British Politics’s Blog

The ravings of an individual, UK voter frustrated with our politicians

Archive for January 2009

New Labour broadband promise, say something, do nothing

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Well the government is leading the way again, with a promise that we can all have broadband by 2012, with speeds up to a earth shattering 2mbps. Wow, this is likely to be news across the world, isn’t it? Well no, of course not.

But once again this government of spin is making promises way before the detail has been agreed. Such as, how it will be achieved, who will be responsible, who will pay etc. We are told it will be a combination of fibre optics, upgraded copper, mobile and satellite communications. So where is the big story then? Other than the fact that the government has demonstrated a lack of any real ambition. I mean 2mbps, the average in the UK is currently only a measly 3mbps, despite unrealistic promises from Internet service providers to the contrary. But really, everyone knows that technology moves apace, how can this government be taken seriously when all they can promise (as empty as their promises invariably are), is 2mbps by 2012. By then, it is highly probable that the majority of homes will already enjoy speeds of up to 50mbps, in spite of this governments promises, not because of them.

Now admittedly this is just an interim report, but please, what was the point in an announcement? It demonstrates either a complete lack of ambition and/or a failure to understand the subject matter. Reports like this should contain a strategy, numbers, justifications, challenges and so on. Instead, it has just been taken at face value by government ministers and turned into a bit of opportunistic political spin.

Gordon Brown and New Labour have demonstrated, if any further proof was necessary, that not only are they completely out of touch, but that New Labour is the say something, do nothing party when it comes to anything other than spending our money or attacking our civil liberties.

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1929 stock market is history repeating itself

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I read an interesting article over at the political blog Power to the People, about the similarities between the 1929 stock market crash and our current economic situation and I am finding it difficult to fault the parallels. Clearly many of the problems we are experiencing today are similar to those during the 1929 crash, except, as the author points out, back then it was shares and today it is property.

As the author makes clear there were some people in power in 1929 that were rightly concerned about the possibility of the whole pack of cards falling down, but elected to do nothing.

The people of America felt rich, lifestyles improved after the austerity of the first world war and few people raised any doubts, those that did, such as President Hoover, tended to keep it to themselves, rather than be see as the Cassandra.

Surely Gordon Brown knew there were real risks that the property bubble could burst, particularly given the property crash of the 1990’s, he must have been aware that the economy was being fueled by cheap and easy credit and above all, that the massive profits being reported by the banks were not from their high street activities alone. Yet, he chose to do nothing, now he is puffing his chest out and telling us how he is going to save the world. Personally I think that there is something morbid about allowing the same person who threw us in at the deep end to then jump in, ignoring his own culpability and receive backslaps for his vain attempt to save us.

During the 1929 crash, millions of people were destitute, having lost all their saving. Today, with millions of people investing in pensions, the fall in key stocks means that their pensions are worth considerably less than they were 18 months ago. Perhaps by as much as 50%! Those that have saved for their retirement, will be punished with low or non-existent interest rates, resulting in a reduction in their standard of living, even though they may not have been benificiaries of the largesse that caused these problems. Of course, most civil servants do not have to worry about such anomolies, because their final salary schemes are paid out of future income and as such, are guaranteed.

But the lessons of history havent been learnt, as the article goes on to state;

After the 1929 stock market crash, Hoover introduced the Securities & Exchange commision to regulate US markets, this had the desired affect. However, over the past 20 years or so, the rules and regulations have been relaxed, seen as no longer necessary and much of what we witness in the United States today can be attributed to the easing of those regulations. Similarly, the much vaunted deregulation of the City was also a pre-cursor to the problems we all face today. Light regulation and a hand-off approach by government and the regulators has allowed the banks to enter very high risk transactions which many people struggle to understand.

