Litigious Britain?

They say we are becoming a litigious society.

Perhaps the scandal of MP Expenses and daft Government policies would suggest we are not litigious enough. Between the Iraq and Afghanistan wars, where it is clear we are sending troops into dangerous situations without adequate numbers, armour and transport, a few hundred have lost their lives while we do not even get a sense of how many have been maimed, badly injured, wounded and psychologically affected by the wars. Already it is legally dubious under UN rules that we ever should have invaded Iraq while our participation in abetting torture of those captured has put our leadership into the spotlight but no one seems to have the guts to challenge them legally.

On top of this we hear that slack immigration rules as reported in the Sunday Times has meant that we have almost certainly allowed in potentially dangerous people into Britain without proper checks. It could be a ticking clock as to the next homeland atrocity but would the Immigration Service and the Government be legally culpable for negligence?

This week we also learned that last year over 39,000 serious assault offences which would normally carry up to 5 years in prison for the offenders, if found guilty, have been allowed to go by with mere cautions - no wonder the crime figures seem so low. What if the next victim of one of those cautions is not so lucky to be seriously injured or even killed by lapse rules and target-led policing?

I am not one for a litigious society but some policies are just barmy and are asking for trouble. Perhaps ministers should be exposed to the power of the law for their most stupid of mistakes that leave people in direct danger?

As Easy As One, Two, Three

Alistair Darling is a formidable politician and a fine Chancellor. His record proves it. Yeah.

So when he tells us that the route out of our borrowing situation - not mess - is as easy as one, two, three then we should believe him and start doing a Jackson Five jive. Like his Lords and Masters, Brown and Mandelson, he believes the prime way out of the mess we are in is to borrow to grow.

Hands up all those people in business who have borrowed to grow. A fair number I would suggest. Hands up all those businesspeople who have borrowed to grow in a recession. Not many. Typically in business we borrow to survive when in a recession as growth opportunities are fewer unless you can find a little opportunity niche that you can exploit.

Granted running a country isn't like running a business but there are only so many things you can spend the borrowed money on to incent growth. So far, we have seen the massive bank bailouts as the main form of spending, hence borrowing. This has been the vast majority of what we have spent. We have also reduced VAT which is due to end but retailers would say this has helped stave off the worst of the economic recession. In business to business companies like mine, VAT decrease make not a jot of difference.

So if we borrow more, we can theoretically invest to produce growth. I would really like to understand exactly what the Government is going to invest in right now to stimulate growth other than to entice consumers to do what they did before which is borrow heavily to fund their spending. Already, people are facing some austere spending cuts as job uncertainty grows. Credit card and unsecured debt across the population is dangerously and unsustainably high, wages are set to not grow and possibly decrease, and taxes are set to increase. It really does not take a genius to work out that growth is really going to have to be 'false growth' in order to stimulate the economy.

The Chancellor's wish list is that we borrow more, try to reduce spending while maintaining priorities and increasing taxes which will all stimulate growth - one, two, three. The growth will produce a richer economy which will make it easier to pay off the debts.

Right. Meanwhile, across the pond Alan Greenspan is warning that US debt is now dangerously high at $1.4 trillion. He warns that there comes a point when the economy runs away from you and you continue to borrow more money just to service the interest on the debt as the growth rate just eludes you enough to need to borrow more just to try to catch it. In 2014 it is estimated our interest bill on our debt will be £60bn per annum which is equivalent to the entire NHS budget at current rates.

There comes a time when you need to stop borrowing and cut your cloth for the economy you are in. That does not stop you from investing in growth - it is just a realistic look at what you can really afford. It means that some of your grandest plans will have to be re-thought, some of your pet projects put aside. It means you have to make a rigorous look at the layer upon layer of wasted management and bureaucracy. It means you have to look hard to gain efficiencies, it means that some services will have to be downgraded and cut. It means some businesses will have to be allowed to whither and die. It is just a fact.

Britain has gone through an unprecedented period of 'false growth' where we believed we were prosperous but we were not as well off as we thought. We have to rein in spending across the board - at a personal and Governmental level. We have to make certain sacrifices which some people will not like - but there is far too much fat in our public sector and we are letting far too many people into our country. That is not a racist remark - it's a simple fact. I have no time for people like the BNP, they are dangerous and a subversive influence with no credence in modern politics. But they will gain a foothold if we do not face stark facts in this country.

13 years ago, Blair and his Government trashed the issue of immigration at election time and swept to power. Like so many other things about that wave of 'Cool Britannia' the issue came back to haunt them in their laissez-faire style of Government. Like so many other issues, like the economy and the banking system, they now look to blame the previous Government for current problems. It really is a time when the reckoning is long overdue.

