Selective Memory

Ed Balls says abolishing the nom-dom statuses would be costly for Britain In an interview on BBC Radio Leeds in January,

I’m not yet sure if I should feel uplifted by the bountiful entertainment we receive daily through election campaign mishaps or if we should feel dispirited and dismayed that some of these utter buffoons might actually get elected on the day and god forbid, some of them might end up with the keys to something important.

Labour are of course leading the way with a daily car crash and this morning’s furore over non domicile residents is especially notable. In the spirit of “knock out a quick policy announcement, grab the headlines and don’t worry about the detail,” Labour did just that this morning and it was all going swimmingly until someone had the temerity to look at the detail. The whole nonsense has been unravelling ever since. First we discover that Ed Balls in an interview with Radio Leeds in January said, “If you abolish the whole status it will probably end up costing Britain money because some people will leave the country.” Quite.

Shabana Mahmood chucks some keroscene on the flames

Then we discover that Labour has befitted from some £12m in donations from non-doms various. Ed Balls appears to have gone missing from the airwaves and his aides have been stumbling through interviews making up more stuff as they try to make sense of the mess they've been abandoned to.

Quite frankly, I care as much about non doms as they do about me which is very little indeed. The problem here is that Labour are running an election campaign based on envy. If it doesn't fail, as it deserves to, then the economy will certainly do so in quick time shortly afterwards.

Here’s a take from my chum Marcus Ashworth at BESI,

It's the Equality stoopid... this election is coming down to two words Economy vs Equality. And I defy anyone who says this is all dull, it's a right humdinger and to misquote Samuel Johnson if you are tired of this election then you are tired of life. Golly even the sainted Nicola Sturgeon was booed as she made clear that the 2016 Holyrood election SNP manifesto would likely include a call for another independence referendum.

All the rules are being broken as Bliar is wheeled out from his political banishment despite the Labour manifesto writer John Cruddas being really rather rude about him only recently. UKIP rather enjoyed Europe having its five minutes but surely the man who tried to give us the Euro and doesn't trust the hallowed British public to make up their own minds is an odd ploy for Miliband who has fought and expects to win an election on a very clear rejection of everything New Labour? Maggie died 2 years ago so what next? My how things have changed since her time as the Marxist Kraken awakes from its slumbers.

Europe and Bliar were sharply shoved back in the closet though as Red Ed lives up to his moniker by promising to revoke something that goes back to Pitt the Younger. The Tories have already pointed out that Labour is not really going to revoke non-dom status as 1. They have no clue how much it would raise (or much more likely in the law of unintended consequences how much it would end up costing us all) 2. Would only apply to those who stay for more than 4 to 5yrs (cue a little spell abroad and hey presto I’m back under a new guise).



Soak the rich class war is the only platform Miliband has left under his Equality drive - Labour is utterly moribund under anything to do with the economy but no amount of further CEOs of FTSE100 companies signing letters is going to influence what is fast becoming the most divisive election since the war (Attlee was a silent assassin). The politics of envy are to the fore and logic is the car crash victim but Miliband has never shirked from believing that the lessons of the GFC are that the moral reprehension so ably stoked by the BBC/Guardianista bien pensant is a major vote winner and hang the inevitable consequences.
 

Ed sincerely believes it is his mission to change the UK permanently and finish the job Gordy Bruin so nearly achieved. So much for the canard that all the major politicos are alike as Farage trumpets - we have a red in tooth and claw old-fashioned socialist and he wants to alter a country near you. As does his new chum north of the border with her "have it all" message to Scotland that by voting SNP you get rid of Cameron and subsequently the Sassenachs entirely. By definition the 55% who voted for the Union in Sep should logically thereby vote Tory? Unfortunately that is a leap too far sadly methinks.

By rights Cameron should be walking away with this election but Crosby has kept him on a tight leash as he stood by and let Sturgeon and all the other left-wing rabble get away with unmitigated economic illiteracy that makes a mockery of all this coalition has achieved in averting the head on car crash that Gordy drove us towards. Clegg had his chance to be remembered favourably for his unheralded sterling work that kept his unhinged party from ruining the really quite radical work of the past 5yrs.