This government has a lot to answer for. Mr Brown promised an end to boom and bust yet, in spite of his promise, we are actually in one of the most dire economic positions ever experienced by this country, even though the warning signs were there all along. They were just conveniently ignored for political expediency and no doubt, because Gordon Brown, whilst basking in the glory of being described as the ‘iron chancellor’ didn’t want to be a party pooper. Shame on him, he was in the best position to know the risks and to do something about them, but he did nothing. In my view he is either incompetent, inept or reckless.

And…I couldn’t agree more with the statement made on this posting…

In my view, government ministers and bankers must be called to account because they have demonstrated what appears to be a reckless disregard for the interests, respectively of the people of this country and the interests of their shareholders.

We must all demand that all those in position of power or responsibility that have played an active part in this economic mess be made to accept responsibility. Further, anyone that has been reckless, irrespective of whether they are in government or commerce, must be brought to book. We, the people will automatically have to pay for any mistakes we have made (as well as those we haven’t), why should politicians and senior business executives get away scott free?

Stop banks from carrying forward losses to offset future profits

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Most analysts forecast that most, if not all of our high street banks will shortly announce record breaking losses, as many re-value their assets and take the write-off’s on the chin. In fact, informed pundits are suggesting that this will continue for another 2-3 years. Well, there is little or nothing we can do about that.

However, any bank that has been in receipt of state aid, support or taxpayer sponsored insurance schemes must not be allowed to benefit from a double whammy. That is to say that, whilst the taxpayers of this country take on much of the risks associated with their recklessness, the banks carry forward these massive losses, to allow them to offset past losses against future profits. That would most certainly rub salt into the wound. Under current taxation rules, business can carry forward past losses, to set against future profits. This concession made sense for most businesses that have a difficult year or two, or those that are in a start-up phase. It should not be used to reward banks and their shareholders, when they have had to rely on a state bailout or support programme to allow them to survive intact.

Government ministers and opposition parties must provide the assurances, here and now, that the banks will not be permitted to carry forward past losses, to offset against future profits where these banks have been in receipt of any state aid. A failure to do this will allow banks and more specifically their shareholders to receive handsome ‘tax free’ rewards at the very time that the taxpayers will being having to accept higher taxes as a direct conseqeunce of the banking crisis and the largesse, or indifference of our government and ministers. This would be completely unacceptable. If the banks were not so integral to our economic well being, they would not have been treated as a ‘special’ case and received such massive state aid. But they are and they have been. MP’s must now undertake to identify the banks as a special case in the future, given the racing certainty that they would, under existing rules, be rewarded with future tax breaks/concessions.

Once we come out of the other end of this recession, taxes will rise and if the past is anything to go by, the public will be expected to pay the lions share through direct and indirect taxation. This country will need banks and industry to pay their fair share. We cannot afford any bank or any business to use 2 or 3 years of losses to offset against the following 2 or 3 years profits. Everyone needs to make a contribution. If business, such as the car industry are in receipt of state aid, then they must also be prevented from offset past losses against future profits, similarly, if these businesses are not registered in the UK for tax purposes, then they must undertake to do so before any taxpayers funds are advanced and for a period beyond, to make sure that taxpayers benefit in the future. Now is the time to be negotiating tough terms and looking ahead in terms of these banks and businesses making a real and tangible contribution in the future. A failure to do so will result in a massive public backlash in the future.

Israel, Gaza conflict affects us all

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I rarely allow myself to comment on world politics principally because I am no expert on local issues and conflicts. However, in the case of the war in the Gaza Strip, I am prepared to make an exception. From the outset, I would make clear that whilst I have read about the principals, I am no expert, but then, neither are the vast majority of other people and therefore, it is likely that they will hold similar, equally uninformed views, whatever their political divide. Therefore, the opinions of the uninitiated must be considered alongside those that can or do claim to fully understand the history.

I have long sympathised with Israel, positioned as it is, in the middle of a hostile area, surrounded by countries that believe they should not be there and one or two, who believe that they have no right to exist at all. Moreover, I have always held that they are right to remain strong within the region and defend themselves against those who would do them, rather than wish them harm. From a personal perspective, I also tend to take a hard-line on any people or organisations that act in an aggressive manner.

