Category: Tories

sidewalk social scientist don’t get no satisfaction..

So I said you could hide a million-strong dole queue with enough bogus hairdressing and then it totally like happened.

Discussion follows. Fortunately it’s possible to answer this question with data and that’s precisely what Anjum Klair of the TUC policy division’s fine blog did. There’s a lot of detail there, but let’s focus on chart 2.

Untitled-2

The green bars represent part-time self-employment, the red ones full-time self-employment. The blue line is the total. Earlier in the second recession, part-time self-employment is driving the total, up to about June 2012. Full-time is flat at this point. The first major uptick is the end of May or beginning of June, 2013. Then there’s a brief dip at the end of August. And then it takes off.

This is crucial, both because it matches Faisal Islam’s chart very closely in point of time, but also, as Anjum Klair points out, it accounts for 82% of the net increase in employment over that period.

So what happened in the spring of 2013? Back on the 3rd of March, 2013, I blogged on a variety of evidence that more or less fictitious self-employment was an emerging survival plan for the unemployed and for badgered Jobcentre Plus staff alike, as well as being a way for chancers like A4e to juice their billings to the government. I called this the bogus hairdresser phenomenon for reasons set out in the post.

I also pointed to this fine post of Voidy’s on the Universal Credit regulations and their tendency to encourage the self-employed to declare more hours.

Basically, declaring self-employment permits you to stop the abuse, permits the Work Programme chancer to bill the government, permits the Jobcentre Plus caseworker to close the file and therefore happy their manager up, and lets you claim Working Tax Credit. If you have kids, you also get additional tax credits in respect of this, which means that you may actually be better off than on JSA. The regulations sort-of get this, giving the DWP the power to bother you to do more hours – therefore pushing you to declare full-time.

So when did the regulations come into force? The 29th of April, 2013. Give them a month to spread through the bureaucracy and for all parties to learn about the new setup, and I think we’ve got a suspect. By October, other people using other methods had also noticed a rapidly growing gap between claimant-count and survey-based measures of unemployment and of underemployment.

Oh, and you were wondering about this? Wonder no more.

Your chance to meet Create Streets.

So, it’s well known that I’m an obsessive about Create Streets, the flaky Tory wanktank that wants a whole succession of gimmes for developers who are in no sense their mates, except when they are.

Single Aspect notes that the Urban Design Group is having a thing on Wednesday the 23rd of April, i.e next week, 6.20pm, The Gallery, 70 Cowcross Street, London EC1M 6EJ to discuss “estate regeneration”, with an architect and none other than Create Streets identity Nicholas Boys Smith, Peter Lilley’s old bag-carrier.

I would totally go to this, but I’m out of town until the next day.

Check the meetings register in a month’s time

We refer of course to this Daily Hell story, in which best mate of Andy Coulson and Rebekah Brooks, David Cameron, is supposedly astonished and deeply shocked to hear the word sex. So is Joanna Shields, ex-Googler, born 1962.

I find this deeply unconvincing to say the least. As Stian points out, it was probably published so the Hell could enjoy it. But I would go further. Did the meeting ever happen? I’m basically blogging this to remind myself to check the register.

If Miller goes, so must Osborne.

So, down goes DCMS Secretary Maria Miller. Paul Lewis explains, with 140-character concision.

It’s probably time to delve into the archive for a TYR Flashback! I think Flipper is trying to tell us something. This post swung off a story in the Daily Telegraph, specifically this quote:

Shortly before Mr Osborne entered Parliament in 2001, he bought a large farmhouse in his Tatton constituency. Instead of taking out a mortgage on it he increased the mortgage on the London property to pay for his new home. When he had been elected an MP, he designated his London property as his second home with the House of Commons fees office, allowing him to claim back on his additional costs allowance the interest on the portion of the mortgage representing the farmhouse.

Two years later, Mr Osborne took out a separate £450,000 mortgage on the farmhouse and flipped his second home designation, enabling him to claim those mortgage interest payments on his ACA. Since then he has claimed up to £100,000 in mortgage interest payments for the farmhouse mortgage. During this whole period, Mr Osborne told the Inland Revenue that his primary residence for tax purposes was his London home.

In 2006, Mr Osborne sold his London home for £1.48million, making a £748,000 profit. Because it had been declared for tax purposes as his primary residence since he bought it in 1998, he did not have to pay capital gains tax.

Osborne, outrageously, got off scot-free, with more than a little help from the Telegraph, which chose to run this story buried deep in the paper, in a rare exception from the front-page treatment it gave all the other expenses dodgers.

