Craig and Matthew Elliott: Fleeced!

How we've been betrayed by the politicians, bureaucrats and bankers and how much they've cost us.
50,000 taken from every person in Britain.

November 2003, Deputy leader, Liberal Democrats, Vince Cable:

The growth of the British economy is sustained by consumer spending pinned against record levels of personal debt, which is secured, if at all, against house prices which the Bank of England describes as well above equilibrium level. What action will the Chancellor take on the problem of consumer debt?

Chancellor Gordon Brown: We have been right about the prospects for growth in the British economy and the right honourable gentleman has been wrong.


A is for Austerity after the Avalanche of bad debt.

You may have despaired, as I have, of ever keeping track of the serial mismanagement of Britain. There is a positive advantage in numbing the public with one disaster after another, so that the last is over-shadowed by the latest. Early in Gordon Brown's premiership much of the population's confidential banking details on computer went missing. The new premier assured us it would soon be forgotten. And so it would have been, with all the rest of the blunders, if he hadnt been so dismissive of this particular one.

This 2009 book, Fleeced!, follows several by these writers, sometimes with other co-authors on the epic of inefficient spending by New Labour, since 1997. It isnt all that partisan. One of the laughs is a wry rant on trying to lead a Tory horse to drink.

One of the authors advised the Tories to have a policy of ring-fencing vital services, while cutting out the layers of managerial fat. David Craig emfasised they must never say something like: we will ring-fence health or education, implying that the bureaucratic waste would be spared. But sure enough, that was just what they soon came out with.

In fact, Ive just seen written in the standard David-Cameron commandeered side of the local Tory leaflet for the 2010 general election: "We will protect spending on the NHS and improve it for everyone."
With the authors, thru-out, you have to laugh that you might not cry.

Reviews of these books, like Squandered; Plundering the Public Sector; Rip-off!, have called them "terrifying," "horrifying," "shocking," etc. We should be grateful that there are journalist accountants with a dogged determination to hold government accountable.
The really terrifying, horrifying, shocking fact is, tho, that Labour and Tory parties are only beginning to do their worst to this country, in their commitment to more nuclear power stations. Sixty years of fission energy provides evidence enough that scientists and technologists, and their political masters, can be as ignorant and impractical as anyone towards human survival and prosperity. If The Taxpayers Alliance, which Elliott heads, cannot see that, their worthy work is all but in vain.

Craig and Elliott say: In New Labour's decade of tax and spend, over a trillion more spent than under Tory government levels.

We should remind ourselves a little of what went before. As I heard someone say at the time of the Tories: This government doesnt want you to have anything for nothing.
Worse still, the poll tax - taxing you just because you exist, as one Labour MP put it.

One would think from the authors that all Labour spending was bad. But in fairness, I would have to say this was not entirely true. A highly visible example is spending on public libraries. If our local central library was anything to go by, the Tories starved it of funds over many years. The stock was getting ever more dated, gaps in the shelves, hardly any new books.

I did find some of Labour public library spending wasteful and inefficient. Replacing every library, in a standard county way, was not to the advantage of every library. Our central library was austere and utilitarian pre-war, it is true. Personly, I prefered that to the luxury refurbishing. And the big oak bookcases were replaced by much smaller, from shoulder-high to crouch-yourself shelves. This further reduced book capacity, as did the room taken-up for computers.

These are relatively small matters but typical of government that all such decisions go on above the heads of the local people who use the services.

Nevertheless, I find it hard to believe that the Tories would have brought the libraries into the electronic age. Not nearly as readily as Labour did. Tory privatisation dogma was turning people away from the public library service by their neglect, perhaps as a pretext to roll it up altogether as out-dated. I doubt the Tories would have allowed any free access to the web. As it is, it's down to half an hour per day, since 2009.

A private-public conflict is a line of divide and rule by which the Labour-Tory duopoly persist in cornering power for themselves. As this book shows, Labour has built-up an army of largely dubious dependents in the public sector. The 2010 Labour election slogan of resisting Tory cuts seems to be an appeal to this bought support.

New Labour politicians were caught in lobbygate stings trying to sell themselves. So, it would not be surprising if mercenary politicians treated voters as mercenaries.

Moreover, the meddlesome control-and-fine inspectorate reads like a government turning Prussian rather than democratic. And this perhaps in Tory-controled council areas, so that it, in effect, becomes Labour-Tory duopoly policy.

Another weakness of this book is the failure to remind us of the private sector Fat Cats. The Press, unavailingly gave vent to chronic rage, against private firms' uncontroled increases in excessive executive salaries.

The authors forget their Fat-Cat attacks, when they criticise the Press for allowing the Westminster journalists' lobby to be managed by the government, feeding them scoops, so they would over-look public spending failures. After all, private sector greed has been emulated, if not matched, by the excessive public sector salaries.

The anxiety of Tony Blair, becoming PM, as well as Peter Mandelson, to encourage people (including himself) to become rich, encouraged corporate plunder. Inequality, not wealth creation, has been his legacy, in the private and the public sector. Of course, the authors are right to pick on the bankers as becoming pre-eminent instruments of inequality and injustice from the private sector.

