The End of The Olympics
The Greek government has blamed the unchecked spending on the 2004 Olympics as being the reason for Greece's growing budget deficit.
Seemingly, because of accounting errors and "omissions", this deficit is likely to grow.
The latest figures from the EU show the deficit at 6.1% of gross domestic product, more than double the cap allowed by the EU.
Prime Minister Costas Karamanlis told the Parliament:
"The burdens we face from the past are very large..".
The cost of the 2004 Olympics is now being estimated at being $12BN. The Greek government has until the end of the month to explain to the EU how it will lower the deficit.
In a statement on the Finance Ministry website, the blame is pointed directly at PASOK, the socialist government that ruled Greece in the lead-up to the Olympics.
Additionally, there is the nagging question of what to do with the now redundant white elephants that made up the Olympic infrastructure. These are costing around $100M per annum just to maintain.
In respect of the breaching of the EU deficit rules, I would imagine that some form of political "fudge" will be made. The EU is notorious for allowing its members to break the rules, this will be no exception.
After all, if the then Greek government had been honest about the costs it would never have been allowed to join the Euro.
The EU will never admit to the fact that it had been conned.
With regard to the $12Bn cost, this is surely proof positive that the Olympics as a whole need to be totally reformed and scaled down.
No one in their right mind should even think of hosting them, if they are going to cost this much.
The trouble is that politicians' egos overrule common sense.
Maybe it is now time to abandon the Games, and for countries to spend their money on something more productive instead.
Sunday, March 20, 2005
Tuesday, December 14, 2004
Don't Dilute The Brand
My professional body, the Institute of Chartered Accountants (ICAEW), will be launching yet another campaign to persuade its 126,000 members to approve a merger with two other accountancy bodies in the UK (CIPFA and CIMA).
The ICAEW ruling council argue that:
NO!
NO!
NO!
NO!
The arguments put forward represent the same, tired old mantra recited by previous ICAEW councils. They failed then, and they will fail again to convince the membership that a merger is a good idea.
We, the members of the ICAEW, do not want or need a merger of incompatible bodies. The merger will “dilute the brand value” of the FCA qualification.
Rather like a poorly conceived marriage; forcing unequal, ill suited partners together is a recipe for disaster.
The membership of the ICAEW have strived long and hard to achieve their qualifications; yet the council of the ICAEW seek to fritter away the labour of years, like a gambler “blowing his salary” at the dog track. To accept the merger would, in effect, consign the members’ efforts to the dustbin of history.
To hand over control of the governing council of the ICAEW to a new body, will denude the current membership of its right to veto who can become an accountant.
The council has wasted far too much time and money over the years, in trying to persuade the members to vote for a merger. The time has come to stop this disgraceful waste of members’ subscriptions, and stop the merger juggernaut once and for all in its tracks.
The argument about demographics is spurious, and indeed a sad indictment on the “management” by the council of the ICAEW. The decline in “youthful” members is surely down to the decline in the attractiveness of the qualification, and the out of date “fuddy duddy” image of the ICAEW. These issues should be directly addressed by the council, not swept under the carpet in the guise of a merger.
Diluting the brand is not the way to address the fundamental problems facing the ICAEW.
Vote no to the merger.
I have set up a website, dedicated to fighting the ICAEW merger proposal, it can be accessed via www.stopthemerger.org
Please tell your friends and colleagues about it.
My professional body, the Institute of Chartered Accountants (ICAEW), will be launching yet another campaign to persuade its 126,000 members to approve a merger with two other accountancy bodies in the UK (CIPFA and CIMA).
The ICAEW ruling council argue that:
- The demographic skew of the ICAEW means that by 2023, half the membership will be over 55. The merger, in their view, will inject young blood into this dying organisation.
- The merged body will be larger, and better equipped to address the issues facing accountants in the 21st century.
- The merged body will be able to stand up to the UK’s other accountancy body, the ACCA. The ACCA is, for reasons that remain unclear, not participating in the merger talks.
- The ICAEW argue that we have been down this route so many times before, there have been several merger attempts in the past that have been vetoed by the membership, that it is now time to make up our minds once and for all; ie vote yes.
NO!
NO!
NO!
NO!
The arguments put forward represent the same, tired old mantra recited by previous ICAEW councils. They failed then, and they will fail again to convince the membership that a merger is a good idea.
We, the members of the ICAEW, do not want or need a merger of incompatible bodies. The merger will “dilute the brand value” of the FCA qualification.
Rather like a poorly conceived marriage; forcing unequal, ill suited partners together is a recipe for disaster.
The membership of the ICAEW have strived long and hard to achieve their qualifications; yet the council of the ICAEW seek to fritter away the labour of years, like a gambler “blowing his salary” at the dog track. To accept the merger would, in effect, consign the members’ efforts to the dustbin of history.
To hand over control of the governing council of the ICAEW to a new body, will denude the current membership of its right to veto who can become an accountant.
The council has wasted far too much time and money over the years, in trying to persuade the members to vote for a merger. The time has come to stop this disgraceful waste of members’ subscriptions, and stop the merger juggernaut once and for all in its tracks.
The argument about demographics is spurious, and indeed a sad indictment on the “management” by the council of the ICAEW. The decline in “youthful” members is surely down to the decline in the attractiveness of the qualification, and the out of date “fuddy duddy” image of the ICAEW. These issues should be directly addressed by the council, not swept under the carpet in the guise of a merger.
Diluting the brand is not the way to address the fundamental problems facing the ICAEW.
Vote no to the merger.
I have set up a website, dedicated to fighting the ICAEW merger proposal, it can be accessed via www.stopthemerger.org
Please tell your friends and colleagues about it.
Friday, September 17, 2004
1984 – Twenty Years On
In Orwell’s chilling vision of the future of Britain, 1984, the Ministry of Truth was responsible for propaganda. Orwell illustrates this by describing the release to the media of news about the statistics for shoe production. The statistics showed another increase in production.
