British Politics’s Blog

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

Posts Tagged ‘alistair darling

New Labour lies and contempt for the public

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No matter which way you try and paint it, New Labour have lied to the public. This, by virtue of the fact that they gave a commitment in their Manifesto not to raise income tax and then reneged on that promise, without a hint of embarrassment or self-doubt. So, if there was anyone out there that still believed New Labour was a party of honesty and integrity, then they only need to look at the fact that they have deliberately broken a contractual commitment with the public. A business would pay the price in the courts, this discredited government must pay the price at the ballot box, because we can never believe them again.

Alistair Darling is reported to have said, “I want to ensure that people inside this country can aspire to do as well as they can for themselves and their families – people want to ensure that if they do a hard day’s work, they get a reward for it.” Surely the irony of this statement is not lost on Mr Darling, given it was he that introduced a penal rate of tax for those that strive to do better for themselves and succeed. This is a tax on hard work, achievement, success, enterprise and entrepreneurship.

Darling went on to say that those with the “broadest shoulders” should pay more. By this he means anyone earning over £100k who will have been told they will lose their personal allowance incrementally to the point where it was vanish by the time they have earned £113,000 and, those earning over £150k, who will be charged 50% tax on all earnings over that threshold. But, as one commentator has already pointed out and, as Chancellor Mr Darling should know, these people already pay nearly 7 times more tax  (in cash terms) than the average British worker. Surely that means they are already shouldering a larger, if not disproportionate, slice of the £150bn income tax take? If our Chancellor cannot even count, then why on earth is he in such an important position?

No further evidence in need, New Labour now stands for broken promises and it is clear that the party no longer values effort, success or enterprise, instead New Labour see these aspects of human endeavour as something to be punished. New Labour don’t deserve to even be on the ballot box, much less governing this country. If they had any self-respect left, they would call an election now!

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Voters must boot out self-serving MP’s

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Based on recent press reports, it is quite clear that many of the ‘honourable members’ are not as honourable as we every right to expect. When it comes to expenses, it seems that many MP’s see this as a right (as opposed to out of pocket expenses), something they are entitled to claim and money that they must and will use to supplement their income. Of course, when you have a system that has been designed by MP’s and is subsequently sanctioned and voted on by the same people, it is not too difficult to have an expense allowance programme that can be easily milked.

Now, far be it for me to suggest that any of the MP’s that are claiming a second home allowance are corrupt, clearly they are not that stupid, but I can say with virtual certainty, that in the court of public opinion, dipping into public funds in this way is insulting to the taxpayer and far from honourable. As a fellow blogger stated in a recent post, it is not the MP’s that are corrupt, but the system that they introduced and then vote in. Some would argue that there is little or no difference of course. However, those in power seem to be in no particular hurry to do anything about this gravy train. Why would they I hear you cry? Instead, it is proposed that another committee be convened, which will take too long, will doubtless have a limited remit and will almost certainly not judge, but instead, suggest higher salaries in place of the discredited allowance programme.

There are a few and I mean a few, members of parliament that have not been tempted to milk the system, but by and large, it would appear that the majority do. Senior members of the political elite appear to be the worst offenders. As voters, we must not forget that we are being fleeced at a time when we are having to tighten our belts, little wonder that the public finances are in such a state.

I believe every voter has an obligation to establish what their sitting MP has been doing. If they have been milking the system, then we must vote them out, regardless of the party they represent. There can be no place in politics for people that treat the public with such utter and complete contempt. If 61m are to permit just 648 people to represent our interests and create new laws, then trust must be 100%. Anything less is unacceptable. If MP’s cannot be trusted with public money, how on earth can we trust them with our security, well-being, economy, laws, liberty and general well-being.