The first time the financial market lost more than half its value was the great Crash of 1929 to 30. But in the last 35 years, there have been three more: 1973-4 with the oil price hike; 2000-02 the dotcom bubble; 2008-9 the credit crunch.

After 2000-02 Dotcom bubble burst, money fled shares into housing, which pushed up prices and encouraged borrowing.
House prices boomed in USA and UK, Spain and ireland.
Government encouraged home ownership and relaxed credit rules. Inflation in house prices, left out of the government's calculation, contributed to artificially low interest rates. Prices fell from increased industrial production in Asia. Low interest rates encouraged financial institutions into riskier investments, all essentially the same but generating huge fees. Doubts about their real value led to crisis.

Another illusive growth was in Britain's public sector to over 6 million. About 5 million have final salary pensions, double that of the private sector, which is closing them down to new employees. Originally part of Tory privatising ideology, from the eighties, much of pensions mis-selling was encouraging to switch out of final salary schemes into risky investments or those likely to perform more poorly.
Companies selling out to pension-management companies creates a conflict of interest in the managers' desire to maximise their own profits rather than the pensioners'. Almost all pension savings tax benefits eaten-up by charges.

A citizen would have to put 50 000 a year for their whole working life to earn an equivalent pension to an MP. Raising their pay to 100 000 per annum (p.a.), since theyve been found-out on expenses, would likewise increase their pensions.

The most generous benefits system in the world encouraged uncontroled immigration from all over the world. At the other extreme, of the world immigration scale to Britain, are countries that shoot, on sight, border crossers.
Meanwhile, Britain's manufacturing, to pay for it all, declined, about 15% under New Labour, unlike China, India, Germany and Holland.

In the bust, approaching half a trillion pounds were wiped-out in UK shares. Another half a trillion pounds or more are to be found for public sector pensions. Then there's the estimated tax-payers loss of at least 200 billion from the banks bail-out.
All in all a boom and bust loss of over 3 trillion, it will take decades to pay.

The world's financial instruments are valued at many times that of national economies, greatly increased since George Soros made a billion pounds in one day be helping Britain crash out of the European exchange rate mechanism in 1992.

They are getting more complex and less transparent, such as involving insurance against risky loans, such as mortgages that couldnt be paid, over-selling and over-borrowing, the spreading of potential defaults thru the financial system. Banks, with worthless investments, start collapsing. Confidence flees causing a chain reaction.

Regulations for more capital adequacy, after allowing too little, over-compensated, inadvertantly leading to the credit crunch. With too much money to be made out of the bubble, credit ratings made investments look rosy.

New Labour gave honors to at least 23 bankers, including 7 life peerages. 3 as government ministers. And asked another 37 to work on commissions, quangos and advisory bodies. At one point 3 financiers, worth 500 million, gave nearly 40% of their party donations.

"What Gordon didnt tell you": while using public money to stave off the banks collapse, the claim, this is to encourage bank lending, ignores that the state is also telling the banks to build up their capital against their enormous losses and pay into a fund against further bank runs. Hence the woefuly poor interest offered for savers, so their prudence is fleeced thru inflation. And good businesses are starved of the credit they need to keep going. Vince Cable keeps hearing of this thru his constituency MP work.

Shares leak value because insiders get the best from knowing when to buy and sell at crucial upturns and down-turns of the market prices. Correspondingly, the public may be the losers. Fees and commissions accumulate into hefty cuts out of the eventual returns. The public may not know the nature of the products they are being sold or mis-sold on pretence they are secure.
The executives get massive bonuses no matter how badly their companies perform.

Pensions liabilities of many companies are larger than their market value. Risks are being placed on the employees. Government can only pay for inflation-proofed public sector pension liabilities by charging the taxpayers. About 34 000 public sector pensions millionaires. May double or even triple from New Labour's extras.

B is for Bureaucracy and Bad government.

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Over half a million civil and public servants, with signs of steady increase despite government protestations.

They are often transfered to quangos, whose number of employees rose from a million in 1998 to one and a half million by 2006. Spending up from 49 billion to 130 billion. Yet, powers transfered to regions and to EU. Regional Development Agencies were dupications of English Partnerships over regeneration. Many over-lapping agencies, against disadvantage, under the Department for Communities and Local Government.

Constant disturbing reshuffling of segments of departments made them look smaller on paper, as in case of Cabinet Office. Constant abolishing and refashioning of ministries dislocates effective government.

Number of NHS managers doubled since 1997, despite 30% decrease in beds. Brussels laws doubled from 40% to 80% in ten years. Two-thirds reduction in proportion of laws matched by two-thirds increase in MPs' salaries and expenses. New public sector managerial class created, one for every two administrative staff, checking targets, ticking boxes, writing reports, attending luxurious conferences, spreading best practise, instead of practising it and not wasting actual workers' time with inititiatives to make themselves look active and improve only their own financial well-being.

The attempt to cut staff, with by-product of a redundancy bonanza, defeated, while hiring more people. An army of consultants cost 2.8 billion a year.