However, as the protagonist Winston Smith mused, no one knew if the statistics related to left foot shoes, right foot shoes or were for pairs of shoes; indeed no one knew if the statistics were correct and, most damming of all, no one cared.
In 2004 we find ourselves to be in a very similar position. There is a rumour, “doing the rounds”, concerning the latest figures released by the government about the number of homeless people living on the streets of London.
It seems that a “directive” was issued to all the homeless care centres in London, instructing them to hold a party for the homeless of London on the same evening.
The homeless were duly “rounded up” to attend this very philanthropic event. A good time, we assume, was had by all.
On the face of it there is nothing sinister, or worrying, about giving a little warmth and cheer to those on the lowest end of the social ladder. However, there is one piece of information that needs to be added to this “Dickensian tale” of generosity.
The night of the party was the night that statisticians were walking the streets of London, counting the number of people living rough on the streets. These statistics would then be compared to the previous count, to see if the government had reached its target of reducing homelessness.
Needless to say, because a large number of homeless people were attending the special party they were not physically on the streets at the time of the count. Therefore, the statistics for the number of people living rough on the streets of London showed a marked improvement. The government had reached its target!
It seems that Orwell’s vision, although it may have missed the mark by twenty years, has become reality.
Bliar and his team of cronies in New Labour are so adept at lying, that they know that they can do it with impunity; the lies are no longer reported, even when they are no one seems to care.
The result is that Bliar no longer cares what lies are told; so long as it serves the cause of New Labour, and their desire to cling on to power at whatever the cost.
In Orwell’s chilling vision of the future of Britain, 1984, the Ministry of Truth was responsible for propaganda. Orwell illustrates this by describing the release to the media of news about the statistics for shoe production. The statistics showed another increase in production.
However, as the protagonist Winston Smith mused, no one knew if the statistics related to left foot shoes, right foot shoes or were for pairs of shoes; indeed no one knew if the statistics were correct and, most damming of all, no one cared.
In 2004 we find ourselves to be in a very similar position. There is a rumour, “doing the rounds”, concerning the latest figures released by the government about the number of homeless people living on the streets of London.
It seems that a “directive” was issued to all the homeless care centres in London, instructing them to hold a party for the homeless of London on the same evening.
The homeless were duly “rounded up” to attend this very philanthropic event. A good time, we assume, was had by all.
On the face of it there is nothing sinister, or worrying, about giving a little warmth and cheer to those on the lowest end of the social ladder. However, there is one piece of information that needs to be added to this “Dickensian tale” of generosity.
The night of the party was the night that statisticians were walking the streets of London, counting the number of people living rough on the streets. These statistics would then be compared to the previous count, to see if the government had reached its target of reducing homelessness.
Needless to say, because a large number of homeless people were attending the special party they were not physically on the streets at the time of the count. Therefore, the statistics for the number of people living rough on the streets of London showed a marked improvement. The government had reached its target!
It seems that Orwell’s vision, although it may have missed the mark by twenty years, has become reality.
Bliar and his team of cronies in New Labour are so adept at lying, that they know that they can do it with impunity; the lies are no longer reported, even when they are no one seems to care.
The result is that Bliar no longer cares what lies are told; so long as it serves the cause of New Labour, and their desire to cling on to power at whatever the cost.
Friday, September 10, 2004
The Rotten Core at The Heart of Britain’s Financial System
It is often assumed by both the public and the politicians that, aside from the occasional scandal such as the Maxwell fraud, Britain’s financial system is well run and relatively honest.
After all, the UK has a plethora of rules, regulations and watchdogs (such as the FSA) governing; the stock market, financial advisers, pensions, auditors and all the other components that go to make up the UK’s financial system.
However, I am firmly of the opinion that this “confidence” is based on nothing more than hubris; and that, in fact, we live in country that has a fundamentally rotten financial system.
I would like to cite a number of examples that support my view:
The Endowment Mis-selling Scandal
The endowment mis-selling scandal, of the late eighties and nineties, readily springs to mind as one of the major failings of our financial system. As has been well documented, the life assurance companies used the bull market to create a totally unsuitable, and useless product, that they aggressively sold in the manner of TV sets and washing machines to over 8 million unsuspecting home owners.
The theory being that the bull market would create high yield returns on this product; that would not just pay off the mortgages of the hapless holders, but would also give rise to a modest surplus. Needless to say, what the life assurance companies did not bother to clearly tell people was that their commission charges would rob the product of much of its initial value, and that their projections for growth were totally unrealistic.
It now turns out that the 8 million holders, of these white elephants, are facing shortfalls of over £40BN. Although, in theory the policyholders can try to claim compensation, the life assurance companies are using every excuse in the book to slow the process down in order to avoid paying compensation. To date a paltry £1BN has been paid to those seeking redress.
The FSA, although they offer some fall back position for those refused compensation by the life assurance companies, do not have any intention of “rocking the boat” too hard. The FSA refuse to acknowledge the fact that the life assurance companies perpetrated the greatest financial scandal in the UK in living memory.
Pensions
Needless to say the results of the endowment policy mis-selling scandal have, coupled with the ill thought out tax raid by Gordon Brown on the pension’s industry, destroyed peoples’ confidence and willingness to invest in life assurance/pensions policies. The British people are facing a pension black hole that will leave the majority of pensioners, over the next few decades, living in penury. The politicians have failed the electorate, by allowing the electorate the self-delusion that they will forever have increasing standards of living without having to work harder. Instead of telling it straight, that people are going to have to work beyond what is considered to be the normal retirement age of 60-65, the government fiddles while “Rome burns”.
Corporate Governance
Corporate governance, so long thought of as being well established and effective in Britain, is failing lamentably. The boards of many companies are made up of directors and non-executive directors from a small clique of friends, and contacts in the City, who sit on each other’s boards. These people, instead of seeking to ensure effective and robust management in the interest of the shareholders, in fact more often than not sit passively; nodding through a host of half baked business plans, and the most greedy of executive remuneration packages.