Unfortunately he has chosen to pick and mix selective memory - if he loses Sheffield Hallam it will be the ultimate irony for the man who petulantly reneged on the Boundary Commission changes - the egregious bias that might really usher in a Miliband Govt. We can't expect Labour to have any shame but any such Admin will be founded on a lie and as with the inevitable consequence of an ending of the Union as the prize that Sturgeon/Salmond will wreak as their prize for supporting a Tories out at any cost mandate then I guess we will really get what we voted for. It's life Jim but not as we know it...

 

Election Entertainment Quotient just went parabolic

Mr Prescott can't wait for lunch and snacks on the nearest available piece of red meat

Ed Milliband in his first speech as leader “I stand here today ready to lead: a new generation [is] now leading Labour. Be in no doubt. The new generation of Labour is different. Different attitudes, different ideas, different ways of doing politics.” 

In The Observer yesterday, Mr Miliband said on bringing Precott back into the campaign fold, "His abilities and experience, as one of the architects of the Kyoto Protocol in 1997, must be used at this critical time for our future and there is no one better than John at bashing heads together to get a deal." 

Mental Crumble “You said it Ed. Labour go nuclear after the condescending Barbie Bus fiasco and haul back the bullying, inarticulate sleazebag Prescott; he’s the one who looks like Jabba the Hut without the charm and dances like an Eddie Stobart truck doing a three point turn. Still, the Election Entertainment Quotient just went parabolic. Odd choice when you think they could have appointed oh lets see, maybe a scientist or something as climate change advisor. We all know what’s afoot and it’s not about the Greens. It’s about stemming the flow of working class voters to UKIP in trying to give Labour an impression of not being a shower of out of touch north London intellectuals.

Could this have been the moment when Miliband met a real live voter that he decided to press the panic button?

Jockageddon Averted - Now It's England's Turn

Commentary and analysis from referendum observers is being produced by the bucket load, not all of it has substance. Here though are some salient points to note from friend Marcus Ashworth, Head of Fixed Income over at Espirito Santo, and he writes really, with no particular axe to grind..

"It was Crumble's Ma wot did it........ the silent majority came out in droves to register their understated desire to retain the Union, whereas in Glasgow the turnout was one of the lowest and 53.5/46.5% was not enough of a Yes vote to give Salmond a chance.  Despite all the puff he didn't get his vote out, and in what was probably the largest % turnout in a modern democracy ever (Aus doesn't count as semi-forced voting).  Bully boy tactics clearly backfired.

A double digit majority was what was required to put this issue to bed for now - though of course Salmond doesn't have that in his nature - "at this stage" was a particularly telling phrase in his most ungracious acceptance of defeat speech.  Evidently his only tactic left is to try and grab as much of the "vows" as possible.  However, Number 10 apparently has some other ideas and talk of Devo Max is being downplayed.

The chat from Downing St seeems to a swift volte face to try and redress the growing clamour from the Tory backbenches about what Gordy was allowed to promise in the final days?  For all the sense of panic it is evident that Gordy had this worked out many months ago but was only sanctioned to unleash the dogs of war in the final nail-biting furlong.  His last speech was apparently his best, though equally Cameron did his bit under unrelenting abuse.  The Better Together campaign was pretty much totally Scottish Labour led and Tory free, it is not the winner though.  Labour party conf in Manchester - Ed needs an even better speech this time - pref without that Disraeli one-nation blather.

The West Lothian question is the key piece of egregiousness that will have to be finally knocked on the head - something that Labour has conspicuously failed to do.  Scottish MPs will soon no longer be allowed to vote on England only matters - whilst of course English MPs have never been allowed to vote on Scottish matters.  This will pose a knotty one for Miliband because it could very well permanently emasculate Labour Govts if on budgetary matters there is not enough of an English-only MP backing.  The Barnett formula (which even its eponymous creator thinks should be scrapped) will stick in the craw.  If affords a permanent upward only subsidy of circa £1500 per person to Scotland over rest of UK.  This has not gone down well south of the border.  At all.

