Yesterday, I wrote an article suggesting how this government could reduce taxes to help stimulate growth in the economy. This was partly a Keynesian approach, given I argued that it was possible that these tax cuts could be self-funding, if my proposals worked. The reason for this was, if we do nothing, there is likely to be a significant surge of people claiming benefits, rather than generating income for government coffers. My proposal was, if the government was going to borrow to invest, they would be better off doing so, with a natural stimulus, rather than bringing forward capital building projects which would only benefit a small section of the economy.

My proposal, amongst other things, was that government should reduce the basic rate of personal tax by 5%. Over a period of 3 years, this would cost around £45bn, less than 10% of the cost of the banking bailout. However, by allowing us to retain more of our own money, we could decide how and where we would spend the extra money we were ‘permitted’ to retain. If we were to spend it in much the same was as we did before the crash, my argument was and is, that more small and medium sized business would survive and therefore more people would remain in employment. I noted that some 13.5m people were employed by small businesses and these same companies accounted for, just shy of 50% of UK Plc’s output. However, I also noted, that the Keynesian approach was that government should adopt a balanced budget, that is to say, they should cut back government spending in certain areas, to allow them to invest in other areas. Having read my post this morning, addressing the usual, inexcusable typos, I decided that I should expand on my own theory.

For example, my pet hate is the government’s proposed Big Brother Database, which I think is a massive attack on the civil liberties of every person in this country and an unforgivable intrusion into our right to privacy. That said, this government, if it goes ahead with this initiative, is expected to spend some £12bn on this massive Big Brother Database. Now quite apart from the fact that we know this government has never yet managed to bring an IT project in on budget, the figure that needs to be allocated is huge.

Therefore, the question I wanted to ask was:
Which would you prefer a Big Brother Database that infringes our civil liberties and intrudes on our privacy at a cost of £12bn or an immediate 4% cut in the basic rate of income tax for at least 1 year? From 20% to 16%? - I know what my answer will be.

Then I went on to look at other large government capital expenditure projects, this time I focused in on the much criticised NHS Database Project. It is worth noting that the original cost was estimated to be £2.3bn, by 2006 that had rocketed to £12bn, with some independent estimates suggesting it could cost as much as £32 billion. Most medical professionals question the viability of this project, the public have barely been consulted on such a massive project and even though some £2bn has already been spent, there is little to show for it. So, lets be generous, and take a middle figure between the governments estimate of £12bn and the independent estimates of £32. This leaves us with a likely cost of £22bn.

Therefore, my question is:
Which would you prefer, to shelve or cancel the NHS Database or receive an immediate cut in the basic rate of income tax of 5% for at least 18 months? The reason I have said ‘at least’ is because if this additional money prevents people losing their jobs and claiming benefits, then it would be possible to extend the period of the tax cut, perhaps indefinitely.

So what of the ID Database Project. Yes, I know, this government is completely obsessed with databases, it is a pity, they do not also consider the massive security risks associated with having all of this information on computers. However, I digress, this particular project, is simply aimed at having all of our personal ID information in one place. The cost, an eye-watering £5.4bn.

So, once again, my question is, which would you prefer, an ID database where only the government and its agents see the benefit, or an immediate cut in the basic rate of income tax of 2%, for a least one year, from 20% to 18%?

My basic premis is that this government has an obsession for massive information technology projects, most of which have been so poorly considered, specified and planned that they are either doomed to failure or massive cost overruns. This governments track record of waste is well documented and appalling. Most of these pet projects are not wanted by the public and it has to be said, the vast majority will allow government to know everything their is to know about every single legal citizen in this country. Because this government is obsessed with using IT to spy and control its subjects. At this time, the biggest threat to our security (apart from the government itself) and our well being, is the state of our economy, not terrorism. Yet no-one from government has suggested shelving, postponing or cancelling any of these Big Brother databases. Even though, combined, these 3 projects alone, will cost a staggering £40bn. If the government were to add an extra £5bn, we could all benefit from a reduction in the basic rate of income tax of 5%. From 20% to 15%, for a period of 3 years, if we are lucky, this would be able to see us through this period of recession. In addition, as I have argued earlier, if this money is invested into the economy by us, then jobs could be saved, government would benefit from the revenues brought about by indirect taxes, business taxes and fewer unemployed claiming benefits.

So, my final question, is which would you prefer? Government to spend £40bn on 3 highly questionable information technology projects at a time of this massive economic downturn, or more money in your pocket. £40bn on IT projects, or a 5% cut in the basic rate of tax for 5 years. QED!

Footnote:
I have also argued strongly for a significant, simultaneous cut in the Bank of England bases rates from 4.5%, to 2%, with all taxpayer funded banks being ‘required’ to pass on this cut to their customers. This will reduce the number of repossessions and/or increase the amount of money available to us, to reinvest into the economy. I am sure there will be economists out there that can or will pick holes in my arguments, well go ahead, someone needs to come up with some ideas, because it is pretty clear to me, this government hasn’t got a clue, the Conservative Party has backed themselves into a corner with their negative, one size fits all ‘austerity’ assessment of our economic future and none of the other parties have any influence. Sad, but true!

At prime ministers questions time, Gordon Brown, once again, decided to take all the credit for “creating 3 million new jobs” and none of the responsibility for the ‘bust’ brought about by the credit funded boom that was his creation. Instead, he avoided all of the questions he was asked and once again, came out with the same old mantra, that the problem was the fault of the Americans and the bankers. Nothing new there then.

He did imply, however, that he believed that the government should invest in times of recession, a sort of embracing of the Keynesian approach. However, John Maynard Keynes did not suggest that government should simply spend, but that there should be a balance. He also argued, that it was possible that if government used borrowed money wisely, it could be self-financing. For example, most people want to work, which means that given the opportunity, they will not be a burden on the state, but an asset. In addition, companies want to sell their goods, at a fair price, employ people, succeed and therefore, be an asset to the state.

To achieve this, people need to have money to spend, yet the state takes nearly 50% of what we all earn. That is way, way too much. A reduction in direct taxation, would be much less expensive than building new schools and hospitals earlier than was originally intended. Moreover, a construction boom will be very limited in terms of assisting the wider economy. What we need is more money in peoples pockets, which they can invest in buying goods and services offered by retailers, service providers and manufacturers. In other words, a natural stimulus, not a false one.

If people feel poorer, then they will push their employers to pay them more, this adds a further burden to struggling businesses and places inflationary pressures on the wider economy. In addition, public sector workers, who account for some 20% of all employees in the UK are starting to get increasingly vocal about higher wage increases and they are backing this up with threats of industrial action. This is no good to anyone. Furthermore, if they succeed in getting higher wages, this will be a cost borne directly by the taxpayer and will inevitably result in a cut in services as the public sector attempts to balance the books.