I can certify that, more often than not, the primary qualification for being selected to serve as a non executive director (a position that in theory is meant to oversee the actions of the main board, so as to safeguard the interests of the shareholders) is that they have probably served in the same company before, or have certainly got “the right” connections. The concept of robust, proactive, independence doesn’t apply.
Directors of companies are routinely lambasted for awarding themselves, like pigs with their heads in the trough, inflation busting pay and pension packages. Politicians wring their hands, and shed crocodile tears, lamenting at this practice. However, once they have left ministerial office, each one of these “champions of the people” soon finds their way on to the boards of the companies that they were criticising.
Post Enron and Sarbanes Oxley the UK has, in its normal slow unhurried way, put together via the Higgs/Smith reports and the Combined Code a set of guidelines for companies and executives to follow with regard to corporate governance. However, it is not compulsory; all the company has to do, if it wishes to ignore these guidelines, is to write a few notes in the accounts.
Companies that are increasing their internal control and review procedures, not I may say because they want to, but because Sarb-Ox has forced them to; are complaining loudly about the increase in audit fees. It seems to me that it is not unreasonable that, because a greater amount of work is required to be done by the audit firms, they will have to charge more.
Audit Firms
Audit firms are not entirely immune from the rotten stench that emanates from the UK financial system. I well remember as a trainee auditor witnessing the booking of extra hours, that were not in fact worked, to the timesheet of a well known FTSE company; so that the audit fee could be justified to the FD of the client who, not unreasonably, had asked to see a breakdown of the hours worked.
A few years ago, audit firms, having felt the pressure of the market were forced to find ways to cut costs. Their brilliant and inspired solution was to create the concept of “risk management”, and audit only those areas that were deemed to be high risk; system compliance tests, which took up a lot of time, were thrown out of the window. The audit became a cheap and cheerful “risk management” exercise; whereby the real money was made by selling on added value services, such as consultancy.
In 2000 I attended, as an observer, an Arthur Andersen training course in Chicago; the mantra “forget about the audit, hard sell the high margin add ons” was pumped into the participants at every opportunity.
The consultancy advice usually given to the hapless client was to outsource mainstream functions such as; internal audit, tax and treasury to yes, you’ve guessed it the audit firms. I would say this, if Arthur Andersen had not been the first to “cop a fall” over lack of segregation of practices and excessive greed with its Enron and WorldCom debacle, then one of the other big firms probably would have done so.
Now they are forced to segregate services, and as such are reverting to the old “tick bash” routine in order to keep fee incomes high.
There is one other fly in their ointment. With the Enrons of this world came mega sized law suits, something that the accountancy firms and their insurance firms do not wish to pay for. This has caused something of a stand off with the government; Gordon Brown wishes for uncapped liability of audit firms, the audit firms are arguing for a cap. Their secret weapon is that if they don’t get a cap, they will dump certain “high risk” clients; this would leave the government with the responsibility for reviewing these companies’ books of account. In other words, the audit firms are holding the government to ransom; and trying to pass the risk of errors and omission in their working practices on to the shareholder and tax payer. Nice trick isn’t it?
The Stock Market
Those of you who are still not convinced that the financial system in the UK is rotten, should take a look at the stock market; and ask yourselves whether the ordinary investor, with a modest portfolio, can make money to the same degree as the big market players.
Monitor the swings and movements in the share price of any share, that you care to pick, over a few months; and watch the buys and sells preceding the announcement of any news that affects the share price, such as a take-over bid. In the majority of cases you will see that there are significant buys/sells (depending on the nature of the announcement), prior to the news being made public. That is not coincidence, but the result of the news being leaked to a few well connected “players” in the market.
When there is little news coming out about a company, more often than not the market makers will adjust the prices to shake out sellers or buyers; there is no reason for these price movements, other than to panic smaller holders into adjusting their portfolio which in turn generates commission for the market makers.
Consumer Debt
I will take as my final example the house price bubble that has grown over the last few years. As I write this, the effect of the recent interest rate rises by the Bank of England seem to be slowing the price rises down or indeed may even have pricked the bubble. The fact that this unsustainable rise could be allowed to continue for so long is damming in itself. However, the real issue is what has been sold on to the unsuspecting, and financially illiterate, consumers on the back of the bubble.
In the eighties, as already noted, we had endowment polices; now we have equity release schemes designed to consolidate credit card debt to encourage borrowers to borrow more, and spend on short term consumption. Borrowing long to spend short is recipe for disaster, as Weimar Germany and the world discovered to its cost in the 1920’s.
Loan companies have been allowed to aggressively target their advertisements at the most vulnerable, financially illiterate, people in society; without any regulatory interference. The interest rates on many of these debts bear no correlation to the risk profile of the loan. Instead they reflect the lending company’s “greed pricing grid”; which is the in house pricing model utilised by the lender to identify the maximum rate of interest that it can charge without losing customers to other lenders.
The result is that consumer debt in the UK now stands at over £1 trillion, which in my view is unsustainable. As house prices start to deflate many people will find themselves in a situation with negative equity; unable to move house, or restructure their finances. They will be saddled with an unsupportable level of debt for the rest of their lives.
Now, taking all of the above into consideration, do you feel that the financial system in the UK is well regulated and honest?
It is often assumed by both the public and the politicians that, aside from the occasional scandal such as the Maxwell fraud, Britain’s financial system is well run and relatively honest.
After all, the UK has a plethora of rules, regulations and watchdogs (such as the FSA) governing; the stock market, financial advisers, pensions, auditors and all the other components that go to make up the UK’s financial system.
However, I am firmly of the opinion that this “confidence” is based on nothing more than hubris; and that, in fact, we live in country that has a fundamentally rotten financial system.
I would like to cite a number of examples that support my view:
The Endowment Mis-selling Scandal
The endowment mis-selling scandal, of the late eighties and nineties, readily springs to mind as one of the major failings of our financial system. As has been well documented, the life assurance companies used the bull market to create a totally unsuitable, and useless product, that they aggressively sold in the manner of TV sets and washing machines to over 8 million unsuspecting home owners.