Cameron may have been knifed by Clegg on the Boundary Commission changes (which is the most outrageous breach of code for the so-called Mother of Parliaments) - but this way he may partly get his own back.  If he fails then he will really face the chop from the 1922 cmte.  Bear in mind Clacton by-election shortly will see a big slap for Cameron - and his image is very much of the "essay crisis".  Tricky times if he drops this ball on Constitutional change - especially if Salmond gets traction on any perceived signs of backsliding on the vows.

Labour has acted appallingly throughout this campaign being utterly self-serving and using every opportunity to try and turn a battle to save the Union into a call for a Labour Govt next May.  If Miliband fails to engage in a William Hague (as Leader of the House) overseen all-party talks, then it will be Labour who will carry the can for failing to deliver on the myriad of promises offered up by their last Prime Minister.

If only for that fact Cameron should emerge from this as the biggest winner and it's a 2nd big win for him after seeing off the Lib Dems on proportional representation, is he on a roll for winning in Europe as well?   OK that might be a leap of faith too far - still the gamble has largely paid off and the Tories can get to shape constitutional change whilst still in power.  That is a major, major difference from the expected situation that the next Labour Govt (as the polls still point to) would carve it up as they see fit.

........... welcome back Scotland

I find it hard to see (bar Gordy, Darling to some extent and of course the redoubtable Jim Murphy who will clearly get a Knighthood) who in Labour comes out of this with any accolades.  Miliband is a dead man walking - and he knows it.  It is one thing for Cameron to find it difficult to campaign in Scotland but for a Labour leader not to either basically bother to get up there until the last few moments and then not to be capable of walking through Edinburgh is a travesty of not just how the Yes campaign has been conducted but of Miliband's validity.  Clegg has proved that the Lib Dem vote has vaporised.  Question now is whether Salmond can survive, let's hope not as he allowed a very dirty campaign to get quite seriously out of hand - he deserves to go just for that alone.  Only Farage had the temerity to call him out for that."


Rotherham; Lacking Leadership

Rotherham; Abdication of leadership

Let's stand back from the continuing furore for a moment and reflect on what our political leaders have said on the subject,

"                                                                                                                                                         "                                                                                                                                  David Cameron

 

"                                                                                                                                                         "

                                                                                                                                  Ed Milliband  

 

"                                                                                                                                                         "                                                                                                                                    Nick Clegg

That is just an astonishing abdication of leadership promulgated I have no doubt, by pointy headed PPE policy wonks, Australian and American media guru's and Boss-suited electoral consultants. You can hear them now, "Well, best to say and do nothing in case you are tainted politically in the minds of the swing voter in the key marginals just by being on the same news segment. We'll get you on Marr this Sunday and you can do the reflective, mature statesman thing....................."

I'm afraid gentlemen, it won't do. It won't do at all

One more thought. The media are on their traditional witchhunt for the odd responsible individual to resign. My more radical contention, (see below), is that central government needs to sweep in and take over with the sort of special measures to reform and rebuild that are successfully applied to schools. The scale of the cover up however, has been so vast that I can't help but wonder if organised crime might be sitting behind some of this. I'd mostly be sending the National Crime Agency up there to have a look see....... just in case.

beggers belief

 

 

Blue Skies?

The view this morning from outside the office was nothing but uplifting. I think it’s the first blue sky I’ve seen this year!

Unlike some other parts of the country which continue to suffer although real perspective from the media was long since flushed away. Now though, that the pastures of South Western England are more easily identifiable with the paddy fields of South East Asia, and talk on the 06:00hrs from Haslemere is reminiscent of the Blitz, “I see Somerset was hit again last night,” “and they got the Rose & Crown in Chertsey,” it is reassuring that the governmental machine has at last rolled into action. Unfortunately, it again took a media storm and growing political embarrassment to force action to acknowledge the situation that the stoic citizens of the South West and elsewhere find themselves in and past errors of judgement which have exacerbated the problem.

Are not the floods though, another pressing indictment on short duration politics which constantly strive for immediate electoral favour without regard to long term unintended consequences? The paucity of multi decade planning is being laid bare across every part of our society and embrace energy, transport, defence, education and the vexatious issues of long term health and elderly care. We’ll have another opportunity to witness “last safe moment crisis management,” with the next financial crisis which is trundling down the tracks with an arrival time of later this year.