Public Accounts Committee member called the efficiency savings "an enormous amount of smoke and mirrors in the whole of the public service."
(Reviewer: unelected and unaccountable officialdom doesnt work. It's time for representative democracy of all vocations and occupations, so that they can keep a check on themselves and each other.)

The civil service answer was that savings had been made regardless of the costs of making them, often more expensive than the savings.

The PAC said such answers could have come out of the satire: "Yes, Minister".

Pay for front line services kept under control. (Only be a matter of time before driven to disruptive but ineffective strikes.) But top ten civil servants earn over 200,000 pa. Top 10 quangocrats earn from one and one-quarter million pounds to three-quarter million pounds. British Nuclear Fuels include two of them. Over 60 earn more than top civil servants and at least 169 earn more than PM.

BBC top salaries from over 800 000 to 400 000. BBC bidding-up for sports sometimes artificially increases costs. Their charter is not to compete with commercial broadcasting but supply other service.

Organisation for Economic Co-operation and Development. (OECD) showed Britain's public spending on the scale of nations, from 1997 at 17, by 2007 to 11, if not higher after. Education: reading fell from place 7 to 17; maths 8 to 24; science 4 to 14, from 2000, before tens of billions thrown at it, by 2006.

But Britain is high on crime tables and proportion of unskilled work force.

Despite more than doubling health spending from 45 billion to 105 billion a year, survival rates for cancer and strokes should be about 17 000 less, going by comparable European countries. ("Wasting Lives." Taxpayers Alliance.)

NHS website admits 34 000 die unecessarily and 25 000 a year needlessly disabled in hospitals each year. Money squandered on new managerial class with no healthcare training, living in their own world of target-setting and form-filling. Managers doubled from 20 000 to 40 000 from 1997 to 2009, costing over 3 billion a year more. Plus 600 million a year on managment consultants to show the managers how to manage. There's 5000 more managers than medical consultants. Directors of finance, marketing, strategy, communication have lavish pay and pensions. It's Parkinson's law with a vengeance..

"Achievments" might be doing more harm than good, as ritual of meeting targets can be fatal, just to make the figures look good. No patient has to wait more than 4 hours in Accident and Emergency. But it's claimed some patients held back and dying in ambulances rather than break the 4 hour dead-line.

Hospital buildings, under the governments inordinately expensive and failing Private Finance Initiatives, cost over 10 billion.

NHS service ethic replaced by a "managerial cover-up culture" reminiscent of the Bhopal and Exxon Valdez disasters. Margaret Haywood, whistle-blower against denial of basic care, was struck-off by Nursing and Midwifery Council in 2009. All the nurses in a hospital with high mortality were afraid to take part in a tv undercover documentary.

This contrasts the pay and pensions boosts to one suspended on lavish salary, a chief executive of a hospital criticised by the Healthcare Commission finding anywhere from 400 to 1200 needless hospital deaths with shocking and appalling care: "hundreds of patients died because the trust's board was more interested in meeting government targets and attaining elite foundation status than in patient care."

Most government ministers have no experience of management in general or of what their departments do in particular. Most of them have never learned that money has to be earned before it can be spent. Typicly, politicians are lawyers, lecturers, trade union representatives, or political advisers straight from university. They are versed in a protective layer of management-speak or gobbledygook.

European Central Bank study estimated if UK public services were as efficient as in USA, Australia, Luxembourg, Ireland, Japan, Switzerland, there would be the same level of service for about 15% less cost. A trillion pounds wasted and probably another trillion to be wasted before it can be brought back under control, if ever.

Instead of a positive feedback from wise investment, a negative feedback of wasted money, rising social breakdown, millions of unskilled who've never worked, rising benefit costs, increased taxes, reduced competitiveness, falling wealth, greater borrowing, higher taxes, greater burdens on households and businesses. The real costs of waste are almost unimaginable.

Prestige projects for politicians spend public money of no value to public: political or profiteering gimmicks. Pretence of low cost results in over-spending that suppliers can get away with, because of administration's attitude that it's only public money, and inexperience in auditing. Most civil servants and politicians move on from financial disasters and would rather avoid the blame than face-up to the failure.

Regular ritual, of Public Accounts Committee calling evasive civil servants, is to vent histrionic outrage. Serial poor value projects are usually described as the "worst" this or that.

The millenium dome only came 9th on cost-overruns. The 2012 Olympics and the NHS IT system by far the worst wastes. The Olympics involved building many facilities already well provided for. At least ten of the Olympic managers won gold by earning more than the PM.

In Plundering the Public Sector, the authors "explained in possibly painful detail exactly what was wrong with the whole project; why it would cost billions more than budgeted; why it would be at least ten years late; why it would never work; and why it wasn't ever necessary in the first place."

The project boss left - apparently to Australia, as far as possible away without leaving the planet.
Two of the four suppliers couldnt be induced, by all the billions, to have anything further to do with this highway to hell. It still doesnt work and many hospitals wont touch it. The money is still being wasted. Theyve started so they will go-on regardless of cost or value. No-one has courage to pull the plug, lest government lose face, tho the NHS would benefit from the transfer of spending.

