come the French, US and UK, lambasting the Germans for not printing Euros the way the US and UK printed dollars and pounds.

Cameron, representing a highly indebted country with a dreadful balance of payments and a riotous immigrant and underclass population, whose prime export is intelligent natives, will today preach profligacy to the leader of Germany, a nation with none of these problems.

"You want more IMF cash, because you're too squeamish to print? We debauched our currencies - you can damn well debauch yours! And if you don't, there'll be a global depression - and it'll all be Germany's fault!"

Economic Illiteracy - Media Edition

Great news !

"British retail sales grew more than expected in September after a surprise increase in sales of laptops and video games, the Office for National Statistics said on Thursday."

By strange chance, Laban bought a new laptop in September - and his youngest son also got a new games console as a reward for better-than-expected GCSE results, after a paternal promise the previous autumn which at the time seemed unlikely to ever need redeeming. Fair play though - he got the grades. Perhaps that made the sales difference ...

How good that must have been for British laptop and video console manufacturers !



Terrible news !

"In a blow to the government's aspirations for exports to lead a recovery, the trade gap – the difference between imports and exports – widened to almost £10bn in September, prompting warnings that already lacklustre economic growth for the third quarter will be downgraded."

Perhaps one day someone will put two and two together and recognise that, for as long as we continue not to make anything, strong retail sales are part of the problem, not part of a solution.

Globalisation In One Country

"In a blow to the government's plans for Britain to manufacture its way out of recession, Bombardier has placed its UK operations under review after the Department for Transport awarded a contract to make carriages on London's Thameslink rail route to Siemens of Germany, bypassing Britain's last remaining train factory. The company has called an 8am press briefing on Tuesday morning at its Derby headquarters. Senior shop stewards will be briefed on job losses in time for the end of the night shift at 6am."

I have not done the digging, but I would be amazed if the vast majority of French rolling stock was not manufactured in France, and the vast majority of German stock in Germany. (Strangely enough, railway nerdism doesn't translate into Web nerdism very well, although there are sites like this.) Only this morning someone on the Today prog was explaining how European governments can take 'other factors' into account, industrial strategy etc, when State enterprises hand out contracts. Not here.

Labour will doubtless be bashing the Tories over this, but this is just the continuation of existing policy. No government's put the British people first since 1992 (if that) - why expect Cameron to buck the trend ?

"Payback Time"

David Cameron has arrived in India for a visit he hopes will inject new energy into Anglo-Indian relations and help build trade links between the nations. The prime minister, on his first visit to Asia since taking office, is being accompanied by several senior Cabinet colleagues and UK business leaders.

The government regards India as a vital regional and economic partner in the drive to boost exports and investment.

If India's a 'partner', why are we giving her foreign aid, especially when she has a space program and nuclear weapons ?

Mr Cameron travelled from Turkey where he pledged to help its EU entry bid.

Ah, yes. Doubtless driven by that grass-roots Tory pressure for a few million Turks to come to the UK.

Cameron can talk of partnership as much as he likes. Indian businessmen aren't stupid.

"Recently there was speculation that Anil Ambani, one of the richest men in India, might buy Liverpool football club. There was much debate on Indian television of the merits of owing a Premier League club. One participant suggested it was payback time to the British for the East India Company. The presenter cut in sharply, saying: "We paid them back a long time ago. I thought the Indians owned most of the British businesses worth having. We don't need to buy a football club to demonstrate that."

The rest of the panel roared with laughter.."

As Churchill put it in a slightly different context : "It makes one flush to read the comments which were made behind the scenes about our country and its representatives."

Support The Bangladeshi Garment Workers!

AFP -

DHAKA — Garment manufacturers in Bangladesh said they would reopen all factories closed Tuesday in the country's major industrial hub after authorities pledged to protect key plants from protests. Tens of thousands of Bangladeshi garment workers, employees at some 700 factories that supply top names in Western retail, have been on strike since Saturday, demanding higher pay and forcing the closure some 700 factories.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), which represents factory owners, said the factories would be reopened Wednesday following a government pledge to put down the protests.

