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Austerity has been shown to damage your health, but thankfully the law is intervening
In a striking paper which has just been published in “Clinical Medicine” (Vol 12, No 4: 346–50), the official journal of the Royal Colleges of Physicians, the authors, Martin McKee, Marina Karanikolos, Paul Belcher and David Stuckler from the London School of Hygiene and Tropical Medicine, UK, European Observatory on Health Systems and Policies, Royal College of Physicians of London, University of Cambridge, write as follows:
“Many governments in Europe, either of their own volition or at the behest of the international financial institutions, have adopted stringent austerity policies in response to the financial crisis. By contrast, the USA launched a financial stimulus. The results of these experiments are now clear: the American economy is growing and those European countries adopting austerity, including the UK, Ireland, Greece, Portugal and Spain, are stagnating and struggling to repay rising debts. An initial recovery in the UK was halted once austerity measures hit. However, austerity has been not only an economic failure, but also a health failure, with increasing numbers of suicides and, where cuts in health budgets are being imposed, increasing numbers of people being unable to access care. Yet their stories remain largely untold. Here, we argue that there is an alternative to austerity, but that ideology is triumphing over evidence. Our paper was written to contribute to discussions among health policy leaders in Europe that will take place at the 15th European Health Forum at Gastein in October 2012, as its theme ‘Crisis and Opportunity – Health in an Age of Austerity’”
So far, 83 MPs have signed the ‘early day motion’ regarding ATOS. The full text of this motion is available here. The Daily Mirror recently used the Freedom of Information Act to discover that, between January and August last year, 1,100 claimants died after they were put in the “work-related activity group”. This group – which accounted for 21% of all claimants at the last count – get a lower rate of benefit for one year and are expected to go out and find work. This apparently compares to 5,300 deaths of people who were put in the “support group” – which accounts for 22% of claimants – for the most unwell, who get the full, no-strings benefit of up to £99.85 a week.
Furthermore, Dr John Canning, chair of the GPC’s professional fees committee and a GP in Cleveland, has said: “A 40% success rate of appeals suggests the appeals process and the first round are inconsistent in their approach. We have concerns about the process with Atos and how their doctors are remunerated and encouraged to work – that is to do with how the contract is managed. The second bit is how long it takes to get an appeal, it can take up to nine months in some cases and that is incredibly unfair on people. I don’t believe that the tribunal service is adequately staffed with doctors – certainly not with doctors who are active in clinical practise.”
Campaigners had called for Dow’s sponsorship of the London Paralympic Games to be dropped due to Dow’s ownership of Union Carbide, the company responsible for the Bhopal gas disaster in 1984. An account of the impact of this disaster is given in Wikipedia, but, on the other hand, George Hamilton, the Dow executive in charge of running the Olympic show for the company, has said that they “believe in the Olympics and what they stand for. They bring the world together like no other sports event. But we have to make it worthwhile. We are targeting $1 billion in incremental business over the 10-year partnership.”
In a recent report by Amelia Gentleman in the Guardian, prompted by TV investigations through the flagship programmes, ‘Panorama and Dispatches’, it was described that secret filming of training given to doctors recruited by the private company Atos to assess whether sickness and disability benefit applicants are fit for work had suggested that staff are monitored to ensure they do not find excessive numbers of claimants eligible. On Thursday 26 July 2012, the High Court granted permission to two disabled people to bring a claim for judicial review against the Secretary of State for Work and Pensions to challenge the operation of the Work Capability Assessment (WCA).
In granting permission to apply for judicial review, the judge stated:
“I consider that it is reasonably arguable that the reasonable adjustments required by the [Equality Act 2010] include the early obtaining of independent medical evidence where the documents submitted with the claim show that the claimant suffers from mental health problems and that this has not been done, or at least not done on a sufficiently widespread basis”.
Again – if austerity is having such a negative impact socially, one is left asking the question whether the legislature or the judiciary are ultimately having to sort out the problem. It is now considered that the current governing parties (a coalition of the Conservatives and Liberal Democrats) has produced “the worst recession for 50 years”, having succeeded in producing a recession was in fact growing when they took over in May 2010.
The closing ceremony for the Olympics – get the Spotify link soon!
Rupert Murdoch – Ring My Bell
Chris Huhne – Rush Hour
and finally the Tory Cabinet…
The Twitter Joke – not menacing, but rather empty bombastic or ridiculous banter
The full judgment, on BAILLI, is here.
