500 Not Out and The Rise of The Machine

I was a little staggered to realise that this is the 500th post on my blog. For those who know me, I have always had a lot to say on many things but I never thought I would write so much in such a short time.

Then again, a lot has happened. When the history of the period is written, it will be hard to know where to start - we are in the aftermath of several major terrorist atrocities attributed to the deadly but unseen Al Qaeda, led by an equally unseen leader, Osama bin Ladin. He has remained at large although the American Dyslexic Rangers thought they had him early on when they surrounded Debenhams after a tip that Bed Linen was inside.

To a large extent we can explain why we went into Afghanistan but the trail of reason stops there. It is a vast and mountainous country with tribal factions which has not been annexed effectively since Alexander the Great (Kandahar is a version of is name). Modern British and Russian Armies have been defeated there and still we persist against history - and how history repeats itself as we under-equip and fail our brave forces in what is fast becoming a pointless war.

The aftermath of Iraq is finally taking us to the real reasons why we invaded. It started with Bush's 'Axis of Evil' speech and then came the charades of WMDs. Blair concocted a reason - any reason would have done as he has now confirmed - and we spent years opening a new front for those with a gripe against the West to come try their luck and stoke up the hatred of Islamic fanatics for the next century. There has been no good to have come out of Iraq, and no WMD were ever found.

Then came the financial meltdown. After years of trading largely fictional products amongst themselves, the financial people got caught by their own scam - rather than see their companies go belly up like anyone else who has traded effectively illegally, these people held us all to ransom. The scam was so big and widespread that the entire banking system was at risk and so the taxpaying people of the world had no choice - we had to bail them out. UK Government borrowing to do this has escalated and currently our national debt is 69% of our total GDP and rising faster than everyone predicts. Billions and trillions have been lost in supporting a thin wedge of people who were already extremely rich. At the Copenhagen Summit of Climate Change, African nations express their disbelief that rich nations could throw away so much money and yet not have a few million to help them as they starve. But that is the crux of the issue - there were no real profits made over the 12 years leading up to the crash, it was all fiction. We settled the gambling debts of a few 'gifted people' and reloaded their pockets to do it all again.

It proves that you cannot have Capitalism and a global conscience - and so Africa will always be Africa and poor.

At the nadir of the Crash and the ensuing recession came the trivial yet infuriating revelations about MP Expenses. We got the claims for duck houses, blatant 'flipping' of residences to profit and avoid Capital Gains Tax, manure, kit kats, toilet ducks, second homes in London for London MPs - the list was almost endless and staggering how the taxpayer has been abused. Then came the contrition and now the fight back. Despite doing tit for tat claims on second homes with her husband, Julie McBride, having said she would stand down, has decided that the public really think what she did was morally right and will stand again. Meanwhile we have a whole cast of cynical 'Zombie MPs' who will shuffle off in shame but will not be sacked or resign as they get a pay off for being elected off at the next election. You really could not make this all up it is so disgusting. We now have several MPs moaning that the rules have been changed and applied retrospectively - welcome to the real world, I say. Sadly, at the next election, I think we will have forgotten the sleaze and many will get re-elected because of our own ignorance.

The Rise of The Machine

The rise of the machine has been amazing. Since 1997, a million more jobs in the Public Sector have been created and during this recession, as over one million extra have been dispatched to the dole queue, still the Public Sector has not been affected and continues to recruit at a fearful rate. Over one in five jobs are in the Public Sector now but that does not tell the whole story as so many are not reported as they have been outsourced - the picture is much closer to one in four jobs in the Public Sector. And top end salaries have risen enormously - throughout the recession, the Sunday Times Appointments Section has been devoid of Private Sector jobs but full of top level jobs at £200k packages for the Public Sector. Layers of Government have been introduced with fat salaries and little power - the First Ministers in Scotland and Wales earn as much as and more than Gordon Brown - then there are the armies of Assembly members, flunkies, MEPs, Commissioners. The machine is vast and getting bigger - we are being spoon fed what to think and do by more layers of Government than you can shake a copy of '1984' at. The bill for all this is crippling us.

Spin has dominated this country for the last 12 years and we have listened and believed all that has been said. Careful angling of Public Enquiries have delivered no change time and again and then come the 'big plays' which are designed to show how the Government has delivered. The rise of the 'Target' in the Public Sector has thrown us off the track as to what is important - more kids get top grades in exams but can't add or write, the NHS has no queues but is obsessed with trivial treatments to score. Then we have grandiose schemes like the Asset Protection Scheme, the Automotive Protection Scheme, the Credit Top up, the Enterprise Loan Guarantee schemes none of which have delivered any good anywhere.