That notwithstanding, I firmly believe that any defensive actions should be proportionate. Israel is right to want to defend itself against indiscriminate rockets being fired at their citizens. However, I cannot see the use of rockets, tanks and phosphorousbombs as a measured or proportionate response, particularly when fired into a built up area such as Gaza. Two wrongs do not make a right. It would not have taken a genius to work out that such bombardments in a built up area would inevitably lead to a very large number of civilian casualties, which would include, non-combatants, women and children. Israel is experienced at war and therefore they, more than anyone, would have known that the civilian population of the Gaza Strip would have to pay a very high price as a consequence of Israel’s decision to use bombs and rockets. Yet they embarked on this course of action regardless. To me this is akin to the schoolyard bully that, having been hit with a stone, responds with an AK47 and keeps shooting until the entire schoolyard is cleared and the threat neutralised.

Israel had, at the very least, a moral obligation to consider how their actions would be considered on the world stage. Every day for nearly 3 weeks, people from around the world have witnessed the suffering of the Palestinian people, not soldiers on the battlefield, but women and children in, or close to their own homes. Few people, however removed from the politics, could fail to be touched by their plight, but imagine if you will, how this plays into the hands of those that sympathise with the Palestinians, even if they don’t agree with Hamas tactics. Truth be told, the families of the victims could end up being the “martyrs” or suicide bombers of tomorrow, surely Israel would have known that a high civilian casualty rate could lead to more extremism, not less. And, how does Israel believe this is being played out on the world stage, extremists and sympathisers are going to be very angry at the sight of women and children suffering at the hands of the Israelis. I am not an extremist and no-one would describe me as a pacifist or apologist, but I am angry, very angry. Surely, no-one watching this on their television screens could or would argue that the end justifies the means?

On top of this, the world has been impotent in their attempts to stop the Israelis bombardment of Gaza. As a consequence, weak words, rather than strong condemnation may imply that ‘we’ don’t care. How long before the people of this country or Europe pay the price for the actions of Israel? A constant wringing of hands, a few weak words and a furrowed brow does not deliver the right message to Israel, in fact, we almost look complicit. Had Israel targeted terrorists with ground troops, instead of indiscriminate bombing, I would have understood their aim, but to bomb built up areas which are full of women and children is quite frankly despicable. In doing so, Israel is stirring up a hornets nest and, there is every likelihood that we in the UK will end up, one way or another, paying a price for Israel’s actions.

Invariably, when countries use bombs instead of ground troops, it is to minimise casualties on their own side. In its way, this is completely understandable. However, when it ignores the fact that a disproportionate number of the victims will be non-combatants, women and children, it is to suggest that one innocent life is less valuable than another. How can that sit with anyone? I for one do not believe a Palestinian life is worth more or less than an Israeli one. I recognise Israel’s right to defend itself with, if necessary, pre-emptive action, but I believe it must always be proportionate. However, I would condemn the government of Israel and for that matter, any other country, that would consider such a high percentage of non-combatants, women and children as an acceptable price to pay to eliminate the threat. Particularly when ground troops or special forces could have been used with considerably fewer innocent casualties and arguably, more effect. Governments around the world have, at the very least, a moral obligation to protect innocent people from dying as a direct consequence of their actions.

Only United Nations officials on the ground have had the courage to loudly and universally condemn Israel, not for their motives, but for the consequences of their actions. Our government must do likewise and now, for whilst many people may sympathise with Israel’s plight, Israel has lost a great deal of credibility and support as a direct consequence of their readiness to slaughter innocent women and children in this indiscriminate way. I for one, will never view Israel the same way, for me, they have lost much of the moral high ground. By using this level of force, Israel has condemned the world to a be a less safe place than it was 3 weeks ago and who gave them the right to act, albeit by proxy, in our name?

Written by British Politics

16 January, 2009 at 4:40 pm