The theory being that the bull market would create high yield returns on this product; that would not just pay off the mortgages of the hapless holders, but would also give rise to a modest surplus. Needless to say, what the life assurance companies did not bother to clearly tell people was that their commission charges would rob the product of much of its initial value, and that their projections for growth were totally unrealistic.
It now turns out that the 8 million holders, of these white elephants, are facing shortfalls of over £40BN. Although, in theory the policyholders can try to claim compensation, the life assurance companies are using every excuse in the book to slow the process down in order to avoid paying compensation. To date a paltry £1BN has been paid to those seeking redress.
The FSA, although they offer some fall back position for those refused compensation by the life assurance companies, do not have any intention of “rocking the boat” too hard. The FSA refuse to acknowledge the fact that the life assurance companies perpetrated the greatest financial scandal in the UK in living memory.
Pensions
Needless to say the results of the endowment policy mis-selling scandal have, coupled with the ill thought out tax raid by Gordon Brown on the pension’s industry, destroyed peoples’ confidence and willingness to invest in life assurance/pensions policies. The British people are facing a pension black hole that will leave the majority of pensioners, over the next few decades, living in penury. The politicians have failed the electorate, by allowing the electorate the self-delusion that they will forever have increasing standards of living without having to work harder. Instead of telling it straight, that people are going to have to work beyond what is considered to be the normal retirement age of 60-65, the government fiddles while “Rome burns”.
Corporate Governance
Corporate governance, so long thought of as being well established and effective in Britain, is failing lamentably. The boards of many companies are made up of directors and non-executive directors from a small clique of friends, and contacts in the City, who sit on each other’s boards. These people, instead of seeking to ensure effective and robust management in the interest of the shareholders, in fact more often than not sit passively; nodding through a host of half baked business plans, and the most greedy of executive remuneration packages.
I can certify that, more often than not, the primary qualification for being selected to serve as a non executive director (a position that in theory is meant to oversee the actions of the main board, so as to safeguard the interests of the shareholders) is that they have probably served in the same company before, or have certainly got “the right” connections. The concept of robust, proactive, independence doesn’t apply.
Directors of companies are routinely lambasted for awarding themselves, like pigs with their heads in the trough, inflation busting pay and pension packages. Politicians wring their hands, and shed crocodile tears, lamenting at this practice. However, once they have left ministerial office, each one of these “champions of the people” soon finds their way on to the boards of the companies that they were criticising.
Post Enron and Sarbanes Oxley the UK has, in its normal slow unhurried way, put together via the Higgs/Smith reports and the Combined Code a set of guidelines for companies and executives to follow with regard to corporate governance. However, it is not compulsory; all the company has to do, if it wishes to ignore these guidelines, is to write a few notes in the accounts.
Companies that are increasing their internal control and review procedures, not I may say because they want to, but because Sarb-Ox has forced them to; are complaining loudly about the increase in audit fees. It seems to me that it is not unreasonable that, because a greater amount of work is required to be done by the audit firms, they will have to charge more.
Audit Firms
Audit firms are not entirely immune from the rotten stench that emanates from the UK financial system. I well remember as a trainee auditor witnessing the booking of extra hours, that were not in fact worked, to the timesheet of a well known FTSE company; so that the audit fee could be justified to the FD of the client who, not unreasonably, had asked to see a breakdown of the hours worked.
A few years ago, audit firms, having felt the pressure of the market were forced to find ways to cut costs. Their brilliant and inspired solution was to create the concept of “risk management”, and audit only those areas that were deemed to be high risk; system compliance tests, which took up a lot of time, were thrown out of the window. The audit became a cheap and cheerful “risk management” exercise; whereby the real money was made by selling on added value services, such as consultancy.
In 2000 I attended, as an observer, an Arthur Andersen training course in Chicago; the mantra “forget about the audit, hard sell the high margin add ons” was pumped into the participants at every opportunity.
The consultancy advice usually given to the hapless client was to outsource mainstream functions such as; internal audit, tax and treasury to yes, you’ve guessed it the audit firms. I would say this, if Arthur Andersen had not been the first to “cop a fall” over lack of segregation of practices and excessive greed with its Enron and WorldCom debacle, then one of the other big firms probably would have done so.
Now they are forced to segregate services, and as such are reverting to the old “tick bash” routine in order to keep fee incomes high.
There is one other fly in their ointment. With the Enrons of this world came mega sized law suits, something that the accountancy firms and their insurance firms do not wish to pay for. This has caused something of a stand off with the government; Gordon Brown wishes for uncapped liability of audit firms, the audit firms are arguing for a cap. Their secret weapon is that if they don’t get a cap, they will dump certain “high risk” clients; this would leave the government with the responsibility for reviewing these companies’ books of account. In other words, the audit firms are holding the government to ransom; and trying to pass the risk of errors and omission in their working practices on to the shareholder and tax payer. Nice trick isn’t it?
The Stock Market
Those of you who are still not convinced that the financial system in the UK is rotten, should take a look at the stock market; and ask yourselves whether the ordinary investor, with a modest portfolio, can make money to the same degree as the big market players.
Monitor the swings and movements in the share price of any share, that you care to pick, over a few months; and watch the buys and sells preceding the announcement of any news that affects the share price, such as a take-over bid. In the majority of cases you will see that there are significant buys/sells (depending on the nature of the announcement), prior to the news being made public. That is not coincidence, but the result of the news being leaked to a few well connected “players” in the market.
When there is little news coming out about a company, more often than not the market makers will adjust the prices to shake out sellers or buyers; there is no reason for these price movements, other than to panic smaller holders into adjusting their portfolio which in turn generates commission for the market makers.
Consumer Debt
I will take as my final example the house price bubble that has grown over the last few years. As I write this, the effect of the recent interest rate rises by the Bank of England seem to be slowing the price rises down or indeed may even have pricked the bubble. The fact that this unsustainable rise could be allowed to continue for so long is damming in itself. However, the real issue is what has been sold on to the unsuspecting, and financially illiterate, consumers on the back of the bubble.
