Thatcherite Britain Returns

Stubborn, suicidal union versus clueless, stoic management, backed by a Thatcherite Government.

Sounds like the 1980s? Nope, welcome to Britain 2009. In the face of multiple strikes which to be frank have seemed to have made no difference to an already sporadic service, Royal Mail's Golden Boy multi-million pound management team came up with a brilliant idea which will really solve the problem. Hire 30,000 temporary staff.

Well no doubt the Government are happy on two counts - 1) their stoic Thatcherite stance in the face of leftie Unionism is holding steady and 2) 30,000 off the dole queue will do no end of good to the tragic unemployment figures. It could have been a plan from the Iron Lady herself. But it is her deputy - Lord Mandelson who plays this Iron Lady. Calling the strike suicidal, he wears the mantle of free market capitalist well, even down to saying he has agreed to arbitration when the Union says he hasn't. Perhaps the letter telling them so was in in the post.

It's a really pathetic situation. All across Europe, the old public owned postal behemoths have largely carried on functioning, but for us we have a combination of bright ideas to sell off the profitable bit and leave the millstone around the ever welcoming taxpayers' necks. As Sir Howard Davies said of us all recently, we have no idea of how bad our crisis is and sure enough, as our ever generous cheque book keeps on paying up, we have no idea how much such stupidity will cost us in the future.

Mandelson loves playing God. He loves sucking up to rich Adonis's in the vain hope he can be one. But this has been rank stupidity after daft management. It stems simply from appointing management who have nothing to lose, because when matched with Union leaders who equally have nothing to lose, it is a game of chicken where neither party will turn as neither have a vested interest. In between stands a large workforce who are going to get royally shafted because they think everyone has their best interest at heart.

It's Thatcher's 80s all over again. Substitute Leighton and Crozier for Ian McGregor and Mandelson for Thatcher and you wouldn't know the difference but for the hairstyles. Meanwhile, unlike a homegrown steel and coal industry, every single person depends on the postal service. This is not suicidal, it's downright needless and stupid.

Who Do You Think You Are Kidding, Mr. Brown?

Gordon Brown’s speech at Conference was well staged. In fact, it was hard to notice where the strings were on the above gantry that worked his arms or, indeed, where Lord Mandelson’s arm was, as it was so far up his backside that you couldn’t actually see it and you couldn’t see him move his lips either as the puppet Brown spoke. Remarkable.

There was plenty for the feint-hearted New Labour activists – lots of reminders of what might or might not have been achieved and lots of rather desperate rally calls. Then the inevitable happened. Fully 12 years after the Conservatives were last in power, and longer for the hapless Mrs. Thatcher, the entire blame for the credit crisis and recession was landed at the Tory door. Apparently it was their belief in free market correctionism (or some techno speak similar) that caused the whole damn thing.

Clearly in the intervening 12 years, Gordon Brown has not heaped praise on himself for being a financial genius or for how well he has managed our economy and its marvellous growth. He also has worked ceaselessly, albeit unnoticed, in trying to rectify the situation caused by the Conservatives. Right-wing fundamentalism (the reference was fundamentally unintelligible) was the root cause and free markets has caused that whole mess.

To be honest, I had to listen twice to get what he was saying. He basically said that in his whole 12 years in 11 and 10 Downing Street, he was opposed to everything around him. The growth he so (apparently) relished (and took the credit for) must have actually hurt his very soul as he alone knew it would heap doom on us and, clearly, he was powerless to stop it or to tell anyone. In retaliation, the very people he knighted in the City, like Fred Goodwin, are now to be vilified for their greed and money-making as they did it all behind his back so he had no idea what was going on and had no power to stop it. He alone wrestled with the terrible problem of informing the British public that this crash was inevitable yet......

He did absolutely nothing to stop it. Zip. Nada.

He just sat by, congratulating himself, sipping champagne as Hedge Fund managers, bankers and businessmen took tax free profits out of the country as banks made £billions in profits that have now been identified as immoral and illicit. He did nothing to curb bonus culture or to stop banks making deals on risky products. He did nothing to curb the outrageous and unfounded rise in house prices or stop us withdrawing equity from our homes – he did nothing to warn us our average household income was rising lower than inflation and we were saving negatively for our future. None of it. He had 12 years, not just one year or 5. He had more than enough time to have reversed the situation or impose his own doctrine or left wing fundamentalism or whatever he pretends to believe in that would have avoided it all.

It was a monumental and bare faced lie – it was also a stupid, cack-handed attempt to fool an already ‘fooled-weary’ public that he actually was always against what was going in the City and hence the British Economy. Yet in his speech he was proud to pat himself and his Party on the back for the very things that the economic growth brought about. To be absolutely frank, it could have been one of those spoof speeches you see from the desk of Supreme Leader Brown in Private Eye so howlingly morally bankrupt the whole speech was.