The political establishment would gather much more support if they focused more on doing the right thing, rather than always lurching for the politically expedient path. We’re not as stupid as they evidently think we are. 

A politician trying to look windswept & interesting (click)

Would it be too cynical to reflect that Berkshire and Surrey have been sacrificed to manage the water flow through London? As a plan it does have an economic logic although not for the citizens west of London. The flaw in the plan of course is that such is the weight of water, it’s displaying the temerity to go around the upstream weirs and is now encroaching as far as Richmond. Londoners may be phlegmatic but the floods are worsening, as evidenced by the Navy appearing upstream and not just the Army!  While politicians stare at the floods trying to look windswept and interesting, enquiring minds are left to ponder, what about the moles and is there any truth in the rumour that Somalian pirates have been spotted on the Somerset levels?

Sandbags.jpg

The drafting in of servicemen, if only to reassure citizens, is woefully overdue, even if they don't have the kit, (we sold it all), or training to make a significant difference. As Think Defence points out, using servicemen as general labour to fill sandbags, (probably because it fulfills some hearty belief in that's what soldiers do), is "pure tokenisim." 

There have been some suggestions of remustering the Civil Defence Corp. I think it's a great idea and long advocated here. Call it what you will, but a series of CDC detachments and or TA Royal Engineers stationed up and across the country with dedicated long term depots of food, fuel, light, shelter, pumps, earth moving kit, snow moving kit and so on to support the civil community in times of urgent need is an obvious good. It doesn't matter if they're young reserve soldiers or civilian middle aged and retired specialists, (perhaps a mixture of both), but the poverty of our preparations to deal with disaster is becoming a national embarrassment and a dereliction of duty by HMG. The Americans have FEMA , we've got a bunch of clowns in wellies. Mind you, in the US the Corp of Engineers look after the waterways but then they are almost half the size of the whole British Army.

Why doesn't it happen now? I suspect a mixture of self entitlement, self importance and self preservation from all currently involved. The whole structure, where one exists, needs a shake down.

For the moment, there are no winners. The Environment Agency has let itself and the country down, (even though many planning departments ignore their advice on developing on flood plains), the media are turning the whole thing into a hysterical circus with not even a crumb of scientific analysis, (Charles Glover's piece in the ST about farmers in Somerset putting their topsoil at risk in flooding by over planting with maize is an exception), Westminster have been shown to be the comedy act that they are and some householders have seen a lifetimes endeavor floating away toward the English Channel. All the rest of us, well we'll end up with the bill because we keep electing people with no vision, foresight or appreciation of risk.

Market watchers meanwhile are left to consider the weather impact on food prices. From the drought in California, the snowstorms across southern and eastern US, the hottest December on record in Brazil and our own floods there will be an inflationary impact to come on the High Street. 

"The first such foreign policy defeat since 1782"

Last nights vote against intervention was a victory for Parliament who, for once, listened rather than heard and saw rather than looked. The lack of enthusiasm for catapulting us into conflict without a strong case being made to the country, without limitations and without a clear aim has been greeted with relief. Wisdom and maturity have prevailed.

The problem doesn't go away but there is a clear instruction to the government that having done exhaustive preparatory planning,  they must then engage and explain. We're not going to war off the cuff again. We value our country and the lives of our servicemen somewhat higher than the price of post Prime Ministerial American lecture tours.

The clear loser is David Cameron. The Prime Minister has a reputation in Westminster for being idle. He is thought not to anticipate problems coming down the tracks, (partly through not reading briefs thoroughly). This leads to ill thought out solutions hurriedly thrown together. If he spent more time working hard and less time on the beach, (more holidays than most Prime Ministers in modern times), he might not be so disconnected from the prevailing sentiment of the country, Parliament and indeed his own party. 

