Tuesday, 26 January 2010

UK economy out of recession (not!)

They're saying we're out of recession. Yes, our economy grew by +0.1% in the last quarter of 2009! Of course they were expecting it to grow by +0.4% so it's not time for total euphoria, but still growth is growth, isn't it?

Well, firstly, how much exactly is +0.1% of quarterly GDP? It's about £350 million. And over the same period the government pumped almost £50 billion of quantatively eased "printed" money into the economy. They also subsidised new car sales by £1,000 a pop and galvanised shoppers with the (then) impending VAT rise from 15% to 17.5% - now a done deal of course. Also there was Christmas. Sometimes that has been known to add a little to people's spending.

So the £350m "growth" is statistically insignificant and dwarfed by other factors in the economy. The government has its "good news" story of the day, but really this is nothing to be proud of.


Wednesday, 20 January 2010

BNP to seal ballot boxes

The BNP has decided it will exercise its right to seal under the Ballot Act of 1872. This allows candidates to put their own seals on ballot boxes. In certain key constituencies the Party's agent will affix a seal immediately the polls close at the general election.

Why? Because this:

Three Labour councillors in Birmingham were caught operating a "vote-rigging factory", an Election Court has heard. Police found the trio handling unsealed postal ballots in a deserted warehouse in the city during a late-night raid in June 2004, the hearing was told.

Check out the consprators in this case:

They are Muhammad Afzal, Mohammed Islam and Mohammed Kazi.

On learning that the BNP intended to seal the ballot boxes a Labour spokesman said: "We are confident that when the general election comes the British people will clearly reject the disgusting politics of the BNP. That will be because their politics are vile and divisive not because of any bizarre paranoia about ballot boxes."

Unfortunately the spokesman did not go on to say, "And we promise not to rig any more elections."

Blanchflower and King disagree

Yesterday, Mervyn King, Governor of the Bank of England and Chairman of its Monetary Policy Committee said in a speech at Exeter University, "a key element in raising the national saving rate is the elimination over time of the structural deficit in the public finances," which is his way of telling the government to stop spending so much of other people's money.

Meanwhile, Prof David Blanchflower, member of the MPC from June 2006 to May 2009, has said the MPC should be disbanded because it is not fit for purpose. He went on to say that cutting spending in a recession would create another "dip".

So one wants to cut spending and other wants to maintain it. Who is right?

Well, it seems to this blog that Blanchflower is living in a fantasy land. Yes, if during the boom times the government had built up a cash pile - put money aside for a rainy day - then spending it now to mitigate the effects of the recession would be a good idea. But the government didn't build up reserves during the good times, it just spent all the money it had and more besides. So the only way to keep public sector spending up now is to sell gilts and print money to buy those bonds in a circular operation with investment banks which provides a tiny fig leaf of cover to prevent the world from noticing that the currency is being debauched.

King at least wants to take the first steps towards getting out of our present economic hole. Blanchflower wants to keep digging. Of course, cutting spending will deepen the recession but it will also shorten it. Blanchflower would take us on a shallow dive to perdition while King would take the medicine now and get it over with.


Tuesday, 19 January 2010

Inflation is back

The inflation numbers for December (2009) are out...

CPI: 2.9%, up from 1.9% the previous month.
RPI: 2.4%, up from 0.3%.

So CPI is a whisker under the letter-writing 3.0% level and is the largest ever increase in the annual rate between two months. This is due to a couple of benign factors dropping out the back-end of the index: an oil price drop in late 2008, and the VAT rate reduction.

Now here's a truely horrific number...

RPIX: 3.8%, up from 2.7% in November.

RPIX is RPI excluding mortgage costs, ie, it's the real inflation rate when you disregard the government's manipulation of the housing situation.

And remember, the Jan 1st increase in the VAT rate isn't even in these figures yet!


Monday, 18 January 2010

Slovaks plant explosives on flight to Dublin

I missed the reporting of this when it first happened. It comes from the category of "you couldn't make it up". Apparently Slovak security officers were testing baggage screening at Poprad-Tatry Airport in central Slovakia by placing RDX, a military-grade explosive, in innocent passengers' bags. They planted eight 200 gramme packages but somehow only recovered seven. The eighth "bomb" was carried to Dublin.

