Yet more anti-independence bollocks masquerading as journalism

In honour of James Naughtie badgering Nicola Sturgeon on the Today programme this morning re: something Alex Salmond said in 1999 (!) about the pound and Scottish  independence, lets pick out yet another tiresome example of anti-independence bias and show it up for the utter bollocks it actually is.

This time it’s the (Glasgow) Herald with its recent article headlined “Lloyds could move HQ post-independence”. !!!!!!! Oh no, disaster, loads of jobs might be lost if Scotland voted yes!!!!!

Except, Lloyds Banking Group isn’t headquartered in Scotland. Its company website clearly states its head office is on Gresham Street in the City of London. Its registered office is in Scotland right enough, which is what the CEO was specifically referring to in the interview the Herald derived its completely makey-uppy bollocks from, but – as any accountant will happily explain – where a company is based and where its registered are two very different things. 

So the (Glasgow) Herald article set out a threat, engaged in fear-mongering even, on the basis of a potential something that was just flat-out bullshite.

There’s  two ways of explaining this, 1) the (Glasgow) Herald business journalists know jackshit and/or 2) they or the editor is that rank rotten biased against independence, they’re willing to trot out any made up shite to support the party line. Either way they clearly aren't credible.

But, who didn’t know that already? Besides, the bulk of today’s independence chat was flannel and noise, which served only to distract from the National Institute of Economic and Social Research’s finding that if you divvied out the UK national debt post-independence, it would equal 86% of national income in Scotland vs 101% for the rest of the UK. 

And to be clear the blerk who reached this conclusion is not pro-Scottish independence given an earlier article wot he wrote  started off with post-communist Russia (I shit you not) as a wholly inappropriate and fear-mongering reference point for what an independent Scotland might be/have to contend with.

And this debt number is very, VERY important. Up until now, the national debt has been used as yet another scare tactic by terribly serious anti-independence people. The argument here has been as follows - yes well, independence doesn't just mean keeping the oil to ourselves don't you know, we'd have to take on our fair share of UK liabilities as well, oh yes. 

Except, now, when you deliberately stop quoting totals and start looking at percentages, it turns out that would be a good thing, a very good thing. Really, there are two stories here. One, it turns out Scottish independence does more to reduce public debt than any amount of taxes on the disabled, impliying independence would generate mucho financial benefits for all concerned north of Carlisle. And two, the Scottish broadsheets and London meja are shit scared of basic facts getting out.

Actually there’s a third. Personally, I was mad impressed with Alastair Darling during the more intense stages of the credit crunch. Now, with his anti-independence chat he comes across as being about as credible and insightful as Johann lamont’s left bollock with all the dignity of a badger that's just shat itself. What happened to him?

I blame Gordon Brown

Kinda-ish. Him making the Bank of England independent in 1997 is normally viewed as having been an unquestionably good thing. You could argue, well I’m going to anyway, that it actually made a notable, if indirect contribution to the credit crunch in Britain. Here’s why.

Banks regularly run stress tests. These set out stressful scenarios wherein property prices fall, inflation rises, the economy goes into recession and so on, the point being to develop a sense of what all of these things would do to a bank’s profitability, capital and liquidity. This in turn should inform how much capital a bank needs to hold just in case.

The most demanding stress test used to be the 1 in 20, which looked back over the previous 20 years (or what was regarded as being 3 to 4 business cycles), then used the experience of the worst ever period during that time to set the test parameters.

Before 2007 this meant 1987 to 93 when Canary Wharf first boomed/bust and Britain had its Black Wednesday. The primary cause of this feck up was the exchange rate mechanism experiment when the Tories used what eventually became crucifyingly high interest rates to hold the pound at an artificially high level. Then George Soros bet against the pound and won.

Given this experience, the subsequent decision to make the Bank of England independent and take the politics out of monetary policy made and makes perfect sense. Except, doing so fed directly into the NICE (Non-Inflationary Constant Expansion) decade that followed or what retrospectively looks more, in economic policy terms, like the “Great Complacency” as when schumcks started claiming to have conquered boom and bust.

Going back to the stress tests i.e. what bankers used/use to identify the risks that should be keeping them up at night, the biggest stresses they used to be institutionally aware of – destructively high interest rates and an over-valued pound - were both politically determined and as such  no longer options, the Bank of England was independent and increasingly transparent after all i.e. finance could be confident politicians were no longer in a position to do anything daft. However, this change also meant it simply wasn’t clear what the actual risks or triggers were or could be. In this environment confidence became hubris, which in turn begat a bubble that became a crash (to be fair historically low interest rates helped here as did the FSA, which was utterly rank rotten incompetent shite too).