We know that a boom based on easy credit is not the answer, nor does the equity in a property really amount to tangible wealth. The Keynesian approach advocated, amongst other things that borrowing to provide tax cuts can provide an aggregate increase in demand and, that properly targeted, it could be self-financing, because demand will create or save jobs and people that are employed, are not a burden on the state. In addition, companies that are selling goods, will be pay tax and sell goods that, for the most part, attract VAT.

A cut in direct taxation would have an immediate and tangible affect on the publics ability (not necessarily willingness) to spend. If this would was coupled with a substantial, perhaps 2 or 2.5% cut in bank base rates, then the benefits would multiply as would the potential speed of recovery. The government has indicated that they want to spend £12bn to create a database to spy on the public, apart from the fact that this is both unnecessary and a massive attack on our civil liberties, it is also something that is a nice to have, rather than a need to have. That notwithstanding, even if they proceeded with this database, the chances are, the contract would be awarded to an American company! Yet this £12bn, could ‘fund’ a 5% cut is direct taxation for nearly 3 years, if you were to ask the public what they would sooner have, there are no prizes for guessing their likely preference.

In addition, the government is intending to proceed with the £13bn NHS computer system. There is no proof that the system will work, nor has their been a sensible cost/benefit analysis. This project should be shelved and the money used to invest into small and medium sized businesses. I wrote an article yesterday, outlining some of my own ideas to assist small businesses. These companies employ 50% of our workers, some 13.5m people and provide nearly half of our output. An investment in this area, could secure jobs, companies and tax revenues.

It is true, governments cannot prevent a recession, but they can, through careful management of their (our) finances, targeted initiatives and the shelving of non-essential investment programmes, reduce the length and severity. Had the conservative party not nailed their colours to the mast, with an austerity assessment of the UK economy, claiming that “the cupboard was bare”, then they could have proposed this type of solution. Instead, they must either say that they got it wrong, or the Labour government, if they are bright enough to steal the initiative, will be able to come out of this smelling of roses.

For what it is worth, I am not convinced that this government, or the other political parties will want to endorse my suggestions, because they seem more interested in telling us what won’t work, rather than what might. It is this dithering and indecision that will damage this economy. Whatever action is taken it needs to be bold, decisive and meaningful. Therefore, in summary, my suggestions are as follows:

1. Shelve the £13bn investment in the NHS computer system
2. Cancel the proposed £12bn Big Brother Britain database
3. Reduce direct taxation by 5% for a minimum period of 3 years
4. Implement a package of incentives and tax reductions for small business
5. Instruct the independent Bank of England to slash rates from 4.5% to 2%
6. Ensure that all taxpayer funded banks pass on the full cut immediately, which should encourage the others to follow or lose

My suggestion will cost a tiny fraction of what the government has already invested into the banking system and provide a tangible stimulus to the economic activity of this country. Above all, it may just ensure that we can watch the news and receive some good news. If the government introduced, or the other parties proposed such an initiative, I do not believe anyone, other than a few discredited bankers and economists (who already got it wrong), would criticise the move. The bottom line is it is our money and we should be allowed to keep more of it and decide where we will invest it.

There is a real risk that the plight of small business, the so called SME (small and medium enterprises) are becoming a political football as each party attempts to outdo the other. Labour are saying they will “do whatever is necessary“, where have we heard that before? Then they put up a pittance to address the issue, to put this in perspective, the amount proposed is probably much less than they paid the consultants for advice on the banking bailout. I am not advocating state aid as such, but less government interference and an understanding of what makes small business tick.

David Cameron suggests that a 1% cut in national insurance contributions for companies employing less than 4 people. This he claims will save these businesses up to £600 per year! What? Is he serious, this would barely cover an organisations business rates for one month. He then suggests that small businesses should be allowed to defer VAT payment and PAYE etc., for up to 6 months. Yes, I agree, this will aid cashflow, but the reality is, for many who need to take advantage of this option, it will only delay the inevitable, leaving a large hole in the HMRC balance sheet.

What is clear, is that none of these ministers really have a clue how small businesses operate, what is important, or what policies will make a real difference. They seem to believe that a little tinkering here and there will make it look like they are doing something positive. Wrong, wrong, wrong! Our MP’s visit one or two businesses, ask a few questions and then try and portray themselves as in touch, or knowledgeable on the subject. Instead, they have had, at best, a very limited overview of a couple of businesses. There are 13.5m small and medium sized businesses, yet they talk to a handful, what is the point?

What is clear is that there are many ways in which government can aid small business, some initiatives will cost money, most will not. Some options will work for some businesses and others may only receive a small benefit, but it is something. That said, there has to be a starting point, and I would like to include my two penneth. Firstly we need to look at some hard facts, so that government, ministers and members of parliament can truly understand the risks of doing nothing or just tinkering with the issues. This subject is so important, that it needs to be addressed in the same way as the banking bailout, I am not talking about numbers, but effort and thought.

The UK’s 4.4m small and medium-sized businesses (SMEs) are the engine room of our economy, accounting for 47% UK employment (13.5m), 99.7 per cent of all enterprises and 48.7% of UK Plc turnover. Within the SME sector, some 4.2m actually employ less than 10 employees and a further 167,000 less than 50. In fact, SME’s actually employ 60% of the ‘private sector’ workforce. It is, therefore, self-evident that small business is the primary vehicle for innovation which leads to new jobs, new industries and new wealth for this country and its people. Tangible and effective moves on issues such as tax, regulation, education and infrastructure are areas which are most likely to have a positive impact on small businesses. Only government can do this, because in most cases, they caused to problem in the first place.

It is worth noting that the government currently has in excess of 3000 ‘business support schemes’, yet the Federation of Small Business claims that just 4.4% of their respondents confirmed that they had used any of these schemes. This cannot, by any stretch of the imagination be called a success, but that is hardly surprising, with this number of schemes. Where is a small business to start? Okay, so the government has indicated that they want to rationalise this to around 100 schemes, but given few of these schemes have any tangible method to measure success, it is difficult to see how this government will determine which schemes to scrap.

Business Link is probably one of the best known and supported schemed, but even this ‘local’ initiative has many detractors, who complain that emails are not answered, those charged with supporting small business have little understanding of their needs and that there is very little depth within the organisation. This would imply that whilst the initiative has merit, it needs a vast overhaul.

So what would I do? Well I am going to put forward some of my ideas, some relatively simple, others rather more controversial and perhaps complex. Nonetheless, if we are to avoid a genuine catastrophe within the SME sector, it will require bold, new initiatives and the introduction of some former programmes that have been withdrawn by this government.

I believe Business Link is a good programme, but it truly lacks depth and promotion. There are a good number of semi-retired and retired business people and out in the market and their skills are going to waste. I believe Business Link should look to recruit these people and bring them on board on a casual or self-employed basis and utilise them as business mentors. Many will have sector experience and/or specific skill sets such as finance, sales, marketing and so on. To waste this resource is ridiculous and many, I am sure, will be grateful of the opportunity to get involved in something tangible and the additional income that could top up their pensions. Of course, the recruits don’t have to be retired, there is no reason why full-time, experienced business people should not be recruited to this programme.