Meanwhile, Darling and Mandelson are now waging war on the very people they actually had ‘no issue with if they earned tons of money’ – words from the very mouth of the real Supreme Leader, Mandelson himself. It’s as if they have been swimming in beautiful azure seas and suddenly realised there is a floating turd in it.

Well that’s our Champagne Socialists for you. They ditched the old Labour because they couldn’t sell it to electorate – that served them well. Now that the proverbial has hit the fan, they have found solace and inspiration in the old values and trooped them all out again. Suddenly, the very people they adored and sipped cocktails with on expensive boats and allowed not to pay tax, have become the villainous enemies. They will be curbed, taxed and hounded for their greed.

Of course, next year in Corfu is still on isn’t it, Nat? I take that as a no then.

Double Talk

Have you noticed how Politicians and businesspeople have that wonderful ability to throw a 'feint'? When asked a specific question on a matter they either conveniently manipulate the answer to a completely different question or, in some cases, they answer the question with such assertion, authority or indignation that it sounds as if they mean what they say but mean the opposite.

We have had great examples of these this week as the Government faces creeping dissatisfaction with its leadership. Harriet Harman has been pretty obvious in her desire to be the next Labour Party leader and has dismissed as 'Utter rubbish' the notion that she is plotting to be such. Her mock indignation was a little transparent as her actions give away her motives but she can conveniently point to several others who may be plotting the same.

Alan Johnson, Health Secretary, who really should have his hands full at this uncertain time with Swine Flu posing serious questions, took time to deny his desire to be leader by saying, 'I have no aspirations to be leader.' He was quite believable until he qualified it and said, 'I am not saying there are no circumstances' when asked if things changed of their own accord for the increasingly beleaguered Gordon Brown.

The vultures are certainly circling. Hazel Blears' inopportune comments about 'lamentable communication' were deemed as out of context although reading the transcript of what she said, it was pretty unequivocal as she mentioned Brown's ill-fated YouTube addresses.

It coincides with some heavy comments from a former minister who certainly felt they had been hard done by. Charles Clarke, the perennial failure, said of recent events that they had left him felling 'ashamed to be a Labour MP'. Leaping to the defence of the leadership were party heavyweights like Lord Kinnock, who asserted that infighting would hand victories to the BNP. It seems Lord Kinnock has been spending too much time abroad as the Polls have the Conservatives and Lib Dems slightly ahead of the BNP as the big threat to the Labour Government.

Justice Secretary, Jack Straw, also pledged his support to Brown and perhaps the last nail in the coffin was a rallying call from John 'Judge me on my record' Prescott who called upon members to stop whinging and get behind the leader, though I think it was not clear which leader he meant.

The duplicitous comments from a growing throng of MPs seemed to show signs of concern that the bandwagon has finally lost its wheels. A year or so ago, Brown was facing calls to end his leadership for entirely different matters, and just as the Falklands had conveniently deflected such calls on Thatcher in her reign, the Credit Crunch and Recession had helped Brown to try and recreate his image as a financially astute leader. That seems to have backfired as so many obvious mistakes have been made on comparatively small matters like Goodwin's pension that everyone is now questioning how big the mistakes have been generally.

The real wobbler came this week, after a major climbdown in the poor handling of the MPs' expenses affair, the dreadful vote of Gurkha rights to live in Britain horribly backfired and exposed how out of touch Labour thinking was on matters of honour. It seemed to expose the whole attitude before and after the main financial crises and showed where Labour, or at least the Leader's, morals lay.

He would rather support greedy bankers who ruined our economy with a total of £1.3 trillion of our money than spend a small amount in comparison on people who have pledged to die for us.

I suppose it is the way of Politics to cackle and snipe like hyenas to wear the prey down without direct attack but it is pretty clear that Brown's days are numbered. The very fact that he is being talked about at all means they are unhappy.

Grim Faces

Quite what Gordon Brown was grinning about and patting Alistair Darling on the shoulder for after perhaps one of the most grim budget speeches since 1945 in terms of the country’s finances is beyond most people. At least our finances back in 1945 were grim for good reason – we had just saved the world by fighting a real war.

Yesterday we heard how Britain was going to try and dig itself out another, far more serious financial situation caused by greed and incompetence to a degree not encountered before in the globe’s history.

The surprising thing was that it seemed to amuse Brown greatly. Personally, I would be holding my head in shame.

The budget was undermined by an inability to add up. Less than a few months ago, the PM and his sidekick were telling us confidently that the economy would not shrink by a certain amount and therefore borrowing would not need to be so high. Yesterday we heard that he and Darling had got the numbers wrong – the economy would decline by 3.5% this year before picking up by 1.25% next year and because of lower tax revenues due to higher unemployment, the borrowing would be significantly higher than anticipated before. Even before he had finished saying it, the IMF roundly contradicted him saying the economy would decline by over 4% this year and a further 0.4% next year and so borrowing requirements would be higher than he had predicted in his speech. The IMF, to be fair, has called the UK numbers far more accurately than our own Ministers.

