Westminster: February 2009 Archives

cleggpost.jpegPeter Mandelson's plans for Royal Mail are basically a scorched-earth retreat from some of the last moral territory they inherited from their elders and betters. His disgraceful surrender of any residual Labour values is helpfully laid bare, in his own words, in the Guardian today.

He thinks the pension deficit is a reason to privatise the company and a sign of incompetence: actually the proceeds from the massive pensions holiday Royal Mail took was just slushed straight into the Treasury. So they gave Government their money and weakened their business? Of course Ministers can't pay it back! For contrast, the banks threw their own money away, but they then get bailed out with ours.

What's more, the £3.4bn deficit, built up thanks purely and directly to Government mismanagement, is less than 15% of the RBS one-year loss announced today. It's not a bail-out they should be doing, they should just be paying back their debts.

The idea that an entirely private company will become more profitable to us, the taxpayers, if a private company takes a stake, is profoundly absurd as well as a category mistake. The private company will demand a rate of return on their investment which can only be disproportionate, and the costs will be borne by staff and users. 

It's a category mistake because it misunderstands what the Royal Mail is for, as noted here before. We don't expect it to make a profit. We expect it to deliver our mail, which is rightly regarded as a vital public service even by those of us who know how the internet works, and we'd like it to do it cheaply for us. 

We value the staff, we value the universality, and even we anti-monarchists think Royal Mail sounds better than Consignia. We don't expect the NHS or the police force to turn a nifty profit, and despite the deployment of Mandelson's famed dark arts, we don't expect Royal Mail to do so either.

The political logic behind this is incomprehensible. I'd love to see the polling numbers, but I'm certain it's driven entirely by ideological fervour and hatred of the public sector, not some response to public opinion. I couldn't be more angry - I wish, yet again, that there was some way I could cancel my subscription to the Westminster cavalcade of horrors.

And where's the Westminster opposition on this? There's some on the benches behind where Peter Mandelson would be standing were he even accountable to a vaguely democratic chamber, and there's the odd Tory with principles on the issue. However, no Labour rebellion can succeed, because Mandelson can, if he needs to, "rely on Conservative and Liberal Democrat votes to get it through". 

The Tories are no surprise on this, although it helps illustrate the extent to which they've not changed one bit. But the Liberals? While Labour wants to start with a 30% sell-off, they actually proposed starting at 49% last year. I wonder if all those poor local residents who worried about losing their post office know that those strange but friendly people in yellow tights and hats with the petitions who're trying to help are, in their day jobs, plotting the privatisation and certain demise of the whole enterprise, seven years before its five hundredth anniversary?

Steve Bell comes good for me.

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Reading the tale of the so-unlikely-as-to-be-practically-impossible submarine accident yesterday, I thought I'd wait to blog about it until Steve Bell did the illustration for me. Having grown up on If.., which regularly featured randy whales wooing Trident submarines, it seemed unlikely I'd be disappointed.

Anyway, back to the subs. Next time someone tells you that GM technology or nuclear power can be trusted because the chances of an accident are vanishingly tiny, think about the "millions-to-one" chances of two nuclear-armed subs colliding. Or the "infinitesimal" odds of two satellites hitting each other in the vastness of orbit. Thanks Abbie for this chilling thought.

Obama, Churchill & the Mau Mau.

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churchillmohican.jpgChurchill remains the closest to a political saint we have, in the public mind, and he was clearly the right person to lead in 1940. I shudder to think what would have happened had Chamberlain not been removed in time. Nevertheless, Churchill's career has some substantial blots on it.

His campaigns in the Boer War have been cited as including the first implementation of concentration camps, and in 1919 he wrote in a memo that "I am strongly in favour of using poisoned gas against uncivilised tribes" to "spread a lively terror". The specific targets were the Kurds, in what was then Mesopotamia. Gas may not have been used in the end, but either way it was a grim foreshadowing of Saddam's appalling barbarism in Halabja.

Much later, as Prime Minister for the second time, he ordered the repression of the 1952 Mau Mau rebellion in Kenya. The ensuing torture caught up many uninvolved Kenyans, and just like many modern "anti-terror" campaigns, radicalised them and their friends and family too. One earlier victim of this approach was Hussein Onyango Obama, the President's grandfather. No wonder the bust's going back, even if Obama and Churchill are family.

Here's an unrelated but telling story about Onyango from Dreams From My Father, and another reminder to listen to the whole book if you haven't done so yet.

Radical failure.

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badgerroll.jpgI listened to Jim Murphy on the Politics Show today, a painful experience as usual, but one which set me thinking about the bank bailouts again. I still believe the Brown/Darling plan, which is simply to keep giving our money to banks and bankers until there's nothing left to give, will fail to meet its stated objective: to refloat the economic system which continues to teeter on the verge of complete collapse. 

Jim's view is that we need to keep on forking out, even at the price of almost any other government spending, and whatever the public reservations about the approach. However gross the failure, the Chancellor should simply roll over on our behalf and have his tummy tickled by the bankers who fill every review and quango going. I think the problem is deeper than he realises, though.

Even if the give-away succeeds, in Labour's own terms, we'd be left with the same flawed system which has led to the current dismal economic, environmental and social circumstances. Surely a time like this should be an opportunity to take one more step back and ask what the banking system should be designed to deliver?

Such a question may be more complicated, for sure, but the outlines seem clear. Banks should provide a safe place for depositors to put their money, and that act should be rewarded. The first of those objectives has only been met over the last year because of government intervention, and the latter is hardly true now interest rates have nearly reached Japanese-style rock bottom.

