Archive for May, 2014|Monthly archive page
The tidiest dump in England
I visit quite a few public dumps around the country (and in Germany). I am not alone in this. It is one of the rituals of urban living. Some of them are endearingly chaotic. What I do notice, however, is that those who work there are supremely proud of their facility.
Recently I visited a facility in East Yorkshire (Preston, near Hull, pictured). I ask, is this the tidiest public waste facility in the country?
Keeping cats at bay
Since moving into our new house we have been plagued by cat bowel movements. There are at least five culprits. Some are sweeter than others. However, they use the yard as a toilet. Cat poo is not pleasant. We decided to act.
The solution we investigated might be a sonic device that emits a sound frequency that they simply cannot bear. Apparently.
So, here it is (left). It is branded as Rentokil and made in the UK. It worked for the first two days. However, the cat poo returned.
We are currently procuring a new weapon against them:
European election results
There is an uncanny resemblance between this graphic and opinions that I have been listening to on the radio this morning after the release of the European Election results in the UK.
Unemployment – get out of Europe. Housing – get out of Europe. Stop immigration. Recession – get out of Europe. Stop immigration. Etc.
Europe as an entity and a ‘project’ is a mess, for sure. It is expensive. There is a lot of free riding. It is dangerously expansionist, as the crisis in the Ukraine demonstrates. And it does fuel some of the economic excesses of globalisation. However, the opinions that I have been listening to are bigoted, ill-informed and dangerous.
Some basic knowledge about economics might help. And a look at the expenditures made by the Swiss and Norwegians in complying with European legislation in order to trade in the EU, indicate that leaving the EU is not an answer. Most of our trade is with Europe. I trust that in the event of a vote to leave the EU, the hundreds of thousands of ex-pats living and working in Europe will be asked to return to the Isle?
Moreover, as ex-commodities trader, Nigel Farage, leader of the UK Independence Party, ought to know the recession is not the fault of the people, it is his class that caused it. And the mainstream ‘professional’ politicians that allowed them to do it. So, I can understand the need for change and some honest talking over a beer. But surely the future should come from the left, not the fascist right?
Picture: http://www.hopenothate.org.uk/blog/nick/archive/1/2014
The entrepreneurial state
Professor Mariana Mazzucato’s book, the Entrepreneurial State, contains some interesting observations about the role of the state in fostering innovation and hence creating wealth. It is evident that the private sector relies on public sector investment in research for its ideas, frameworks and technologies. The internet is a good example. Many drugs have their origins in publicly-funded laboratories (recent discussions around AstraZeneca and Pfizer have been caught up in this). Google is built on it. And even if the ideas, prototypes, patents do not originate in public research/educational establishments, the minds behind them do. The problem is, it seems, the private sector’s ability to appropriate these public goods for itself.
Professor Mazzucato’s recent lecture on this topic can be seen here: http://www.sussex.ac.uk/newsandevents/sussexlectures/2014?lecture=116&fmt=youtube; it was one of the best professorial lectures I have witnessed in recent years (notwithstanding Jonathan Chapman’s at the University of Brighton on Sustainable Design, 22 January 2014: http://www.youtube.com/watch?v=iBECx-L55Fg). Mazzucato demonstrates a number of indicators of disingenuousness on the part of knowledge-rich firms. One of the most startling and worrying is buy-backs. Large firms that spend their cash on buying back their own shares rather than investing in research are painted as villains. In the past, the exemplars were Xerox and Bell with their investment programmes that brought us spinouts such as Adobe, 3-Com and Lucent amongst many others in technology.
Buy backs take out investment from the economy. They put the burden on the public sector to do the risky stuff. Firms have become increasingly ‘financialised’. Pfizer, she argues, is just one example. There are many more spanning hi-tech industries across the globe. She explains this around 24 minutes into her lecture.
And so to remedies. Professor Mazzucato argues that states should be able to claw back some of the benefits accruing to firms when they win on the basis of public funding. Professor Mazzucato’s recommendations include: “golden shares of IPR and a national innovation fund”, “income-contingent loans and equity” and “development banks”. Stian Westlake of NESTA, the UK innovation investment fund, by way of critique, notes the following:
- Essentially, they all involve the government retaining a financial interest in companies that develop innovations based on public funding, with the idea that this money can be recycled to back more radical innovations. As far as I can see there are three problems with this idea: It would be nightmarish to administer It imposes costs on exactly the wrong businesses, creating both a presentational and a practical problem It’s worse than an already existing option – funding innovation from general taxation.