Another Tory who was too important to make the front page was Michael Gove, who is suddenly all principles:

Michael Gove, the education secretary who was elected to parliament on the same day as Miller in 2005, said that her resignation should serve as a warning to the political class as a whole about their expenses.

In a sign that Downing Street acknowledges the need for further reform of the policing of MPs, Gove told the Today programme on BBC Radio 4: “The political class as a whole need to reflect on the events of the last few days. It reinforces in my mind the fact that the public still feel a degree of anger about the expenses scandal.”

Yes, yes, we do. Anyway, playtime over, back to double maths.

That the Chancellor not only cleared a huge profit on his exes, but used the process for tax purposes, must be well known – the author of the piece is none other than enormously popular Tory journalist, Melissa Kite. Personally, I absolutely welcome the reopening of the expenses issue. Will Osborne finally pay his capital gains tax?

Dave from PR in the French Revolution

Being a Salmagundi from the Talking-Pointes of the late Sieur Davide du Camerone, Gentleman of the Privy and Counsellier upon the Fourth Estate to his most Catholic Majesty, the late King Louis XVI

An unexpectedly large forecast error in the Budget leads Finance Minister Necker to call an emergency Estates-General:

We’re all in this together. Only a balanced parliament reflecting the national consensus to deal with the debt can keep us from ending up like Spain. M. Colbert didn’t fix the roof while the sun was shining, but His Majesty is determined to get our finances in surplus by 1792. That’s on a rolling five-year cash basis excluding interventions in North America and royal mistresses.

Serious disorder breaks out in central Paris, and unruly demonstrators set the Bastille on fire:

You have to understand that there were only a very small number of low-category prisoners in the Bastille. In fact, as part of Finance Minister Necker’s austerity plan to deal with the debt, we were thinking of closing it next year. In a sense, and speaking entirely off the record, the rioters have done us a favour, and have driven the silent majority to support our new decapitation-based law and order strategy

Queen Marie Antoinette’s ill-advised selfie with the cakes goes viral on canard.fr:

Her Majesty understands aspirational households’ aims to do better in life more than her elite Parisian critics ever will. I’m confident the country sees that she speaks for hard-working families.

Entirely off the record, this is why Prime Minister Richelieu is so keen to get immigration under control. The country’s swamped with Austrians. The sooner we can deport her the better. You didn’t hear that from me

The King leaves Paris, in disguise and a hurry, under cover of darkness:

His Majesty’s eyes have been suffering under his heavy responsibilities. He’s decided to take a brief vacation in our beautiful French countryside. Does Robespierre promise to support the tourist industry this summer?

Entirely off the record, do you know a good shipbroker?

The royal family is put to death, and the Sieur with them. In a final unattributable briefing on the tumbril en route to the guillotine:

I don’t see this as my brutal execution in front of a screaming mob, but more of an example of the Big Society in action, and the opportunity to launch a new phase of my career. Entirely off the record, I never used my head anyway…

So we found out how the coalition would perform in a crisis

I seem to remember having said I worried about this government’s response to a major crisis like the floods of 2007. The current situation shows all the basic flaws in the government. Our key source for this post is the Daily Hell.

First up, we have the lack of administrative grip. This lot are routinely taken by surprise by all kinds of things, and struggle to recover from the surprise. They don’t do detail. This has been going on since Christmas.

Secondly, they are heavily lightweight. After the 2007 experience, was it really wise to give DECC the biggest percentage cut out of the departments, when so many Tories (and other people) very obviously depend on the Environment Agency’s management of engineered landscapes? Was anybody thinking? Actual experts seem to feel nothing but contempt for this bunch of amateurs.

Third, they know they lack chops and therefore they turn to what they know, which is PR. They would spin anything. This leads them to do crazy things. The prime minister announces that he will chair the COBRA meetings, and then that he will fly to the Soggy Zone to be seen in his wellies. Naturally, if he’s in Somerset he can’t also be in Whitehall, so he has to go there and then rush off somewhere (probably a military installation) to find a secure teleconference bridge to dial into the COBRA.

As a result, we end up with the genuinely hilarious idea that the COBRA chair will rotate among the ministers. Let’s all hope and pray Iain Duncan Smith is last in the rotation.

And I mean the wellies thing.

Mr Paterson in particular is accused of botching the response, leaving his wellington boots in his car while visiting Somerset, blaming Dutch settlers under Charles I for draining the Levels and refusing to support claims the storms are linked to climate change.

And I mean the COBRA thing.