The unwitting passenger reclaimed his bag at Dublin unaware of the explosives and it wasn't until three days later the Slovaks admitted what they had done. And even then they just texted baggage handlers at Dublin airport and then faxed an ambiguous message to the guarda - leading to the innocent passenger being arrested.

Details here: Independent

Wednesday, 13 January 2010

Right to trial by jury died today

The government has just successfully kicked away another plank of the justice system in this country: the right to trial by jury. In the case of R v John Twomey, Barry Hibberd, Peter Blake and Glen Cameron on charges relating to armed robbery the judge alone will decide their guilt. There will be no jury called.

It’s the first serious criminal trial to be held without a jury in England and Wales for more than 350 years. Right to trial by jury is enshrined in the Magna Carta. (Magistrates courts don't have juries, but they do have three magistrates.)

Last June, Lord Chief Justice Lord Judge made legal history by allowing the trial to be heard by a judge alone as he feared jury tampering using powers under Sections 44 and 46 of the Criminal Justice Act 2003 that came into force in July 2007.

The right to trial by jury can now be found in the same dustbin as the right to silence and the presumption of innocence.

Even countries which have no tradition of trial by jury at least have a panel to decide guilt, not just one man working alone.


Friday, 8 January 2010

The cold snap - so far not too bad

It's Day 3 of the "cold snap" and not too early to report on how the authorities are handling it. And it seems they are doing quite well, at least as far as this blogger in the home counties is concerned: mail received every day; buses running normally; trains running with only a few cancellations and delays; major roads gritted and passable, and grit supplies holding up at the moment.

The private sector has failed to match public sector performance. The London airports have been closed at times and many flights cancelled when they were open. Eurostar - the undersea train service to France - has had massive delays.

The main public sector problems seem to be: lack of grit on the minor roads, which most drivers have to use at the start and end of their journeys, and lack of grid on the footpaths.

There's an easy solution to the grit on the footpath problem. This blogger while trudging through six inches of snow on Wednesday morning met a street cleaner pushing his dust-cart and enquired of him how he planned to pick up litter when he couldn't even see it. His answer was rather non-committal. What should have happened is that on reporting to work this street cleaner should have been issued with a gritter rather than his dust-cart and been told to grit rather than clean. There would be a marginal equipment cost, but the cleaner's wages are already paid.

The major block on this plan is that street cleaning, like so much of the public sector's responsibilities, has been out-sourced: there is a contract to pick up litter, not to put down grit, and as the workforce no-longer works for the local authority directly it cannot be re-deployed to handle exceptional circumstances. The whole contract would have to be re-negotiated. In many cases out-sourcing is a simple abdication of responsibility - the public sector takes our money (under threat of imprisonment if you don't pay up) and passes some of it on to a private sector organisation which does the actual work, whilst retaining enough to make a fine living themselves.

The core functions of any public organisation should not be handed over to the private sector. This includes keep the roads and footpaths open and passable and such things as hospital hygiene - note we barely had any MRSA or C. Diff. before the hospital cleaners were shunted off into the private sector.

Tuesday, 5 January 2010

It's cold and we're running out of gas

So Happy New Year to all readers, and it's February 2009 all over again - several airports are paralysed by snow, London could be getting six to ten inches of snow over the new 24 hours and yesterday the government issued a "gas balancing alert" which is a way of telling the big industrial users to cut back or switch to other fuels otherwise the boilers will be going out in houses up and down the country.

On the continent they have a hundred days' reserve of natural gas (methane) while here in the UK we're down to our last eight days'. The government has persistently refused to build more storage capacity for the last decade, while our electricity generation has migrated from coal to gas.

When the gas is gone there will be rolling black-outs, or "rota disconnections" in the DTI jargon.

Let's hope we get some warm weather before it comes to that.

Daily Telegraph
Government emergency plans