The government's reflex response to any problem is to set up an independent committee or watch-dog. In 2008, ten of the largest, set up since 1997, cost almost 1 billion. With expanding budgets and staff.

The utility bills go up steeply, nevertheless. Ofgem and Ofwat fail to protect: foreign energy and water companies earn 4 to 5 times the profits in Britain compared to their properly regulated home markets.

Qualifications authority spent over 1 billion while exam results so discredited that university admissions departments no longer recognise them as valid. Regulatory capture, the concern in businesses such as oil, tobacco, nuclear power, pharmaceuticals, is now in public sector, such as health care and financial services.

2001, National Patient Safety Agency has 292 staff, 30 million p.a. budget. After spending well over 100 million, it still didnt know, by 2006, how many patients harmed by medical error. Public Accounts Committee (PAC): NPSA is "dysfunctional" and "not value for money". NPSA is one of several budget-busting regulators, some re-organised.
Health Protection Agency produced vast amounts of literature including about hospital-acquired infections. Meanwhile, 30 000 deaths in Britain. Comparable rate, had these victims been in countries like Belgium, Denmark and Sweden, would have been less than 600.

In 1997, Labour manifesto promised to cut administration to strengthen front line. Instead, 450 million p.a. more for regulators.

Gordon Brown's tripartite system of financial regulation didnt give clear line of command and responsibility to one organisation in a crisis. The Bank of England was given the wrong target of monitoring the Consumer Price Index instead of the Retail Price Index, thus living in a fools paradise that inflation was only about 2% p.a. while no regulators noticed the unsustainable house inflation bubble.

The Financial Services Authority had over-seen selling of financial products, like savings, pensions, investments, unit trusts, mortgages, Ponzi schemes, etc. In any case, there was a whole series of mis-selling scandals, met by "FSA apathy," to quote the Press. Likewise, "Toothless FSA leaves us all at the mercy of the banks." Giving the FSA the job of macro-economic policy, the market stability of financial institutions, was not suited to its dubious skills.

In the crisis, a BoE excuse was that it was given the job of over-seeing the stability of the system, not individual institutions, the job of the FSA. (The Treasury designed the over-all structure of regulation.)

174 of the FSA staff received 6-figure salaries and practicly everyone in the building got a record bonus during the crisis, when they actually had some real work to do. Government allowed it to take its budget from 300 million to 415 million p.a. They admitted they would pay more than necessary to recruit more staff.

As in the USA, former leading financiers influence regulatory advice.

After the 1929 crash, the Glass-Steagall Act separated high street saving and lending banking from high risk investment banking, to protect from financial gamblers being bailed out with public money when they lost, because they were too big ro go down without taking the country with them.

The untouchable elites.

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Local, like national, government out-of-touch.

Joan Bakewell, given some authority, commented, on councils intending to cut pensioners' free bus passes, that people had a right to expect some return on all the money they had paid in council taxes.

Councils doubled council tax, yet want more and say front-line services will have to be cut.

By 2007-8, 1021 people, in the 469 local authorities, were earning over 100 000 p.a. The ten highest receiving more than the PM. Not all councils complied with Freedom of Information over their pay.

Local government employees limited to 2% rise, while top officials average was 6% of a much bigger salary, amounting to 7328 p.a. This also increases their pensions correspondingly. Many councils pay a recruitment company owned by the Society of Local Authority Chief Executives and Senior Managers.

Middle managment earning over 50 000 p.a., gone-up eleven times, under New Labour, to about 38 000.

Since 1997, cost of managers wages and their accessories, such as offices, secretaries, assistants, expenses and pensions, probably multiplied tenfold (or more) from about 400 million to 4 billion p.a. Council tax amounts to 24 billion. Had managers only increased five-fold instead of eleven-fold, council tax could have been reduced 10%.

Councillors allowance increases regularly exceed by five to ten times, the rate of inflation. In 386 local authorities providing information, they pocket an average of 10 000 p.a. Being a member of a police authority can add 10 000 to 15 000 and of a fire authority 5000 to 10 000 p.a.

More than 3500 councillors have joined Local Government Pension Scheme as if they were salaried employees enabled earn pension benefits, inflation-proofed with early retirement thrown in.

Management-speak has invaded local government adverts for frilly jobs, consultants. Foreign and domestic holidays come thru twinning towns and seminars.

Plundering Politicians.

The following unworthily small sample of MPs' fiddles is mainly taken from "Fleeced!"

In july 2009, MPs awarded themselves a 25 a night subsistence allowance payable without receipts when staying away from their main home. This could net some thousands a year tax free over their mortgage, rent, food, utility bills and council tax allowances.

This was right after the may and june Daily Telegraph uncensored version of the redacted MPs expenses given by Parliament.

Gordon Brown, one who flipped his designated second home, shortly after entering Downing Street. David Cameron, shortly after being elected, took out a 350 000 mortgage, for a large house in Oxfordshire, close to maximum allowed.

Choice of second home was often influenced by which could give the 24 000 p.a. allowance. In seven years, Jacqui Smith MP perhaps cost 2 million in salaries and expenses.