The decision marked a dramatic about face by factory owners, who earlier Tuesday declared that all factories in the affected area, Ashulia, which make clothing for global retailers like Wal-Mart, Tesco, H & M and Carrefour, would be closed indefinitely.

About 800,000 workers are employed in the 700 factories in the area and "tens of thousands" have taken their grievances to the streets, forcing the shuttering of businesses, Dhaka's deputy police chief Monowar Hosain told AFP.

"We've stepped up security, brought in reinforcements but the problem is there are too many protesting workers," Hosain said. The workers are demanding wages of at least 5,000 taka (70 dollars) per month. The current minimum wage, set in 2006, is just 25 dollars.

70 dollars a month would definitely be an improvement, and would hasten the day when the average wage in Bangladesh becomes comparable with that in the UK - and we can make a few things again. Mind, the skills will have been long lost. But maybe they'll outsource some of the less skilled stuff to us.

How To Trash a Brand

Laban's not a terribly brand-conscious individual unless it's a question of things you can taste and/or smell - and even then the product may change while the label stays the same. Many famous food brands have been bought and sold half a dozen times in the last 30 years, with production moved from factory to factory.

One of Laban's few brands was soap. I'll shower with Tesco's bottom of the range gel (literally about 10p) but for some reason I just love the smell of Pears soap. I know it won't give me the complexion of a young Susan Hampshire, but I like that the product is pretty much unchanged since the Pears company were annoying Millais in Victorian times.
















I'd buy ten or a dozen bars at a throw and stack them in the bottom drawer of the bathroom cupboard, so I'd only get it every year or so. I ran out last month, and went to buy some more. For some reason the stock in the shop smelled a bit odd, so I just took the one bar. They didn't seem to have any of the heftier bath size, either.

The first time I used it I wondered if the same company was making Wright's Coal Tar and there'd been a bit of cross-over on the production line. Wasn't right at all - a phenolic, chemical smell not at all like the delicate aroma I know and love.

Took a look at the packet. "Made In India by Licensed User Hindustan Unilever Ltd". Ah, I get it. It's a slightly dodgy approximation to the real thing made for less sophisticated overseas markets, and the shop's doing some grey importing. I bought some Heinz Salad Cream a week or two back for 46p, made in Amsterdam and with the label in half a dozen Arabic/Asian scripts. Just make sure you get the UK-made stuff next time, Laban.

Gulp. There ain't none no more. That's all there is.

According to Unilever records, Pears Soap was the world's first registered brand and is therefore the world's oldest continuously existing brand...

In October of 2009 the formula for the transparent amber soap was changed significantly. This completely changed the smell and texture of the soap, making it unrecognizable from the earlier product. The new soap is slightly softer in texture, but the most noticeable difference is the scent. The aroma of the classic transparent amber bar, which used to be characterized by a mild, spicy herbal fragrance, is now a very strong smell akin to frankincense, or even insecticide.

Sales must have dropped off a cliff. They really have knacked it (and they can't spell 'Click' on their website, either. I hate Flash intros on a website.). In Morrison's this week it was on sale at 35p as opposed to the usual 55p price. According to the Mail they were going to backtrack on the formula, but by the smell they appear to have instead moved production to Bhopal. What possessed them ? Why fix something that wasn't broke ?

Looks like farewell to Pears - and there's nothing else like it on the pharmacy or supermarket shelf - you have to hit Body Shop or some small specialist. There's a market opening there for someone fast on their feet.

Not Just America

Edward Harrison at Credit Writedowns :

At the heart of America’s problems is an economic policy which is designed to keep wages down but consumption up. That necessarily means more bubbles, more debt, more wealth and income inequality, and consequently more strife and social unrest when the gravy train ends. You cannot expect to hollow out a country’s manufacturing base, set up a bunch of McJobs to replace it, and still have consumers spend to support the economy.

Well, you can, but it can't go on indefinitely. What's keeping wages down ? A toxic combination of union weakness and mass immigration. What keeps consumption up ? Debt. That scenario sounds like the UK to me.