The full debate can be accessed here: http://www.nesta.org.uk/blog/how-not-create-entrepreneurial-state#sthash.eJoHD7wz.dpuf
The Co-operative’s new era
So, the members have voted to accept the Mynors recommendations for a new structure that will limit the influence of the regional societies. Hence the CEO of the largest of the regional societies, Ben Reid of the Midcounties, has resigned from the national board (now leaving three vacancies). Despite the criticism of Reid, his own society has recently reported revenues of £1.2bn, suggesting they are doing something right and against the trend in the national society with its £2.5bn loss. Reid received particular criticism by Mynors as a member of the Audit Committee of the Co-operative Bank when the £1.5bn shortfall was revealed.
So, we may ask, what is about to happen? Already it is clear that the local societies will no longer occupy their 30 per cent or so of seats. Instead, the intention is to ‘professionalise’ the Board. The new members will be professional executives and no longer voluntary. This business is so big, goes the argument, it cannot be managed by non-professional co-operators. It is indeed they that got the Co-operative into its fix in the first place (see post 24 April 2014: https://weiterzugehen.net/2014/04/24/what-is-going-on-at-the-co-operative/).
The proposals are, according to the Guardian newspaper, the following: the creation of a board of directors that is qualified to run a business the size of the Co-op; the creation of a structure that holds the board to account; the principle of one member one vote; and provisions to avoid demutualisation.
The latter is quite interesting. It confirms that asset strippers – or carpet baggers as they were known in the era of building society
demutualisations in the 1980s- will not be tolerated and will not gain advantage by such conversion. That is inherently a good thing. One-member-one-vote also has merit, though professional Boards do not always practice such equivalence. Structures clearly should be such that executives are held to account. However, more important is the skills mix on a board to know what that means. (As we have seen from Banking, some executives are ‘infallible’ and charismatic, professional or not.) But being a co-operator should not disqualify one from membership of the Board of the Co-operative.
Image and further details about carpetbagging: http://news.bbc.co.uk/2/hi/special_report/1999/02/99/e-cyclopedia/297982.stm
Privatisation watch: the lingua franca (2)
Filed under: Politics, Privatisation | Tags: child protection privatisation
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Plans to privatise child protection services in the UK have been revealed. The proposal in a leaked document is for the Department for Education to allow local authorities – councils – to outsource children’s services. These powers include making decision to remove children from their families.
Private providers, reports the Guardian newspaper this morning, “will allow authorities to ‘harness third-party expertise’ and ‘stimulate new approaches to securing improvements’ for safeguarding services outside ‘traditional hierarchies’…”. Ah yes, there is that ‘expertise’ again. Along with securing…improvements and replacing ‘traditional hierarchies’ with presumably non-traditional private hierarchies.
On an interview on Radio 4 earlier, the word ‘innovation’ was used by a defender of the proposal. Again, only the private sector can innovate. G4S, one of the innovation-led private sector companies thought to be lobbying for this market to be opened up, has innovated in not providing security for the Olympics and overcharging for its offender tagging services. Actually making up some tagged offenders. Another company, Serco, innovated in manipulating figures showing it had met targets in outsourcing family doctor services. Let’s also talk about Atos which in March this year pulled out of its £500m capability assessment contract after evidence of widespread incorrect ‘judgements’ on claimants’ fitness-for-work, leaving many without benefits.
Picture: politicalscrapbook.net
Privatisation watch: the lingua franca
For what is it worth, here are the phrases that justify the privatisation of public assets. Fill the gaps with the name of the organisation/agency earmarked for treatment:
The objective is to: “protect and enhance its [***] scientific capabilities in the long term” – Owen Patterson, UK Environment Minister on the proposed sale of the Food and Environment Research Agency.
It always seems to be the case that public agencies lack expertise, such that “[p]rocuring the right external partner, with the necessary commercial expertise and experience will help [***] to maximise its market potential and grow its non-government revenue”.
Let’s not forget the career prospects for the employees, should critics ask: “I am also confident that a joint venture would offer new opportunities to [***] staff.” That is reassuring from Owen Patterson.
And of course, according to Vince Cable, the Business Secretary talking of the privatisation of the Royal Mail last year, share ownership “energise[s] everyone … allowing employers and employees to share in the company’s future success”. My post is usually delivered by a man who looks newly energised. I’m sure he is also energised by the fact that 6 ‘priority’ investors made £750m out of the sale of shares on the first day of trading. But as Mr Cable told a select committee of the UK Parliament, “that is the market”.
Politicians and increasingly civil servants always tell us not to worry because: “[we] would only take forward specific measures where there was a clear public benefit and subject to suitable safeguards.” (official statement from UK Revenue and Customs regarding the sale of ‘anonymised’ tax data).
More to follow.
Privatisation watch – Land Registry
After yesterday’s post on railways, I’ve concluded that the present British Government is again engaged in a scorched-earth policy of selling the remaining state assets to corporate interests in anticipation of losing the next election whilst ensuring, as the Thatcher/Major Governments did before them, that a subsequent Labour Government (if it is to be such) cannot reverse the transfers.
