Milliband on Banking
I listened carefully to Ed Milliband’s dissertation on banking. I learned much, he confirmed without any doubt, he does not understand what has gone wrong with banking. No more of course than the coalition government. The collapse has been caused by the fractional reserve banking system where banks can lend money which does not exist on a mammoth scale to fuel asset bubbles doomed to bust. A central bank is basically an arm of government which encourages this behaviour. When the money eventually runs out, central banks, at the behest of the Treasury, electronically print yet more money, compounding the problem even more. This is nothing to do with codes of conduct, numbers of branches, number of banks, failed regulation, bonuses or meaningless buzz words like ‘stewardship banking’.
The whole concept is rancid and doomed to failure. Government is part of the problem not the solution. Interesting and sad none of the journalists who asked questions after Milliband’s speech even knew what questions to ask.
Defence
Defence of the realm is supposedly the prime responsibility of government. I am old fashioned enough to agree. As a baby boomer I have seen over the years government of all political persuasions gradually change this emphasis to the implementation of a cradle to grave welfare state. We are now miles away from the original concept of the Beveridge ‘safety net’. Social welfare is largely now a matter of lifestyle choice. Moreover we have also seen an explosion of corporate welfare. This manifests itself through the channels of quangocracies, green initiatives and political ideology, overseas aid and EU contributions are over £75 million per day as I write. Thousands of old people are in energy poverty whilst major land owners wax fat renting land for wind turbines, surely one of the great absurdities of the age. This criminal waste means there is no money left for adequate defence of the realm. Or does it? Arguably the budget for defence as % of GDP is not unreasonable. It is possible to run a very efficient defence force with nothing more than some political will and some expertise.
I was privileged to be invited to give a paper to the National Defence University in Washington in 2006 which flagged up exactly where the missing billions were going and why. Quite how the conservative coalition were so surprised when they took office is bewildering.
There is a need for a drastic strategic change in direction in UK defence policy. If the UK had been a Plc this would have taken place years ago, unfortunately a two party constitutional democracy is doomed to chronic inefficiency, it is built into the system. There are no shareholders in UK plc to bring the board of directors to account. An electorate, largely without the benefit of a traditional education often deliberately misinformed by public service broadcasting, which is of course a tool of government, leave all the real problems of the day unaddressed. This is how a situation has developed where there are more civil servants in the MoD than soldiers indeed the great state monolith the NHS has 1.3 million staff, less than half of whom have medical qualifications of any sort. The state is incompetent because there is no market force at work to weed out failure. This has very little to do with party politics but everything to do with a flawed system.
How can this be rectified? Indeed can it be rectified? It is my belief it can, inexpensively and relatively quickly.
It calls for a ruthless surgeon’s knife. Not necessarily in order of priority here are the main steps:
The Minister of Defence must be a cross party appointment, not necessarily drawn from the ranks of party membership. Indeed it would be an advantage to actively discriminate against career politicians. The average term of office over the last 25 years for Ministers of Defence is 1 year 4 months.
The Minister could have a small defence committee. I mean small. Three is plenty. No good ever came out of a committee with more than four members, I resist the allusion to the camel. The constituent members could include an historian, who could argue the late Professor Richard Holmes would not have added value, or indeed John Keegan or Corelli Barnet. Perhaps an entrepreneur who has built a business not inherited a Footsie company by climbing the greasy pole of corporate politics but a Tim Martin (Wetherspoons) or Brian Souter (Stagecoach). A real entrepreneur. I would add, perhaps radically, a temporary rolling appointment for an officer of middle rank fresh from Staff College with recent operational experience. I did enough soldiering as a Territorial to know the procurement of army trucks was done by a cavalry general in my day, who had never been in a truck in his life. I had dinner with the Deputy Chief Executive a Bedford Commercial and he told me.
This brings me on to procurement. The MoD is not fit for purpose it has to go. It is not reformable. There are excellent people in the MoD. It is the organization that is rancid. We need a new procurement agency headed up by the best MoD people of 2 star rank with the regular rolling co-opting of service officers on the basis of careful selection criteria. No ‘Buggins turn’ arse-creepers. The whole procurement process should be de politicized. Defence of the realm is not blind support of defence industries in marginal seats. Off the shelf is the order of the day. The UK defence industry is big enough and ugly enough to live in the commercial world.
Significant changes need to be made in pay, pension and service welfare. Admiral Snooks does not need £200,000 per year to push paper about Whitehall. Corporal Sprogins needs a periodic bonus to keep him in the game of sudden death in Helmand Province. Colour Sgt Knaggs in Afghanistan needs a better package than Flt Sgt Comfort counting blankets at RAF Wittering. The team on operations need helicopters and plenty of them, not one with wrap around quadraphonic music, electric windows and leather seats, but bog standard. Army trucks can be bought from TATA at £25,000 each and sprayed green, not state of the art trucks from MANN in Germany for £150,000. Remeber that beautiful RAF poem Johnny Head in Air ‘wants his children fed’, he also expects an on base dentist for his family in Catterick, Colchester or Portsmouth.