Dies Irae I - Cadbury's

Another British company bites the dust. Now all our chocolate will have processed cheese in it.

It's Longbridge (followed by Longbridge II, no doubt) all over again. The A38 south from Brum looks set to become an industrial wasteland to compare with the north of the city, where the remains of the Ansells brewery and the HP factory are long gone, and only the redeveloped Fort Dunlop remains as a reminder of past glory. The east has been mostly deindustrialised (and the natives displaced) as far out as Solihull and the Land Rover plant - only in the west do you still find people making things.

A very long time ago my primary school class sat in the dining room to watch "The Story Of Bournville" - chocolate from Africa to Brum. Now (I might have been 6 or 7) I knew the full story of the Cadbury trucks and tankers we passed on the Bromsgrove to Birmingham line, in their sidings opposite 'The Factory In A Garden'.

The open spaces and gardens around the factory are used by staff during lunch breaks. There are sports grounds. Men play football. There is a swimming bath for the women and an open-air pool for the men. Scenes in Bourneville village, the Day Continuation School, Selley Manor and Minwirth Greaves, the Friends Meeting House, the Church, the Almshouses and the school. Young employees are seen at summer camp under canvas, washing-up, playing cricket, on an excursion in a boat, sea-bathing and playing music in the evening. The nightwatchman says "It's pretty wonderful, isn't it?"

Flickr photoset here. Wonderful description of a 1920 factory visit here :



Kraft said all the nice things about investment and the brand when it took over Terry's of York. Now the York factory is empty and the chocolate oranges are made in Poland.

Already the first talk of redundancies is coming from the company. I guess it was nice while it lasted.

What a great phrase ...

and it sums up the Labour years so perfectly, when we exported jobs and sold our strategic industries to countries much too sensible to ever reciprocate.

"Globalisation In One Country"

Hat-tip to Martin Kelly and of course to Marshal Stalin for the original concept.

Where's Jack Jones When We Need Him ?

Alice Cook

Back in the 1970s, workers had a voice and it served as a bulwark against the more virulent forms of rapacious capitalism. When industrial unions were destroyed, that voice was gone and our democracy suffered enormously.

With the unions weakened, this country was comprehensively deindustrialized. Finance became the only industry that mattered. Today, trade unions only represent the public sector. Private sector workers have been disenfranchised and silenced by anti trade union legislation...

I would happy put up with a few extra days of industrial action to regain a degree of balance in our political discourse.

Discuss.

A Few Daisies From The Curate's Lawn

Apologies for the light posting - family commitments and all that. Plus, while the country continues to go to hell in a handcart, it's just doing it in what's become the traditional way, with the traditional liberal responses. There doesn't seem to be anything unique or new about what's happening.

Ross has the last word on Bloggergate. Incidentally, I see Paul Anderson has come out of retirement for a final final post. Doesn't he realise there's a gap in the market for Labour bloggers as Derek Draper bites the dust, after a meteoric (as in a brief appearance and fade out) blogging career. I guess Paul's just too civilised - Guido and Piers Morgan must have been absolute cads and bounders at their public schools. Paul was probably a swot. Nothing wrong with that, mind you.

The education disaster continues. Every year the teaching unions bemoan the disciplinary nightmare caused (inter alia) by the policies they campaigned for.

A recruitment agency, Aspire People, advertised vacancies for "Hard Core Cover Supervisors".

"You might be an ex-marine, prison officer, bouncer, policeman, fireman, sportsman, actor or you might be an overseas teacher looking to get some experience in the classroom.

"Which ever it is we need someone who thinks they can get involved in a school environment and control the kids in schools throughout the midlands."

As the pound collapses, so our exports are cheaper and so go up - don't they ? Oh no. Talking of which, here's James Dyson in the Telegraph (see also this post) pointing out that we need to make things. Admittedly he took his own manufacturing offshore.

Every year, the number of science and engineering graduates falls. In the last decade, 18 physics departments and 28 chemistry departments have closed. We produce 24,000 engineering graduates a year, compared with over 60,000 psychology graduates ...

