Though Cowards Flinch

This is what the employment minister said:

“What’s happened in the last week is we’ve got a lot of companies who are very jumping, they’re coming under pressure from a big internet campaign that is being run by an organisation that is a front for the socialist workers party.

“Now the high street retail sector is going through a tough time at the moment. If you’re running a company and you’re getting streams of e-mails attacking you it’s very unsettling. It’s a false campaign.

“Let me give you an example, my own e-mail address was hacked by this organisation and used to lodge a complaint with Tesco so I don’t accept the scale of the campaign is very large. It’s a small number of activists who are deliberately targeting these companies and are trying to destabilised them.”

The SWP wouldn’t know a computer from a hobby horse. I remember a time when they were reluctant to have a website, then a Twitter account, the thought of them hacking computers is laughable.

Their aggressive campaigns are born of newspaper selling, they spend most of their time making placards for the campaigns they stick their noses in, and the chances of anything technical happening at their annual meetings is zilch.

But then Grayling is clearly talking out his hat, too. It makes you wonder, when he says socialist workers’ party, does he mean to say just socialists. Is a McCarthyite revival really necessary?

Anyway he has backtracked now. Huffpo put it:

The employment minister Chris Grayling has had to backtrack on claims that his email had been hacked by campaigners against a Government work experience scheme, which is continuing to attract controversy.

We’ll nip the politics of Joe in the bud now, and I can get back to not sympathising with the SWP post-haste.

I am currently reading a book called Changing Fortunes by Stephen Jenkins and one of the main findings in the book notes that around one fifth of the UK population are poor at any one time – that’s the same as in Saudi Arabia.

(The figure confirms, though, that this is a static figure – see here)

But due to poverty dynamics in the UK, and bearing in mind tax-benefit changes since 1991, many more people are “touched” by poverty, though quickly enter out of it. On the plus side, persistent poverty is felt by very few and its prevalence has been felt less over time due to those tax changes.

Whether this result has been made in accordance to rising cost of living, I’m yet to find out. But it is quite an interesting picture – not, however, without its problems (pertaining to income mobility, excluding reference to wages, earnings or wealth).

What, of course, it does suggest is that government intervention to tax changes, namely in the form of tax credits, has helped many from falling into poverty. The welfare system does work, but the fact that one fifth of the population are poor at any one time shows us there is plenty more to be done.

Sign the petition

From January 2001, the rate of VAT for eligible sanitary protection products was lowered from the full rate of 17.5% to the “reduced rate” of 5%. Now we must pick up the campaign to see all sanitary products (including sanitary towels; sanitary pads; panty liners; tampons; keepers and maternity pads) be reduced to the zero rate (0%) alongside most food items, books, newspapers, magazines and children’s clothes.

They are very necessary items and rates on them disproportionately hit women the most. Some common sense on behalf of the government is needed.

Sign it

During the middle of last year, Washington Post columnist Ezra Klein noted that rather than beating around the bush, he would call “what we’re in [now, in the US] a “household-debt crisis,” or something more elegant that gets the same idea across”.

The reason being that household debt to GDP ratio are dangerously high, banks aren’t lending, people aren’t spending, businesses aren’t growing, jobs aren’t being created and recession is giving us a sarcastic wink.

Perhaps as daunting is the growth industry of alternative lenders. What kind of household debt crisis awaits us if spending is only supported by rapid increases in borrowing from high-cost lenders, in a country where there is no law as yet to stop people borrowing over and over again, or borrowing to service other debts (roll over loans in other words).

Remembering the OBR’s forecast for household borrowing and debt, which show this rising from 160% of income last year to 173% by 2015, and prompted by being told by one Labour politician that the next economic crisis in this country will be one caused by household debt, I asked some economists and economy commentators their opinion on what they thought.

As this is research for something else I’ll leave names out, but one academic economist told me, bluntly, no. The reality, for them is:

levels of secured and unsecured borrowing are falling in nominal and real terms … the personal insolvency rate is falling … [and] the OBR’s projections appear too high

Contrary to that, the economics editor for a leading newspaper told me potentially yes. Aside from low interest rates acting as a mask for the real debt problem:

there has been little reduction in the level of household debt since the crisis started

He told me what potential damage there would be if the Bank of England pushed up interest rates back up to normal levels.