Owen Bowcott’s report of it is here.
Click to follow @BAILII, @OwenBowcott or @John_Cooper_QC.
This is a very interesting discussion of the actus reus, making reference to Smith and Hogan’s “Criminal Law” which GDL students at BPP use in studying criminal law.
26. This is the first occasion when this court has been required to address the ingredients of the offence created by s.127(1) of the 2003 Act in the context of messages of a menacing character. As we have seen, however, the section has been considered in the context of “grossly offensive” messages in Director of Public Prosecutions v Collins.
27. It is perhaps difficult for anyone nowadays to remember the time when the telephone system was at the forefront of communications technology of which “Twitter” is a modern example. Nevertheless as long ago as the Post Office (Amendment Act) 1935, s.10(2)(a) introduced a prohibition against the misuse of the telephone to communicate indecent, obscene or menacing messages, and because of the limited technology available at the time, these messages would largely be communicated to a single, often deliberately targeted recipient like telephone operators, who were subjected to indecent, obscene or menacing messages. Unsurprisingly, no one thought that was appropriate and statutory prohibitions against such messages were accordingly introduced. Section 127(1) of the Act has simply updated the protection to be provided from the misuse of technology. This once took the form of a telephone system and has now advanced to the present electric communications networks which, notwithstanding that “Twitter” was not invented at the date when the 2003 Act came into force, includes messages of the proscribed description sent by “Twitter”.
28. The 2003 Act did not create some newly minted interference with the first of President Roosevelt’s essential freedoms – freedom of speech and expression. Satirical, or iconoclastic, or rude comment, the expression of unpopular or unfashionable opinion about serious or trivial matters, banter or humour, even if distasteful to some or painful to those subjected to it should and no doubt will continue at their customary level, quite undiminished by this legislation. Given the submissions by Mr Cooper, we should perhaps add that for those who have the inclination to use “Twitter” for the purpose, Shakespeare can be quoted unbowdlerised, and with Edgar, at the end of King Lear, they are free to speak not what they ought to say, but what they feel.
29. It is elementary, and unsurprisingly there was no dispute before us, that the offence of which the appellant was convicted cannot be proved unless the content of the message was of a “menacing character”. Given that there is “disappointingly little coherence in English law’s approach to threat offences” (Smith and Hogan’s Criminal Law, 13th edition, at p951) we do not think that an analysis of the numerous other offences based on threats, including blackmail, takes the interpretation of this statutory provision any further. We were told that the word “menace” is defined in the shorter Oxford dictionary as “a thing threatening danger or catastrophe; a dangerous or obnoxious thing or person; a great inconvenience”, and that as an intransitive verb, to “menace” was to “utter menaces; be threatening”. Mr Smith submitted that no more, and no less, was needed than the application of ordinary language to the context in which any particular message was expressed and to all the relevant circumstances. Mr Cooper suggested that for a message to be of a menacing character it must, on an objective assessment, contain a threat of such a nature and extent that the mind of an ordinary person of normal stability and courage might be influenced or made apprehensive. Our attention was drawn to DPP v Collins, in the Divisional Court, while considering the meaning to be given to “grossly offensive” within the section, Sedley LJ identified the four different classes of message proscribed by s.127(1)(a).
In the context of a menacing message he observed:
“… fairly plainly, is a message which conveys a threat – in other words, which seeks to create a fear in or through the recipient that something unpleasant is going to happen”.
30. The attraction of the argument, implicit in the development of Mr Cooper’s submission, that it is a necessary requirement of this offence that the message must be credible as an immediate threat to the mind of an ordinary person of normal stability and courage does not quite penetrate to the heart of the problem. The telephone operator in the 1930s and 1940s may not have believed that the person using the telephone to threaten violence would or could implement the threat, but that would not extinguish its menacing character. After all a message which cannot or is unlikely to be implemented may nevertheless create a sense of apprehension or fear in the person who receives or reads it. However unless it does so, it is difficult to see how it can sensibly be described as a message of a menacing character. So, if the person or persons who receive or read it, or may reasonably be expected to receive, or read it, would brush it aside as a silly joke, or a joke in bad taste, or empty bombastic or ridiculous banter, then it would be a contradiction in terms to describe it as a message of a menacing character. In short, a message which does not create fear or apprehension in those to whom it is communicated, or who may reasonably be expected to see it, falls outside this provision, for the very simple reason that the message lacks menace.