Nine of the world's 10 biggest corporations make tangible goods, whether they are cars, turbines, computers or consumer electronics. Of the world's 20 most profitable companies, three are in services. Although British firms increased research and development spending by 7 per cent in 2007, the increase was largely in oil and gas production, software and computer services, pharmaceuticals and banking. We need more research that results in exportable, patented goods.

And all those psychologists (IMHO psychology is a quasi-science and psychiatry not a science at all) are doing wonders for our "mental health" ? Er ... (admittedly the Mental Health Foundation has a vested interest in bigging things up. I presume it's a tax-funded 'Fake Charity').

Actually, those psychologist numbers. While the general point that we're producing lots of useless trick-cyclists is valid, compare with Dyson's Dimbleby lecture of 2004.

Since 1997, we have closed 18 physics departments and 28 chemistry departments.
As a result, we now produce only 3,000 physics graduates a year. Compare that to an astonishing 15,000 psychologists !

Hmm. While not impossible, I think it's unlikely we've quadrupled psychology places in five years. Maybe he's got better data. Or maybe not.


"The family isn't in decline, it's just changing"

Women aged 25 are now more likely to have had a child than to be married. Women aged 25 are now more likely to have had a child than to be married. The latest landmark in the decline of marriage was uncovered yesterday in Social Trends, the annual snapshot of the nation by the Office for National Statistics. Until recently more women had married by the age of 25 than had had a child.

But a large number of those having children will in fact be married. They're not mutually exclusive states. I think I'll do a separate post when I've looked at the stats.

The most interesting thing I've read in the last week is that the Blessed Michael Howard's son is an evangelical Christian preacher.

He is deeply unimpressed at Tony Blair preaching to the Pope last week about homosexuality and the use of condoms. The former prime minister said the Pope’s “entrenched” views were out of step with ordinary Catholics. He added that if we were to stick to the letter of the Bible “you’d have some pretty tough policies across the whole of the piece”. But this cuts no ice with Howard.

“Blair’s wrong,” he says. “There’s a clear process of development as God makes covenant after covenant with his people, but the Bible has an end and we can’t write an extra chapter.”

Just to be clear, he still believes people in actively gay relationships should not be part of the Christian community: “If a gay person was sitting here with us now I’d tell them Jesus had a fulfilled, wonderful life without sex.” As for the rivalry between faiths, Christianity will ultimately triumph? “Yes, but not by the sword.”

Howard lives on the generosity of 30 or so religious enthusiasts who have set up small standing orders to fund his preaching – although his parents helped him buy the house.

At least today, as they gather for Easter Sunday lunch, the family will have something safe to talk about – the launch of Howard’s book, 24 Hours That Changed the World. Like 24, featuring Jack Bauer, the ruthless counter-terrorism agent, the story of Jesus’s last day on Earth is told in tense, one-hour segments.

The opening – “Right now, government agents are plotting to assassinate me and someone I work with may be involved. My name is Jesus of Nazareth, I am a travelling preacher from Galilee and today is the longest day of my life” – gives the general idea.

The book is part of a series aimed at introducing Christianity to a new audience. The title of a companion volume, My Mate’s Gone Mad, neatly reflects the reaction of Howard’s friends when he first “got God” at the age of 15.

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.

"go and work in Europe, Mandelson tells strikers"

... thus far have the People's Party come.

It's the 'speaking from Davos' bit that gets me !

"England has not defaulted since the Middle Ages"

While the eyes of the world were on Washington DC, the eyes of Laban and quite a few others were watching the pound lose nearly 5 cents in a day, and the bank shares continuing to slide.

Gordon Brown really is an economic genius. With hindsight his abandonment of the competition laws to save HBOS ("too big to fail"), by steering it into the grateful embrace of Lloyds, creating "much much too big to fail", seems more like the advice of a man who comes across someone sinking into a quagmire, and recommends to a naive passer-by that they should reach out and save him.

"There'll be a handsome reward for you, Sir Victor - he's a very rich man !"