As my friend Stephen Lewis, (Chief Economist at Monument Securities), points out, 

"Before Mr Miliband and a number of Tory MP's frustrated his plans,  Cameron argued that any military action against Syria had to be ‘specific’.  ‘This is not about getting involved in a Middle Eastern war,’ he said.  Whatever the rights and wrongs of Mr Cameron’s stance, one thing is clear.  It would not be for him alone to say whether the outcome would be war.  That would partly depend also on the reaction of Syria and its allies to what they would see as NATO aggression.  One could sympathise with Mr Cameron in the position in which he found himself.  He knows that, to win general support for military action against the Syrian regime, he must at all costs avoid presenting it as the prelude to the kind of adventures Blair initiated in Afghanistan and Iraq.  There is every reason to believe he is sincere in thinking that Syria could be attacked with no further consequences.  Even so, it is disconcerting that he should contemplate action while taking for granted that war will not ensue.  In this, he shares a mindset that has developed within the ruling elite in the developed world.  It does not occur to members of this elite that their decisions might have results other than those they intend.  Consequently, they make no adequate provision for contingencies." 

That he has failed in his first big test creates a pretty big political problem for him. He is not without enemies within his party and many will now be less timid in articulating their concerns. It should be an interesting party season.

Having put a stake in the ground, perhaps the Americans will now prove to be more supportive going forward on issues like the Falklands and Gibraltar

Markets meanwhile, are somewhat relieved that short term uncertainty is removed yet have still to even countenance longer term political change which may result from the events of this week.

Congratulations though, to all those MP's who had the moral courage to stand up for what they believed in. 

MC's Big Idea

It was with a feeling of detached bemusement that I watched Labour catapult themselves into obscurity last week when they elected Ed Miliband as their new leader. "Another policy wonk who has spent two minutes in Parliament without doing any real work in his life," I muttered to myself. Moreover, he looks like a badly made Thunderbird puppet and talks in a voice you'd expect from a voice synthesiser made on Blue Peter with spare bits from the kitchen.

This week though, I've taken the same detached look at the Tories and have more or less come to the same conclusion. This of course, is grossly unfair on badly made puppets who at least, in every crisis appeared to have a workable plan and inspired confidence in every eight year old parked in front of the television.

Watching the Boy Osborne alienate virtually every mother in the country has been pitiful; I almost feel sorry for him. Wherever he goes, whatever he does will mean nothing now because it will be lost in a burning cauldron of resentment from the Mothers Union; even Mrs Flashbang can remember his name.

Of course, it's not the cut in itself which is causing the damage. It's the poorly thought out execution which shouts "unfair," which is causing the damage. Similarly, the £26,000 cap on benefits isn't particularly well thought out. It's the equivalent of a basic salary of over £40,000 and of course, with no travel costs and council tax to pay it's a not unattractive number.

So, with four months already wasted the government are stumbling along with no real initiatives to stimulate growth, stabilise the economy and ward off the very real threat of depression. Policy makers across the world have deployed "shock and awe," to steady the financial sector and prevent fiscal melt down. They have thrown kerosene at the problem in the form of fiscal stimulas in an attempt to stimulate demand. It hasn't worked so they're thinking about getting a bigger bucket of kerozene and trying again, all the while debasing their currencies and lighting the fuse for an inflation storm down the road. That path hasn't worked in Japan and it won't work here.

Where then is the clarity and originality of thought that will stir the country and provide incentives to get the economy moving forward; you can't just keep beating people, no matter how much the detached Vince Cable would like to. Don't strain yourself George, I'm here to help and return to an idea which I wrote about some months ago.

The virtue of this plan is it's simplicity and mutual benefit to all.

- Issue a 30 year 4.5% National Mortgage Gilt

- Issue fixed 30 year 4.75% mortgages

The benefits would include -

- Stabilising the housing market

- Allowing households to plan their house purchase and debt management over the long term

- Kick starting badly needed replenishment of our national housing stock

- Getting the building industry back to work

- Recreating the enfranchisement of all levels of society into home ownership.

- Gives entities with long term liabilities, (pension funds, insurance companies etc), a means to obtain a sovereign rated bond with a good return.

The only objections to doing this will come from vested interests. Given RBS and Lloyds are majority owned by the taxpayer they will mostly do as they're told and the rest can either get on board or ship out and face the consequences.......... ie, no future government business or support. There could be restrictions on second homes and so on, to prevent creating more bubbles, but they're not material to the central thrust at this stage.

There would also be a profound change in the perception not just of the recession amongst householders but also of the government. Everyone needs a bit of sunshine in their lives.

Go on then George, there's the ball....... run with it.