The Coalition has become like an investment bank that is difficult to regulate
In the good times, an investment bank makes a profit and returns a nice dividend for its shareholders if it has the ability to do so. How much a bank makes is determined in large part by its ‘beta index’ – and it can be the case that the return can be very large if there is high risk. That’s how the market works. Investment banks typically have a high ‘beta index’.
The Coalition has now become like a bank that nobody particularly knows how to regulate. It has decided to take a risky course flying in the face of most economic experts. This policy has seen no return – in fact it has been downright dangerous, but thankfully the centre-right blame everyone for the economy; because they are idiots. Britain plc, under new management, starved the UK of investment in the construction industry, much needed at the time, through abolition of schemes such as ‘Building Schools for the Future’. Labour was much derided by the Conservatives and Liberal Democrats at the time, and the construction industry yesterday contributed to 0.4% of the -0.7% shockingly bad (deterioration) of the GDP.
The scale of this disaster cannot be underestimated. The Conservatives and Liberal Democrats inherited an economy which was weak in its recovery. Like an ill patient, the Doctor bled the patient to death. As a result of this haemorrhage in the last 27 months, the patient is in intensive care, but the hospital doesn’t wish to sack the doctor.
Mixing metaphors up, it’s because George Osborne has to be caste as the ‘rogue trader’ of Britain Plc. In public, Britain plc. is ‘doing well’ – all is good in the world, mounting ‘the biggest security operation in a lifetime’. There is no mention by Dave and Seb of the G4s cock-ups – national pride is the Microgynon of all criticism here. But Britain Plc is putting on a brave face for its future investors – like ENRON did.
Britain plc is not even returning a dividend any more. Real economists, many of whom are Keynesians, are fully aware that the recovery – if at all – will not begin until 2018 at the earliest. This is because there was lack of investment in the infrastructure of Britain leading to poor growth – the employment statistics reveal a more flexible workforce, but a country which is economically sick.
The best Britain plc can do, to be regulated, is to ringfence George Osborne. That is, put all the liabilities in George Osborne, with a view perhaps to flogging off George Osborne’s minimal assets and liabilities elsewhere. His assets as a master strategician makes the Great Stupendo look like a possible Royal Variety Act. He is at best a rather feeble tactician, evidenced by delivering possibly one of the most incompetently executed Budgets ever known to the UK in modern times.
George Osborne is accused of completely murdering the UK economy. Perhaps he can reduce this crime to manslaughter, if he can argue that he was provoked by Alistair Darling and Gordon Brown ‘maxing out the credit card’. This argument is difficult as the UK Plc, under a different board of management, had in fact had the lowest debt of all the G20 entering the global recession. Or maybe that George Osborne can claim ‘diminished responsibility’ – the abnormality of economic mind may be attributable to his 2.1 in modern history at Oxford, with little real-world experience of running a small business, let alone a sovereign economy. George Osborne may ‘get off altogether’ by claiming self-defence, but chronologically he started the verbal attacks of Ed Balls, culminating in a discredited smear campaign which even led the Tory press to ask for his political head.
Vince is no Saint either. It makes for a convenient story line for Michael Oakeshott to plonk him on a horse to lead a cavalry, but a real Keynesian would not have let this mess get this far. It was St Vince who famously said, in response to a Labour Budget, that “it doesn’t matter where the recession came from”. Oh really? St Vince of Cable has in fact, it is alleged, been a ‘silent bystander’ to the murder of the UK economy. The clue in his role comes from the unsubtle clue that he is in fact Secretary of State for Business, Innovation and Skills, during this fiasco.
So, it doesn’t particularly matter if Britain Plc. rearranges chairs on deck – mixing metaphors further to become HMS Britain. It has hit an iceberg, and the question now is whether this is enough to sink it on May 8th 2015. Incedulously, Cameron and Co. Limited (now Britain Plc.) wish to continue in their ideological campaign to cut the deficit, but given that the deficit and borrowing exploded this year, it might be safer for Britain Plc. if it frankly went into administration until it’s fit for purpose – after the Olympics of course.
At least we now know that Thatcherism was built on rocky foundations
22 years ago, towards the dying days of Margaret Thatcher’s government in the eighties, I decided that I would never vote Conservatives for the rest of life. 22 years later, I have stuck to this. I remember when Maggie boasted that she had built the UK on ‘firm foundations’. The rest of Europe, apart from us, have now visibly rejected another potent ideology, austerity – simples, austerity failed. I believe we should now reject Thatcherism too as a failed ideology.