It would be good to hear from people like the Chancellor the truth about our situation, what he actually proposes to do to in real measurable activities to remedy it and then get started. If he thinks that just talking will solve it as is the traditional method of politics, then it will be as easy as one, two, three but we will be no further forward. However, if he looks a little further afield he will see that countries like France and Germany have got to the very heart of the problems and are now functioning nations out of recession as we still wallow in it. He will learn quickly that applying vast sums of money only pays dividends if you apply it in the right places.

Stuffing it into the pockets of bankers was our biggest mistake and will be the most enduring. As these rich people wave two fingers at us and make vast profits again off the back of our kindness and stupidity, Britain is no better off. Borrowing more money will not help us now - we should have never have blown so much in the first place.

I fear for the situation we are in. As Sir Howard Davies put it recently, we do not have a clue how bad the situation really is. What we do know is that debt is probably the biggest issue this country and its people face. As any small businessman will tell you, there comes a time when your business needs more cash at a much faster rate than it can grow - we call that throwing good money after bad.

Right now, Britain faces exactly that situation. For every new pound borrowed, we had better know exactly how we will spend it and how much it needs to return and in the meantime we need to find how we can create more money from savings ourselves - long before they raid the pockets of the people in taxes. Because right now, as a taxpayer with a stake in all this, I would really like to know where my next pound will be spent and it had better not be to give more support to rich bankers, support the immigration of more people, fund vast inefficiencies and bureaucracies in Government and the public sector, pay for wage rises to politicians, fund vast allowances for the same people or on wars which we should not be fighting.

It's my money, and I want a say. I think we are all in the same boat.

Who Should We Believe?

Depending on which set of figures you look at for the economy, you could be verging on the suicidal to the ecstatic. Certainly, we seem to be clutching at straws if we think Britain has emerged from its recession yet.

In the week, I highlighted The Sunday Times Appointments Section as being devoid of private sector jobs and full of public sector senior appointments, arguing this was a bad sign. Yet for the second month on the trot, there has been a marginal increase in the number of appointments available generally according to Government figures. Encouraging, if fragile.

But, the National Institute of Economic and Social Research (NIESR) has calculated that our GDP did not rise a jot in this last quarter. This falls in line with the worrying industrial output figures reported for August which were sharply down on July. True, we could argue it's holiday time but the level of drop, some 2.5%, surprised most economists. Bizarrely, the Government's response was to say that this prediction of stagnated GDP showed that the Government's policies are working.

We have also heard that house prices are now nearly back to levels experienced in 2008 - certainly there are plenty more placards up in my area - but this is still some 15-20% down on prices in July 2007. The number of mortgages being approved has risen but we know that lending to small businesses, despite Government indications to the contrary, is reckoned by the Bank of England to be £14.7bn down on last year. Are we putting the credit in the wrong places, you might ask?

Bank profits and bonuses are sharply rising, the price of gold has hit a peak (perhaps I should have followed those persuasive TV adverts), car sales are up 11.4% from this September to last, inflation has fallen to 1.6%, and the Services sector, such as restaurants, showed expansion for the 5th successive month and is now at a two year high - trashing my comment on empty tables for pre-theatre meals in London last Saturday. Or so it would seem.

The figures are all slightly baffling. The reality we see is a great deal of uncertainty as we face a great many cuts to public services no matter who gets into power which will inevitably hit jobs after 12 years of growth in bureaucracy in the public sector that now accounts for 1 in every 4 jobs in the UK. Our population is rising faster than expected due a new birth rate explosion, 25% of that growth coming from couples not born in the UK as immigration takes its toll on the UK. Unemployment continues to rise to nearly 2.5m and there are predictions of over 3m by this time next year which is well above 7% of the working population.

The budget deficit continues to rise and at a greater rate predicted by the Chancellor, indicating that it may well be getting out of control, which will see Britain borrow an extra £175bn this year - and rising. Many predict, contrary to Government promises to halve it by 2015, that borrowing will be nearly 99% of GDP by 2014. As we are faced with a rising Welfare bill due to more people on the dole claiming benefits, and greater immigration numbers than ever predicted, and therefore a shortfall in tax revenue, the squeeze is on. And there will be a need, due to the heavy borrowing, to find big cuts, some 10%, to try and manage the situation down.

I find the whole situation baffling but the one thing I believe to be true is that we are paying for 12 years of unsustainable and unreal economic growth that was based on a flawed financial system that relied on the unchecked ascent of asset values and the instruments which relied upon that principle. And we have set up the remedies to start the exact same cycle again, despite posturing to the contrary - banks are once again out of control.