If we are not going to war with America I suggest we would be better with significantly more squadrons with integrated weapons systems compatible with our real allies, not a ‘buy European’ policy at five times the price with Mickey Mouse allies who, history shows, will always let us down.
Last but by no means least, we need a reserve and recruitment policy which reflects a youth unemployment rate of 26%. The nation deserves to die if we have under recruited infantry regiments in catchment areas where young men and women watch day time TV as they await their welfare cheque.
As Churchill would have said, “Action this day”.
By kind permission of Defence IQ
Public Service Europe Article - Defence
National defence is very much like the annual insurance premium on the family house. Most folk rarely claim, houses rarely burn down or have their entire contents stripped by burglars. However it is the responsibility of the head of household to ensure the premium is paid. So it is with defence, the state’s primary responsibility, defence of the realm. In recent years this fundamental priority has shifted. Government no longer believes this is a priority. The new priority is protection of the banks, industries too big to fail, social and corporate welfare and an energy policy built on junk science and political manoeuvring.
Yet the defence budget is adequate in itself, the failure is the apportionment of that budget. Since the Great War the tax allocation to defence has not been based on primary or even secondary threats to the United Kingdom but a systematic subsidy transfer to the British defence industry. Compounded in recent years by a flawed commitment to European defence industries.
Procurement is, and has been, the downfall of a strategic policy since the last war. There are pitifully few politicians of any party who understand defence or even have a military background, the Ministry of Defence is not regarded as a step on the ministerial promotional ladder. Out of the choice of second division modern politicians comes from the bottom of the barrel therefore which is how we find a £40 billion hole in the budget, something I flagged up in a paper to the National Defence University in Washington six years ago.
How can we put this right? How can we sort out decades of incompetence and neglect?
We must be ruthless, in order to do so we must form a cross party authority. The Liberal government and Conservative opposition worked together through the Haldane reforms in the early 1900s so there is a strong precedent for joint party solutions. The MoD is unreformable, it must go. Replaced by a procurement agency taking its briefing as directly as possible from the Chiefs of Staff. We must get away from senior service squabbling over ships, soldiers or aeroplanes. Away from ‘either, or’. There are enough top senior civil servants who are capable of driving this through within the MoD already. They need a free hand and motivation to bring the new agency into being as a matter of urgency. Civil servants and service personnel acting as civil servants need culling on an unprecedented scale. We really cannot disband infantry regiments to maintain Whitehall warriors.
Notwithstanding the howls of protest from the defence industry in marginal seats military hardware must be at the right place on time for the right money. We do not need to pay £100,000 for Army trucks, £60 million for combat helicopters, £1 billion for all singing all dancing super multi role fighters. The procurement motto must be ‘off the shelf’ wherever possible. I am afraid this will have to mean a heavily buy American policy. Certainly weapons platforms and airplanes. We can fit our own weapons systems where they can be developed at the right price and they must work.
The UK’s prime defence capability has to be at sea and in the air. We have never traditionally had a significant standing Army like the continentals. It is not credible the British Army should fall below 100,000. 4 Divisions, air portable. The reserve to be made up of a further 3 divisions of Territorial troops. The brilliant Haldane set out the blue print for this as sound today as it was 100 years ago. The infrastructure is already there. To make this work there must be an uncompromising social commitment. Pensions, bonuses, family health care, our commitment must be total, too often we have failed our military post conflict.
There are plenty of radical ways we can retain expertise. City style warrant options for example based on service, not just length of service but type of service. Counting blankets at RAF Snodsbury is not the same as patrolling Helmand Province. We must also close the gap between Admiral Snooks on £200,000 per year and Marine Atkins on £300 per week. If potential long term career officers want big salaries, choose a different profession.
Warrants and bonuses for regulars and territorials should be significant. Recruitment should never be an issue, not with 24% youth unemployment. Carrot and stick please.
As Churchill would have said ‘Action this day’.
by kind permission of Public Service Europe
What do UKIP MEPs do in Strasbourg and what does it all mean?
On Thursday 24 May in the parliament in Strasbourg, a city very beautiful to visit in the warm month of May, there was a minor vote on a minor non-legislative matter which UKIP won. That is to say, UKIP voted with the majority of the MEPs in the European Parliament on an individually electronically recorded vote for a small section of a report which merely expresses an opinion in the house, but was not binding for any action or passage into law.Now as anyone at all familiar with the voting in the EP knows, UKIP winning any vote is a rare enough event, but even so this is nothing to crow about, it being but a small fish when seen in proportion to the whole shoal.