The two years which have just gone have seen a remarkable realisation by the general public of the marketisation principles espoused by the Conservatives and New Labour. New Labour’s ultimate sin is to pursue the deterioration in social inequality and greater degree of commodification of public sector services. This rejection has taken the form of the pendulum swinging away from Thatcher at last, with Cameron and Clegg having done quite long-lasting damage to the Thatcher brand. Members of the general public who comment that, ‘even Thatcher didn’t go as far as this’, are in fact correct in identifying that the Cameron government has tried to implement the worst aspects of the Thatcher administration, but done it completely incompetently. This Coalition is not just woefully incompetent in strategy, but also in operations and tactics, magnificently demonstrated by Osborne’s Budget this year.
When William Hague said to George Osborne, looking lovingly at No. 10, ‘We’re desperately close you know’, both Hague and Osborne knew that they had done so on a tissue of lies, which they hoped to maintain until the Office for National Statistics called time on their drinking of misinformation. The story to tell was Gordon Brown and Alistair Darling had been reckless with the public finances. Two facts spoke out clearly against this. Firstly, the IMF also showed that, when it came to government debt, Britain had the lowest levels of all G7 states, and close to average levels of the countries in the G20. Secondly, the deficit which Labour ‘ran up’ in 2008 was due to bailing out the banks saving UK of an even bigger economic crisis which happened at that time. This was all during a period where Labour had maintained public spending on the infrastructure, leading to record levels of satisfaction in the NHS. When Peter Kellner was asked why this had not benefited Labour in terms of a ‘poll leader’ at the meeting of ‘Southern Discomfort’ at a meeting of the Fabian Society in 2010, Kellner offered that there was an aspect of ‘IMBYism’ in that beneficiaries of Labour’s spend on the NHS with a good NHS considered themselves ‘some of the lucky ones’.
It was extremely difficult for Labour to win in 2010 at the tail end of 13 years in power. Gordon Brown’s encounter with Gillian Duffy exposed the fault lines in the immigration and insecurity debate. Ed Miliband has succinctly summarised this perfectly, by saying that not everyone who raises the topic of immigration is a bigot. Labour had become repulsive to many, because of epitomising an overzealous State which believed in overdetention without charge. The public blamed Labour for the state of the economy, but in May 2010, the country was – albeit weakly – emerging from recession. We are now back in recession, as a direct measure of policies such as scrapping of ‘Building schools for the future’ and throttling consumer demand through the VAT hike).
Cameron doesn’t do ‘organic’. Like the control management systems of corporates, there is a ‘command-and-conquer’ approach of the NHS Commissioning Board and the Big Society (the biggest fraud of them all, as it was all a cover for venture philanthropism through the Big Society Bank). Nick Clegg’s PBB called ‘Broken Promises’ now has a definite irony about it. Many in Labour resent the Liberal Democrats for denying Labour a majority, but Labour should not be oblivious to the faults of the Brown/Blair regime either. The Liberal Democrats have made it possible for the controversial legal aid cuts, unpopular welfare benefits changes (victimising the disabled) and privatisation of the NHS to reach the statute books. The vast majority of observers of social welfare will not vote for the Liberal Democrats in 2015 for this very reason. Even the demonisation of the Unions backfired spectacularly with Francis Maude tried to incite political hatred towards the petrol workers who never went on strike anyway. Cameron has perfected, however, in copying a trait of Thatcher – alienating sectors of society one-by-one such that you ultimately become unelectable. Luckily for us, we have extremely sharp bloggers with projects such as Sunny’s “Five Million Votes”, present company excluded, and brilliant tweeting activists (such as Rosie’s recent #twitterviews initiative).
The contempt for the Coalition has become visceral, and it’s entirely mutual. The reason that the ‘benefit scroungers’ campaign by the Tories, whilst being popular, is ideologically difficult is that allegations abound of rampant tax avoidance by corporates of the order of millions. Private entities, facing serious serious allegations, include A4e, G4S and Barclays, and this mistrust of corporate philosophy has even spread to resentment of McDonalds and Coca Cola sponsoring the Olympics (a criticism even voiced by British doctors in view of ballooning obesity in the UK). Many industries in Britain function as oligopolies, which means that they can easily put profit ahead the needs of the stakeholders including customers and suppliers. This has been seen with the high prices charged by utility companies, and the corporate bullying by corporate supermarkets of farmers in the provision of milk. Whilst the propaganda still exists of ‘unions crippling the country’ from the 1970s, the vast majority of people in this country would prefer workers in the economy to have powerful democratic representation, than not. The idea that companies actually exploit workers to make a profit has taken afoot, such as through the disaster of Workfare. The actual power of shareholder activism in international corporates has been shown to be embarrassingly weak, thus far. The country is dangerous unbalanced, another legacy of the Thatcher administration though exacerbated under Labour.