Next on the list – reported today in the Guardian newspaper – is the Land Registry. The land registry is the state body that records ownership of land and its value. It also adjudicates on disputes. Its clients are conveyancers (Law Society) and mortgage providers (Council of Mortgage Lenders).
In terms of financial performance, justification for privatisation is not based on improvement. According to the Guardian, “…it made a surplus of £98.7m in 2012-13, up from £86.1m the previous year, while revenue slipped by 3% to £347m.” Likewise with customer satisfaction, seemingly, very high. This translates into an estimation of its value as £1.225bn.
In order to get round the conflict of interest that may arise from a private company adjudicating on disputes, the Government plans to set up an “Office of the Chief Land Registrar” to manage this part of the portfolio. I’m reassured.
Rail nationalisation – think it through
I woke up yesterday morning to a news story that 30 or so candidates for the Labour Party in the UK are arguing for a partial nationalisation of the railways in line with Ed Miliband’s indication that a new Labour Government would seek not just to ‘run’ the country but to ‘change’ it. In order to avoid paying compensation to incumbent franchise owners, franchise contracts will simply not be re-let when existing contracts expire. The East Coast franchise, they argue, having been run by DOP (a public-sector company) for four-and-a-half years after it was abandoned by National Express after failing to meet targets, has been a ‘success’. There is a better way to run the railways, seemingly. And one that will see a reduction in ticket prices.
Let us just examine this in a shade more detail.
First, what is success? DOP delivered returns to the Treasury (£208.1m last year according a Guardian Newspaper report, 26 October 2013), but did not match the National Express contract
commitments; not least because they were flawed. Though customer satisfaction levels were, it seems, at a record high (2-3 percentage point higher than the Intercity averages).
Second, the railway is a capital intensive: infrastructure (already in the public sector as Network
Rail) and rolling stock (trains – all privately owned by Angel Trains; Porterbrook; Eversholt Rail Group and QW Rail Leasing).
The Franchises own virtually nothing over and above a few ticket machines. The costs, therefore, are largely fixed. They pay track access charges (to Network Rail) and rental charges (to one of three rolling stock leasing companies). The profit comes from a margin between fares, subsidy and operating efficiency.
Should the franchises be transferred to the public sector, those costs will not change significantly. Certainly not significantly enough to see a reduction in ticket prices.
Third, under the present structure of the transport industry, who benefits from reduced ticket prices? The unfortunate reality is that the main beneficiaries are the relatively wealthy middle classes. The routes in the South East of England – in and out of London – attract the most attention for this reason. Also because the routes encompass some of the most sensitive electoral constituencies. And richest. The least wealthy areas, even in London, do not enjoy links with either the national rail network or the Underground. Actually, these areas are much more dependent on buses than trains. On that basis, it makes much more sense to nationalise the bus industry than the railway industry.
Now I am not arguing against nationalisation. It is clear in the years before privatisation, the railway industry was efficiently managed. Privatisation was at best a scorched-earth policy by the outgoing Major Government and, at worst, asset stripping by foreign and national ‘operators’. Any nationalisation programme will need to find a way to bring back all of the assets, including the rolling stock, back into public ownership.
However, the issue is not about the ownership of the railways, rather transport policy more generally. What are the railways for and how do they link into the provision of mobility ‘rights’ for citizens, by whatever mode? And what is that worth in terms of transfer payments from the taxpayer to operators whether public or private? Let us not also forget the role of public transport in meeting environmental protection targets, such as CO2 emissions. It is cheaper, in many cases, to use private motor vehicles, particularly over longer distances.
Then there is the question of demographics. So much public money goes into servicing passengers in the South East of England because of the London effect. Government policy surely has to consider equalising wealth and opportunities across the country rather than concentrating it in the Capital which perverts demand for transport services.
In essence, then, a radical policy is not about the ownership of a few railway franchises. A radical policy requires new thinking about transport, its function, value and impact on other policy domains such as housing and economic development (beyond the capital).
Picture:
InterCity coach and 125 in Hull Paragon Station: Oxyman/Wikipedia
Nationalisation graphic, Bring back British Rail: http://www.bringbackbritishrail.org/news/page/2/
The Pall Mall couple
Pall Mall’s spring advertising campaign goes into overdrive with the Pall Mall couple. (see posts 18/19 April) What is unusual about this campaign poster – in contrast to the others – is its lack of subtly. Here we have a young couple with intent. They share the source of ignition. Those cigarettes will be lit and smoked. And what’s more, there’s plenty more where they came from. Packs now have 30 sticks full of toxic chemicals. All for 7 Euros.
There is a certain double meaning – the strapline translates as ‘the taste victory’. I suspect the brand owners view this as a pact for life by the couple. There is no accounting for taste.
Be informed 