But I feel this little victory is worth comment, as a second glance shows that on some issues the mood in the parliament can change very quickly, and there is a way that we may be winning bigger votes in the future if we play our cards right.
The report A7-0161/2012, is entitled 'On a resource-efficient Europe', and is a non-legislative 'Motion for a European Parliament Resolution', sponsored by the Environment committee MEP Gerben-Jan Gerbrandy. The overall tone of the report calls for total EU control of land, water, carbon footprint, material footprint, etc, in the interests of 'sustainable development', much like the control the defunct Soviet politburo exercised over the defunct USSR. Not very promising territory for UKIP you might think.
However, while the overall report has the crucial final vote which we were bound to lose, paragraph 52 is very sensible, and was subject to a separate vote, which we won.
It reads:
"52. Urges the Commission also to calculate and disclose the costs of the environmental damage arising as a consequence of the EU’s agriculture and fisheries policies;"
The vote figures were:
Resource efficient Europe
Paragraph 52 (want Commission to calculate and disclose costs of environmental damage of CAP & CFP) - 312 in favour, 287 against, 12 abstain {UKIP for (we won!)} - Tory against - Lab for - Lib for
This reminds me of the fisheries vote we won late last year, preventing a subsidy of EUR38 million to the Moroccan government for EU permission to fish in their waters - which would do to their fish stocks what have been done to Britain's.
The moral of the story is simple: if we can get the Green Environmental costs quantified, or even threaten to quantify them, and relate them to damage already done by the same EU policies, we can win a lot more like this, and save our industry and our land from utterly wrong and foolish EU policies. Note that banging on about the cost on its own does not work. We need to add the extra motivator of the environment policy back-firing to get the needed majority.
One last point - the cherry on top - the Conservatives voted against holding the Commission to account for the eco-vandalism of their expensive policies. A telling point we all might relate in our discussions in the pub.
An English Constitution
Perhaps Lord Oakshott should read this excellent 100 year old appraisal.
ENGLISH CONSTITUTION
The importance of the English Constitution in the political history of mankind is so great that the question of its origin is of unusual interest. The unanimous judgement of the world at the beginning of the twentieth century is that this is the best system of government yet devised. All monarchies which have adopted a constitution have derived their forms from it, and the same is true of most republics. Local necessities, or local prejudices, have made the adoption in individual cases more or less complete, or have led to variations from the typical forms, but these are hardly sufficient, even in the most extreme case, to conceal the indebtedness. The English Constitution has made the circuit of the globe and become the common possession of civilised man. After so many centuries of experiment, practical action, whatever be the opinion of the theorist, unites to declare this the best result of all experience. If this is true, the question from what and how it began to be should be considered one of the greatest and most absorbing of all historical studies.
Some definition is, however, necessary for the sake of clearness. By the term constitution, as used above, is not meant the whole system of government, all the organs of the state, the whole political machinery, national and local. What is meant is the machinery of a limited monarchy those devices by which an absolutism, once existing in fact, can be retained in form and theory while the real government of the state is transformed into a democratic republic.
From: The Origin of the English Constitution by George Burton Adams, Professor of History at Yale University, 1912.
Silly Signals
DECC have produced a statement from Nick Clegg and Ed Davey (Chris Huhne's successor) which is so far removed from reality it is hard to know where to start untangling it.
It's an argument in defence of higher emissions reduction targets and the carbon floor price, which is necessary according to Clegg & Davey, following the failure of the ETS mechanism, caused by the economic situation.
It's shouldn't be a surprise to learn that the planners of the ETS didn't anticipate economic downturns, which is to forget the advice that is attached to every advert for investment services.
Nick and Ed continue the daftness. If energy prices are up, in spite of demand being low, what is the need for a further incentive against energy use? The economic downturn and high prices are doing the job that the ETS was intended to do.
The most absurd claims made by the pair are that:
- 'the crashing price of carbon' is a ' a threat to our shared prosperity'
- 'The global low-carbon market ... supports over 900,000 jobs in Britain' and that 'those numbers can grow'.
- 'more ambitious [carbon reduction] targets will help grow our low-carbon industries, ensuring Europe's competitiveness in a fast-growing sector
- 'many business leaders recognise, the real risk is moving too slowly, not too fast.'
All of these statements are sheer bunk. The last of them is contradicted by an article in today's Guardian -- of all places.
The article reports that 'Andrew Shepherd-Barron, a specialist in the clean tech sector at brokers Peel Hunt, has just come up with a review of share price performances and describes the green scene as a "graveyard" for investors globally.'
Clegg and Davey are simply trying to rescue their fantasies from reality. Like Huhne, they believe they can simply pull policy levers to 'send signals to the market', and that it will obey. As the market has disobeyed, so they send louder signals. The problem for the rest of us is that we have to put up with the noise.