However, he [the No.10 spokesman] was unable to say who was now leading the response to the flooding on behalf of the government. Asked who was in charge, the spokesman said it was a cross-party effort to tackle the storms, with different cabinet ministers likely to chair each meeting of the Cobra disaster committee.

Disaster committee is putting it mildly.

Fourth, they don’t know how to shut up. Having fucked up, they insist on bombarding us with announcements, tours, photo calls, etc. When you’re in the doghouse, it’s best to shut your mouth. The Daily Hell piece was released this morning, but since then it’s gained a ton of photos of Cameron standing meaningfully near Royal Engineer plant doing jazz hands. (No. Look.) He also visits First Great Western’s Plymouth Laira depot – earlier in the day, I heard that FGW is seriously looking into how to evacuate trains stuck there by the floods, perhaps by sea.

Fifth, they are obsessively partisan. Suddenly, there is a Tory way of water management, which is “dredging”, and a Labour way which is…something else. Never mind that nobody involved could comment intelligently on this, or that the supposed pause in dredging was more than a decade ago. I can’t imagine anyone who has less to say about this than Nick Clegg. It’s not so much blind men describing colour, as blind men fighting over the definition of yellow because their PR advisors said so. You have no idea. Shut up!

Sixth, their mean streak shows. As soon as it finally became too bad to deny any more, it all came out. Pickles kicks down, like the undignified bully he is, on the EA workers wading thigh deep in the shit. Unknown colleague tells us that Owen Paterson is a buffoon:

One Cabinet minister told MailOnline: ‘He just isn’t very bright. Most of the people around the Cabinet table are bright, even if I disagree with them, but not Owen. He isn’t climate sceptic, he’s climate stupid.’

The prime minister then turns around and stabs Pickles to defend Paterson. The shark ethic prevails, in the shallow murky waters. Omnishambles rules.

Two simple plans – mine and another

There’s a lot of interesting stuff in this Randeep Ramesh piece in the Grauniad.

However, the coalition is concerned that these levels of building will not meet the demand for properties, particularly in south-east England where outright normal home ownership is not an option for many. So [Danny] Alexander and his Tory cabinet colleague Eric Pickles will announce a review that will examine how “innovative financing mechanisms” could be used to raise the rate of affordable housebuilding.

That sounds like a simple plan! In fact, one of the proposals mentioned gives the simple plan an extra twist by suggesting that local authority pension schemes might be persuaded to invest in it. Unlike the central government schemes, council ones are funded, so they control some really large investment funds that need a safe home with a non-risible fixed return. I am actually kicking myself for not having included this in the original simple plan, as it’s a genuinely neat idea.

That said, it’s always worth counting your fingers with this lot.

Sources in the Treasury were keen to stress that the review would not be able to recommend measures that breached the government’s strict borrowing rules, seeking to contrast this with Labour’s “borrow to invest” political rhetoric.

Housebuilding based on the LHA income stream might well pass the government’s prudential borrowing tests, but so far councils have been told in no uncertain terms that there’s no point applying. So either the review is going to “offer all possible help other than actual assistance” in the words of Winston Churchill, or else it’s going to invent a new category of less borrow-y borrowing.

The government’s affordable rent scheme will see housing associations and councils offer rented homes to social tenants at a maximum of 80% of market rent rather than the 30% offered by traditional council housing. Accompanying changes to the way tenancies are offered will allow housing providers to offer more flexible leases, some as short as two years.

I don’t know why the “will say” trope is used here; “affordable” has been defined as 80% of market, i.e. not affordable, for years. The point about leases is also interesting and worrying. Up in the head of the piece, before the bit about local authority pension funds, there’s this:

The government is to announce a “wide-ranging” review to examine how to encourage City investors, insurers and pension funds to put up cash to build affordable housing schemes, designed to help poorer people get a roof over their heads.

Between 1989 and 2007, UK housing policy was famously to let housing benefit take the strain, pace Lord Young. This meant that people would rent, rents would be allowed to go where they might, and central government handouts would fill any gap and also act as a unacknowledged financial settlement between regions. They would rent from private landlords, and also from housing associations.

The private element of this was dependent on two innovations. The first was mortgage securitisation, which permitted the expansion of buy-to-let lending. The second was the assured shorthold tenancy, which permitted the expansion of buy-to-let borrowing by making it easier to function as a landlord without putting in time. The combination of these two innovations with the decline of final salary pensions and the string of mis-selling disasters from Barlow Clowes to PPI made rental property the middle class savings vehicle of choice. In the context of a property market with restricted supply and deregulated mortgage lending, it also made a property bubble very likely and made any action to stop it politically and eventually practically impossible.