The people of this country must not limit their sights to a reform of the corrupt series of allowances available to MP’s. We must go much further. What we need is a wholesale reform of the political system that will allow the constituents to boot out MP’s if they fail to deliver, not just the party hierarchy. The people of this country must, once again, take charge.  I am not suggesting anarchy, just that we must make a stand, ensure that our voices are heard loud and clear.  Because, above all, we need a system that allows ‘real’ people to stand for office, not simply those that are selected based on their race, their gender, who they know, who they are related to, which union they worked for, who they went to school with or their public profile.

The public are getting angry…it is time for a change to our political system and politicians of all parties would be well advised to remember that they rule by consent, not as a right. The trust and confidence in politicians is an an all time low, instead of being shame-faced when they are caught out or fail to deliver, politicians are brazen, almost arrogant. Jacqui Smith’s 10,000 Tasers will not have much affect if 61m people start to get restless. This Government and most of our MP’s shepherded us into an economic mess, they were paid to PROTECT our interests and they failed (yes, I know we must also shoulder some of the responsibility), they now risk making another mistake, that is to ignore the will of the people. It will not be so easy to shrug off the effects of a disaffected and angry majority.

Ed Balls recession comments, a slip or planned?

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It is difficult to believe that the comments attributed to Ed Balls, “I think that this is a financial crisis more extreme and more serious than that of the 1930s and we all remember how the politics of that era were shaped by the economy”, was a mistake. Ed Balls is one of Gordon Brown’s closest confidantes and credited with some of the secret briefings to journalists during Tony Blair’s tenure as PM.

As a former key Treasury adviser to Gordon Brown when he was Chancellor, he would have known that his comments would be widely publicised and as an experienced politician, I cannot believe that this was anything other than deliberate. The Governor of the Bank of England has indicated that the economy could shrink by up to 6% this year, unemployment is at 2m, forecasters suggest that this will rise to 3m this year, Sterling is under pressure against all currencies, the expected rise in exports has not materialised…the list goes on.

Now Gordon Brown, having pounded David Cameron for talking down the UK economy and not being one to admit that he is wrong, would hardly have made the announcement himself. So, is it conceivable that Ed Balls was just Gordon Brown’s mouthpiece? After all, it is not like this would be the first time is it?

New Labour has always leaked bad news, they don’t make announcements and what better way than to have a cabinet minister and former Treasury adviser to let this ‘slip’ whilst addressing the party faithful in Yorkshire. Call me a cynic if you will, but this does seem typical of New Labour, drip feed bad news, announce good news with fanfare. Now it is in the public domain, ministers and eventually Gordon Brown, can add a little meat to the bones, temper the news by saying, whilst it will be worse than they forecast, it won’t be like the great depression. That said, a 6% contraction (year on year) of the UK economy would be more than we experienced during the Depression. Convenient that this ‘announcement’ should come a few weeks before Alistair Darling’s update on our economic future.

Did anyone else note that Gordon Brown, I believe for the first time, used the word “Nationalisation” in a response to David Cameron at PMQ’s? What happened to “public ownership”, is Mr Brown slowly inching towards Old Labour?

The folly of a reduction in VAT

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Suggestions by so called experts and hints by Gordon Brown that the proposed tax reductions will take the form of a VAT reduction will be a complete waste of time. Whilst I accept that Gordon Brown may want to adopt his usual smoke and mirrors approach to how much a tax cut is worth, no-one will believe him, with some justification. A cut in VAT is a reduction in a consumption tax, this will not make people feel as if they have more money in their pocket, instead, they will just feel that their money goes a little further on some vatable items, which excludes groceries, utility bills etc.

By way of an example, a £50 item with VAT charged at 12.5% instead of the current 17.5% would see a reduction of just £2.50, assuming that retailers and traders do not use the opportunity to shore up their own margins. Would this be enough to get people into the high streets spending their money, I think not? Retailers are giving far more away in so called special offers. But from Gordon Brown’s perspective, he can hail it as a massive giveaway, given he is prone to use an over simplistic, almost child-like set of sums, that allows him to maximise the value of a tax breaks, even in the full knowledge that the impact on government finances would be a fraction of the number made public. We have seen this time and again in his budget speeches, anyone remember the 10p tax debacle?