Sir Victor thinks of the reward, steps up, stretches out his hand and pulls lustily. But the weight ! The man is too heavy ! He pulls his hardest but with horror he finds his feet slipping inch by inch towards the swamp ... he wants to let go, but the sinking man has his hand clasped in the iron grip of fear, and feels himself being dragged inexorably towards the quicksand ... it's giving way under his feet, and the man, still clinging, pulling, is sinking down ... down ... the Lloyds 'rescue' is going to be the death of the rescuer.

“Some people are saying that we are nothing more than a big hedge fund, not entirely unlike Iceland, and that national bankruptcy is a real possibility,” noted the man from ITN. “Whatever else this represents, surely it is total failure of bank regulation?”

Gordon, so angry that his eye-bags were packing up and leaving without a backwards glance, noted sharply that American sub-prime was to blame. “I utterly dispute what you are saying. I would urge you to be cautious in the remarks that you make."

Some interpreted this as a threat to the journalist - a foolish idea. Gordon is instead becoming distinctly aware that the markets are looking for the next falling domino. Spain and Ireland were the front-runners, but the UK is coming up on the rails in fine style.

“I would urge you to sell any sterling you might have,” Mr Rogers advised his army of investment followers. “It's finished. I hate to say it, but I would not put any money in the UK.”

The collapse of the RBS share price reveals another puzzle :

Taxpayers put £5bn into RBS in the form of preference shares in October. The bank now has a market capitalisation of £13.7bn (as of Friday night).

The government is tomorrow expected to swap the preference shares for equity. We - the public - will end up with another 10 per cent of the bank, ie up from 58 per cent to 68 per cent.

So we seem to be exchanging £5bn of pref shares for £1.4bn of equity.

That was £1.4 bn with a share price of around 36p - it's now a third of that. Is this fraud or incompetence ? Just Gordonomics I guess. He really does seem to be moving non-existent divisions around the map.


My new favourite hell-in-a-handcart merchant, Ambrose Evans Pritchard, thinks it looks bad. He thinks that in every article I read, mind - but he's been right so far.

What have our leaders wrought? The reckless conduct of City, the fiscal incontinence of Gordon Brown (3pc deficit at the top of the cycle), and the pitiful regulation of the UK housing boom have all combined to bring the country to the brink of disaster.

England has not defaulted since the Middle Ages. There is a real risk it may do so now ...

The Baby Boomers have had their moment in power. The most spoilt generation in history has handled affairs with its characteristic hedonism. The results are coming in.

Well ? Dollars ? Yen ? Euros ? Property ? Swiss Francs ? Tell me, someone - before exchange controls are reintroduced !

A Leak From Every Seam

Riots in Latvia, Lithuania and Bulgaria.

Putin's Russia gets more gangster-like every day. And his Chechen satrapy is even worse.

While UK banks collapse, things are looking even scarier across the water. Bank shares in the Free State dropped 48% yesterday. The Irish government took the lead in guaranteeing deposits, but the nightmare, Icelandic scenario is if the banks' liabilities are greater than the Irish treasury's purse. The UK is in the same boat, but we can always inflate (i.e. collapse) the currency.

Can anyone suggest a safe-ish currency for my savings ?

Spain's in the doo-doo. I wonder how Santander, only a few months back a safe haven for Alliance and Leicester, Abbey National and B&B, is faring, given the Spanish property slump ?

Spain also has demographic collapse plus mass immigration.

Alice Cook is a woman after my own pessimistic heart :

Today was an historic moment. The RBS and its barely comprehensible loss signaled the end of an era. The days when finance was the engine of the UK economy are definitively over. The UK banking sector has become the 21st century equivalent of coal mining; over-staffed, over-paid, and profoundly unproductive ...

So what happens next? The government will continue to prop the banking system with liquidity. Whatever Brown and Darling might say in public, they now have the minimalist objective of preventing total collapse. It is simply inconceivable that lending could return to the 2007 levels. The heady days of near limitless credit growth have gone. The government would be doing well if it simply avoids another financial sector meltdown ...