The new policy sketched in the last quote is very similar, with one major difference. First of all, rents are deregulated and go up. Second, private landlords are central to it. Third, tenancies are shortened and made much less secure in order to financialise housing. This is precisely the package deployed by Young in the late 1980s.

The difference is that the landlords are expected to be strategic investors rather than retail savers. This represents the fact that a lot of people have burned their fingers and a lot more don’t have any savings, perhaps because of the cost of housing.

Anyone who’s ever been a tenant knows that there is more to being a landlord than rent; it’s fair to say that professional management, in itself, would be an improvement. You can make a case that amateurs are better out of the game, too. But we ought to be sceptical of the same old bullshit from the same old gang. “Unaffordable rent, mitigated by LHA” renders the people in the houses too vulnerable to political caprice. And real estate professionals are very often the biggest plungers in the boom and the biggest crashers in the crash. Watch out.

Making It Happen: How Thatcherism Just Happened Like That And It Was Nobody’s Fault

Iain Martin has done a book about the Royal Bank of Scotland, entitled Making it Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy after their corporate slogan from the boom era. I’m gradually reading the books that fell out of the banksplosion, and I would rate this one not as good as Anglo Republic: Inside the bank that broke Ireland on Anglo Irish Bank, which I reviewed here.

The main criticism I have is that it is shamelessly partisan for Gang B versus Gang A, and the facts of the story don’t fit into a story about Gang B and Gang A, but rather about the wider meta-gang, the business, media, bureaucratic, and political elite. Trying to force it, Martin has to torture some of his facts and incorporate chunks of nonsense he was given by people who have no place in a serious book. To his credit, he’s aware of this, but the concessions he makes tend to highlight the problem.

Making It Happen is weakened by being a partisan book, but it is stronger for being a Scottish book. Martin argues strongly for the Scottishness of RBS and of its key executives, the role of Scottish politics and the Scottish elite in its rise and fall, and the role of the bank in Scottish life. Christopher Clark insists that the Balkan crisis of 1914 happened in the Balkans for Balkan reasons; Martin that the Royal Bank of Scotland’s Scottish managers crashed the bank in Scotland for Scottish reasons.

Scottish officials and politicians around the Scottish Development Agency, the Scottish Office, and the devolved government set a policy goal of building up a Scottish financial services centre as a post-industrial source of growth and a way of recycling oil money, and one of them, Sir George Mathewson, moved from the SDA to the Royal Bank to take charge himself as CEO. He in turn appointed most of the other key personalities, whom he recruited from the Scottish elite that had tapped him. The caricature example is that Johnny Cameron, the head of RBS investment banking, was the brother of the Cameron of Lochiel. Mathewson was an engineer, a product of Scotland’s technology culture, originally promoted by its Labour Party political machine but later close to the SNP; Cameron, a scion of its premodern aristocracy.

This is useful. But although Martin identifies the build-up of the financial services sector as a political choice in Scotland, he bizarrely doesn’t for the UK as a whole. Apparently, change in the UK economy’s structure in the 1980s was caused by “financialisation”, which came from a clear sky, and nobody is responsible. Financialisation, in Scotland, was the work of individuals with faces and names; in the UK, a diffuse miasmatic phenomenon without author.

This is where the partisanship kicks in. There was a government minister responsible for the economic development of Scotland in the 1980s – Lord Younger, who was also chairman of the Royal Bank, and who appointed Mathewson as CEO. Yet he gets an incredibly easy ride, even when he is flagrantly sacking off his responsibilities at RBS in favour of politics. Supposedly, he said on his deathbed that the bank was taking too many risks, but the only witnesses to this touching scene are people with every reason to defend the reputation of Scottish Conservatism. Younger is described as “Scotland’s man in Margaret Thatcher’s government”; I know for a fact that there are plenty of Scots who thought he was a heartless proconsul imposed on them to destroy their way of life. Extreme, you might say, but suffice it to say that his record is far from uncontroversial. The problem is simple: he’s a mate.

In fact, the partisanship comes out mostly in the judgment of individuals. We get Younger as saint; we also get Sir Steve Robson as saint. Robson is the Treasury civil servant who designed railway privatisation and championed PFI, before switching to a sinecure job promoting more PFI with a thing called “Partnerships UK” funded by the PFI industry. He was also a director of RBS – which did quite a bit of PFI business – right up to the finish. This makes him quite possibly the one man who has cost British taxpayers more money than anybody else bar Gavrilo Princip. But he is wheeled out as a sage, again and again. Apparently he had doubts about RBS’s strategy – so much so that he nearly said something!