In addition, I believe that Business Link should be able to provide small business with specific advice on key areas, such as sales, marketing, health & safety, legal, employment law, exports, finance and so on. I know that Business Link will claim that they already do this, but my point is that they should seek to employ the best, not the cheapest, so that the small businesses can have access to the best advice.

This government has wielded the stick over everyone ever since they came into office, particularly where it comes to HMRC and regulation. They do not appear to have understood, that most ‘normal’ people use and respond better to a combination of carrot and stick. The New Labour government has always and continues to act as a schoolyard bully, not supporters of small business. They are the first to claim to be business friendly and that may be the case where businesses can afford the services of lobbyists, but it is most certainly not the case for small business. This has go to stop. Government must act and act now to reduce the burden of red tape imposed on small business.

Here are my proposals, in no particular order.

• Government must reduce personal tax for all by 5%. This will cost around £40bn over 5 years. However, it will reduce the pressure on businesses to increase wages, it will negate the public service sectors claims for higher wages to take account of higher inflation, so at least in this sector it will be self-financing and above all, it will (potentially) provide a natural stimulus to the economy. If people spend more, jobs can be saved and government will not have to pay out tax payer funded benefits. Instead, they will benefit from tax receipts through national insurance contributions, income tax, VAT and so on. Contrary to popular belief, this type of initiative introduced now may even be self-financing.
•  Government must extend the ’small business rate scheme’. Business rates are often the third largest expenditure for a small business, after wages and rent and proportionally higher for those with turnovers of less than £1m. I believe businesses with a turnover of less than £1m or employing less than 10 people should receive a 100% rebate, with a progressive programme for larger businesses. Furthermore, business should not have to apply for these rebates, they should be automatic, given many small businesses are not even aware that they have an entitlement.
• There should be a cut in small business corporation tax (businesses with a turnover of less than £5m) from the proposed 22% (2009) to 17.5% and the introduction of a tax threshold (before tax is payable) of £50k
• The VAT registration threshold should rise from £67k to £200k. HMRC, whilst retaining their vital role of collecting VAT revenues, should be directed to be supporters of business, in partnership, rather than assuming that every unpaid tax collector (anyone registered for VAT), is out to shaft them. They must also stop issuing threats to “wind up” companies that are a little late with their returns. A late return does not mean that the business is in danger of folding, it is more often than not, something that is considered a bind, a burden and therefore, not necessarily something at the top of the priority list. Fines for late returns from small business should be ceased immediately, except for persistent offenders, particularly in the current climate.
• VAT rules on exports need to be simplified. Current HMRC will offer advice, but cannot be held responsible for it, unless they agree to put it in writing (a ruling). Missing Trader Fraud has now meant that HMRC assumes that everyone is trying to do something dodgy on exports. As a consequence, they make life very difficult, especially when it comes to Europe, because often HMRC will tell the trader that they must charge VAT, the European customer argues that this is wrong and the order is lost to the business and, of course, UK Plc. In addition, small business are expected to shoulder the financial burden if VAT cannot be recovered by HMRC, even if the HMRC provided the information that exempted a transaction. I know many companies that despair of HMRC when it comes to exports, so much so, that many now avoid European exports,rather than take on the VAT risk!
• Unlike sole traders, for tax purposes, if you are a director of a limited company, you are an ‘employee’ of the company. You are therefore liable to pay Class 1 NIC’s on your earnings. The limited company is also liable to pay Class 1 NIC’s as your ‘employer’. This practice should cease for businesses that turnover less than £1m or employ less than 5 people.
• Small business should be encouraged to take on the long term unemployed and those that in receipt of disability benefits (some 2.5m), but can work. Small business employers could be offered a full rebate on all employer NIC’s for employees that are classed in either of these categories. This will assist small businesses, increase the opportunities available for the long term unemployed and result in a massive reduction in the burden on the state from those who are in receipt of benefits, rather than contributing. This initiative could be self-funding or even offer a surplus.
• Small business often have to use large commercial vehicles out of necessity, yet they are now being penalised as a consequence of the increased vehicle excise duty, under the guise of an environmental or green tax. This should be reduced to the lowest tariff for small businesses with a turnover of less than £5m
• Government should understand that a ‘one size fits all’ approach to business is not appropriate, especially where employment laws are concerned and specifically in the case of businesses with a small workforce. For example, parental or maternity leave obligations may not adversely affect a company employing 100 or more people, but a small business employing 4 people, could lose 25% of its resources overnight. The employment laws must be relative to the size of the workforce and the regulations relaxed for all employers with a workforce of less than 50. Employees have a choice, if they want all of the benefits of parental leave, maternity leave, paid sick leave and so on, they must look to find a job with a larger employer.
• Government bodies, local authorities, NHS trusts, agencies and so on, must be required to actively encourage trading with small, local businesses. Most small businesses are not aware of  supply opportunities with government agencies and if they are,  they find the paperwork too time consuming or complicated, especially for what may be low level or uncertain returns. Therefore, many do not pursue this opportunity. Businesses with a turnover of less that £1m should be given free access to www.supply2gov.uk, rather than charged £180. Many local authorities, for example, use the same suppliers as they have done for years, instead, they must be required to encourage new suppliers, they must assist these companies to complete the paperwork and offer constructive advice. Tenders have to remain open and unbiased, but the process of encouraging new local suppliers has to become a priority. Similarly, where possible local government bodies should be required to share their tenders amongst more companies, rather than using a single source.

Cashflow
Cashflow is important to small business. In fact, many small businesses fail or cannot expand, not because of a poor business model, but because of the pressures on cashflow. Invariably, this is the fault of larger companies that will not adhere to agreed payment terms, this problem now is all too common. The small business is often reluctant to chase too hard, in case the supplier refuses to place further orders. Government must legislate, to require all large companies, perhaps those with turnovers of over £5m, to pay on time and where they do not, offer a fast track legal recovery system for small businesses to recover their outstanding invoices.

Public companies should be required to sign up to an ‘ethical small business practice’, where they undertake to pay all SME’s businesses within 30 days. This objective should be audited by the firms auditors and included in the company’s year end accounts. Where public companies fail to meet these obligations, they should lose the support of investment funds and/or face fines based on turnover. Further’ all companies with a turnover of over £5m should be required to provide their ‘average payment terms’ to Companies House in the form of, for example: 1. Average payment terms 30 days., 2. Percentage paid within terms 85%. Legislation does already exist in part, but it is not enforced by Companies House.

Banks & Credit Card Processors
Two organisations that can have a significant impact on small businesses are banks and credit card processors and yet, they are very lightly regulated and, for the most part, operate a virtual monopoly in terms of financial support services to small business. Banks can change terms, conditions and rates on a whim and often do, whilst credit card processors, successfully pass of much of their financial risk in relation to fraud, directly on to the retailer, through a set of onerous terms and conditions.