The Consumer Credit Counselling Service identified last year 6.2 million “financially vulnerable” households, 3.2 million of which “are already either three months behind with a debt payment or subject to some form of debt action,” and on top of that unemployment is rising fast.

Utilities are costing us more and our wages are not reflecting the increasing cost of living. When David Cameron asked us to pay back our debts, rather than doing as he says, we are doing as he is doing and staying in debt at the expense of some rather hideous economic policies.

Something exploding in household debt is clearly plausible. But depending on your definition of household debt crisis we could be experiencing one now. Or, indeed, OBR could have projected too high, too soon last year for 2014-15 and the whole thing could be fuss for nothing.

What do you think?

On 5th January Cameron visited a hospital, decided it would be a good tactics to be outraged about standards of nursing care, and announced the establishment of a Nursing & Care Quality Forum.

I care a lot about standards of care, so I have followed developments. 

First, the health minister told us that the Forum will ”“not be made up of the great and the good, but is actually being made up of frontline staff”.

Then, we were told by the Chief Nursing Officer that “the first meeting of the forum will take place in late February”.

So I asked the Department of Health who was actually going to make up the forum, given that it is due to meet very soon.  A press officer told me:

We will be announcing the membership of the forum in the coming weeks.

I have a legitimate interest in who is going to sit on this forum, not least because Cameron has already sought to politicize it by ordering, from a position of total ignorance, that nurses must organise their work in a very particular way; as I set out in detail here, the jury remains out on whether the “intentional rounding” Cameron is so impressed by will actually be beneficial to patient care in the long run, and it is the height of irresponsibility to seek to impose it in this way.

Why, then, can the Department of Health give me no information on who will sit on this forum?  What are they trying to hide?

In a busy few days of news, you could be forgiven for having missed this from PIRC:

PIRC research last year identified that at least £1.4bn of deferred bonuses payable were not carried as a liability or disclosed by Barclays in respect of 2010 and previous years. Barclays said that it was nevertheless complying with international accounting standards (IFRS) under which a liability to employees does not count as a liability.

That was contrary to the requirement of Section 411 of the Companies Act which requires amounts paid and payable to employees be disclosed, independently of whether IFRS or UK GAAP was used. It then became clear that this problem was common with other banks.

With today’s figures Barclays is now disclosing amounts payable in accordance with Section 411, even though it is not adjusting its profits or balance sheet for this. This reveals:

• The amount missing in 2010 was in fact £1.7bn, higher than PIRC’s estimate.
• For 2011 the missing sum is now £2.0bn.

That is, while Barclays are this year just about complying with company law by admitting to the £2bn liability in the notes to their accounts (page 33, Performance Management section), they deliberately omit these liabilities from their overall profit figure.

If these bonus liablilities are taken into account, and other IFRS quirks are ironed out, PIRC calculates that:

Barclays true profit for 2011 is only £2,914m, not the £5,879m IFRS number, nor the group’s own “adjusted” number of £5,590m.

This is important because the bonuses being paid out to Barclay’s investment bankers this year have been based on what now appears to be an over-inflated profits announcement.

Thanks to PIRC, Bob Diamond has a little more explaining to do.

Mehdi Hasan, I once said in a blog post, can say whatever he wants about how difficult it would be to operate a military intervention in Syria, but we know deep down his principles are unmovable – he is against western intervention whatever the circumstances, and that can never change. A deeply disturbing thesis.

In a piece for the Guardian last year he said:

There is no call for [foreign military intervention] by opposition leaders, a NFZ would be of little value as Assad is operating with use of small clans on the ground, and a carpet bombing campaign would not help the opposition.

The trouble is, a pro-intervention Michael Weiss, for the Henry Jackson Society, says exactly the same thing.

It would be extremely difficult given the lack of a safe zone, particularly now given the retaliation of Assad’s regime over Zabadani. It has to be said that while opinion is changing, perceptions of foreign intervention by Syrian rebels is split – this is a problem.