What about the real economy? This too will adjust, and it will be painful. The bulk of the adjustment will be in financial services, which has just begun to shake out all that value-reducing labour that created this appalling banking crisis. Currently, the sector employs about 6 million people. Don't be surprised if that number falls by half.

I said 2009 was going to be interesting !

It's The Economy

Things are moving with remarkable speed. By next week Barclays and HSBC may be in the Government's bail-out tent, while Lloyds TSB, which was meant to be coming to the rescue of HBOS, may be more than 50% state-owned. Given that most of the banks would be bust without taxpayer guarantees I don't know why they don't just wind them up in a controlled manner, transferring assets and liabilities to the state, before beginning the process of building a case against their boards, freezing their assets and attempting to claw back their bonuses, property and pension funds - on the basis of the effectively fraudulent accounts, based on flawed asset evaluations, which have showed such huge profits over the last ten years. What would happen to a small or medium sized quoted business which inflated its assets in the accounts year on year, distributing huge dividends and bonuses until the day the assets turned out to be not quite as valuable as the liabilities ? At a minimum, HMRC would be all over their books, if not the Fraud Squad. In the States they'd do time - why not here ?

They might claim they truly believed the valuations - in which case sectioning under the Mental Health Act might be more appropriate. Their delusions have turned out profitable for them and dangerous for us.

Laban's not generally a believer in the state doing what can be done by private enterprise. But the banks are in a unique position - licensed to create money - and have been found grieviously wanting.


Only a few months back any Tory spending proposal would be greeted by Labour with cries of 'where's the money coming from', with dire prognostications of closed hospital wards and classrooms. Now Gordy's spending money he hasn't got like the proverbial drunken sailor, and the tab marked 'taxpayer' behind the bar gets longer and longer.

When the Tories stopped believing in God and Labour stopped believing in the British working class, they soon found other things to believe in. The Gods of the Market Place satisfied the spiritual needs of many Tories, while Labour returned to the Old Religion of the Pelagian Heresy - that man is essentially good and perfectible - but with a twist that Marx would have noted with a sardonic smile - perfectible only with enough teachers, social workers, Housing Officers, Funding Stream Co-ordinators, outreach workers and other Labour-activist beneficiaries of the Caring State.

Old Labour scorned the Gods of the Market, but New Labour realised that the taxes (and the party donations) would have to come from somewhere, so were quite happy to let the Market Place rip while taxing it to feed their core constituency clients - said social workers, Housing Officers etc. Indeed, for the architects of New Lab, it was but a short step from being intensely relaxed about others getting rich to being intensely interested in getting rich themselves. In this context I would recommend a read of lefty Yank Greg Palast's expose of Mandy's mate Derek Draper. It certainly dispels any illusions about the People's Flag.

Draper should have been pleased with his success. But his mood was philosophical.

“I don’t want to be a consultant,” he said. “I just want to stuff my bank account at £250 an hour.”

Blair and Gordy took the whole thing a little too far, though. Convinced that with enough social workers and Sure Start schemes, crime would fall, they didn't bother to build any prisons - and now the ones they have are full. Convinced that 'something would turn up' - like wind power - and afeared of the Guardian, they closed all the nuclear power stations and didn't commission any new ones. Now they've had to sell our energy future to the French, and the lights will soon be going out as the old stations shut faster than new ones can be built. The story of Anglesey Aluminium is a disgrace.

Above all, they spent and taxed in the boom years as though they would never end. What are they going to do now that they have ? The kitty's empty.

IMHO there's only one option open to them. They'll keep spending and start printing. Consider their position. With unemployment projected to rise to three million, they'll be worried about keeping order among the youth of our rainbow nation. No way can they let up on the outreach workers, but who will pay for them ?

The oldies will - especially those who were employed by the private sector. They don't fight. They probably voted Tory anyway. Many of their company pensions have been destroyed, but there are still a fair few impacting the bottom line with their future pension liabilities. Just print money, let inflation rip, and zap ! those future pension liabilities are halved in real terms.