It seems that even if we halt the decline this quarter, we are a full 6 months behind our competitor nations in recovering despite all reassurances to the contrary before we hit the recession - the one that we were reassured that we would not hit - and I believe we are focusing on the wrong areas to manage the situation. Time will tell, but the comedy of errors by the Government, Investment Banks and the FSA in calculating a bailout of the financial system literally over a few late nights and some pizzas will haunt us for a generation. Last Sunday's article in the Times was meant to reassure us that the parties took the banks on and dressed them down for 10 years of excess. What it showed was that having ignored the banks for 10 years, they suddenly became experts in their business to save them.

If you believe that, then you will believe that little green men have invaded Uxbridge and put up the price of rail tickets.

The Welfare Time Bomb

Last week I mentioned that we are sitting on a massive Pension issue here in the UK and that it isn't going to get any better as this year, for the first time in the last 10, our population grew because the rate of births exceeded that of deaths and overtook immigration as the primary cause of population expansion in Britain.

We now have 61.4m living here and 791,000 births took place in the UK last year, with a trend, for the first time in a while, that younger people are contributing more. As an increasing share of the population gets older and so drains the Welfare State on health grounds and burdens us with paying state pensions for longer, we have other issues at the new born end to contend with.

Not least, that many births puts its own strain on the NHS and other parts of the Welfare System. But an interesting fact is that a quarter of all those births were from parents who were not born in Britain so immigration was, in fact, again the largest contributor to population growth after all. William Hague famously fought and lost an election campaign on the immigration issue and tried to make it a political, not racial, debate. He failed and was laughed out by the Blair spin merchants who claimed he was barking up the wrong tree. But how wrong was he?

Studies show that the optimum population for Britain to get sensible well being is between 17m and 27m and this is based on studies, albeit mainly subjective, across the globe of countries who enjoy relatively low density pockets of population. The US came top rather oddly as you wouldn't think their inner cities showed a great deal of social well being or the murder rate wouldn't suggest such either. As with many pieces of Government funded, utopian work, the study is a bit previous unless we want to embark on a program of selective extermination as there are roughly 2-3 times the optimum number of people here already. And the population is rising - at around 0.7% per annum and this is three times the rate of the 1980's.

So as our tax take drops, in recent months by as much as 20%, as corporates currently make less and less people are working, and this figure is expected to fall further as unemployment homes in on 3m, we have a massive time bomb ticking at both ends of the spectrum. More babies are being born at a faster rate than before while we are living longer. The Welfare State as it stands and is funded today, simply will fall over in the very near future. Oh, and there is another, minor problem, that may disappear in 2032 - we have much increased borrowing as a nation as we have pledged so much into the failed banking system, which wasn't exactly planned for.

Put in those simple terms, we have a major problem facing Britain. It's all very well to moan about immigration being an issue but it's a done deal. In fact, if anything, more people are leaving than arriving now. Perhaps they can see the problem better than the rest of us. The Welfare System will implode - and we are not that far away.

We talk, this year, of a lost generation of youth as young people have been disproportionately been hit harder by the recession in terms on unemployment than older people. We are also talking of raising the retirement age, as we cannot afford the state pension payments for longer living people, to 68 and even 70, which only postpones the problem. But it creates a huge problem for young people arriving on the job market - what chances do they have of getting a good start to their career and what chance do they have of progression if older people stay in senior roles progressively longer?

The answer may actually see Britain suffer a 'brain drain' much as Ireland experienced some years ago. But it is different for Britain as we have a dense and ageing population and we don't have generous payouts by the EC to help incentivise companies to relocate here. In fact, we are becoming a less attractive proposition as our employment laws fall into line with Europe and greater strain will go on employers to retain, potentially, less flexible staff for longer who will require senior levels of pay and benefits. Meanwhile, at the bottom end, we will see a greater onus on employers to put greater provision aside for pensions for new staff as time goes on. What happens next may already be occurring as this week BT, one of the largest employers in Britain, announced that it had suspended its graduate entrant scheme - while many others have cut back the number of graduate entrants.

There is now the standing joke that the best prospects of a career start for many new graduates are call centres - what a training ground for Britain's best talent.

What the credit crunch and recession has done is to bring the underlying issues into stark focus for us all but we have yet to understand the implications. It comes to stupid things like this - as we fight two major wars in Afghanistan and Iraq, we have stopped our Army Reserves, the TAs, from training with live rounds while regulars also have seen their training with live ammunition be cut back in order to cut costs. We have systematically reduced the Armed Forces and its capability at a time when it has been most utilised since WWII. But such stupidity is now prevalent at all levels with retirement ages increasing while unemployment in the young is peaking.