Dennis Skinner once referred to George Osborne as a man ‘educated beyond his intelligence’. Jeremy Hunt, Michael Gove, George Osborne, David Cameron, Nick Clegg and Danny Alexander have now become the people you would least likely want to go down the pub for a drink with. Ed Miliband’s personal ratings are now quite good, Ed Balls is now trusted on the economy more than George Osborne (and reasonably so as he predictedly perfectly why Osborne’s Plan A would fail). With slogans by David Cameron echoing in the ears of Labour members like ‘Time for a change’ and ‘We can’t go on like this’, whilst we may not have our version of the Poll Tax Revolt or the Michael Portillo moment, the public has finally begun to understand why the foundations of Thatcherism led to a horrific legacy. One hopes that this will be replaced by an ethical socialism, and that the Olympic legacy is better.
Privatising the blood bank and NHS, G4s and A4e fiascos.. ENOUGH!
This has got to be the most putrid, sick, incompetent Government. Thanks also to the LibDems for selling the NHS down the river, at the expense of Lords reform which they never got.
bwah bwah bwah
The State is a 'soft target' for misleading attacks, but it's easier to continue lying
I’d actually written this article prior to publication of @DeborahJaneOrr’s excellent article, ‘Private sector efficiency – this lie has to stop’ (clicky). You can follow Deborah on Twitter here at @DeborahJaneOrr.
What is most confusing about the private vs public sector debate is a reluctance in acceptance that they both form part of the wider economy. Whilst teachers, doctors and nurses aren’t ‘wealth creators’ in the sense that a Barclays banker might, wealth of this country would not exist without them; using a strict sense of the word, the public sector brings wealth in other senses and value, rather than profit. Whenever the State is discussed, nobody ever defines the State. When criticising the State’s various manoeuvres such as “over-detention without charge”, Conservatives are oblivious to the fact that the independent judiciary, which is part of the State, stopped it. It is easier to define the State by what is not the States, as entities which are not in the private sector. The advantage of this definition is that it includes structures and functions which the Conservatives have chosen to outsource such as nurses or police workers.
Private sector entities in business are obliged to maximise shareholder dividend under law. This is true whether you are discussing Virgin Care or otherwise. Or take another sector – maybe Virgin Banks. In discussion of how bloated the State is, the Conservatives are wilfully blind to bulky corporatilist operations, such as Google or Virgin. There are too many ‘screws up’ by private companies in Cameron’s corporate Britain to mention, like allegations of A4e failing to meet work programme targets, A4e accused of fraud, andG4s in olympics security. The State can be incredibly efficient – take the NHS for example. A lot of functions are indeed outsourced in the NHS to private organisations. For example, the London NHS Trusts are populated with ‘bank nurses’, which largely charge for their nursing services at a higher rate than traditional NHS staff. They are therefore not in any contract with the State. Like outsourced policemen, or outsourced police officers, or outsourced security for the Olympics, the public have little recourse to them either legally or morally if something goes wrong.
In the pendulum of politics, fashions come-and-go. There is currently a libertarian and liberal fashion, some proponents of which have been fast to criticise the State which gives the vulnerable and disadvantaged in Society some security. An attack on the State is therefore potentially an attack on values. There is no reason why private organisations are inherently not interested in stakeholders’ interests, but it is perfectly possible to a run a hospital with patients or a school with students that does little to maximise value of their transactional experience yet does a lot to enhance shareholder dividend. Not all that generates a premium shareholder dividend is a paragon of virtue, either. Look at the recent allegations and proven activities in Barclays Bank or News International. The fact that utility companies and train companies can increase their prices without delivering necessarily a better service is a sad testament to this.