The Bank of England governor Sir Mervyn King, and the Bank as institution, are touted heavily. But we now know that King was hugely uninterested in bank regulation and actively hostile to the career prospects of Bank officials who specialised in it (one, two, three, four).

Staff found presenting financial stability issues in front of the new governor frightening because of his apparent disdain for their work. One current official remembers a talk on the Spanish banking system. “How is that relevant?” Sir Mervyn asked. Staff learned the only answer was to find a reason why such matters should concern the monthly decision on interest rates. Former colleagues say that Sir Mervyn found it difficult intellectually to grapple with the influence the BoE had when things were not written down with formal targets and powers, so he preferred to assume markets were likely to be efficient and crises would not occur.

“The process within the Bank was one of second-guessing what your superiors and specifically Mervyn King would like you to think about a certain subject before offering your opinion on it. Agreeing with the Governor was the route to advancement. Some people did not like it and left. It’s all a bit pointless if you are just going to reflect back what somebody already thinks. There were a lot of people at the Bank being paid vast amounts of money to hold a mirror up to Mervyn.”

And of course the Bank was so worried it nearly said something.

The partisan element here is that the Tory case against Gordon Brown is basically that he set up the so-called tripartite regulatory system, with responsibility divided among the FSA, the Bank, and the Treasury. It is held that this was a mistake and the Bank would have done a better job. This only makes sense if the Bank was in fact clamouring to do something about the banks. Memory has to give way, for pride cannot, and so we get King as saint. After all, he played a major role in pushing the coalition in the spring of 2010.

Martin is unintentionally eloquent on how thin the Tory case to have predicted anything going wrong is. The only evidence he can find that anyone in Gang A, or was it B, thought there was a problem is an intervention in the Commons from Peter Lilley in about 1998, worrying that the regulators might “take their eye off the ball” while the FSA staffed up. It was hardly still staffing up in 2007.

There’s more; Martin quotes Gordon Brown’s remark about no more boom and bust on every other page, but he doesn’t manage to mention that Sir Mervyn thought we were living through the NICE Decade of non-inflationary continuous expansion – i.e. precisely the same thing but in econospeak – even once in the whole book. He finds it necessary to tell us that an RBS exec once did a consulting assignment at the Rosyth naval dockyard in the mid-80s, “near Brown’s constitutency”. The point is to imply that Brown agreed to the Queen Elizabeth-class ships because the yard was in his constituency, a charge the Tories kept making even though the yard isn’t. Martin is smart enough not to say that it is, but still can’t keep himself from going on about it. Like so many Tories, he seems to have been startled by Gordon Brown as a baby.

He has a personal down on Shriti Vadera, a Tory tic which originates in her being right about rail privatisation. He calls an Australian RBS banker an “Italian immigrant” because, as far as I can make out, his name ends with an o. But why care? He quotes Internet troll Fraser Nelson’s batshit innumerate notion that the UK’s debt to GDP ratio is 400%, very likely because Nelson is his boss at the Spectator.

There is a conclusions section in which he addresses some of this stuff. He recognises that the crisis was global, and therefore that Gordon Brown had remarkably little influence over Washington Mutual’s or IKB Deutsche Industriekreditbank’s lending standards. He accepts that the UK made a political choice for financialisation in the 80s and that somebody somewhere might be responsible, although the sainted name still cannot be pronounced. So, suddenly the government in charge at the time was sort of responsible. We’re not going to agree about economics in a million years, so I’ll just note that he (or possibly Fraser Nelson) has weird hard-money ideas.

This could have been a good book. It could even have been a great one and it probably ought to have been, had it only had the clarity and the sheer will to trash Gang A, Gang B, Gang C, and anyone else in the alphabet that Anglo Republic had in spades. The problem can be located precisely, in the list of acknowledgments. It’s long..and My God!…it’s full of dicks!

We have the wretched Fraser Nelson. We have Scottish Tory Bruce Anderson, who I will always remember for his amazing ability to get at least one racial slur into each of his Indy columns. We get Tory ambassador to the 21st century, Tim Montgomerie. We get Con Coughlin, MI6′s man in the Telegraph and the bloke who got CURVEBALL’s rubbish about 45 minute WMDs into the world’s press. It’s a horrible line-up of hacks, bullshitters, and propagandists, and the smell off them gets all over the book.