Many small business operate with a bank overdraft. Banks can, in many cases, withdraw these facilities with 24 hours notice, change the risk profile requiring further security, higher charges or apply penal interest rates and/or the interest rates are variable. Government must legislate, alternatively the regulators must insist that banks offer their customers the alternative of a fixed rate of interest or variable on all bank overdrafts, reviewed annually. Banks must be required to provide small business at least 6 months notice of their intention to withdraw or reduce overdraft facilities. Banks must permit small business to convert, on request, overdrafts into short or medium term loans at rates no less favourable than the overdraft rates.

Government or the regulator must come up with a formula to ensure that interest rates are ‘reasonable’ taking account of the risk, available security and Bank of England rates. For example, many overdrafts are charged at very high rates, even though banks have personal guarantees and/or a fixed and floating charge over all business assets. Where a bank acts unreasonably, small businesses should be able to refer the matter to a fast-track arbitration service which is binding on both parties. Banks that ignore these rules should be open to litigation if a business suffers or fails.

Currently all business credit card processors have a similar set of terms and conditions. These terms, in effect, pass off the risk of fraud to the retailer. Even when the retailer has had the transaction ‘authorised’ by the card processor and followed all of the rules. The card processors have an appeals process, but this is long-winded and I am not aware of anyone that has ever ‘won’ their case.  It is estimated that credit card fraud costs small business upwards of £200m every year and the figure is rising rapidly with the advent of the Internet.

Card processors automatically charge the retailer, whenever there is a suspected fraud, it is then up to the retailer to demonstrate that they followed the rules. However, where the transaction is ‘cardholder not present’, even if the retailer has used a terminal to verify the validity of the card, the address, transaction amount and signature strip number…if it turns out to be a fraudulent transaction, the card processor re-charges the retailer. Worst still, the card processors, may take 6 weeks or more, before they re-charge the retailer, even then, the first time the retailer is aware of it is, invariably, when they receive their statement.

These terms would undoubtedly be considered unreasonable in a court of law, however, any business that needs to transact debit or credit cards, has little choice, because all of the card companies have the same onerous conditions attached. If the retailer complains, the card processor will just terminate the contract. Government must legislate, alternatively the regulator must investigate this unreasonable practice as a matter of urgency. Card processors that have approved a transaction, must be required to honour the transaction, unless they can provide incontrovertible proof that the retailer was party to the fraud.

Now, I know that I have not included everything here and I am sure that more ideas could be added. Equally, I am certain that it is possible to pick holes in some of my arguments or suggestions. Although I hope that anyone that wants to criticise will be constructive and perhaps, offer alternatives. What I am adamant about however, is that whatever steps are taken to assist small business, they must be bold, swift and meaningful. Not all of my suggestions will cost money, some just require new or tighter legislation. Some will be self-funding and other initiatives may cost money, at least in the short-term. However, to ignore the plight of this sector, is, in many ways, more risky that allowing the banks to fail. Too much of our economic well-being is reliant on the SME businesses, from GDP, to taxes and employment to enterprise. Politician’s that use this aspect of UK Plc as a football, do so at their peril!

Since I was sufficiently outraged to write an article about the goverment’s latest move to increase its powers to spy on the its own citizens, there has been a healthy and, for the most part, positive response. It is clear that there are many people out there that share most, if not all of my sentiments and are able, and willing to add their voice, or blog, to the cause by reproducing the article with their own comments or thoughts. For all of those people that have done this, I would like to offer my thanks and I would also urge those who have not, that believe the state is gaining too much power, to do likewise and reprint my article, or a version of their own, based on the same theme. Please feel free to use as much of the content of my article as you wish.

Over at ShrewMammal.com, the author has introduced his own way of indicating his disgust at the was in which this government is steadily increasing its ability to spy on the public by stealth. He is urging people to include the tag ‘RESIST‘ in all like minded posts and has included a logo which I have included on the front of my own blog. Several people have also suggested that I join NO2ID and the Open Rights Group. I think this was good advice and I will act on these suggestions. However, there is a caveat to all this, because I remain convinced that we all need to act as individuals as well as groups.

There is a real risk that if we leave the arguments to dedicated and well-meaning groups, that we do, by default, pass our individual responsibility for doing something tangible to others. I know it is possible to participate in these groups and have your personal views considered and taken into account. That said, surely it is better to join and support these groups as well as making a noise on our own? Part of the reason that government’s are able to introduce such draconian laws is because we are represented as groups and not individuals. It is much easier for government to target and rubbish groups, than it is the entire electorate, they do it all of the time. At least that is my view.

I shall live by my own argument, I will support groups that have similar values to my own, whilst continuing to disseminate my own views and I will try garner as much support for these arguments as I can with other like minded people. That way we get the best of both worlds!

With the level of information that is gathered on every single individual in this country and the government’s powers to access it, there is little or nothing that we can do or say which cannot be accessed by government through the introduction of new legislation. In fact, it is not just government’s that has access, to this information, but tools of government, the police, security services, local authorities, customs and excise, even commercial organisations, such as insurance companies, parking companies and so on. Many of the laws that have been introduced have been brought about by the risk of terrorism and the need to combat it. But lets be honest, there is no rhyme or reason why everyone of us, all 65m, should become ’suspects’ for the sake of tracking a few thousand individuals with questionable or even life-threatening motives. I can only speak from a personal perspective, but I would sooner face the minute risk of becoming a victim, rather than see so much state control and interference in my everyday life.

I am also, personally, sick and tired of the vocal, perhaps even well-meaning individuals, that insist that anyone who objects to this level of surveillance and government intrusion must have something to hide. This is utter bullshit. I have nothing to hide, in fact, I am quite willing to publicise my views on this blog, come what may. Government’s throughout the years have relied on a sheep mentality, they indoctrinate through the media, everyone’s thoughts in terms of the risks of terrorist attack, in order to justify their latest attack on our civil liberties and entrenched right to privacy. The sheep take it hook line and sinker. The sheep show no sign of being able to think as individuals, they think if something is published in the press, then it must be true, if something is said by a politician, then it must be accurate, that if someone is wearing a suit…available for under a £100 at Matalan, then they must know better. What a sad, sad state of affairs.

I believe that everyone is entitled to their own point of view, but this must be based on considering both sides of the case. I have considered carefully the views held by the sheep, but I remain to be convinced that 65m people should be spied on for the sake of catching a handful of people that may wish us harm. Throughout the ages, the masses have always been under threat, from war, terrorism, facism and so on. This Government has made no attempt to tell us precisely why they need so much information, instead, they just tell us that is is “necessary to combat terrorism and serious crime”. So next time I buy a car, if they salesman says it is a great car and he is wearing a suit, I should just buy it?