Balls and Cooper switched to second home the residence from where their children went to school.

Claims, on mortgages already paid, raised questions of criminal offenses.
"Flipping" is when MPs change which is their main home, so they can claim for furnishing and contents. Gordon Brown, flipper, used his Westminster flat as his second home, despite having a Downing Street flat. After moving into Downing Street, he flipped to his house overlooking the Firth of Forth.

Alistair Darling changed his designated second home 4 times in 4 years.
Geoff Hoon, as former MEP, maybe had a head-start in the expenses stakes. Built up a property empire thru expenses; flipped 4 times in 4 years. Finally caught, in march 2010. in another lobbygate sting with other Labour ex-ministers Patricia Hewitt, Stephen Byers, and another Labour MP, Margaret Moran.

Moran is standing down after "a furore over her expenses". She is also the chairman of an all-party Parliamentary group on the information society "which - highly unusually - is registered as a company." (Mail on Sunday, 28 March 2010: MPs and peers run private company selling 'influence over government policy'). Its corporate members pay more than 120 000 p.a. and fund expenses for junkets abroad.

Hazel Blears claimed for 3 properties and nights spent in a series of hotels in just one year.

John Bercow (Speaker) flipped twice in a year, both times avoiding capital gains tax from two house sales.

Kitty Ussher (Lab) flipped for a month during sale of property.

In 5 years, 27 outer-London MPs made claims averaging 63 000. But another 22, living similar distances, made no second-home claims.

Married MPs are the Wintertons, Keens (known in Westminster as "Mr and Mrs Expenses") and Mackays.

Married Andrew Mackay and Julie Kirkbride, each designated a separate second home. This meant that, between them, they had no main home but two second homes. Kirkbride's sister employed as a secretary tho living 125 miles away. Her brother allowed stay in constituency home against Commons rules as it was funded out of expenses.

Alan Duncan gardening expenses claimant had his new flower bed cut in shape of a sign. One of half a dozen Tory MPs submitted gardening and grounds claims "in error" and repaid.

Barbara Follett claimed 25 000 on security guards as expenses. Why didnt she change Labour policy if it is so ineffective?

Parliamentary Commissioner for Standards, John Lyon dismissed 93 out of 113 complaints and resolved one in a year.
His predecessor, Elizabeth Filkin led high profile investigations into Keith Vaz, John Major and William Hague. It seems, she was subject to a whispering campaign against her and obliged to re-apply for her job.

The Sunday Times, january 2009, did a sting, of the House of Lords, showing some members willing to change legislation in exchange for lobbying fees.

Allowances amount to substantial incomes of 56 000 to 66 000 taken by some Lords. All but one of this ten sample tabled no questions or almost none. One peer claimed over 40 000, tabled no questions, spoke 9 times and voted twice in a year. Others nearly as bad value.

Several peers have registered as their first homes their French homes to allow generous expenses for visiting London.

The appropriately named Lord Ryder claimed over 100 000 by claiming that a converted stables, in his parents country estate, was his main home.

The Sunlight Centre for Open Politics complained against Lord Rennard, former chief executive of LIb Dems on second home claims.

The Bank Robbers.

Once again, labour - the impoverished working class in Britain's old industries, a large percentage of them miners - was being asked to bear the cost of capital's mistakes.

Historians would condemn the crisis of the summer of 1931 as 'the bankers' ramp'. The flight from sterling on 11 August was not precipitated by the budget deficit - the millions being paid out in unemployment benefit - but by the speculative activities of London's bankers.

...The London bankers were caught out, facing short-term foreign liabilities estimated at over 400 million.. It was the Bank of England's decision to allow them to draw on the gold reserve that had caused sterling to run down.

The upshot was a National Government and a National Emergency.

Black Diamonds, by Catherine Bailey, in 2007 (the year before the Credit Crunch).

In 2007, the bankers appeal, to government for a bail-out, involved a capital guarantee that could be far in excess of the national income.

The assets and thus liabilities of Iceland's banks were about ten times their national earnings (GDP). In UK, about four and a half times.

In 2007, the Royal bank of Scotland had total liabilities 1.9 trillion; Barclays 1.2 trillion; Lloyds-TSB and HBOS each 1 trillion. In all, UK GDP itself was just 1.4 trillion.
But the largest US banks, Bank of America, Morgan Chase, Citigroup, only had liabilities (in pounds) of about 1 trillion compared to US GDP of 14 trillion.

On just a few deals, RBS lost more than UK annual defense budget.
In a few months from 2008-9, Barclays share price, which later recovered, lost more value than UK spending on police and criminal justice in a year.

Banks bailed-out, including RBS and Northern Rock, went on to give bosses and staff extravagant bonuses; also huge earnings and bonuses to bosses of Lloyds-TSB and Badford & Bingley.

In april 2008, the FSA prevented institutional shareholders of the RBS voting against Sir Fred Goodwin, Fred the shred, misguidedly fearing a mass rebellion, against the board, would rock the boat.

FSA claimed it was already looking into HBOS lending, a former HBOS head of Group Regulatory Risk, Mr Moore, warned against. The FSA did not explain how the bank still collapsed.