They should also lend to responsible businesses, enabling them to provide appropriate jobs, products and services, and to responsible individuals, helping them manage their lives better. Instead they used over-leveraged deposits to buy, repackage and resell speculative absurdities, and now they're hardly lending to anyone despite the massive brown envelopes they've received on a regular basis since September 2007.

Clearly, these simple objectives are not met by the existing system, despite the public props under it. Nor were they even properly met in the pre-crash supposedly happy days when only the prescient (yes, Nouriel Roubini has a blog), the permanently pessimistic and the ideologically opposed foresaw any problems coming.

So what should we do instead? The clearest progressive alternative would instead see Government backing individuals, not the banks they've borrowed from, taking shares in people's houses to protect them from repossession and so on. The Treasury should be directly reducing the risks to sensible customers, not hoping the bailout will trickle down to borrowers and depositors.

The rest of the next multi-billion tranche of money destined for the bottomless pit in the city could then be diverted to capitalising a series of new regional banks, and perhaps other specialist financial institutions. Their constitutions could resemble those of the old trustee savings banks, the loss of which has been bemoaned here before. Others could be set up as mutuals, credit unions, et cetera.

These new institutions could be established to put their communities' interests first, be required to lend with a due diligence eye on the long term, to focus on true sustainability, and they could be obliged to account for themselves transparently. Bonuses could be paid for genuine successes and responsible innovations, rather than automatically to the boards who oversee failure.

Before anyone suggests this is mere nationalisation fervour, it would also allow a proper application of market principles. Shares in these new banks could be given per-capita to local residents, a minority stake initially, then the rest could be issued on the same basis. Some of the old banks would be likely to fail, just as they are already, but their staff and their customers would have alternatives to turn to for work, for loans, and for savings accounts. 

The primary losers would be the existing banks' shareholders, and there would be pain to get through, but at least it would ensure that that suffering was for a purpose. The bailout is hardly meeting their needs right now anyway, given that we appear to be trying to pour water into a series of sieves to fill them up.

We need a financial system, true, but it doesn't have to be a replica of the irresponsible system praised by all the other parties in the good times. With this much capital being expended, we could instead lay the ground for a new set of players. Good banks, in short. Doesn't that sound better than taxpayers paying for a "bad bank" and assuming the risk that properly belongs to shareholders?

In short, if the question is stupid, the answer will be too. Even if Brown/Darling/Murphy etc meet their own objectives, it's absolutely certain they will fail to usher in anything more responsible and imaginative. They have missed their chance to be remembered as the midwives to a new system designed to meet the needs of the country rather than the interests of the bankers. Failure is guaranteed.

Watching the egregious Mr Murphy also reminded me of a story from his first days in Westminster in 1997. On arrival he found the place a bit stuffy and rule-bound. After all, until 1998 anyone wishing to raise a point of order had to wear a top hat to do so, and collapsible headgear was laid on just in case.

So Oor Jim took the initiative, and wrote to his 658 colleagues to suggest that he chair a committee to review procedures. Tam Dalyell, who'd been there for thirty-five years, was apparently heard to guffaw at his impertinence. Still, Murphy has learnt how to play the game now, and his properly refined New Labour talking points have replaced his youthful enthusiasm for change.

Oil be damned.

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Thumbnail image for rigdown.jpgAnother round of 1970s documents about oil and nationalism, another round of nationalist frothing about oil and the conniving English. The BBC claims that "between 25 and 30 billion barrels could still be recovered over the next 40 years", which is presumably what the SNP press release claimed. 

To be absolutely clear again, North Sea oil peaked in 1999. There is still oil out there, obviously, but it's becoming harder and more expensive to access. Chris Skrebowski of the Energy Institute set out the situation we find ourselves in in May last year:

"Alex Salmond's predictions are simply wrong. Even with optimistic assumptions about future North Sea oil production, and even if Scotland was allocated all of that production, an independent Scotland would be likely to be a net importer of oil by 2015 or 2016. By that stage, given the global decline in output which has already begun, we will have to buy oil on the open market for two or three times the current price. It's completely fraudulent to suggest that Scotland can just live off its oil wealth now."

An even more pessimistic prognosis was provided by Keith Kohl of Energy & Capital in 2007, who observed that "the expected rate of decline could virtually eliminate oil production in the North Sea over the next five years!", just after the next Scottish election.

The argument about whose oil it is, or whose oil it was, is therefore irrelevant as well as dull. Whether we become independent or not, our future lies in those abundant renewables Scotland has been blessed with. The same would have been true by now even if devolution had been established in the 1970s.

Every minute the SNP spend attacking Whitehall over oil is a waste of time that could be spent making ourselves independent from oil, as is every minute the Labour Party spends defending itself. Get over it and get on with the job.

Not funny.

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Dutch Muslim-baiter Geert Wilders bears more than a passing resemblance to a Harry Enfield character, and even sounds like one, too. In fact, his politics appear to be nothing more than a pathetic rendition of Oi! Muslims! No! 

Portillo's right, though, banning him from entering the country has just given him bigot-cred and a faux civil liberties argument. Better to have ignored him, just like I probably should have. After all, we haven't deported all those BNP activists to Holland.

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About this Archive

This page is a archive of entries in the Westminster category from February 2009.

Westminster: January 2009 is the previous archive.

Westminster: March 2009 is the next archive.