In the eighties, as already noted, we had endowment polices; now we have equity release schemes designed to consolidate credit card debt to encourage borrowers to borrow more, and spend on short term consumption. Borrowing long to spend short is recipe for disaster, as Weimar Germany and the world discovered to its cost in the 1920’s.
Loan companies have been allowed to aggressively target their advertisements at the most vulnerable, financially illiterate, people in society; without any regulatory interference. The interest rates on many of these debts bear no correlation to the risk profile of the loan. Instead they reflect the lending company’s “greed pricing grid”; which is the in house pricing model utilised by the lender to identify the maximum rate of interest that it can charge without losing customers to other lenders.
The result is that consumer debt in the UK now stands at over £1 trillion, which in my view is unsustainable. As house prices start to deflate many people will find themselves in a situation with negative equity; unable to move house, or restructure their finances. They will be saddled with an unsupportable level of debt for the rest of their lives.
Now, taking all of the above into consideration, do you feel that the financial system in the UK is well regulated and honest?
Thursday, August 05, 2004
The Diana Memorial Fountain – A Monument To New Labour
After considerable delays, and at considerable cost (approximately £3.6m), the Diana Memorial Fountain was recently opened in London amid much hyperbole and razzmatazz.
Its design, we are told, is unique and “cutting edge” in the world of fountains.
However, as with all “unique” and “cutting edge” architectural designs, the fountain has had its fair share of problems.
It has had to be shut several times since its recent opening; owing to leaves blocking the water outlets, and people falling over in it.
A minister in the Labour government rushed to the fountain’s defence, and blamed the public for not using it properly. Plans are now being considered for extra park patrols and inspections, in order to prevent people and dogs from paddling in the fountain.
This “mini fiasco” bears all the hallmarks of the New Labour approach to government:
I suggest that it be renamed “Tony’s Folly”, a lasting monument to the architect of New Labour.
After considerable delays, and at considerable cost (approximately £3.6m), the Diana Memorial Fountain was recently opened in London amid much hyperbole and razzmatazz.
Its design, we are told, is unique and “cutting edge” in the world of fountains.
However, as with all “unique” and “cutting edge” architectural designs, the fountain has had its fair share of problems.
It has had to be shut several times since its recent opening; owing to leaves blocking the water outlets, and people falling over in it.
A minister in the Labour government rushed to the fountain’s defence, and blamed the public for not using it properly. Plans are now being considered for extra park patrols and inspections, in order to prevent people and dogs from paddling in the fountain.
This “mini fiasco” bears all the hallmarks of the New Labour approach to government:
- The project was expensive and unnecessary, but it went ahead anyway.
- When problems emerged, Labour sought to blame others; in this case they blamed the public.
- The fountain design has not been well thought through, and is unsuitable for the environment in which it has been placed. There are numerous New Labour projects with that as an epitaph; the Dome, the invasion of Iraq, the PFI initiative and elected mayors readily spring to mind.
- The fountain is a memorial to an individual who was famous because of her connections and celebrity status, rather than her contribution to society. New Labour attach themselves to vacuous celebrity icons, like a barnacle to the hull of a ship.
- The solution to the fountain’s problems is to increase inspections and patrols. How very New Labour; when presented with a problem, such as education or health, their response is to smother it with inspections and statistical analysis and to regulate it to death.
I suggest that it be renamed “Tony’s Folly”, a lasting monument to the architect of New Labour.
Saturday, July 24, 2004
The Butler Report
Lord Butler’s report has, much like the earlier Hutton report, exonerated the government and individual members of the government from blame; in relation to taking the UK to war on the false premise of Iraq possessing weapons of mass destruction (WMD).
Butler has achieved this neat side-step by working on two mistaken assumptions:
Unfortunately they don’t.
Protecting individuals from specific blame is the act of an honourable man. Unfortunately, the politicians that he protects are not honourable; and have readily in the past sought scape goats to protect their own positions, when errors of judgement and incompetence threaten their privileged positions.
The argument that it would be irrational for Blair not to tell the truth, shows how little Butler understands Blair. Blair did not care whether there were WMD or not, the possibility of there being WMD was enough to use in his argument to take the UK to war.
Blair, as a lawyer, knew that whatever the outcome of the search for WMD he would always be given the benefit of the doubt; ie that he acted in the best interests of the country. It could never be proven that he had deliberately lied, it is after all still an essential part of the law that you are innocent until proven guilty.
I am afraid that Lord Butler, being a man of honour and integrity, inhabits a world that has long since ceased to exist; which is exactly why he was chosen to prepare the report.
An honourable man cannot be accused of deliberately colluding with the government in a cover up.
Lord Butler’s report has, much like the earlier Hutton report, exonerated the government and individual members of the government from blame; in relation to taking the UK to war on the false premise of Iraq possessing weapons of mass destruction (WMD).
Butler has achieved this neat side-step by working on two mistaken assumptions:
- He has assumed, that with respect to the evidence on WMD; all parties and processes connected with the collation, processing and dissemination of the evidence functioned unsatisfactorily. Therefore, if all were to blame, no one individual could be held personally responsible or singled out for blame. He assumes that the UK government still operates under the principle of collective Cabinet responsibility.
- Butler also noted that if Prime Minister Blair had not really believed that there were WMD, then he would never have used that as an excuse for war. Butler holds to the belief that once the lie had come out, after the war, the Prime Minister’s position would have become untenable; ie it would have been irrational for the Prime Minister to lie.
Unfortunately, the pretence of collective responsibility has long since been abandoned by Prime Minister Blair; who has little interest in the seeking the approval or counsel of Parliament, or his colleagues in the Cabinet.
However, Butler ignores one very salient point, that is exactly what has happened. There were no WMD, and the Prime Minister is having to explain how this “error of judgement” occurred.
Unfortunately they don’t.