Stark facts elude us. We have remained in recession longer than any other G20 nation, it is a record length and depth of recession, we will continue to repay our borrowings long into the next generation of working kids. The world is changing in front of our eyes and we deny it - instead of lowering our carbon footprint, we trade it. What idiots we all are.

It's my 500th post and I have covered a lot, as well as issues and help for small businesses. But I am hopeful of a good 2010. We will emerge finally from recession, we may not have learnt any lessons from the Credit Crunch but at least it has exposed a poor, laissez faire Government for the sham it was - perhaps we will get a decisive vote at the election but that will depend on the quality of the opposition and, frankly, it is not good enough at the moment. At least we have found that a couple of our sports stars are only human after all - Tiger Woods is as weak as the next man, Gareth 'Alfie' Thomas, ex-Lion Captain (for one test) has proven gay people can be amongst the best in the most macho of sports.

I hope for one big thing. I hope that the next Government will not have a 167 seat majority on just 34% of the vote. The impregnability of this last Government has been the massive drag on progress and it has been a period of missed opportunities. I hope that does not happen again.

All Mouth And No Trousers

Cast your minds back to January this year and we got lots of big talk from the aptly named Department of Business of how it had introduced a scheme to support the car industry pledging up to £2.3bn in cash for loans.

This week we have heard that despite the bravado and big talk, not a single penny of that money has been given to the car industry. There have been plenty of meetings and negotiation, with Jaguar trying to get its hands on around £300m at one stage but for one reason or another, no firm has received any benefit for a scheme that was largely advertised with the sole intention of grabbing the headlines and making it look as though ministers were actually doing something about the potential collapse of an entire business sector on which around 800,000 jobs depended.

The grandly called Automotive Assistance Program (AAP) offered minimum loans of £5m to ailing car firms while the Enterprise Guarantee Scheme (EGS) offered loans of up to £1m - clearly any component or distribution firm in the car industry that wanted a loan anywhere between £1m and £5m was scuppered from the start. But then came the conditions. Far from taking on risky loans as the scheme was intended, with £400m of potential toxic debt write off written into the scheme form the start, firms who applied for the scheme found the rules too inflexible.

The Government, meanwhile, claim that there are 10 firms in negotiation on the scheme needing as much as £2bn of loans or guarantees. It seems that during the period of inertia from the beginning of the year, the scrappage scheme, successfully cloned from the continent, has filled a gap which has helped rescue rapidly falling car sales by offering incentives directly to customers to promote buying new cars - a simple and sensible proposition, easily aimed at the right point. It seems that simple, well directed applications of money get immediate and exciting results whereas complex, airy ideas which are difficult to implement but far more grandiose sounding and headline grabbing get no results whatsoever.

If only the Government had looked at its history in education and health it would have realised that smaller packets of focused money deliver greater results than shed loads poured down a hole with no real objectives and spurious measurements of results.

The Automotive Assistance Scheme has been an object lesson in how to waste time and money and get zero results but good headlines. It also illustrates that spin gets the desired results as everyone will see car sales recovering and believe it was the AAP that helped. Instead it was a continental idea that had already brought spectacular results in France and Germany - both of whose economies were out of recession at the end of the Summer.

IT seems that inaction speaks louder than words.

Another fine fiasco has been the trade credit top up scheme, designed to help small companies where their credit insurance has been lowered or withdrawn. The Department of Business, once again, offered £5bn in another headline grabbing initiative which was said to help companies maintain trade with one another. It is a testament to the fortitude and invention of treasury departments that just 72 UK businesses have benefited from the scheme utilising just £18m of the £5bn funds (less than 4% of the total).

Now Lord Mandelson has said that he will withdraw the scheme as it was no longer required, which has sparked uproar among small to medium sized business owners. The issue is that during the recession, businesses have focused on cutting their cloth and recognising more profitable business opportunities where credit is easier to cover. Now that we are entering the recovery phase, businesses will be gearing up to get a little more creative and risk-taking as markets pick up speed.

Once again, companies have felt that the scheme was too inflexible, restrictive and prohibitively costly to use. However, rather like the AAP and the EGS, great sounding, ostentatious schemes have delivered nothing to British business and it is little wonder that when so much was given so cheaply to banks and so little and expensively to business generally that the recession has lasted far longer in the UK than anywhere else. Grand ideas with little substance packaged with large business in mind always.

Too much money given to too few too cheaply, and too little to many too expensively equalling a long recession. It's a lesson in mathematics and economics that I hope Mandelson remembers in future.