If any package is going to work, then the public need to know that they have more money in their pocket, it would be a hard sell in the current climate to convince people that their money will simply go further. In addition, this is one of those occasions when Gordon Brown must not try and bulls**t the public, nor should be tinker with taxes, it needs to be a bold and dramatic cut in direct taxation, something in the order of a 5% reduction in direct taxes. Anything less is doomed to failure and as anyone with half an ounce of commonsense knows, a delay in a period of such a significant loss of confidence and economic downturn will lead to a prolonged recession or require a much larger cut in the future.

Much is being said about how to pay for the tax cuts. Well there are any number of government projects and initiatives that could be curtailed or cancelled which need not affect education or health services, a good start would be to look at the vast sums being spent on information technology projects, with highly questionable returns. That notwithstanding, the government has no choice, they must give the economy a boost, irrespective of what it does to the short-term finances of this country, one thing is for sure, other developed countries will, in spite of Gordon Brown’s suggestions, not because of them.

However, the government must not stop at personal taxation, they also need to look carefully at small business. This sector has been severely affected by the downturn, in terms of less business, slower payers and bad debt provisions. Given the SME sector employs some 12.5m people, it is self-evident that many will be struggling given the tax on employment (NI) and tax on business (business rates) that the government use to punish enterprise. They will need a package of measures which includes, but should not be limited to, a reduction in business rates and the reversal of employers NI contributions for those that employ 10 people or less. Given many will struggle to make a profit, there is little point, at this stage, in reducing corporation tax, although is has to be said that Brown’s recent increases in corporation tax for small business, does not encourage entrepreneurship, so much for being business friendly.

David Cameron is due to provide his suggestions for tax cuts today, but given he is not in government, I doubt that will make much difference to our everyday lives.

Bank auditors should also be held responsible

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I find it difficult to disagree with anything stated in this article from Power to the People, which I have reproduced in case anyone has missed it. The reality is, auditors do have a major responsibility to shareholder’s, who rely on their reports being objective and searching, surely the auditors can’t claim that they cannot he held liable for the fact that they have missed completely or failed to understand the risks involved with the strategy employed by some banking and financial institutions. I feel sure some ‘auditor’ will come in at some stage, in defence of his profession and I look forward to the response, assuming he or she is not too busy dealing with company administrations and liquidations!

At the moment one day pretty much blends into another, but on one of the evening news programmes this week, another fat cat, fee-earner had the temerity to say, when questioned, that auditors had played no part in the financial mire that is the bane of every UK taxpayer. I have to admit, that I wanted to throw something at him, because I have been arguing for weeks that the auditors have failed in their duty to the shareholders and worst still, shall be one of the few ’industries’ that will make money out of this fiasco, through company administrations, receivership’s, consultancy fees and so on.

Lets look at the generally accepted definition of a Finance Audit:
The process of verifying a company’s financial information. Auditors are certified public accountants who are independent of the corporation. An auditor examines a company’s accounting books and records in order to determine whether the company is following appropriate account procedures. An auditor issues an opinion in a report that says whether the financial statements present fairly the company’s financial position and its operational results in accordance with Generally Accepted Accounting Principles (GAAP).

And here is a common definition of an Auditor
Auditor is the person appointed to conduct an examination of the records, to form an opinion about the authenticity and correctness of such records, by verifying the correctness and reliability of the recorded transactions from the evidences available, opinion and inference reachable based on his expertise.

Most, if not all, stock market listed companies in this country and, for that matter, around the world, use the services of one of the so called ‘Big Four’ accountancy firms. These big firms charge huge sums for their audits, often running into £millions, and the audit teams are lead by high ranking ‘fee earners’. In other words, as the businesses, banks and financial institutions they audited expanded, so have the fees earned by the auditors and yet, not one audit firm appears to have asked any questions about what is now being described as “questionable accounting” practices within the financial services and banking sectors.