Protecting individuals from specific blame is the act of an honourable man. Unfortunately, the politicians that he protects are not honourable; and have readily in the past sought scape goats to protect their own positions, when errors of judgement and incompetence threaten their privileged positions.
The argument that it would be irrational for Blair not to tell the truth, shows how little Butler understands Blair. Blair did not care whether there were WMD or not, the possibility of there being WMD was enough to use in his argument to take the UK to war.
Blair, as a lawyer, knew that whatever the outcome of the search for WMD he would always be given the benefit of the doubt; ie that he acted in the best interests of the country. It could never be proven that he had deliberately lied, it is after all still an essential part of the law that you are innocent until proven guilty.
I am afraid that Lord Butler, being a man of honour and integrity, inhabits a world that has long since ceased to exist; which is exactly why he was chosen to prepare the report.
An honourable man cannot be accused of deliberately colluding with the government in a cover up.
Wednesday, June 16, 2004
Confidence in the Financial System
Sir Richard Sykes, a "big player" in UK business circles and a leading government adviser, has published a report entitled "Restoring Trust; Investment in the 21st Century".
Sir Richard, worried about the small amount of money that people are putting away for their retirement, is trying to persuade investors to return to the UK stock market.
With the melt down in share prices in the first few years of the 21st century, the £40BN shortfall on endowment policies and the Enron and WorldCom scandals to name but a few; investor confidence has taken a battering over the past few years.
Sir Richard ought, in some respects, to be able to count on the help of the Financial Services Authority (FSA). Their primary function is to maintain confidence in the financial system in the UK.
One significant piece of the jigsaw that forms the financial system is the trading of shares on the stock market. Confidence in the working and price mechanisms of the market will minimise investors’ fears about investing in that market.
I have been watching the activities surrounding one particular share, with a degree of fascination over the past few months.
The share, which shall remain nameless, is highly volatile. Its trading range, in pence, has moved from below 10p to the high 70’s then back to the mid 30’s. All of this, in spite of the fact that the company has yet to earn single penny in revenue from its activities.
The main driving force behind the price swings have been:
To some extent this will always happen in a free market. However, the degree to which this has happened with this share has given me much cause for concern.
Matters came to a head recently when a false AFX note, containing information that would have caused the share to leap, was posted on a bulletin board. On discovery that it was a fake, the poster claimed to have posted it as a joke.
Following on from that, the CEO in an email to a shareholder (the contents of which were naturally posted on a bulletin board), noted that he was fed up with the volatility of the share price; and that news flow would be staunched in order to stabilise the price, and remove the speculators from the share.
There are two possible scenarios, but only one conclusion, wrt this email.
Either way, this is a very clear example of market manipulation; something which the FSA has an interest in stamping out, in order to maintain confidence in the financial system.
I applaud Sir Richard’s intentions. However, before trying to persuade investors to return to the market, he needs to ensure that shenanigans such as this are stamped out. In other words he needs to ensure that the FSA are proactively investigating occurrences such as the one I have just described, and taking action where deemed appropriate.
Sir Richard Sykes, a "big player" in UK business circles and a leading government adviser, has published a report entitled "Restoring Trust; Investment in the 21st Century".
Sir Richard, worried about the small amount of money that people are putting away for their retirement, is trying to persuade investors to return to the UK stock market.
With the melt down in share prices in the first few years of the 21st century, the £40BN shortfall on endowment policies and the Enron and WorldCom scandals to name but a few; investor confidence has taken a battering over the past few years.
Sir Richard ought, in some respects, to be able to count on the help of the Financial Services Authority (FSA). Their primary function is to maintain confidence in the financial system in the UK.
One significant piece of the jigsaw that forms the financial system is the trading of shares on the stock market. Confidence in the working and price mechanisms of the market will minimise investors’ fears about investing in that market.
I have been watching the activities surrounding one particular share, with a degree of fascination over the past few months.
The share, which shall remain nameless, is highly volatile. Its trading range, in pence, has moved from below 10p to the high 70’s then back to the mid 30’s. All of this, in spite of the fact that the company has yet to earn single penny in revenue from its activities.
The main driving force behind the price swings have been:
- Optimistic news releases via RNS and AFX notes.
- Speculation by gullible fools.
- Ramping and de-ramping (talking it up and talking it down), on the bulletin boards of financial websites.
- Optimistic conversations, and emails, between the CEO and shareholders. The subjects of these "private exchanges" are then published, by the same shareholders, on the bulletin boards.
To some extent this will always happen in a free market. However, the degree to which this has happened with this share has given me much cause for concern.
Matters came to a head recently when a false AFX note, containing information that would have caused the share to leap, was posted on a bulletin board. On discovery that it was a fake, the poster claimed to have posted it as a joke.
Following on from that, the CEO in an email to a shareholder (the contents of which were naturally posted on a bulletin board), noted that he was fed up with the volatility of the share price; and that news flow would be staunched in order to stabilise the price, and remove the speculators from the share.
There are two possible scenarios, but only one conclusion, wrt this email.
- The posting of this email, if false, means that the poster was trying to manipulate the market.
- However, should the email be genuine; then it means that the CEO was trying to manipulate the market, via news management.
Either way, this is a very clear example of market manipulation; something which the FSA has an interest in stamping out, in order to maintain confidence in the financial system.
I applaud Sir Richard’s intentions. However, before trying to persuade investors to return to the market, he needs to ensure that shenanigans such as this are stamped out. In other words he needs to ensure that the FSA are proactively investigating occurrences such as the one I have just described, and taking action where deemed appropriate.
Tuesday, June 08, 2004
The Price of Petrol
The recent rise in the price of oil, to around $40 a barrel, has once again brought the price of petrol in the UK into focus.
There have been threats by various action groups to blockade the roads; in a repeat of the chaos that ensued a few years ago, when petrol prices hit new highs.
It seems that the hard pressed British driver, so we are told, will not tolerate petrol at 80p or more a litre. The argument is also made that, since over 50% of the price is tax, it is up to the government to keep the price down by reducing the tax.