The lie has got to stop. The Right have relentlessly spun too the notion that the private sector underwrites the debts of the public sector, and finances the country at large. Not true from two key perspectives – the City directly caused the economic catastrophe of England (not the teachers or nurses, many of whom receive little more than a living wage, if at all). Secondly, the ‘private sector’ has not taken up any slack in the effects of the cuts in the public sector. Back to my original stance that we are all part of one big economy, and it is senseless to pit one sector off against the other, but if you’re playing dirty the private sector have a lot to be grateful for from the public sector. However, giving the austerity plan of this Government has clearly failed, it is difficult for politicians to stop lying suddenly.
Blair can offer his support, but his advice would be toxic for Miliband
Tony Blair concluded his speech last night with these penultimate paragraphs: “So it’s an honour to be part of it and it is an honour to be here tonight to support our Party, whose values and principles I have always believed in and always will. And to support Ed, support his leadership, support his drive to make our Party win. Leaders need support. What they usually get is ‘advice’. So Ed, you don’t need my advice but you will have my support.” Blair previously had stated categorically that “he doesn’t do tribal politics”, possibly with the same fervour and conviction with him “not doing ‘God'”, but the unfortunate truth is that the bitter wrangling between the Brownites and the Blairities exists to this day. It is hard to ignore that ‘the second coming’ or resurrection of the son of Thatcher will strike fear into humble grassroots Labour members. The notion of Blair acting as adviser to Miliband is treated with fear by many current members of the Labour Party, despite Blair apparently ‘winning three elections for Labour’. Two of these reasons are that, under Blair, we invaded Iraq, still a hugely controversial decision; furthermore, on Blair’s watch, Labour lost four million votes between 1997 and 2005, and his personal poll ratings were plummeting at the time when he did eventually relinquish office and power. The idea of Blair advising Miliband cannot be taken seriously when he is already cumulatively earning millions advising corporates such as JP Morgan. Furthermore, he has nothing offer. Blair was the future once.
As a historical allegory, Blairites wish to emphasise the ‘golden era’ of Jonathan Powell and Alastair Campbell, pointing out the contributions such as a minimum wage, and ‘capturing the mood of the public’ such as with the ‘People’s Princess’ and ‘I feel the hand of history upon us’ speech. Critics of Blair will tend to shrug this off as ‘Blair was a B-rate actor’, but even this criticism is too extreme. The fundamental dismissal of Blair’s contribution to politics I feel must be an ideological one. Blair represented a ‘third way’, but is in fact more like, on reflection, ‘the middle way’ which inspired Mussolini. A pathetic way of rebranding left wing politics as the ‘human face of capitalism’ has left lasting damage for Labour. Labour’s human face of capitalism is in fact Labour. It is putting the workers and employers’ needs at least as level as, or above, the need for profit. Whilst Ed might have previously called it ‘responsible capitalism’, it is more akin to the community investment form of capitalism, where competing interests of acting in the best interests of the community and the best interests of the shareholder are reconciled. It is more than an antithesis to ‘crony capitalism'; it explains why Marks and Spencer should not have been morally allowed to lay off many thousands of workers, whilst generating a substantial profit, in the name of its business model, and it explains why employers with venture capitalist influence (such as Beecroft) cannot be allowed to act unlawfully under European law of employment to hire and fire staff as they wish, providing little job security for such people.
This is fundamentally what Labour should stand for. So I offer Ed Miliband advice and support. I am not going to write an open letter, so keen of left-wing bloggers around Christmas time. I am going to advise Ed Miliband not to get caught up in the hysteria of the academics of the ‘social market’ – I should like you to embrace that one bit of Blair’s advice that is useful. That is, for Labour to go back to its roots, and to think about how it can represent the views and ambitions of people it has always seek to represent – there is no point courting the City, with their tax cut meaning that we cannot ‘afford’ a new national social care service. This means representing too workers and their Unions, including the nurses and teachers; without them this country would not have wealth (let alone profit), so they are the true ‘wealth creators’ by definition.
A discredited government which the country is disgusted at
If you were a trader in shares of Osborne plc, on the basis of this afternoon’s session in the Commons, you’d be urging your fellow commodity sellers to cheer the mantra of ‘Sell, Sell, Sell’. David Cameron and George Osborne has made a very grave error of judgment, as the pathology in the culture of the banking industry is not just restricted to the LIBOR fraud from Barclays. Don’t let the BBC deceive you – the Government has been proven to be a moral cesspit, and the country is completely exasperated.