This is by no means exhaustive, but it is worth looking at how many databases are out there that contain information on our everyday habits and lives, not just government controlled, many are commercial, but of course, government bodies can have access to anything that is contained on a database, often without any court order, simply with the authorisation of a senior member of management. Some of these databases are essential, others and I mean the majority, highly controversial, particularly given the level detail held and the easy access by anyone with a suit!

Transport:

·     The DVLA hold a massive database on the cars that we own, or have owned in the past. Whether they have insurance, an MOT and the details of the registered owner. This information is even on sale to commercial companies.

·     ANPR and CCTV cameras monitor our every move, there are some 4.2m CCTV cameras in the UK, many on the road networks, so our journeys can literally be tracked from camera to camera. ANPR can be used to track individual cars using number plate recognition

·     Oyster cards, both in their current format and that proposed, can track our movements on any form of public transport.

·     Many vehicles now has SatNav fitted or trackers, this is a further instrument allowing the authorities to track movements with reverse engineering.

Health

·     More and more of our records are now held on a database and once the current multi-billion pound project is completed, we can expect everything, our full health history to be held on a database. Authorities, or maybe even commercial organisations, can access this information at will. They could find out when we have had colds, if we have suffered from any communicable diseases, if we have terminal ilnnesses, how many children we have, if we have ever suffered from depression, you name it, they know it. Often our most intimate details, that have been entrusted to someone that has signed the Hippocratic oath.

Shopping

·     The advent of loyalty cards allows commercial companies, such as supermarkets and other consumer goods stores to track what we buy, how often, what we pay and so on. In fact, from this information alone, you can get a very accurate picture of an individuals life. If it is on a database, the authorities can access it.

Travelling

·     Government’s now insist of exchanging information on passengers incuded on their manifest, air, sea etc. So now they know where we travel, what for, what method of transport we prefer, how much we paid, how long we stayed etc.

·     Passports will soon include more and more information, including, if the government gets its way, an iris scan, maybe even our DNA. There has also been a suggestion that passports include a microchip, which can be used to track movements (RFID).

Communications

·     Governments and its agencies have long had the right to tap telephones, albeit this had to be authorised at a very senior level within government or the judiciary. Not any more, already, government agencies routinely monitor telephone calls, internet traffic, email, mobile phone calls and text messages. Now they wish to include this on a massive database, information that will have to be held for 2 years. Before, there was the option for a ’service provider’ to request an independent review, to determine whether the information being requested was legitimate, lawful and reasonable. Now the government even wants to remove that right. Why, if they have nothing to hide? Government is now also insisting that passports are used when a prepaid phone is purchased.

·     Mobile phones can also be tracked via cell site analysis, so our every move can be tracked for the past 2 years, it is not entirely accurate, but it can provide a pretty good picture. With more and more phones now having GPS installed as standard, this information will be accurate to a few feet.

 ID Cards

·     I won’t go into the level of information that is being proposed to be held on ID cards, because it has been covered in many articles on the internet. Suffice to say, the chip on the ID cards will be a sort of chip, with access to so much information it is truly frightening, especially when you consider that whatever form of encryption they use, someone smarter than they, will be able to break the code.

DNA Database

·     Many people support a DNA database and I have to say, I have some sympathy for these views, this technology has been used to solve some very old crimes. However, we are so wrapped up in how DNA is as accurate as it is possible to be, we are prone to forget that it could be misused by anyone wanting to ‘frame’ someone, because a jury, may be so convinced of its accuracy, that they may not consider the possibility that the evidence could have been planted. Yes, call be paranoid, but how many times have we seen miscarriages of justice, because a ‘well meaning’ police officer “knew” that the person was guilty? A government intent on dealing with detractors could quite easily frame an individual with DNA evidence and with so many prone to lie to us, I would not trust them. Is this a database too far?

·     Where anything that is supposed to offer irrefutable proof of guilt (or I accept innocence), there needs to be very powerful oversight, given most people are inclined to believe DNA evidence.

·     Another issue with DNA, is the fact that the taking of this is now routine for any arrest, no matter how minor. We have the largest DNA database in the world. It is no longer used just to track offenders, but as a way to tell us about our futures, our genetic disposition to certain ailments, diseases, life spans etc. The more information they have on the DNA database, the more they can compare, which means that very soon, government will be able to forecast our futures, certainly from a health perspective.

The list goes on and this post could end up exceeding 10,000 words if I were to add each one and provide a details explanation. We are all able to complete our research online into any or all of these tools of government, therefore I will not seek to do it on this post. My intention is only to highlight just how much of our personal lives and how many of our civil liberties are already at risk, let alone what we will lose with the additional powers the government is seeking. Any government that wanted to know how its citizens were intending to vote, could access any number of these tools and get a pretty good idea, how democratic is that?

 You can call me paranoid, but I cannot be accused of nothing to hide, because quite clearly, by life is already an open book for any government officer with the authority to delve into my affairs. They will be wasting their time and our money. But as my life is an open book, so is yours. Everyone, everywhere must have something that they would not want other to know, not because it is illegal, but because it is in the past, embarassing, or could be easily misunderstood. It is our very right to close the door when we go to the toilet or do our most intimate things, we should not have to be concerned about Big Brother, the state watching our every move. The ballot box will not remove existing laws, the ballot box cannot stop this government from introducing unreasonable acts against the will of the majority, but we can, if we are motivated to do so, push our case, publicise our views. So why not write your own version of my article, draft your own letter and make your point on the blogosphere. Let us all see how democratic this country really is, because I suspect, we have been so indoctrinated to take government ministers at face value, that we will, soon find that our opinions don’t matter any longer.

RESIST!

“I prefer liberty with danger than peace with slavery”

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Transport Secretary, Geoff Hoon, also know as Geoff the Buffoon has indicated that he is prepared to ignore our civil liberties in support of the proposed database that Jacqi Smith wants to bring in.

When asked on BBC’s question time by Lib Dems’ communities spokeswoman Julia Goldsworthy “How much more control can they have. How far is he prepared to go to undermine civil liberties?”. Geoff Hoon interupted with the following response “To stop terrorists killing people in our society, quite a long way actually. “If they are going to use the internet to communicate with each other and we don’t have the power to deal with that, then you are giving a licence to terrorists to kill people.”

This is further evidence if any were needed that this government and it’s minister will go to any lengths to further pry into the private affairs of its citizins, in the complete knowledge that this will infringe our civil liberties as was actually knowledged by Hoon’s statement. This government continues to use fear as a weapon to increase their hold over the public and it has got to stop. The majority of people shrug their shoulders, but they shouldn’t, they must sit up and take notice. We are already the most spied nation on earth with some 4.2m CCTV cameras, but do you feel any safer..No!