Some politicians have jumped on the “petrol price bandwagon”, and expressed their support for the British motorist.
However, in my view, far too much time and effort is expended by politicians and the press in trying to placate the motorist.
Let us take a look at a few facts:
I am therefore very happy to see petrol prices rise in line with the price of oil.
The recent rise in the price of oil, to around $40 a barrel, has once again brought the price of petrol in the UK into focus.
There have been threats by various action groups to blockade the roads; in a repeat of the chaos that ensued a few years ago, when petrol prices hit new highs.
It seems that the hard pressed British driver, so we are told, will not tolerate petrol at 80p or more a litre. The argument is also made that, since over 50% of the price is tax, it is up to the government to keep the price down by reducing the tax.
Some politicians have jumped on the “petrol price bandwagon”, and expressed their support for the British motorist.
However, in my view, far too much time and effort is expended by politicians and the press in trying to placate the motorist.
Let us take a look at a few facts:
- In real terms the price of petrol has remained, more or less, constant over the past 30 years. In other words, the motorist is no worse off now than 30 years ago.
- Britain is a small overcrowded island of 58 million people. It seems that, despite the congestion of the roads and cities, everyone feels that it is their God given right to own and operate a car. Newsflash, it isn’t!
- Oil is a dwindling resource, the more we use the less there is; by definition there will have to be some from of rationing. The most effective form of rationing is via the price.
- Taxation on petrol is required to support the ever increasing demands of the electorate for better schools, hospitals and, dare I say it, more roads. It is time for the motorist to wake up, and realise that these thing have to be paid for. Therefore it is not unreasonable for the government to tax motorists, given the fact that they (the motorists) insist that every inch of the country be covered in motorways.
- Cars are a blight on the environment, high petrol prices are a good way to make people think twice about using them.
- The use of cars in the UK at the moment can be said, in many cases, to be unnecessary. The “school run”, in the mornings and afternoons, sees a multitude of unnecessary car journeys; as “little Johnny” is driven the few yards to school by his overprotective and doting mother. We are breeding a generation of fat, lazy and spoilt children. It seems to me that they, and the environment, would benefit immensely from them walking to school each day; rather than being chauffeured.
I am therefore very happy to see petrol prices rise in line with the price of oil.
Wednesday, June 02, 2004
The Current Situation in Saudi Arabia
The recent attack on the foreign workers in Saudi augurs ill for the future. Saudi Arabia, despite earning a good income from oil production, has a number of significant social/political problems that it needs to address.
These include the following:
The social and political problems within Saudi have provided a fertile recruiting ground for Bin Laden and his acolytes.
In my view, time is running out for Saudi Arabia. The Saudi government needs to address the above issues, with urgency, in order to avoid the significant and irreversible breakdown of law and order that is inevitable.
Failure to address these issues will ensure that the House of Saud is replaced by an extreme Islamic theocracy. This will not be good for either the Saudi people, or the oil-based economies.
The recent attack on the foreign workers in Saudi augurs ill for the future. Saudi Arabia, despite earning a good income from oil production, has a number of significant social/political problems that it needs to address.
These include the following:
- Demographics, over 40% of the population are under 25 years old
- Reliance on a single revenue source, oil is the sole revenue source for the Kingdom. Saudi has failed to develop any other form of revenue earning economic activity
- High unemployment, Saudi relies on 6 million foreign workers to run its key industry. The result being that its own citizens are unemployed
- Security, Saudi’s security services and armed forces are not “top rank”. This was very clearly demonstrated by the events over the weekend. Saudi relies on the USA to protect its borders
- Democracy, this is in fact non-existent. Saudi has been ruled a by the House of Saud since the state was founded in the early 20th century
- Human rights, Saudi has a very poor human rights record; eg women are not allowed to drive cars and people are still beheaded
- Education, Saudi education is religious based and highly anti Western
The social and political problems within Saudi have provided a fertile recruiting ground for Bin Laden and his acolytes.
In my view, time is running out for Saudi Arabia. The Saudi government needs to address the above issues, with urgency, in order to avoid the significant and irreversible breakdown of law and order that is inevitable.
Failure to address these issues will ensure that the House of Saud is replaced by an extreme Islamic theocracy. This will not be good for either the Saudi people, or the oil-based economies.
Wednesday, May 26, 2004
The European Elections for the Invisible Parliament
The citizens of Europe are facing the joys of a European election in the next fortnight, when we have the opportunity to vote for our Members of the European Parliament (MEP’s). This provides an apposite opportunity to pose a few questions, I am happy to publish any replies:
Despite the fact that the EU elections are only a fortnight away, I have not received a single solicitation or piece of information from any of the candidates standing; telling me about themselves, or their policies.
We pay these people a more than generous salary and expense allowance, and they have a far better standard of living than the majority of the citizens whom they represent. Yet they choose to remain invisible.
The staging of the elections for the “invisible parliament” costs the European taxpayer a very large sum of money. Yet we see no return on our “investment”.
I, for one, intend to register my protest at this insult to democracy; I do not intend to vote.
I recommend that every like-minded citizen of Europe follow suit.
The citizens of Europe are facing the joys of a European election in the next fortnight, when we have the opportunity to vote for our Members of the European Parliament (MEP’s). This provides an apposite opportunity to pose a few questions, I am happy to publish any replies:
- What exactly do our MEP’s do?
- Can you name one piece of legislation, passed by an MEP, that has had a positive effect on the way of life of the citizens of Europe?
- Does anyone know the name, or party, of their MEP?
Despite the fact that the EU elections are only a fortnight away, I have not received a single solicitation or piece of information from any of the candidates standing; telling me about themselves, or their policies.
We pay these people a more than generous salary and expense allowance, and they have a far better standard of living than the majority of the citizens whom they represent. Yet they choose to remain invisible.
The staging of the elections for the “invisible parliament” costs the European taxpayer a very large sum of money. Yet we see no return on our “investment”.