I reckon we’re still suffering from a broader, complacency hangover due to the Bank of England’s independence when it comes to the broad understanding of economic policy. The interest taken in Mark Carney’s appointment, his supposed superstar status and notions of him being here to save the British economy distract from how (a) the Bank of England has already done pretty much all it can and then some, (b) economic policy is about monetary policy AND fiscal policy and (c) by focusing on a pretty technocrat, we ignore the reality, which is political dogma is alive and well and actively – via fiscal austerity – influencing economic policy in ways that are actively undermining Britain’s short, medium and long-term economic prospects.

The question isn’t can Mark Carney save the British economy, his primary purpose after all is nothing more than to keep consumer price inflation as close to 2% p.a. as possible, rather its why are George Osborne and the ConDems doing so much to undermine it?

Its all gone a bit Paul Ryan

The thing about Paul Ryan, the former vice presidential candidate, was how the mainstream media in the US, and here largely ignored the fact he's mental. There was a self-selecting, self-sanitising thang at work where the party projected rhetoric about him being a deep thinker and policy wonk was bought into and the reality - he's a nasty, bigoted, fantasist with an aggressively pragmatic approach to the truth - was ignored. I reckon a similar process is at work in Britain today and has been for some time now.

The most obvious example of this was the muted reaction to the ConDem's appropriation of a 1970s National Front slogan, which they stuck on the side of a van and sent round multi-ethnic areas at the taxpayers' expense.

The bedroom tax is another obvious one and in a different way so are the various help to buy schemes i.e. profoundly unfair and vicious, shitty policies geared to punishing minorities at the same time as subsidising the well off on an industrial scale.

All these policies prompt the same simple reaction - that's just wrong. Except, it appears they're so wrong and so nasty, they're so hard to reconcile with the notion of David Cameron a someone who hugs hoodies, could lose some weight, christ he's almost like you and me bullshite that they either get ignored or any attention paid is allowed to quickly peter out. They also raise far more important questions than  the Nick Robinson type pish about who's in or out of favour in either party or whether Boris is going to challenge Dave.

Well, lets quote some reality about what the current nasty bunch of bastards are actually doing:

1) You're disabled, you're on benefits as a result despite not wanting to be and you live in social housing. You have a spare room you keep equipment in/a carer sometimes stays in overnight - the government's policy is that you will be charged extra for the spare room. And no there isn't a one bed flat you can move into.

2) You earn c.£112,000 a year, you have £30,000 of savings in the bank, the current government's policy is to lend you up to £120,000 for free (for 5 years) to buy a house.

That's the reality of the current government's policies. That's just wrong.

No seriously, the help to buy scheme really is mental

First off lets be clear, the various government Help to Buy schemes are and will make a lot of people a lot of money. House builders obviously, but you too could cash in if you:

1)      Borrow as much as you can to buy a house in London and the S.E. of England within the next 18 months.

2)      Live in it for 24-30 months

3)      Sell it and buy somewhere cheaper outside London and the S.E. of England

4)      Use the profits to travel the world for a year or two

5)      That’s it.

Now bearing in mind the scheme hasn’t fully kicked in yet i.e. its not boosting house prices as much as it's about to, lets do some sums. If you bought (and remember the more you can borrow i.e. the bigger your income cos this is about helping the already well off, the more you’ll make) a £300,000 house, all you’d need is a £15,000 deposit. If the current rate of house price growth was maintained, after 30 months you’d be something like £54,000 up on paper. Nice. And I guess making the housing market more accessible does generate the broader economic benefit of freeing up the labour market/making labour more mobile. Despite that though the schemes are still feckin’ mental and profoundly unfair.

Lets bring some additional reality into play now. Most people get a 2 year fixed price mortgage (really, right now you should try and get a 5 year fixed – please don’t consider that professional advice BTW). Except, depending on who you talk to interest rates are now expected to start rising from late 2014 onwards and even more likely to start doing so from 2015/16. Then you look at the details of the government schemes and see that after 5 years of being a freebie they start charging 1.75% in year six and then retail price inflation plus 1% thereafter.

This means:

1)      Government policy is to help people who can’t afford a mortgage get a mortgage

2)      The cost of these mortgage will start rising from 2014/15 onwards

3)      It’ll really start rising when the charges kick in

4)      Pay rises are pants and lag house prices. A lot.