All this is fine, and Hasan can write about this until he is blue in the face, but a fact remains the same for him – in his own words - “The sad truth is, it is not our job to topple Assad.”

So no matter how long he spends on looking at the operational difficulties a coalition of willing nations would have, it’s all for nothing, since his first principles override reason.

Before, on my part, this was an accusation. But now he admits as such. He is romantically against western intervention because it doesn’t sit well with him.

In a new article, for the New Statesman, he writes:

Whether we like it or not, it is incumbent upon those of us who are instinctively opposed to western military interventions in the Middle East to answer the question: what would you do to stop Assad?

Let me tell you, Mehdi, when on the coalface, instinct is often all you have, but when you live the cosseted life of a second-rate commentator, shaping opinion for the rest of us, perhaps instinct is the very last thing you should appeal to.

The concerns he spells out are no different from those of us who are, albeit cautiously, pro-intervention. But one thing divides us from him: namely, that we listen to the people in Syria and the best information that leaves that country and enters ours. Further still, reason.

He has sacrificed these for simple instinct. On the Middle East, I honestly fail to see why he is listened to at all by anyone other than those on the fringes.

Duncan Weldon has a piece up at Touchstone debunking the ongoing Tory pretence that the UK has low debt interest payment rates because of its economic policies. He quotes Bloomberg:

Chancellor of the Exchequer George Osborne’s pledge  to eliminate the budget deficit isn’t the main reason U.K. government-bond  yields are at record lows, say most analysts in a Bloomberg survey.

The Bank of England’s quantitative-easing program,  which has so far purchased a quarter of outstanding gilts, was identified as  the single biggest cause by a third of 27 economists polled. Just over a  quarter said investors fleeing other European bonds were driving U.K. rates  lower, while 22 percent said Osborne’s plan was the main reason.

The ‘safe haven’ cause is the one backed in Casenove Capital Management’s latest (to Dec 2011) analysis of its own performance, sent out to the owners of the funds it manages:

Heightened anxiety caused government bond yields to fall substantially during 2011.  The UK, the US and Germany continued to be viewed as safe havens, with 10-year yields falling to 1.96%, 1.81% and 1.83% respectively. The difference between equity and bond yields is a clear reflection of investors’ risk aversion. 

That was the picture as of December (the 1.96% low on UK bonds was reached on 29th December).  So it’s interesting to see what Matthew Vincent has to say in the FT about the latest position:

Vincent goes on to say that the switch to equities may be short-lived, especially with the ever-present possibility of chaos as a result of “events in Greece.” 

If we do see a sustained movement to equities over the next month or two, however, a concomitant rise in the UK bond yield would provide pretty good empirical evidence that Osborne has indeed been talking total bollox about the reason why they are currently so low.  (The yield on 10 year UK Bonds had already increased by 0.25% since the start of February to 2.23% at close on Friday.)

If yields do rise, it will be important for those critical of Osbornomics not to try to have their cake and eat it too, by blaming any rise in borrowing costs on UK economic policy, at least in the short term.  While Osborne is clearly lying about why rates are currently low as a justification for his continued austerity madness, proper economists should stick with the pretty obvious conclusion that – the effects of QE aside – what rate the UK bond rate continues to depend how much of a mess the rest of the world the big investors think the world is in.

Martine Aubry, a big player in Francois Hollande’s presidential campaign, gave a newspaper interview yesterday.  It marked a real step forward for the campaign, but I hope it will also embolden the British Labour party.

Central to the interview is Aubry’s attack on Sarkozy’s scapegoating strategy:

Avec son interview au Figaro Magazine, M. Sarkozy commence sa campagne de 2012 comme il a gouverné depuis 2007: en voulant désigner des boucs émissaires - les chômeurs, les étrangers, les homosexuels, les professeurs, la gauche…- qui seraient les responsables de tous les maux du pays. Une nouvelle fois, il cherche à diviser les Français au lieu de les rassembler.

[Trans:  With his interview in Le Figaro, Sarkozy begins his 2012 campaign as he has governed since 2007: by creating scapegoats - the unemployed, foreigners, gays, teachers, the left - whom he would have us believe are responsible for all that is wrong with the country.  Once again, he seeks to divide the French people instead of bringing them together].