This is what I said in my article yesterday (Public must call time on Big Brother Britain):

It is expected that plans to collect more data on people’s phone, e-mail and web-browsing habits will be included in the innocuously sounding ”Communications Data Bill”, due to be introduced in the Queen’s Speech in November. By all accounts, these proposals are supported by Home Secretary Jacqui Smith, Gordon Brown and much of the Labour government. Once again, the government is expected to justify this gross intrusion into the personal lives of 65m people under the auspices of ‘counter-terrorism’, this is utter garbage, they know it and we know it. Yes, there are terrorists out there and they don’t wear badges, but this country has faced terrorism before and the security forces managed to investigate and prosecute without such laws.

There is a radio advert doing the rounds at the moment which claims that some 6 plumbers per week, die from asbestos related diseases. That is over 300 per year. In 2007, some 2940 people were killed on our roads. In spite of these appalling numbers, we have not witnessed a massive increase in legislation to prevent these deaths, or a massive erosion of our civil liberties. As attrocious and upsetting as the July bombings were, in the 3 years since, 3 times as many farmers were killed in farm accidents. Police and security forces have received a significant increase in budgets for front-line personnel in name name of combatting terrorism and I have no criticsm of this extra money, but it is time we put it into perspective.

How many people have been killed over the years to protect the civil liberties and freedoms we used to enjoy until New Labour came to power? How many people have died to protect us from tyranny? The answer is millions. For 30 years we endured terrorism on the mainland, yet no government sought to remove our rights and freedoms, this has been left to New Labour. It is fear that ensures public compliance, but this is actually manipulation. This government, your government wants to read your emails, monitor your telephone calls and texts and look over your shoulder as you read this article. How is that going to stop terrorists?

Whenever the government wants to get legislation through that seeks to remove our rights as citizens and our liberties, they come up with another “plot”, take your mind back. In fact, they did the same thing only a few days ago, this time when they wanted to extend the detention without trial from 28 to 42 days. Our own government is manipulating it’s people, it is raising the stakes by trying to promote fear, yet, if you are a farmer, you are more likely to be killed at work that my a terrorist, you are more likely in fact, to die in a plane accident, than die at the hands of a terrorist. Knowledge is power and this government is obsessed with power. they know that is they have knowledge of it’s citizens, then they have ultimate power. Yet, we are supposed to be in charge, not them.

We must tell our elected member of parliament that enough is enough, we must instruct them not to vote for this draconan piece of legislation. This is what I proposed in my article yesterday.

We must demonstrate to our MP’s that they should be more in fear of the wrath of the British public that the Chief Whip of their own parties. Opposition MP’s should do their jobs and oppose this draconian piece of legislation. We must also warn our local members of parliament that if they vote for this Act, that we will not vote for them, we must make it clear, that we have a voice, not once every 5 years, but throughout their tenure and that we will have it heard. Everyone that feels this Act is a direct infringement of our civil liberties, right to privacy and an attack on the very fabric of our society, should write to their MP and tell them so. I have provided a ‘draft letter’ which can be viewed, personalised and sent to your MP. Draft Letter to MP

I would also invite all fellow bloggers that feel as strongly as I do on this issue to reproduce this article in part or full, topped and tailed if they wish, to publicise this issue to as many people as possible. Let us all stand up and fight in this issue, and remind this government who is actually in charge.

RESIST!

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Enough is enough, the UK is becoming a police state by our control obsessed government and we are sitting back and allowing it to happen. It makes me angry to see such lethargy. Everytime a new act is brought in, far more sinister aspects are buried in the detail, which further curtail our civil liberties, freedom and privacy. This has got to stop and now, state should not be permitted to control the people, it should be the other way around. As it stands, just 650 members of parliament are pushing some 65m people around, yes, I mean 650, because whilst this government may have a majority, the MP’s from other parties are not making enough noise about this massive intrusion into our lives, they should be fired, the lot of them. We are quick to condemn the bankers (rightly so in many cases), but we do nothing about the MP’s that have consistently introduced or supported Acts of Parliament that intrude into our lives, in a way that will affect us for many years to come. We must put a stop to it.

It is expected that plans to collect more data on people’s phone, e-mail and web-browsing habits will be included in the innocuously sounding ”Communications Data Bill”, due to be introduced in the Queen’s Speech in November. By all accounts, these proposals are supported by Home Secretary Jacqui Smith, Gordon Brown and much of the Labour government. Once again, the government is expected to justify this gross intrusion into the personal lives of 65m people under the auspices of ‘counter-terrorism’, this is utter garbage, they know it and we know it. Yes, there are terrorists out there and they don’t wear badges, but this country has faced terrorism before and the security forces managed to investigate and prosecute without such laws.

I don’t know how many terrorists are out there, but it is not 65m and is probably less that a couple of thousand, why should the privacy and personal of 65m people be invaded by this government because of a few people that mean us harm? This whole thing needs to be put in perspective, more people in the UK die on the roads than as a result of terrorism, more soldiers are killed abroad, than in the UK as a result of terrorism, in fact, more people are killed in farming accidents than as a consequence of terrorism. This government has invested massively in the security services, allowing them to go on a substantial recruitment drive, there should be no need for a massive Big Brother surveillance operation of the entire population of the UK. Before some smart-arse suggests that it is this surveillance and investment in the security services that has reduced the number of terrorist incidents in the UK, I would ask them to provide further evidence that this is the case and then to put it into perspective. For example, it is well know that the airline industry work out whether safety mechanisms are worth introducing on their planes on the basis of a cost/benefit analysis. In other words, will the costs associated with an accident outweigh the cost of implementing the safety programmes. Fact of life, they all do it, they just rarely tell us!

Of course the government will issue the usual platitudes and assurances that they will not misuse this information, but can we believe them. The Icelandic authorities had their assets frozen using anti-terror laws, in spite of the fact that there were other laws that could have been used and would have been just as effective. A local council used anti-terror legislation to spy on the parents of a child that they throught was in the wrong ‘catchment area’. This list, trust me, goes on and on. We also know that this government and it’s private sector partners are incapapble of securing data, which means our personal lives could be open to all and sundry. Some will argue that if you have nothing to hide, then there is nothing to hide, these same people probably still believe in Father Christmas. As we know information, any information can be used in different ways, depending on the intepretation of the recipient, how many times have we all said or done something that was completely misrepresented?

I have nothing to hide, but I object strongly to my personal calls, web browsing habits and email being monitored and invaded by the state. Government’s could even misuse this information to find out how we intend to vote! It is an appalling proposal and it is high time the British public called time on this control obsessed government and it’s supporters, irrespective of which party they represent. This goes beyond party politics, it is a direct attack on the very fabric of our society and no-one will be safe from government interference if it is allowed to pass into law. If the government believe that this act is so important, then they should allow the British people to vote on it through a referendum, I believe they will get a resounding No…and they know it!