That solves the problem of paying the outreach workers, it ensures more donations and directorships from grateful capitalists - and it also makes a lot of pensioners, with their pensions eroded by inflation, once again dependent on the State. It's a win for everyone - except the pensioners, but who cares about them ? They don't riot !

Tariffic !

The trade barriers are starting to go up. While the company formerly known as British Steel, now Indian-owned, faces 30% production cuts, India is raising steel tariffs to protect its domestic production capacity. At the recent G20 meeting, participants swore to uphold free trade - then went home and raised duties on steel (India) and cars (Russia - a decision which provoked protests).

The Economist is distressed.

Tariff increases may be the protectionist’s barrier of choice, despite limits agreed by members of the World Trade Organisation (WTO). This is because in the past decade many countries have unilaterally cut tariffs to well below those limits. They have plenty of room to raise them without breaking any rules.

If all countries were to raise tariffs to the maximum allowed, the average global rate of duty would be doubled, according to Antoine Bouet and David Laborde of the International Food Policy Research Institute in Washington, DC. The effect could shrink global trade by 7.7%.

China has announced tax rebates for its favoured exporters, as well as pegging its currency at what America sees as an unrealistically low level. In many countries there's pressure for more import duties.

“Post-imposition of the duty, the prices for imported zinc would go up, thereby inclining buyers to opt for domestic variants,” an official of a zinc company said.

He seems to have grasped the concept pretty well. The Economist is reminded of the 1930s and the Smoot-Hawley tariffs. In fact, the increases weren't that hefty compared with the already-existing tariffs. But :

Smoot-Hawley did most harm by souring trade relations with other countries.

And that's the point. America was then the great world exporter. By provoking retaliatory tariffs, she cut off her nose to spite her face, as Ambrose Evans-Pritchard, again in Cassandra mode, explains :

There has been much talk lately of America's Smoot-Hawley Tariff Act, which set off the protectionist dominoes in 1930. It is usually invoked by free traders to make the wrong point. The relevant message of Smoot-Hawley is that America was then the big exporter, playing the China role. By resorting to tariffs, it set off retaliation, and was the biggest victim of its own folly.

Britain and the Dominions retreated into Imperial Preference. Other countries joined. This became the "growth bloc" of the 1930s, free from the deflation constraints of the Gold Standard. High tariffs stopped the stimulus leaking out.

It was a successful strategy - given the awful alternatives - and was the key reason why Britain's economy contracted by just 5pc during the Depression, against 15pc for France, and 30pc for the US.

Could we see such a closed "growth bloc" emerging now, this time led by the US, entailing a massive rupture of world's trading system? Perhaps.

Interesting to see that the 1930s depression in the UK was apparently nowhere nearly as bad as in the US, thanks to Imperial Preference - the policy of making the British Empire as nearly as possible a free-trade zone. Some remnants of Imperial Preference - like the favourable UK import regime for Caribbean bananas - only vanished relatively recently. Not that depression was a picnic for those affected - my grandfather was unemployed for pretty much the whole of the 1930s, with occasional labouring work on Government relief schemes, and his daughter went to school with cardboard in her shoes.

We have no Empire any more, so that avenue is closed to us - and America is not the world's exporter any more, so the lessons of Smoot-Hawley don't necessarily apply to them either.

Protection can work pretty well for a nation with a devastated economy and infrastructure wishing to rebuild. Japan and Korea did pretty well out of it - can you think of any candidates closer to home ? The South African and Rhodesian economies under the impact of sanctions did not collapse, but substituted imports and became self-sufficient.


I must admit I had M. Sarkozy down as a Brit-style price-of-everything sell-the-grandmother merchant. Maybe not so, although he's probably just playing to the gallery :

"We cannot be the only continent in the world that does not support its builders and manufacturers. We have to help our industrial infrastructure," Sarkozy told the assembly.

"Otherwise we are going to see an industrial wasteland."

What do you mean "are going to see" ? M. Sarkozy obviously hasn't taken a train between Birmingham and Wolverhampton or Sheffield and Leeds.