Now I guess one way of dealing with the government charges is to remortgage i.e. borrow more and use that to repay the government, except that’s to assume asset prices only ever go in one direction (see here for a list of companies that made this same assumption). Alternatively, you're taking a punt that banks will be more willing than they are now to do higher LTV mortgages.

Really, what we appear to be contending with is a government whose policy is to increase risk/enable people to go bust from 2018 onwards i.e. they are planting a cheeky wee economic time bomb at the same time as boosting already questionable house prices by helping voters borrow to buy something they can't afford. This will also direct money towards unproductive assets i.e. houses rather than say new factory equipment.

It is truly mental.


P.S. A thing that's always struck me about the left is they're very good at critique, but pants at proposing an alternative. Here's one. Instead of giving free guarantees to the middle classes worth tens of thousands of pounds, give them to housing associations instead or establish a big pot of debt for them so they can build tens of thousands of new social housing. This would push down on rental costs, create state assets and give more people decent homes. The current proposals do none of these things.

Swallow anything

So on the one hand you've the broader cultural phenomenon of loads more people getting loads more shit tattoos and on the other it would appear that one swallow (or a single quarter of marginally better than shite growth) does indeed make a summer judging by George's Osborne's chat about the economy.

As for mass, long-term youth unemployment? Skivers.

Living standards for yer average punter still way down on what they were 5 years ago? They're just not working hard enough, obviously.

Spending cuts clattering the working poor and the disabled? See youth unemployment above.. .. and they're probably on the fiddle.

Growth getting pumped up by steroid like bribes to middle class voters via help to buy? No, actually we're rebalancing, in fact the "recovery" is "balanced, broad based and sustainable" according to George give or take dull stuff like the long-term structural decline in manufacturing

Besides, what this single data point proves is that the argument fiscal austerity prevented growth  is pants give or take no, no one ever said that (what they did and do say was/is that fiscal austerity limited growth in the short-term by undermining demand and in the long-term by permanently destroying productive capacity. And they were right).

How not to save the British economy

A simple way of summarising a key plank of the Tory’s economic policy is that it involves shitting on the poor the morning after a red, hot curry. No, I’m not talking about the benefit changes because that’s more a madras than a phaal, what I mean here are the changes beginning to be made that originated in the report on employment law submitted by Adrian Beecroft, a driver of several Aston Martins, a private equity millionaire and a Tory party donor*.

Beecroft, the private equity millionaire and Tory party donor whose given fistfuls of fivers to the Tory party, began his report as follows; “Britain has a deficit crisis, from which the only escape route is economic growth. Growth needs to be encouraged in every way possible. Businesses must be able to manage their affairs in a way that allows them to become more efficient, more competitive on a domestic and global basis and hence more likely to grow and employ more people.

Yet much of employment law and regulation impedes the search for efficiency and competitiveness. It  deters small businesses in particular from wanting to take on more employees: as a result they grow more slowly than they otherwise might. Many regulations, conceived in an era of full employment, are designed to make employment more attractive to potential employees. That was addressing yesterday’s problem. In today’s era of a lack of jobs those regulations simply exacerbate the national problem of high unemployment”.

Cool. Me? I work in a lightly unionised PLC to be sure, but in an industry with an established tradition of gold plating the minimum standards employment law sets because its engaged in the “war for talent” bullshit i.e. I’m insulated from much of the mad shite Beecroft trotted out. Similarly, so are public sector workers who, for the most part, have good union representation. 

But, Beecroft - the private equity millionaire and Tory party donor - knows this, he does refer explicitly to small businesses after all. Really, his notions will have the greatest impact on those most reliant on employment law to set the minimum standards their employers have to meet, which in practice means the lowest paid. 

So here's a (tweaked**) list of the 10 worst paid jobs in Britain in 2012 because they’re the people most exposed to the Beecroft proposals:

• Haridressers £12.1k
• Waiters £12.4k
• Bar staff £12.8k
• Kitchen & catering assistant £12.9k
• Nursery assistants £13.9k
• Sales & Retail assistants £14.3k
• Cleaners £14.4k
• Housekeepers £15.1k
• Cooks £15.6k
• Receptionists £15.9k

Picking thru the list you notice a couple of things. 1) They’re feminized occupations for the most part, 2) they’re non-union, but 3) and most importantly, given the  Beecroft chat about global competitiveness, you can’t export/outsource any of them, not a frickin’ one (you try getting your hair cut via an Indian call centre, go on I dare ya).