The government plays to the gallery, blustering about regulation to reduce risk, while fighting the European Union regulation proposals, they fear would reduce profits, to get the nationalised banks off their hands.

Vince Cable: "It is clear that the conditions set by the government over the original capitalisation were a sham. No effective monitoring and controls were put in place to ensure that the money went where it was intended." That is in lending to homeowners and business. The disappearance of public money was largely to be expected because it was also telling the banks to build up capital against the worsening economic situation caused by their not lending to business.

Anything from 200 billion to 500 billion goes to banks to insure against potential losses in return for them to increase lending by about 40 billion.

Britain's financial sector about 9.4% of GDP; the Swiss is over 12%. Perhaps better to have let a few banks go to the wall with their big bosses massive pay-offs. Emergency legislation could have handed over the banking job, say, to the supermarket chains, to lend money, while the banking system was purged.

The top five US banks paid out $38 billion dollars in bonuses in the crash year of 2007-8, up from $36 billion of previous year's record profits.

This dislocation of results and rewards explained by one condescending Wall-Streeter: "Joe-six-pack is never going to get this, but if we don't pay the bonuses we lose the talent."

Bosses making millions bankrupting Britain's banks. Taxpayers have been voluteered to pick up the bill. Trashing one or two banks has done many bosses no harm at all, as future managers will have noticed.

There used to be five accounting firms, till Arthur Andersen was caught shredding incriminating evidence in the Enron scam. The four earn millions selling consultancy services to the banks, they are supposed to be auditing, creating a conflict of interest against whistle-blowing.

Deloitte's appeared to raise no concern over RBS, which was to become the world's biggest bankruptcy, but have been re-appointed auditors.

The big four auditors control the world market, can set high prices, passed on to the share-holders. They dominate the committees for standards and (non-)liabilities of accountants.

Bankers, regulatora and auditors were playing an "elaborate game" with "detailed and complex rules absolving any of the players of responsibility for anything, yet they all became fantastically rich from plundering our money".

The authors conclude:

never again should ordinary people's liabilities to any failing financial institution exceed more than five per cent of GDP. As for us being exposed to losses that were potentially greater than the country's GDP at just one badly run bank, this is so absurd that it hardly seems believable that our leaders allowed it to happen. Unfortunately for us, our politicians' and regulators' self-interest has become so entwined with the interests of a few bankers that our government has pursued and is continuing to pursue policies which seem to favour financiers over ordinary people. Nothing any of our politicians or regulators has said so far gives any confidence that this imbalance, where the interests of over 60 million people are so cynically subordinated to those of a small but influential elite, will ever change.

C is for Crash diet after Britain's Credit Crunch.

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The public sector grew from 38% in 1997 to 48% by 2009. Studies show 10% increase liable to reduce GDP by 1.5% and thus undermine ability to pay off debt. This trend almost mirrors the period from 1964 to 1976, when Labour had to go to the IMF in return for public spending cuts.

The need is to ring-fence front-line services, not Tory plan to bring in armies of accountants and consultants, franticly lobbying to look for department cuts, thus adding to costs rather than reducing them, and putting-off making obvious and necessary savings.

The Inertia of Large Numbers: Wander round a department, attend a few pointless meetings; asess the poor quality of decision-making; notice the level of inactivity.

The levels of managers cannot see that they are the problem and only can cut down essential services. e.g. police cutting down front-line officers while awarding managers huge bonuses.

500 000 out of 800 000 new posts have little to do with providing direct services to the public. Not hiring them would have saved 20 billion as well as their pension liabilities.

We will be told that tough decisions have to be made, meaning that the elite expect to reduce the quality of life for the many so that the few can continue their excesses.

On the contrary, here are half a dozen points to cut waste and inefficiency without damaging and possibly relieving beneficial services:

1) 7 billion. Immediate savings in cost of bureaucracy: stop all bonuses, early retirement or redundancy pay-offs and recruitment of all but front-line services, such as police officers, doctors, nurses other medical specialists, teachers, and a few categories of manual workers for maintenance work. A public sector pay freeze for all those earning say over 40 000 p.a. Savings of 1 billion p.a. are a start, out of 670 billion p.a.

Declare a national emergency, like the Heath government's 3-day week and put all public sector managerial and administrative staff, not dealing directly with the public, on a 4-day week. This would include all council and all NHS executives and managers and most admin in the main government departments, like health, education, the Cabinet Office, business enterprise and regulatory reform (or whatever it's called this week), environment and many others, and almost all staff working for regulators and quangos.

Admin processing things like driving licenses, pensions, benefits, passports etc should be exempted but their managers should be put on a 4-day week. Least disruptive probably to take every friday off.

Private sector companies have used reduced numbers of shifts and shorter working weeks to save money while protecting jobs.

Letting the "multitudes of policy advisors, executives, managers, communications professionals, diversity officers, community relations specialists, involvement officers, diet advisors, racial awareness specialists, equality experts and administrators take every Friday off" should save about 4.5 billion a year, including 360 million from 40 000 managers in the NHS alone.