Sarkozy’s interview in Le Figaro (a key rightwing newspaper) does indeed reflect a lurch for the dog whistle, as he tries to shore up his vote against Le Pen’s Front National, which may not yet be surging but certainly isn’t retreating as a threat to Sarkozy even making the second round (assuming Le Pen makes it onto the ballot paper with the 500 nominations she needs).  His suggestion that allowing immigrants from outside the EU to vote would result in “des cantines scolaires hallal” (Halal school canteens) all over France, for example, gives us a pretty good indication of the votes he’s pitching for.

The Sarkozy interview is also notable for the quite bizarre idea that if re-elected he might put vocational education (formation professionelle) policy to a full referendum, and when the interviewer then follows up with two questions about whether other matters would need a referendum, it feels as though he’s mocking Sarkozy.  It’s so odd a move that even the Daily Mail has noticed.

Sarkozy may be getting desperate already, so it can be argued that it’s all easy enough for the Hollande campaign team, and that they can well afford (and need) to court the leftwing vote even at the expense of the few that might go missing as a result of their approach.   Even so, it’s good to see  Aubry, on Hollande’s behalf, calling out Sarkozy so directly on his scapegoating strategy. 

From a British left perspective, there is inevitably a sense of regret that the Parliamentary Labour Party lacks the confidence, as yet, to speak out firmly on the right side of the argument.  As I said back in July:

If Labour keeps on trying to scare the shit out people on things like crime and immigration, as a way of getting Labour votes, it’s making a big mistake; it’s really just doing the Tories’ job for them*.

Hopefully, as Hollande maintains his lead and goes on to become President, Miliband and team will learn that constant rightwards triangulation is less effective as a route to electoral success than doing the right thing.

*George Monbiot made much the same point  last week, claiming that only he and Charlie Brooker had realised what was going on (perhaps he’s just not reading the right blogs):

Confronted with mass discontent, the once-progressive major parties, as Thomas Frank laments in his latest book Pity the Billionaire, triangulate and accommodate, hesitate and prevaricate, muzzled by what he calls “terminal niceness”. They fail to produce a coherent analysis of what has gone wrong and why, or to make an uncluttered case for social justice, redistribution and regulation. The conceptual stupidities of conservatism are matched by the strategic stupidities of liberalism.

I went to go and see Maurice Glasman give a talk last night on the inevitability of community politics, and what the state – and especially one facilitated by the Labour party – can do to help it.

I’ve written about it here.

It was slightly more detailed than the argument of how a central body can legislate for and fund something that is, essentially, bottom-up – you remember, the sum total of the boring “mutual moment” argument – but that wasn’t really what interested the journalists present.

An ITN reporter asked Lord Glasman did he feel Ed Miliband was leading yet. She was referring to *that* New Statesman article where he said, of the Labour leader:

he has not broken through. He has flickered rather than shone, nudged not led. It is time for him to bring the gifts that only he can bring. He should leave behind stale orthodoxies and trust his instinct that change is essential. He must show the kind of courage needed to steer the ship of state through uncharted waters. Now is the time for leadership and action. So far Ed has honoured his responsibilities but has not exerted his power. It is time that he did so.

So, 6 weeks into 2012, does Glasman think Ed is leading yet?

Short answer is yes. Glasman said he  is “really pleased with how it’s going” and that actually he was “a bit surprised by how much leadership Ed has shown”.

In the Statesman article, Glasman also pointed out that Labour, under Ed, ”show no signs of winning” the economic argument.

Does Glasman think that now? No, he says that Ed’s predator/producer intervention will really take off this year, and on the economic argument Ed is leading the way.

No matter that in November Jim Pickard for the FT pointed out, in a blog post entitled “Chuka Umunna tones down the producer-predator rhetoric“, that:

I’m now told that senior Labour figures are not using the words “producer” or “predator” anymore; instead the done thing is to criticise companies when they behave in “predatory” ways and praise them when they act constructively.

Bottom line: Maurice Glasman backs Ed again. Well, to be honest, he always did. In fact *that* New Statesman article ends with Glasman saying “I’m backing Ed Miliband.”

No changes, then.