So there you are then, putting to one side the Tory tosh shat out in say Britannia Unchained, the reality of actual Tory policy, as shat out by Adrian Beecroft - the private equity millionaire and Tory party donor whose given fistfuls of fivers to the Tory party – is that to restore Britain’s global competitiveness and address the deficit crisis, we need to make it easier to hire and fire bar staff. And nursery assistants. And receptionists, especially the receptionists. Now I don’t know about you, but to me that seems as mental as its dumb as it’s completely beside the point as it’s nasty.

 * Didn't realise Beecroft part owned Wonga. I originally assumed he was just trying to come up with ways to cut costs at the companies he owned. Turns out his proposals are actually geared to drumming up more pay day lending business as well.

** Tweaked in the sense that the list had sales assistants in it multiple times

Is this a d!ldo which I see before me?

Reading the deliberately provocative quotes about the British work ethic taken from the Jamie Oliver publicity stunt, I reckon he had the beginning of some points, just not the ones he was trying to make. This is because what he’s quoted as saying conveys a profound ignorance of poverty and the Eastern European migration that seemingly keeps his restaurants open.

My personal experience based on the Eastern European migrants I’ve encountered is many do indeed work harder and more effectively than their British counterparts. Fer instance, I can usually tell by the length of the queue in the staff canteen whether its Polish or British people behind the till. Similarly, I remember getting a fridge delivered by a British driver with a Polish assistant; the driver initially didn’t want to humph my old one away because it was too awkward until his assistant essentially shamed him into doing so. Then there was the time I walked past a café advertising for staff and couldn’t understand a word said by any of the people queuing up for interviews because, I’m guessing, they were all Polish, Latvian, Lithuanian etc..

These examples tell me absolutely nothing about country-specific attitudes to work. First off, Eastern European migration was and is economic migration and economic migrants are by definition self-selecting; they’re people with the drive, ambition and means to get on by getting out. To give an alternative example of how powerful self-selection can be,  the Rangers fans who went to Manchester were not representative of Scotland as a whole.

Second, migrants, particularly when it kicked off, are frequently massively over-qualified for the jobs they take on arrival. One example was the Italian restaurant in Edinburgh whose kitchen porters were to a man (and women) doctors, medical and otherwise. Another was when I was sifting thru CVs recruting for a job where I was after a decent/good graduate with 2-3 years vaguely relevant work experience. By contrast the top Polish candidate was a former university lecturer who’d gone on to advise the Polish government on privitisations before becoming a management consultant. Judging by the post-arrival silence in his CV, I’m guessing he was working as a kitchen porter or delivery man at the time. So yeah, you put that amount of human capital behind a till and you bet you’ll get your change calculated more quickly than you would by an unqualified Brit on minimum wage.

Third, and following directly on from the second, the low-skill, no-skill jobs Eastern European migrants typically take are often temporary stepping stones to something else. This matters a lot. I know this because for most of my 20s I was poor, which to me meant being physically scared of opening a leccie bill.

But, I was not and never have lived in poverty because poverty means being poor, having no or negligible resources to draw upon when life events - like a leccie bill - hit and not having a credible means of escape (hence terms like poverty trap). By contrast, once I finished the low paid work I’d chosen to do, I used my resources and opportunities to get a job and hey presto - in a completely predictable lower/middle middle class way - I've subsequently found myself earning a chunk more than most people. Go me. 

Except, internally, I always knew this would be the case; all I did, after a few years gadding about, was fulfill the class specific assumptions I was brought up with. My passing experience of being poor was that it was shit, but I never experienced the days stretching into years, then no-escape  decades grind that defines poverty. And much the same applies to many Eastern European migrants; the doctors left the kitchen and I'm guessing the management consultant also got a good job in due course. For them, as for me, the situations they found themselves could only ever be understood as being finite. And its profoundly easier to work hard in a shit job - what Jamie Oliver appears to think is "toughness" -  if you just know you'll not being doing it this time next year.

For me this account of migration and poverty shines a different light on the Jamie Oliver chat. His argument seems to be we should all get a bit more Eastern European. Really? I’ve worked alongside Polish (and latterly Greek) migrants for years, people who've made the transition from low skill, low pay jobs into white-collar careers that actually match their qualifications. None of them leave work any later than me, none of them work any harder than me before they do, partly, am guessing, because they want to enjoy having escaped from ignorant, exploitative, grasping shits like Jamie Oliver.