What it all boils down to is that the Master Plan set out by this Government, underpinned by a Fiscal Policy that relied out a banking system that had to continue to grow way beyond the actual growth of the nation, was fundamentally and catastrophically flawed. I don't know if any other Political Party could have done or will do any better - in fact, I severely doubt it given their absurd utterances - but I do know that the whole New Labour Project was built on bright ideas by 'champagne charlies' who thought if they talked a good story rather than execute the plans sensibly, the whole world would just go along with them.

Well, they have got us into a hopeless situation that isn't going to get any better until they get their priorities right and they address the real issues of this nation rather than pandering to the whims of a small number of incredibly wealthy people because they only want the world set up to serve them.

It could not be further from the make up of the Labour Party. It could not be further from what this country needs.

Foolish Talk Hurts

In the middle of the crisis at the Lindsey Refinery in Lincolnshire, we have the same old stupid arguments from senior Government officials in response to people’s questioning over policy in the last 10 years, particularly with reference to foreign workers in the UK – an issue that many felt would explode in our faces. It has done and the strikes across the country are indicative of a growing feeling of betrayal.

The standard response, used this time by that most experienced of campaigners, Lord Mandelson, is that, ‘These are jobs that British workers do not want to do’.

Context

Where Mandelson is coming from is that many jobs taken up by foreign workers are not wanted buy British workers as they do not pay enough to cover outgoings. This leaves a gap in times of high demand for over-qualified yet willing workers from abroad to take up low level jobs, often for the bare statutory minimum wage and sometimes less.

It is a fact that during the period of ‘Inflation-free growth’ that Brown brags of, there has been a corresponding erosion of household disposable income – the price of growth was simply paid for elsewhere. The by product of increased globalisation which is on balance good is that we have had an influx of foreign low paid workers.

Mandleson was no doubt referring to the general phenomenon that migrant foreign workers will do more menial jobs at a lower wage. But that is not a sign of prosperity and it is not an indication that British people do not want to take those jobs – they simply will not at that those wages. And that isn’t a good thing.

The context is lost in reference to Lindsey and the strikes as clearly these are jobs which British workers very much want to do and there are already contractually agreed wages associated with these jobs. So Mandelson and Brown cannot use the same argument here and it insults the people who are making their voices known – this is clearly not the same.

So I hope Mandelson will get his facts straight before sticking his dodgy nose in the affair in future.

Breaking Rules

Brown et al would argue that under UK and EU Law, Total (the refinery owners) and the contractors in question have not broken any laws. This is true in only some respects and again masks the real issue. Under EU law, any firm can bring in short term workers from any EU country to fulfil a contract so long as it is not a ‘posting’ and in doing so they are only obliged to offer the minimum wage as a lower end. In reality, such jobs are postings with pre-agreed internationally negotiated costs which govern the wages to be paid – and surely was committed as part of a fair tender process or possibly not in this case. This is a flagrant bending of the rules to suit the situation and it deliberately invokes what Mandelson talks of – making the jobs so low paid that British people cannot do them.

This gives this contractor a major price advantage over its competitors who are committed to use local labour to fulfil their foreign contracts. At best it is thoroughly anti-competitive and at worst it is against our national interests to let it go by.

Sign of The Times

It is indeed a sign of the times that such issues now boil to the surface. Some say that in austere times we will see less available jobs and wages will actually rise as a result overall as less low paid workers are kept on as not so many menial tasks are required. The migrants who have come here to do these jobs have grown roots and part of the attraction of Britain over elsewhere in the EU is our generous welfare state.

As more jobs are shed, we will see an ever greater strain on our welfare resources and monies.

It Was Waiting To Happen

This was something just waiting to happen. While growth was ‘apparent’ no one seemed to care about how resources would be consumed or if migrants take low end jobs – again ‘Laissez Faire Government’ which has been another Hallmark of this New Labour Government has dictated that everyone ignores the obvious and then talk their way around it when it occurs.

Well it has occurred and a lot of people, just like predicting the implosion of the housing market, predicted that this would explode in our faces.

And here’s the real danger. As France and other countries have found, immigration, asylum and short term movement to take up jobs are the sorts of issues that cultivate the worst kind of politics – that of racism and fascism. This is precisely the sort of opportunity that parties like BNP need to get some foothold in British politics, particularly when idiots like Mandelson completely miscall the situation and use examples which do not relate but are equally symptomatic of a major underlying problem that will ultimately cause major problems for us all.

On top of all the other things this Government are happy to write blank cheques for , we have the unemployment benefits of displaced British workers and the unemployed low end workers from abroad who have set up their homes here.

This will be one of Tony Blair and Gordon Brown’s most enduring of legacies that will probably last far longer than the 20 year debt repayment they have signed us all up for.