After about six months adaptation, reduce at least half the managers to a 3-day week, eventually bringing-about savings of say 6.8 billion p.a., without any costly retirement payments or redundancy packages. And without having to fight unfair dismissal cases.

If they dont like it, let them go voluntarily for productive work in the private sector, to make wealth instead of spend it. Their hanging-on would show that their working lives are still preferable to the stress and insecurity and inadequate pensions of the private sector.

Cutting jobs is old-fashioned thinking costing more than it would save, at least in the short term. Later, government could look at the need for all the jobs.

The authors suggest reducing Parliament to sitting a 3-day week since most laws come from Brussels. They would halve the number of MPs and merge constituencies.
(Reviewer: But this would tighten the control of the two-party system and hence their pay-masters. Bigger single-member constituencies are harder for any but one of two parties to win. This may be why it is Tory party policy for after the 2010 election.)

2) 11 billion. Make managers manage instead of having so many of them telling others what to do in meetings and documents. Move the transformers and improvers to line-management. Just imagine all theyd save if they actualkly used all their supposed expertise.

End departments hunting around for ways to spend their budgets, and make their jobs depend on cost-effectiveness.

Move spending decisions close to where the public can see it is their money being spent and give the locals power of choice. Give a school its own budget, to alert parents to useless spending on a superfluous official rather than say another teacher or equipment.

Local policing and court budgets with elected police chiefs would pressure crime-fighting rather than bureaucratic bonuses for political correctness.

3). 5 billion, a saving of 1%, by liberating front-line workers, who know best how to make improvements, yet made afraid to make them, by layers of management, all keen to keep their badly-run empires from prying eyes.

Value for Money unit under the Treasury should be obliged to investigate, within a month, all front-line suggestions and their recommendations rewarded at 5% of the savings up to 100 000. Managment shouldnt be so rewarded because making continuous improvements is their job they are already paid for.

4) 5 billion from better buying. Of 170 billion, a 2% procurement improvement (4 to 5% is quite common in private sector initiatives). Despite the Office of Government Commerce providing jargonised versions of freely available advice, the private sector will over-charge inexperienced government buyers.

Since the American Civil War, and rejuventated in 1986, the False Claims Act allows citizens to sue against fraud or corruption in government contracts and programs. Whistle-blowers allowed between 15% and 25% of the money saved the government. A 1% saving means 1.7 billion p.a. saved. The main value in US is admitted to be deterence worth hundreds of billions.

5) Low-hanging fruit. 23 billion plus 4 billion p.a.

Kill Connecting for Health, saving up to 10 billion. But ensure computer compatibility standards and that any locally-bought computer system has at least 10 other willing buyers or users. Would also stimulate the almost destroyed British healthcare computing industry and earn exports.

Austerity Olympics could save 8 billion by cutting on needless duplication of facilities etc.

Pay for consultants or interim managers should be cut by 2 billion out of 2.8 billion. No department should be allowed more than 0.1% spending on them. Consultants should have to itemise their projects and the exact benefits to be gained from them.

Scrap ID cards, save 5 billion. Worst of both worlds the government goes ahead but most people dont have to take part for the supposed benefits. Scrap Contact Point childrens database and computor system. It cost 200 million but at least we wouldnt have to pay 44 million p.a. to run it.

Cancel all government advertising, especially for jobs and put them on a website.

Bring the army home from questionable and unwinnable wars to help-out with the social problems caused by the government's benefits-dependent generation.

Scrap Private Finance Initiatives. Public buyers out-smarted.

6) 8 billion savings in longer term.

Prevent an investors strike with no-one willing to buy government debt, and having to beg the IMF, who will make the government control its spending, anyway. And prevent losing credit status, which would make borrowing more costly and increase the nations problem. The following means necessary:

Emergency legislation makes public sector employees, on, say, over 50 000 p.a., get pensions based on average rather than final salaries with their retirement ages raised to 65. All lump-sum payments subject to full income tax. The Lifetime Earnings Limit for a special tax should have an equivalent in public sector.

Any public sector worker, getting 25 000 p.a. or more, should be disqualified from the basic state pension. They already get enough public money, saving about 400 million p.a. In all, public sector pensions cut by about 2 billion to 3 billion p.a.

Prosecute the bankers for financial wrongdoings. Maybe only would yield 50 million to 100 million but would send a message.

Bring benefits culture under control. French politicians constantly complain about how it is drawing mass immigration from all over the world. Costs more than government gets from income tax.
British passport should depend on working full time five years without benefits. Immigration on needs not on who wishes to come here.
Cash benefits restricted to people holding British passports who live here permanently.

New age of responsibility and self-sufficiency.
Keep fees for less needed courses not essential skills.
No benefits or council house provision for under-21s. This should save 5 billion out of 140 billion in benefits.

Lots of unnecessary complicated legislation immensely costly and bureaucratic, such as 500 inclusion officers.
Darling's small cut in VAT pointless and cost businesses an immense amount of unnecessary work.

Massive admin and enforcment machine for BBC TV license could be avoided by pay out of general tax.
Corporation tax evaded by larger companies going to other countries so smaller businesses pay unfair share. Simplicity of using just one tax, VAT, hundreds of millions saved in admin and billions in lost tax could be collected.