For example, do we know of any audit firm that qualified a set of accounts within the banking sector because of the heavy reliance on a particular financial model, such as in the case of Northern Rock? Has an audit firm raised any prior concern over the way that ‘bundled’ mortgage debt was traded, sold and then re-sold, with each party taking a profit or commission, without really knowing the risks or true value of the asset.

You would think that after Enron and Worldcom, auditors would be even more cautious, especially given investors and business people alike, will have increasingly come to rely on the expertise and the independence of the auditors before they make financial investment decisions related to the company being audited. It is absolutely essential that the audits of company’s that rely on external investors for funding are wide-ranging, thorough and probing, a failure to do this and ask questions, is, in my impinion a dereliction of the auditors responsibility to the shareholders. If an audit is not indepependent, or in-depth, why on earth do so many companies pay so much money out every year for their audits?

I personally believe that, when the investigation begins, as it surely will, the part played by company auditors also needs investigating. Given they will be the only party to have profited in the ‘boom’ as well as profited out of the ‘bust’, yet they were also the only party, other that the regulatory authorities, that had a duty to ensure that they reported the facts, discovered questionable practices and reported their findings in an open, direct and a frank manner. I do not say that any of these accountancy firms are culpable, because I would have nothing to back this up with (other than logic of course), but I can say that, I believe they have failed, for the most part, in their duty to appropriately and competently assess the risks associated with some of the more questionable practices adopted by the banking and financial industries.

I also believe that shareholders that have lost money should consider individual or class actions against any audit firms that are left wanting in this current mess. For them to be preening themselves in front of the cameras, whilst rubbing their hands with glee, behind the scenes, is stomach churning. If there job was not to highlight risks, operating and reporting practices, asset values and profit claims, what on earth were they charging such massive audit fees for? The Audit Firms must not be allowed to extract themselves from any form of responsibility whilst the rest of us are left to pick up the tab and the pieces of what is left.

Article Source: Power to the People

Bradford & Bingley nationalisation, is it a good deal?

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As I have said, not for the first time, I am no financial expert, but I am a little confused about the ‘part nationalisation’and ‘part sell-off’ of the Bradford & Bingley deal. I accept that there is probably still more detail to come about, but from the little that is available, I find myself wondering, whether the government, on behalf of the hard-pressed taxpayers of this country, worked out a good deal.

In the past, building societies received deposits, in order that they could then use that money to offer mortgages and loans to others. The saver would receive interest on their money, the mortgage payer would pay interest on their borrowings and the building society would take a commission in return for the introduction and managing of the arrangement. Although this model has been turned on its head, with the wholesale trading of these mortgages, the principle should still be sound.

Therefore, if the government have taken on all of the mortgage debt of the Bradford & Bingley, estimated to be some £50bn, why not retain the deposits as well? Instead, they “sell”, the ambitious Spanish conglomerate, Santander, some £20bn of saver deposits (2.7 million people), for the miserly some of £612m. How can this be a good deal for the taxpayer? How can the government be so sure that the savers interests are protected, given we don’t really know that much about Santander. In fact, if the government were responsible for the sale of these customer deposits and something were to happen to Santander, would the government be culpable or liable, given it was they who negotiated the deal?

This particular arrangement can’t be good for the employees either, because Bradford & Bingley employed some 3,000 people and operated 197 branches. Does anyone imagine that a foreign owned bank, will give a toss about these employees? No, from what I can see, the UK government has passed over the profitable side of Bradford & Bingley to the Spanish owned bank ‘Abbey’, whilst leaving the British taxpayer exposed with just the bad mortgage debt. What was the point in getting rid of depositors money which has traditionally been used to offset mortgages? Looks like a very poorly thought out deal to me and somebody needs to explain why? Santander must be rubbing their hands with glee at the at the apparent naivety of the UK government.

I would not normally be a supporter of nationalisation, although in this case, as in the case of Northern Rock, there was probably no palatable alternative. However, I do believe that the government is responsible for driving home a decent deal for the taxpayers, they have a duty of care to the public purse and a responsibility to the taxpayer. No matter how urgent the problem, they should not lose sight of this. Yet here, from what I can see and perhaps against the views of many other observers, I fail to see how anyone, other than Santander would be considered to a be a winner.

