British Politics’s Blog

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

Posts Tagged ‘Recession

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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David Cameron, we are listening!

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Okay, okay Mr Cameron, has got our attention, but precisely what is it he wants to say? The majority of the public know that, whatever Gordon Brown says, at some stage we will have to ‘cut our cloth’ in the form of a meaningful reduction in public spending. Moreover, we know that this must be sooner rather than later, otherwise we are all going to face some very hefty tax increases. However, no matter how eloquent David Cameron is on the podium, he must tell us what his plans are if we were to entrust his party with our votes.

Cameron is right to make clear that Conservarive Ministers would be judged on what they deliver, not who they know or how chummy they are with the press. Ministers will be required to deliver more for less, its not that difficult of course, the private sector has been doing it for years. Similarly, civil servants will be held to account, they too will have to deliver results. But, this is okay for a ‘vision’, but contrary to what Cameron thinks, this is NOT a plan and that is what we are all waiting for.

On Channel 4 news on Sunday, William Hague stated that the public do not want detailed policies from the Conservatibes, instead, he argued, we just want the vision. I would like to know who the hell he has been talking to, because everyone I know and talk to say that they want meat on the bones. David Cameron needs to understand that he is at serious risk of becoming yesterday’s man, because he is too frightened to tell us what his plans are. One thing is for certain, he does have some sort of plan, he just doesn’t want to share it with us….yet! However he is missing the point, as well as a golden opportunity. He has the public attention, now he must now use this fact to turn empty rhetoric into a deliverable action plan and then sell it to us. But why won’t he?

This is a missed opportunity and the biggest challenge he now faces is, we are all getting tired of being stalled, of waiting for that golden nugget that demonstrates in clear terms that his team is the one that should be trusted with our futures and votes. If he doesn’t move quickly, I suspect that he will start to lose the momentum he has gained, people will start to believe that he is unsure of himself, lacks confidence and self-belief and if that happens, no matter how far ahead in the polls he is, the Conservative party will lose. Few people want another week, much less another term of this pathetic New Labour government, however, we cannot afford to risk our futures with a party that lacks confidence, depth or ideas. Enough stalling Mr Cameron, tell us what you are going to do if, or when, we trust you enough to vote for your party.

Tony McNulty and an expense claim too far

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I am angry with Tony McNulty, because, although I disagree with most of his party’s policies, I always considered him to be sincere and committed to the policies adopted by New Labour. He was believable and one of the few ministers who could hold his own when challenged by the likes of Jon Snow’s  on the Channel 4 News programme, without sulking. Therefore, to find out that he was one of the members of parliament exploiting the rules related to second home allowances (which was designed to cover rent, mortgage interest payments or hotel expenses) was a great personal disappointment. I do not suggest that McNulty has done anything in contravention of the rules or regulations, but to claim as much as £60k in expenses for a home his parents live in, when it is just a few miles from his home, is truly stretching what could be termed, at least in my judgement, reasonable.

Members of Parliament are supposed to set an example to the rest of us, they are in a privileged position and as such, we are entitled to expect the very highest standards from those who are elected to serve the people. By and large, MP’s tend to vote and decide on their own salaries, perks, pensions and expenses, therefore is it essential that they are seen not to put self-interest first. It is quite clear, to anyone with half a brain cell, that second home allowances were intended to assist those MP’s who lived in their constituency and needed to cover their additional costs in terms of travelling or overnight accommodation in London. It was never intended to be a tax free perk, but that is precisely what it has turned out to be for many. They know that and we know that. Can Tony McNulty really justify his claim, when his permanent home is so close to Westminster, not in terms of the ‘rules’, but in terms of the spirit of the allowance? He may be an excellent debater, but even he will not be able to come up with a set of words that would convince me, let alone the public at large. To his credit, however, he has suggested that the home allowance rules ought to be reviewed.

This discredited expense system, that has become a method for MP’s to boost their earnings, needs to be overhauled NOW! Not by members of parliament, because most of them have demonstrated that they cannot be trusted to demonstrate objectivity, much less intelligence and independent thought, but by a committee of lay people. No longer is it acceptable that MP’s should receive benefits that those in the private sector could only dream of. MP’s need a reality check, they are so insulated from the people they govern, that they seem to have no idea how to act responsibly or appropriately. There is a recession going on out here, people are losing their jobs, companies are closing, families are becoming homeless, personal wealth is falling at an alarming rate and no-one in power seems to give a toss, so long as they are okay.