People often tell me that there is “not much we can do”, but there is. Our members of parliament are worried sick that they may lose their seat at the next election, we must emphasise to them that if they support this attack on our civil liberties that we guarantee they will. We must demonstrate to our MP’s that they should be more in fear of the wrath of the British public that the Chief Whip of their own parties. Opposition MP’s should do their jobs and oppose this draconian piece of legislation. We must also warn our local members of parliament that if they vote for this Act, then we will not vote for them, we must make it clear, that we have a voice, not once every 5 years, but throughout their tenure and that we will have it heard. Everyone that feels this Act is a direct infringement of our civil liberties, right to privacy and an attack on the very fabric of our society, should write to their MP and tell them so. I have provided a ‘draft letter’ which can be viewed, personalised and sent to your MP. Draft Letter to MP

I would also invite all fellow bloggers that feel as strongly as I do on this issue to reproduce this article in part or full, topped and tailed if they wish, to publicise this issue to as many people as possible. Let us all stand up and fight in this issue, and remind this government who is actually in charge.

RESIST!

For more information on how the UK government is steadily eroding our rights to privacy and our civil liberties, I would recommend that you take a look at these articles. Privacy Controls - Nothing to Hide

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Ministers are considering draft proposals whereby up to 186,000 licensed premises, including bars, clubs, pubs and restaurants would be banned from offering free drinks and will face restrictions on so called “happy hours”. The proposals also suggest that wine should be served in ‘marked’ glasses and health warnings placed on drinks. New Labour, not content with the cigarette ban, which has seriously contributed to the closure of over 5 pubs per day, are now to consider having a second bite of the cherry. Yet, this government claims to be “business friendly”. This is simply not true.

Whatever your views on smoking, an outright ban was a significant attack on the civil liberties of millions of people, yes, non-smokers also have rights, but neither group should have had preference over the other. An alternative for example, would have been to allow ’smoking pubs’ or clubs. The same goes for restaurants, they could have been allowed to have a smoking room, much the same as those at many airport terminals. Instead, this government chose to ride roughshod over millions of people, whatever the consequences to civil liberties and business. Now we are seeing 5 pubs a day close and behind each one is a story, an individual or family that has invested their life savings, or another that is working as an employee and subsequently risks losing their job because the pub, bar or club is scheduled to close.

Banning pubs and clubs from offering free alcohol or restricting the traditional happy hour, is not going to solve the binge drinking or yobbish behaviour that we see on our streets almost every night. We all have a choice as to whether we go to a particular pub or bar, partake in ‘free’ offers or take advantage of discounts during happy hour. That choice must not be removed, because to do so, only demonstrates, that the state is attempting to control the people, rather than the other way around. It is not simply an issue of a tired looking government trying to act responsibly, it is yet another example of the state trying to dictate how we run our lives. Already they tell us where we can smoke, how much of our own money we can keep, how fast we must drive on the roads, where we can park, the list is endless…and yet this is supposed to be a democracy.

I am not advocating that there should be no rules, regulations or laws, that would be anarchy, but I am suggesting that there needs to be a commonsense, joined up approach…..moderation. There are 65m people in the UK, yet we are all tarred with the same brush, we could all, technically, have the toughest anti-terrorist laws in the world used against us, by our own government. Even though genuine ’terrorists’ count for an infinitesimal number of our population, the legislation assumes that the problem is much, much worse, introducing a fear fact designed to push us all into submission to another draconian peice of legislation. This scattergun approach to new legislation seeks to destroy the civil liberties of us all, given it does not even attempt differentiate between good and bad. By imposing a ban on everything the government doesn’t like they get, more and more control over the people. 650 Members of Parliament, ruling 65m people…maybe they feel they need this type of legislation to control us all.

What happened to personal responsibility? if people want to binge drink, that is their choice, however, if they overstep the mark, that is to say they interfere with other people trying to enjoy themselves, then they should be dealt with severely. Instead of a smack on the wrist and being sent home, or a night in the cells and sent on their way the next morning, they must be punished in a way that they will remember their transgression for a while to come. Yobbish or anti-social, drink related behaviour should be punished by at least one months income, irrespective of whether the individual is a high earner, on the minimum wage or on social benefits. These sums should be deducted direct, so that employers are made aware of the behaviour of some of their employees outside the workplace and those on benefits cannot refuse to pay. Harsh yes, but it is likely, that unless the individual has a drinking problem which requires help, then they will remember the lesson for a long time to come. Similarly, high earners would be hit proportionally to their earnings, everyone being treated equally.

If I drive too fast and have an accident, I wouldn’t expect the government to ban cars, if I cut myself whilst shaving, the state does not need to ban razor blades. In each case it was my decision, I would know the risks and expect to pay the consequences. No-one else. On the other hand, if we were talking about my children, then I may impose restrictions, until I felt that they were old enough and mature enough to make their own decisions…but only until then. So what do these restrictions on our civil liberties say about what government thinks of us? They treat us like children, they assume that none of us are capable of making our own decisions in life, instead, we must be controlled by rules and regulations.

We must not look at things like this potential ban as a single issue, that is what government wants us to do, instead we must look at each example as further evidence of this nanny state, further evidence that the state wants to control every aspect of our lives, even if this means new draconian acts of parliament to get those powers. We have seen this government use the anti-terrorist act to sequestrate the assets of the Icelandic bank, that was not what the legislation was for and in a prime example of how state can, will and does abuse the trust that we all put in them, when they are elected. There was plenty of other legislation that could have been used in the example I cite, without resorting to anti-terror legislation.

We should all be telling our MP’s the the vast majority of us are sensible, law abiding and have large doses of commonsense…in fact, much more than many MP’s. Therefore, we do not need, nor do we want a nanny state, we want less regulation and rules, not more. Does anyone feel safer as a consequence of the 7,000 additional laws introduced by this government? The answer is an emphatic NO…and that is why we must tell our elected members of parliament, that enough is enough.

If you want to see how the state is interfering in our everyday lives, even in our children’s schools, then it is worth reading an article written by Shrewd Mammal, (White Rome Burns).

Now that Gordon Brown and Alistair Darling have committed some £500bn to the banks in loans, guarantees and shares, it is time to reflect, to allow the city, time to digest the level of this intervention before going any further. There is now a real risk that the government could become its own worst enemy, by saying they “will do whatever is necessary to stablise the UK economy”, they are sending the wrong message to the city. Yes, I mean the wrong message, city investors are not uninterested parties here. Whilst the taxpayer is shoring up balance sheets, buying up shares, rescuing companies and intervening in the money markets, the ‘city types’ have their own investment portfolios protected. The government is continuing to speculate at our expense, with limited or no risk to the investors.

As I have said before, I am no economist, I am no expert, but I have been blessed with some commonsense. This tells me that if you are constantly running at full pelt, you don’t have time to see what you have passed, what you have left behind and whether you are still in the race. The government must stop NOW, before they bankrupt this country. They have oiled the wheels and reduced much of the investor risk through these interventions and the substantial injections of cash underwritten by the UK taxpayer. No more open-ended promises.