OECD UK Recession Warning and the future for MPs

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The OECD have now confirmed what everyone else in the UK could ‘feel’, but our own government was keen to deny, that the UK is about to enter a recession. Darling and Brown simply had to know the truth and it is unforgivable that they could not be straight with the electorate, many of whom, entrusted New Labour with the future of our economy. That abuse of trust is shameful.

Instead of worrying about our economic situation, all Gordon Brown seems to be concerned with is his future as leader, instead of worrying about the people of this country, all New Labour seem to be concerned with is whether they can retain their seats. They are all spending so much time looking inward, for self-interest, that they are ignoring what is happening in the outside world, or more specifically, in the UK.

Contrary to Gordon Brown’s assertions, the UK’s fundamentals are not strong, in fact, it takes the highly respected OECD to tell us that the UK is in trouble. However, not only is the UK economy predicted to shrink in the next two quarters, but the UK is also the only economy not expected to see a recovery this year. The OECD said that Britain would fare worst amongst the Group of Seven leading economies. This is in spite of the assurances from Gordon Brown who has regularly claimed that the UK is the best performer among the G7, which includes Canada, France, Germany, Italy, Japan and the United States. The OECD expects the UK to grow by 1.4% in 2009, against the government forecasts of 2.5%. Okay this government has missed most of it’s previous growth targets, not something they brag about, but in the current climate, wishful thinking is not appropriate. There is also a prediction of some 200,000 people being added to the jobless total, which is already at a record high when you consdier that thatere are estimated to be some 2.5m on some form of long term disability.

The OECD have even given some of the reasons behind our weak position, most noteably that the Government’s policy of spend and borrow has left this country ill-equipped to deal with this economic slump. Interesting, that the average man in the street could see this wasn’t sustainable, but our elected officials could not, or perhaps, would not. The truth is Gordon Brown, as chancellor, borrowed in a boom, leaving us with the largest budget deficit of any industrial economy. Now we are all going to have to pay the price.

Aside from the fact that New Labour, as guardians of our economy, should have been able to predict much (not all) of what is happening and tightened their fiscal belts, what is most disappointing is the other parties. The opposition parties are keen to criticise, but if they want to show that they are fit for government, then they should tell us what they would do. It doesn’t matter if New Labour steal their ideas, it is the well-being of our country that matters and the electorate will know who came up with the answers and demonstrated true leadership skills when we needed them most.

David Cameron and the conservative party are running scared, they are shouting from the sidelines, rather than getting stuck in. In other words, they are basking in the failures of this government, they are gloating, but, above all they are failing to demonstrate that they could do any better. There is no time like the present, for Cameron and the conservative party to show their mettle, air their policies, demonstrate their competence for government and show leadership under pressure. If Cameron cannot see that this is his chance, then he does not deserve the highest office in this country. If he continues to say nothing of any value or substance, then we are entitled to believe that he doesn’t know what to do and therefore, he and his party would be no better.

New Labour in general and Gordon Brown in particular have lost all credibility in terms of economic confidence and they have long lost the integrity that is essential to govern long term. This is not helped by the fact that they have patently denied any personal, or policy culpability, electing to blame everything on other factors such as the credit crunch and oil prices. We know that it had as much to do with this governments policy of spend, tax, borrow and spend, leaving nothing in the kitty for a boom period. 

Cameron on the other hand is demonstrating a lack of courage, an absence of policies or ideas, poor judgement in a time of trouble and little depth or gravitas. Charm and fancy words simply do not wash at a time like this. Cameron and the conservative party are so worried about getting it wrong, they have been paralysed with fear. We expect far, far more from the conservative party, which in the past has invariably been the principal bastions for economic competence, but under the leadership of Cameron, they seem to lack bottle, confidence and spirit.