Ask the average MP why he decided to go into politics and you will get dozens of different answers, but I guarantee that they will not say they did it for the money, yet on closer analysis, it appears that greed (if lawful greed) is the order of the day. If MP’s earnings are so low that they feel they must maximise expense claims whatever the morality, then I suggest they step aside and let ordinary people take their place at the next election. God knows, this country needs people that are in touch with reality, rather than on a different planet.

Gordon Brown needs to get his house in order and Cameron needs to come off the fence and make some recommendations regarding a review of expense allowances, not simply insist that MP’s publish an account of their past expenses. Sometimes I think Cameron is even more removed from reality than Gordon Brown, now that is scary, especially given he may be our next prime minister. The bottom line is, however, that there are few people in this government that deserve their positions, starting at the very top, but I am becoming more and more concerned that there are an increasing number MP’s, from all side of the house, that do not deserve to be described a honourable nor are they fit to represent the good and predominantly honest people of this country.

UPDATE:

Anyone that is angered by the information contained in this post may also like to be aware that there is a new Bill going through parliament which seeks to provide MP’s and all other public servants with what amounts to an immunity from prosecution (civil and criminal) with a legal definition of the term ‘reasonable discretion’. You can find out more here: Bill to Exercise Reasonable Discretion

Have the bank directors failed in their fiduciary duties?

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Whilst doing my rounds today, I came across this article which points out that all directors have a legal duty of care or, if you prefer, a fiduciary duty. The author then asks why it is, that bank directors have been allowed to resign, rather than be sacked, given the government are suggesting that these bank directors have failed? It is a compelling argument.

Theoretically at least, if any director failed in their fiduciary duty, acted recklessly or without due care then, not only could they be sacked, but they could find themselves liable to a civil action. That notwithstanding, it is clear to me, that if ‘trust and confidence’ is an integral part of a fiduciary’s duty, then there has been a failure.

I cannot argue with the sentiment, so lets be clear, one government minister after the other has been heard to repeat the term used by Gordon Brown, that there must be “no reward for failure“.  Similarly, there must be no amnesty for anyone that has failed in their fiduciary duty or that has acted recklessly or without due care.  The author goes on to say;

These individuals have either failed or they have not, ministers must be careful in making damning statements, yet failing to back them up with appropriate action.

Surely government ministers understand that if they are going to step up the rhetoric, then they need to follow these statements with firm action? Anything less would be unacceptable to the general public who are now massive stakeholders in these banks. Moreover, if I were a former bank director, I would welcome the opportunity to clear my name, assuming of course, that I had a defence to the charge.  The article is pretty well summed up as follows;

I am not qualified legally or otherwise to determine whether or not any individual director has failed in their fiduciary duty. Therefore I am not suggesting anyone (bankers or otherwise) has acted improperly, I am relying only on the governments own words, that there should be no reward for failure, which implies that there has indeed been a failure. However, in the “court of public opinion” I would like to state for the record, that I believe there is merit, perhaps even a duty, for the government to seek legal advice on this matter, because they, as a majority shareholder in these banks, have their own fiduciary duty to the shareholders, you and me!

I agree! So lets see some action from government ministers instead of hot air.

Is Harriet Harman is an opportunist?

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It is difficult not to conclude that Harriet Harman’s attack on Sir Fred Goodwin’s pension is anything other than opportunistic. Clearly she will be aware that public opinion is firmly against corporate greed and any form of reward “for failure”. However, if government ministers were to be judged on the same criteria, there would be mass resignations, no pay-off’s and a refusal to take their generous, gold-plated pensions. Of course we all know that isn’t going to happen.

It is fair to say that Sir Fred’s pension is obscene and that the board and Lord Myner’s should have dealt with this thorny issue at the time, but they did not. Instead, it would appear that it formed part of what is commonly described as a ‘compromise agreement’ and this is, whether government ministers like it or not, enforceable in a court of law. Compromise agreements are not the exclusive preserve of high ranking banking officials, many thousands of people every year enter into some form of compromise agreement with their employers, with each party fully appraised by their legal advisers of the consequences.