Bob Diamond in a incoherent set of responses yesterday in the Commons Select Committee, best described as ‘implausible’, was unable to explain why senior ‘LIBOR’ setters, who had apparently been doing the job for decades, were oblivious to the emails from traders publicly wishing the LIBOR rate to be fixed. He had no explanation why it took so long to get to senior management, and provided that the compliance officers had had a duty to report criminal malpractices. This is reminiscent of the “shock” experienced by Rupert Murdoch when he found out about the morally repugnant phone hacking which had apparently occurred at News International. The problem is that ignorance is no defence in our law at least, where company directors are, despite promoting the success of the company, are supposed to act with due care, skill and diligence.
On 28 July 2012, Rachel Reeves claimed that the Chancellor made a conscious decision to exclude LIBOR from the Financial Services Bill in its current form, even when he must have known that a massive FSA investigation into the scandal. It is hard to know how corporate governance mechanisms have failed so dramatically in News International and Barclays, but there is nothing more off-putting to a corporate investor than a large company, albeit running profitably, committing openly criminal activity to pursue its aims.
This afternoon, Ed Balls utterly annihilated George Osborne’s speech, like taking candy from a baby. Balls effectively told him to ‘put up or shut up’, asking him effectively to prove his nasty allegations or desist from making them. The involvement of the Bank of England over LIBOR and the gilt markets is far from clear, and the only way to achieve a solution on this is an independent judicial-inquiry. It is a complete non-argument to say that it is too time-consuming and too costly, as those might have been the same grounds of opposition for the Leveson Inquiry which has gone a long way to showing that the pathology was substantially more than some ‘rogue reporters’. The parliamentary select committee is not able to examine witnesses with the skill of a lawyer, or QC, and probably yesterday afternoon was the best advertisement yet for a judicial-led inquiry.
While this issue runs-and-runs, there can only be lasting damage for David Cameron, whose personal poll ratings are at an all-time low. There will be no closure from a parliamentary inquiry, aided and abetted by the Liberal Democrats who are expected to be electorally obliterated in 2015. The most damaging label for David Cameron is that of the Flashman identity, of a man completely ‘out-of-touch’. The judiciary is the only lifeline for restoring the credibility of the legislature, and a judiciary-led inquiry is the only way for MPs as a collective group to restore their damaged reputation. Cameron is damaged signficantly, the country is most unimpressed, and this could prove to be fatal for this government.
Jeremy Hunt's 'big plan' for #Leveson doesn't add up
In what seemed like a bold, inspiring statement, Jeremy Hunt commented to Robert Jay QC that the business model of the print newspaper did not make sense.
Actually, anyone with a reasonable understanding of management will understand that the way to get around declining sales of newspapers would be to diversify your product, if in a mature market which is not growing much; this would be easy to do, if Hunt were able to invest in the infrastructure to support high speed broadband. However, being a true free marketeer, one assumes that he can rely on big corporates such as Virgin, who are largely supportive of the Tories, to enter into a mutually beneficial strategic alliance. So, taken as a whole, Jeremy Hunt’s statement does make sense.
Jeremy Hunt then went to elaborate how the people were looking to these problems to be solved, but there existed solutions in existing law. He described how there could be a new PCC, but Hunt did not at any point opine whether there should be any further laws. Ideologically, the concern is that Hunt’s new PCC would not have any ‘teeth’, in much the same way a replacement for the Human Rights Act would not be legally enforceable. Perhaps, the new PCC could ‘nudge’ principal stakeholders into action, such as reasonable behaviour. Reasonable behaviour would almost certainly in this definition encompass *excluding* illegal behaviour such as phone hacking of celebrities and other citizens. Unless of course you believe in absolute shareholder primacy.
One half of Hunt’s model so far therefore appears to support sustainability. It would make sense if the other half of Hunt’s model could also embrace sustainability. Corporate social responsibility – or acting with a concern for people and planet, as well as profit. I take this to mean including all members of society in what you’re doing. Where Hunt is clearly correct is that a corporates with pending or active litigation, where its Directors could even be brought under the auspices of foreign legislation such as the FCPA, should indirectly be punished by market forces. It is still uncertain whether corporates of their own accord can do this with a bit of nudging – the behaviour of some companies such as ENRON suggests perhaps not. The question as to whether the UK should introduce direct legislation – making widespread disclosure and transparency targets of CSR information available for investors – to give teeth to bodies such as the new PCC.
I think Jeremy Hunt doesn’t understand CSR. His concrete thinking of money prevents him from understanding how the News International crisis began in the first place. To this extent, I have grave doubts about his solution, or lack of it thereof.