In fact, if we look around, never has this country been so poorly served by its members of parliament. Most of our MP’s are more interested in playing up to the cameras and preening their feathers with statements to, and interviews with, the press, the editors of which, in turn, attempt to set the policy agenda and influence public opinion. Never before have we all felt so removed from our politician’s, who don’t talk like us, act like or or think like us. Our whole electoral system needs a good shake up, no longer should we be represented by career politicians who have rarely held down a proper job, no longer should we be represented by union activists who, however they may try and convince you otherwise, have little in common with the public. We need a system where real people, those with life experiences, families, mortgages, business experience and integrity, can be elected to represent us. In other words, people that look like us, act like us and speak like us.

All too often, as our elected MP’s enter parliament, they immediately go native. Corrupted by power, position and prestige. They forget why they were put there and start to believe that they are ‘different’ from the rest of us. For the most part, our MP’s are just good salespeople, yet once they are put to the test, they appear superficial. What we need is depth, all parties, but particularly the conservatives, should be selecting their candidates based not on gender or race, but whether or not they can make a contribution to society, to government. Not based on whether or not they went to school with them, but based on life experience, how grounded they are and whether they are likely to be seduced by membership of this exclusive club called parliament.

The British people are no longer as politically naive as they were in the past. The Internet means that they can communicate more easily with like minded people, no matter where they reside in the UK. They are more vocal than they have been in the past and they have more information at their fingertips than they have had in past decades. By comparison, parliament is firmly rooted in the past, it is crusty, old fashioned and inward looking. Newly elected members should be looking to modernise parliament, not simply fall in line, they should be looking to use their time in office to pass more control back to the people, rather than entrenching their grand and priveledged positions, by gaining more and yet more state control. Most importantly of all, they should be listening to their trustees, the people that elected them. Placing the electorates’ interest’s first, before their own and before that of the party.

This recession is likely to be different to previous ones. Not because of the suddenness, not because of the depth, or the expected duration, not because our government has lied to us about our true economic position. But because, this time, there is a very real risk that the groundswell of public opinion will not only impact on the government, but also on the lacklustre opposition, and the weak ‘other’ parties. If people have time on their hands due to lack of employment, an easy method of communicating with like-minded people and a desire to see change, we could well see another, formidable political party formed, this time with real people, who have genuine feel for what needs to be done, the energy and the desire to be part of this change and above all, new ideas and a commitment to follow them though.

Political parties take note, members of parliament take note, the public have had enough of micromanagement, of state control, of tax and spend government, of mortgaging our future through uncontrolled borrowing, of manipulating the figures to make things look better than they actually are, of being treated like fools, of lies, of ever rising taxes and above all, of you! In this time of need, we still have an overseas aid budget of £5bn, yes, £5bn, when there is a very real prospect that some of our pensioners will have to choose between heating and eating to use that over used, but insightful term. Where are our priorities?

Opposition parties take note, you need to stop gloating while the people of this country are suffering, you need to stop looking so weak, when we need strength, you need to demonstrate the courage of your convictions, to show us what you would do to make things better. You need to show your true colours (if you haven’t already). Above all you need to lead by example, be confident and at the same time remain grounded and in touch with the people that matter.

Imagine what would happen if the people of this country decided to vote, not for the principle 3 parties, but independents? If we have nothing to lose, this could happen. Yes it would be chaos, but it could be a precursor to a new political force, one that included the voters, rather than career politicians, then the boot would be on the other foot. Just 650 people rule 65m people, this is by consent, not as an automatic right. Our colonial past demonstrates only too clearly what happens when so called leaders consistently let down the people, when they are removed, remote or aloof from the mood of the public and when our leaders start to think they are better than everyone else.

In the UK is will not be a military coup, it won’t be a work to rule, it will be through the ballot box. Once the public recognise that it is possible to make a stand, buy choosing not to elect anyone from the main three political parties, then there will have to be change. When we, your trustees, have little to lose, expect the unexpected. Members of Parliament, you have been warned!

 

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