It is difficult to conceive that any credible member of parliament would possibly suggest that a compromise agreement ought to be overturned through the introduction of new legislation which is applied retrospectively. Yet, Harriet Harman has done precisely that, whether it was her own idea, or someone has ‘suggested’ that she become the sabre rattler is not clear, either way, she does not come out of this with any real credibility. Yes, the public will, at face value, agree with her and therefore, it will appear that she is in tune with the masses. However, this completely ignores the fact that a Labour minister was party to the pension discussions and that the government were aware of the compromise agreement back in October. Yet it has only come to light now, when there was a need to divert attention from the real issue, which is the massive injection of additional taxpayer cash into RBS and the taking on of massive potential liabilities through the underwriting of so called ‘toxic assets’.

There have been suggestions that Harriet Harman has been positioning herself to become the successor-in-chief to Gordon Brown, I don’t know how much truth there is in these rumours. However, if I wanted to set her up for a fall, I would have asked her to do precisely what she has done. Why? Because no minister ought to be proposing new legislation to reverse something in a contract, that they were party to (directly or otherwise), simply because they no longer like the terms. Once that happens, the government can no longer be trusted to enter into any contract, without the other party believing that there is a possibility that any terms could subsequently be overturned, on a whim, through retrospective legislation.

Whatever the rights or wrongs of Sir Fred Goodwin’s pension arrangements, ministers from the Prime Minister down appear to be milking it for all it is worth and in doing so, they are successfully diverting the country’s attention from the real issue and that is our massive long term exposure to RBS liabilities. Worst still, if they are expending so much time and effort on what, in the scale of things, is a peripheral issue, can we trust them to be steering the ship in which we have so much invested? I wonder!

Written by British Politics

1 March, 2009 at 2:06 pm

RBS Pension scandal or attempt to divert attention

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Perhaps it is the cynical side of me, but, I can’t help wondering whether the release of Sir Fred Goodwin’s pension entitlement is a bit too convenient. Bear with me if you will.

Sir Fred has complained that his pension arrangements have been made public. Now lets face it, given the scale of the losses at RBS, it is not inconceivable that this particular obligation could have been ‘lost’ in the malaise, but it wasn’t. Why is that? At time of public anger over bankers, a nice juicy pension to a former banker was bound to get the blood pressure rising, with the masses venting their anger at the recipient. Yes, yes, the government must have known about it, but they have got away with other issues in relation to due diligence, so why not this. Added to which, the government will have known that the public, for the most part, would target the recipient not them. Then there is media commentators, the vast majority of whom have fallen for it, stating that the if the government did know and released the details then, it must have been an own goal. But was it?

Take a look at the headlines and you can get a feel for what has captured the public imagination. Not the fact that RBS is about to receive another £13bn of taxpayers money (on top of £20bn last year);  not the fact that a bank that is 70% owned by the tax payer has just announced losses of £24bn, 70% of which is ours; not the fact that we, the taxpayer, are about to underwrite £325bn of ‘toxic assets’ in return for a premium of just £6.5bn; and not the fact that our ownership of this company is now likely to rise to 84% in economic terms, if not voting shares (75%).

You would expect something of this magnitude to lead the news stories, but is has not, instead, in a classic New Labour ‘smoke & mirrors’ game designed to dupe the public, our attention is turned to Sir Fred Goodwin and his obscene pension. The bailout of the banks, the underwriting of inter-bank loans and the public guarantees on toxic assets have all but bankrupted this country and here we are kicking up a big fuss about Sir Fred’s pension arrangements. Instead of Gordon Brown having to defend the fact that he has just spent way in excess of our expected tax receipts for this year, he could go on television and say that the government were considering legal action to challenge Sir Fred’s pension entitlement, in other words, he (Gordon Brown) could appear to be in tune with the public mood.

Please people, stop falling for these classic New Labour, cynical moves to wrongfoot the public, they are laughing at us and in a way, we deserve it. As for the political commentators that have fallen for this trick, they should hang there heads in shame. Before anyone accuses me of supporting Sir Fred’s pension arrangements, I will state for the record that I firmly do not, I just believe that this government has used the pension to divert our attention and boy, has it worked!

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27 February, 2009 at 3:59 pm

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?