It was ‘Wishful Thinking’ again from Darling who looked increasingly alarmed about the numbers as he mentioned them, as if by actually articulating them it was the first time he had noticed quite how disastrous our position actually is. The problem with wishful thinking, as we know in business, is that inevitably it leads to assumptions upon which wrong decisions are made. For us, it will be the amount of future tax we all pay – it’s that fundamental.

Class Wars

One of the least unexpected features of the speech was that the highest rate of tax has now been set at 50% on earnings above £150,000 which means, with the removal of the personal allowance for earnings above £100,000, that the effective top rate of tax is 60%. Labour has reverted back to the party of taxing higher earners but not the super-rich who can afford to evade this. It was, of course, a tactical move designed to elicit some sympathy from the public.

However, the greater amount of tax would be raised from the additional duties on tobacco, alcohol and fuel. A great proportion of the population consume these products and probably as much as any rich person, which means that lower paid people are getting taxed disproportionately more compared to their earnings. This has been a tactic of this Government since its birth and once again, the soundbite was designed to divert attention from the real menace of the budget – we will all pay more tax.

As unemployment topped 2.1m yesterday and the burden on the welfare state rose again, it is very clear that our situation is getting far worse. In short order, Britain will be borrowing around £1.4 trillion or over 70% of a falling GDP – an additional liability of £23,000 per head of population in Britain, which of course excludes non-domiciles. Whether we believe Darling or the IMF, we are pretty much up the creek without a paddle.

‘Grow Out of a Recession, Not Cut’

Darling’s little snippet may well be his epitaph. How much longer he has to endure the pain of being Chancellor might be mercifully short if he continues to bungle but if he’s unlucky he might have to hang on until the next election and ensure his team loses – a subject on which he is making good progress. Surely, he cannot be enjoying being made to look such an idiot each day.

Meanwhile, the Bank of England Monetary Policy are encouraged that there are signs that the policy of putting new money into the economy is working, the £75bn set aside for buying Gilts is apparently showing signs of effect. The good news is that there will not be any shortage of Gilts to buy as over £225bn of them will be sold in the near future, a very grim reminder of the additional debt the country is taking on. Last month saw the first failure in the Gilt auctions since 1995 and for just a second there it seemed that the whole darn policy had hit a brick wall. External investors had basically shunned us, fearing that Britain did not have the ability to service that debt and there were fears of a down-grading in our credit status globally. That drama has yet to fully unfold and over the course of the next few months, Mervyn King and Gordon Brown will need to attend Tony Blair’s Faith Tour to get the strength to pray enough that the auctions do not fail again.

While the theme was to borrow more to invest and we got a few snippets of how that may be in terms of increases in bad debt insurance, help for the unemployed young and a few other things, in fact, the majority of the budget was how efficiencies were to be achieved and taxes would rise. Wales alone is set to see over £400m chopped off its budget and there were concerns that Health and Education would suffer. Perhaps the Assembly Politicians should have thought of all this before creating so many Politicians on fat salaries, expense accounts and rock solid pensions in their swanky new building beforehand but at least if they scrapped the Assembly now we could salvage some savings for the future. Policies at the start of the Labour Terms are now coming back to haunt them and this is one – layers of Government with no power clogging decision making channels and creating new talking shops in new offices, draining valuable resources - was one of the worst.

There are many, many ways in which this country could save cost and divert the money into better spend and this should have been the theme. Instead, it’s all about draining resources on key things in favour of propping up a failed and flawed bank system. Investment in the right areas should be the priority.

Britain Post 2010

While we are being focused on the here and now by the Government, our future looks very bleak. There is no point in toiling hard and trying to get salary increases only to see most of it absorbed in new taxes while the relief on pension savings is being scrapped at the higher end so we cannot provide enough for our retirement.

Tax bills will rise dramatically and what we heard yesterday was only the start of what will be many calls on us for more money. They say two things are certain in life, death and taxes. Yesterday was the first step of the biggest certainty we will all face – taxes will rise dramatically over the next 20 years regardless of who is in Government. Just as the last Labour regime left the country in a dreadful state that took the policies of Margaret Thatcher to solve, it will be someone else’s problem for the future and it will take some solving.

Of course, one of the lasting Blair legacies was to be the 2012 Olympics. I love the Olympics but I have always had a problem with the obsession by countries of holding them which seems to attract politicians like moths to a light. This Olympics now looks as if it will be more of a millstone than a legacy and already there are rumours of cuts in venues as budgets continue to overrun.

As with Assemblies, legacies are to be earned not paid for and the Olympics is in severe danger of becoming one of another Labour’s major follies.