I, for one, intend to register my protest at this insult to democracy; I do not intend to vote.
I recommend that every like-minded citizen of Europe follow suit.
Tuesday, May 18, 2004
Iraq, What Needs to be Done
The situation in Iraq is, to put not too fine a point on it, a real mess.
Despite President Bush proclaiming, “mission accomplished” in 2003, the ongoing bombings and attacks on coalition personnel prove otherwise.
The situation has not been helped by the disclosure of USA troops abusing prisoners. Quite how the military and politicians thought that this was a good way to extract information is beyond me.
It is fair to say that as a result of this, the American brand image is at an all time low.
The USA and coalition are now faced with some tough decisions. The easiest option would be to cut and run. In the short term, this would save coalition lives. However, in the long run it would be disastrous:
In short, withdrawal is not an option.
Here’s what needs to be done; it is neither palatable, nor easy:
It’s going to be a long summer!
The situation in Iraq is, to put not too fine a point on it, a real mess.
Despite President Bush proclaiming, “mission accomplished” in 2003, the ongoing bombings and attacks on coalition personnel prove otherwise.
The situation has not been helped by the disclosure of USA troops abusing prisoners. Quite how the military and politicians thought that this was a good way to extract information is beyond me.
It is fair to say that as a result of this, the American brand image is at an all time low.
The USA and coalition are now faced with some tough decisions. The easiest option would be to cut and run. In the short term, this would save coalition lives. However, in the long run it would be disastrous:
- Iraq would descend into even more chaos, and many thousands more Iraqi civilians would die; as various factions fight it out for control.
- The temptation for other countries in the region to interfere would be great. Before long, the Middle East would dissolve into chaos and war.
- The oil supply to the rest of the world, would be threatened; and the world economy would sink into recession.
- The terrorists would be emboldened by the withdrawal, and step up their attacks elsewhere.
In short, withdrawal is not an option.
Here’s what needs to be done; it is neither palatable, nor easy:
- Stop abusing prisoners.
- Punish those responsible for the abuse, and those who gave the orders.
- Get the power back on in Iraq.
- Remove the military control of the procurement and funding allocation process in Iraq.
- Install a civilian administration as soon as possible in Iraq.
- Leave as soon as all the above have been done.
- Reduce the West’s reliance on oil.
It’s going to be a long summer!
Friday, May 07, 2004
The Photos of Torture in Iraq
The pictures coming out of Iraq, alleging the torture and abuse of Iraqi prisoners by British and US servicemen are a matter of great concern and shame; if they are proven to be true.
The US and British governments are currently investigating the accusations; and have let it be known that should the accusations be proven, the perpetrators will be punished.
The question is how far up the chain of command will the recriminations go?
No doubt the men and women on the field, who are in these photos, will be punished. However, it is extremely unlikely that they were acting without the direct encouragement of more senior personnel and other agencies.
Will these people and agencies be investigated and punished?
There is also a more troubling question; the young men and women in the US and UK armed forces were sent into Iraq on the pretext of stopping the spread of WMD, and reducing the risk of terrorism spreading.
The senior politicians in the US and UK, specifically President Bush and Prime Minister Blair, made it very clear that the mission was one of “Good vs. Evil”. Those sent into Iraq were, in my view, “pump primed” by Bush and Blair to believe that in effect they were fighting for the very existence of the West’s way of life.
Under those circumstances it is quite possible that, many miles from home in an inhospitable country, the young men and women of the armed forces may act with an almost zealous fervour to achieve their mission.
In other words, they were acting out the roles scripted for them by the politicians.
Bush and Blair need to keep this in mind when they next make moralistic pronouncements about events and countries.
Additionally there are a number of uncomfortable questions arising from this disgrace:
Either way Bush and Blair need to consider their positions. The credibility of the coalition forces, and the last shred of justification for the invasion of Iraq, have been blown away by this scandal.
Meanwhile the people of Iraq must be wondering if they are, in fact, any better off.
The pictures coming out of Iraq, alleging the torture and abuse of Iraqi prisoners by British and US servicemen are a matter of great concern and shame; if they are proven to be true.
The US and British governments are currently investigating the accusations; and have let it be known that should the accusations be proven, the perpetrators will be punished.
The question is how far up the chain of command will the recriminations go?
No doubt the men and women on the field, who are in these photos, will be punished. However, it is extremely unlikely that they were acting without the direct encouragement of more senior personnel and other agencies.
Will these people and agencies be investigated and punished?
There is also a more troubling question; the young men and women in the US and UK armed forces were sent into Iraq on the pretext of stopping the spread of WMD, and reducing the risk of terrorism spreading.
The senior politicians in the US and UK, specifically President Bush and Prime Minister Blair, made it very clear that the mission was one of “Good vs. Evil”. Those sent into Iraq were, in my view, “pump primed” by Bush and Blair to believe that in effect they were fighting for the very existence of the West’s way of life.
Under those circumstances it is quite possible that, many miles from home in an inhospitable country, the young men and women of the armed forces may act with an almost zealous fervour to achieve their mission.
In other words, they were acting out the roles scripted for them by the politicians.
Bush and Blair need to keep this in mind when they next make moralistic pronouncements about events and countries.
Additionally there are a number of uncomfortable questions arising from this disgrace:
- If the scenes of abuse have come as a total surprise to President Bush and Prime Minister Blair, then the chain of command and control has suffered a catastrophic failure. The responsibility for this failure rests with those at the top of the chain.
- If the scenes of abuse have not come as a surprise; then it means that either these acts were being perpetrated on the express/implied orders of Bush and Blair, or that they were informed of it some weeks/months ago before the newspapers published the story. In which case Bush and Blair are guilty of suppressing a scandal that should have been placed in the public domain, as soon as it had been discovered.
Either way Bush and Blair need to consider their positions. The credibility of the coalition forces, and the last shred of justification for the invasion of Iraq, have been blown away by this scandal.
Meanwhile the people of Iraq must be wondering if they are, in fact, any better off.
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