P is for Power to the People.

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Unions down from 13 million to 6 million in 30 years. 15% in private sector. 58% public sector. Public sector unions routed government attempt to raise pension age to same as private sector.

New Labour managed the Westminster lobby of journalists, favoring the friendly and pushing out the over-critical, notably Andrew Gilligan, former BBC journalist for correctly reporting deceit leading to Iraq war.
For a decade or so, Press failed to reveal how gross sums thrown at public services without much noticable improvement.

Media are moving from information to infotainment. Dumbing down, sound-bites. Lack of critical questioning of politicians.

The Freedom of Information Act passed by late 2000 didnt come into effect till 2005, almost the longest legislative delay in living memory. In the intervening four years, there were constant rumors of departments cleaning up their archives and removing info in the name of efficiency.

Some success in exposing waste in British government, but FoI needs extending to discover how hundreds of bodies are using taxpayers money: city academies, regional development bodies, the nationalised banks, quangos and fake charities.

Above all, the unredeemed European Union needs transparency.

By 2008, a strengthened Corporate Manslaughter Act (Corporate Homicide in Scotland) failed in its former or later form to be used to prosecute the many needless deaths from negligence over infections under the Maidstone and Tunbridge Wells NHS Trust, 2005-6, and, from 2005-8, the Mid-Staffordshire NHS Trust.

The Human Rights Act of 1998 into force by 2000, makes it unlawful for bodies to contravene the European Convention on Human Rights. It gives rights but neglects responsibilities. Thus, a right to education neglects the responsibility to be educated to contribute to society. And a right to marry and have children neglects the responsibility to support them without depending on public (other people's) money.

Craig and Elliott:

Like so many laws introduced by this government, it can seem as if the HRA has been mainly hijacked by the feckless, idle, greedy and criminal rather than serving the interests of the huge majority of the population.

The European Court ruled that, as the authors say, has "put the right to dignity of foreign nationals above the right to life of EU citizens." The people who seem to have done best out of human rights are the lawyers, especially the Matrix group, where Tony Blair's wife Cherie Booth worked. Matrix lists at least eleven major areas of law affected by HR laws.

Thankfully, ordinary people also cottoning on. In 2008, a judge ruled that article 2, right to life, allowed sue the Ministry of Defense for faulty equipment causing unnecessary deaths in the army.

This could apply to gross failures to protect patients from infection or citizens from known violent offenders.

Article 41. The Right to Good Administration.

The EU's wasteful and corrupt spending has caused the auditors to refuse to sign-off their accounts for fourteen years in succession. Any member country or group of citizens might prosecute the EU for failing good administration and in the required reasonable time.

Perhaps the squandering by the NHS IT system is another case in point.

Under British law, directors do not have a duty of care. Shareholders may bring class actions to sue directors for negligence. This includes many unit trusts and pension funds, yet none seem to have shown any appetite to sue the banks and their well-rewarded executives.

The Bank of England, the Treasury and "even the ever supine FSA" should be considering bringing civil lawsuits against many

for negligence, breach of fiduciary duty or violation of investment regulations by publishing potentially misleading information about the financial condition of the banks over which they presided. Even though some charges might be difficult to prove, faced by years of potentially ruinous litigation, many of our great financiers might be prepared to settle out of court. Given the vast wealth that these people have accumulated over the years, this action could rake in tens of millions for taxpayers and send a message to other people that the public, through their representatives, will not tolerate the kinds of behaviour that we have seen over the last few years.

Predictably but disappointingly, the politicians and the bureaucrats, who are paid so generously by us, seem unwilling to turn on their friends in banking."

The "charmed circle" are almost never prosecuted while "the public are groaning under the thousands of new laws" introduced by New Labour.

Private prosecutions are costly and risky and would depend on wealthy philanthropists.

Equality and Human Rights Commission, 2007, merging three other quangos. 482 people, on 60 million p.a., have been used for trivial but very costly complaints.
The authors even encourage other trivial complaints to show how ridiculous it is.
(This reviewer does not approve of this sabotage. The complaints system of changing the burden of proof from presumption of innocence, to proving not discriminating, seems a bad precedent. We should not go along with it, even in jest. Besides it only courages a waste of public money.)

The post-democratic age.

Most laws made by 27 unelected European Commissioners in Brussels with 45 000 unelected officials and 100 000 part-time advisors. The EU Parliament can only make small amendments to about half of their laws.

Is this the death of democracy? the authors ask.
They suggest primaries, the Recall.

About 405 out of 646 MPs are in safe seats. In remaining 241, the swing has to be pretty large to worry most of these MPs. The 2001 general election saw almost no change.
The authors are unaware that proportional representation does not have to mean party lists and more safe seats. The single transferable vote (STV) can make elections personly represent voters.
In British Columbia, the corresponding body to Britain's Taxpayers Alliance was the first large group to come-out in favor of STV, during the deliberations of the Citizens Assembly on Electoral Reform.

Review by Richard Lung.
7 april 2010.

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