Government must also look at which stocks are falling. For example, most people accept that we are about to face a world recession, therefore, you can expect organisations that are involved in commodities to see their share prices fall. And, of course, these are some of the largest companies, in terms of value, on the stock exchange. Add this to banking and financial stocks and of course we will see a massive fall in the value of the FTSE. On top of the so called banking crisis, a recession means that city experts will be looking at companies that will do well out of a downturn and those that won’t, this will then be reflected in their share price. So, given there is a recession looming, it is fair to assume that stock prices would have fallen anyway.

Virtually from day one, this government has used taxpayers money as if they had been given their very first credit card. They have gone on a spending spree, thinking they are rich and there is an endless money supply. Then, once they realised they had overspent or reached their credit limit, they simply came after the taxpayer for more money. As a consequence, this Labour government has set a poor example to everyone else, now we must all pay for our excesses…but that includes government who must haul back on their investment commitments, they must learn to live within their means, just like everyone else must do.

My concern, is that the current banking crisis has them on that road again, they think they can spend more and more of our future tax revenues in the name of saving us all from some type of doomsday scenario. Now I accept, some form of intervention was necessary, but this must have limits and I am worried that this government has exceeded those limits with an intervention that is worth at least as much as that provided by the American’s, who’s economy is 3 times the size of our own. It is also worth noting, that £500bn is more than double all tax receipts, based on the 2007 figure. Given we are likely to have much reduced tax revenues because of company losses (they can carry these forward to offset against future profits), falling employment and lower sales, this £500bn might end up being the equivalent of 3 years worth of tax receipts.

Now the government have told us there may be some upside for the taxpayer. I don’t like the word ‘may’, nor do I really trust this government to negotiate a good deal for the taxpayer. It has been suggested that this government has lost close to £110bn in poorly negotiated contracts, mistakes and failed projects. This record does not bode well for the taxpayer, when the same people are negotiating with experts. Lets hope, this time they have learned some lessons, though I will not hold my breath. But in the meantime, I would like to advice Alistair Darling and Gordon Brown to STOP, pause for thought, look at whether what you have done has had any positive affect and stop offering the city a blank cheque, no-one could blame them for taking advantage.

At the moment one day pretty much blends into another, but on one of the evening news programmes this week, another fat cat, fee-earner had the temerity to say, when questioned, that auditors had played no part in the financial mire that is the bane of every UK taxpayer. I have to admit, that I wanted to throw something at him, because I have been arguing for weeks that the auditors have failed in their duty to the shareholders and worst still, shall be one of the few ’industries’ that will make money out of this fiasco, through company administrations, receivership’s, consultancy fees and so on.

Lets look at the generally accepted definition of a Finance Audit:
The process of verifying a company’s financial information. Auditors are certified public accountants who are independent of the corporation. An auditor examines a company’s accounting books and records in order to determine whether the company is following appropriate account procedures. An auditor issues an opinion in a report that says whether the financial statements present fairly the company’s financial position and its operational results in accordance with Generally Accepted Accounting Principles (GAAP).

And here is a common definition of an Auditor
Auditor is the person appointed to conduct an examination of the records, to form an opinion about the authenticity and correctness of such records, by verifying the correctness and reliability of the recorded transactions from the evidences available, opinion and inference reachable based on his expertise.

Most, if not all, stock market listed companies in this country and, for that matter, around the world, use the services of one of the so called ‘Big Four’ accountancy firms. These big firms charge huge sums for their audits, often running into £millions, and the audit teams are lead by high ranking ‘fee earners’. In other words, as the businesses, banks and financial institutions they audited expanded, so have the fees earned by the auditors and yet, not one audit firm appears to have asked any questions about what is now being described as “questionable accounting” practices within the financial services and banking sectors.

For example, do we know of any audit firm that qualified a set of accounts within the banking sector because of the heavy reliance on a particular financial model, such as in the case of Northern Rock? Has an audit firm raised any prior concern over the way that ‘bundled’ mortgage debt was traded, sold and then re-sold, with each party taking a profit or commission, without really knowing the risks or true value of the asset.

You would think that after Enron and Worldcom, auditors would be even more cautious, especially given investors and business people alike, will have increasingly come to rely on the expertise and the independence of the auditors before they make financial investment decisions related to the company being audited. It is absolutely essential that the audits of company’s that rely on external investors for funding are wide-ranging, thorough and probing, a failure to do this and ask questions, is, in my impinion a dereliction of the auditors responsibility to the shareholders. If an audit is not indepependent, or in-depth, why on earth do so many companies pay so much money out every year for their audits?

I personally believe that, when the investigation begins, as it surely will, the part played by company auditors also needs investigating. Given they will be the only party to have profited in the ‘boom’ as well as profited out of the ‘bust’, yet they were also the only party, other that the regulatory authorities, that had a duty to ensure that they reported the facts, discovered questionable practices and reported their findings in an open, direct and a frank manner. I do not say that any of these accountancy firms are culpable, because I would have nothing to back this up with (other than logic of course), but I can say that, I believe they have failed, for the most part, in their duty to appropriately and competently assess the risks associated with some of the more questionable practices adopted by the banking and financial industries.

I also believe that shareholders that have lost money should consider individual or class actions against any audit firms that are left wanting in this current mess. For them to be preening themselves in front of the cameras, whilst rubbing their hands with glee, behind the scenes, is stomach churning. If there job was not to highlight risks, operating and reporting practices, asset values and profit claims, what on earth were they charging such massive audit fees for? The Audit Firms must not be allowed to extract themselves from any form of responsibility whilst the rest of us are left to pick up the tab and the pieces of what is left.

This Labour government is not really known for getting a good deal for the taxpayer, so I am left wondering what sort of quid pro quo, is received by the UK taxpayer, in return for the monies that are being loaned or gifted to the banks. Let me explain.

The justification given by the government for the intervention of the Bank of England is that they need to get the credit market going, increase liquidity, encourage the banks to lend to one another etc. However, what guarantees have the Bank of England or the government sought from these banks? After all, no-one is claiming that it is now easier to get a loan, a bank overdraft, a mortgage and so on. Therefore, is it fair to assume that the banks are not using the money they have been loaned for the purpose it was provided, or is the government just lying to us? Or perhaps, no-one has though of including any pre-conditions for the loans, so that banks are just using this money to shore up their immediate cash flow issues?

The Bank of England has had to intervene by taking over the mortgage debt of Northern Rock and Bradford & Bingley, much of which would be termed sub-prime, or ‘dodgy’ if you are English. If we are to believe all that we are told, then the banking sector is so intertwined, that somewhere, another bank, or more likely several banks have benefited from the effective underwriting of this so-called toxic debt. So, what do we, the taxpayer, having taken on all this risk get in return?

Perhaps I am just missing the point here, I am not a banker, nor an economist. However, I am a taxpayer and as such, my signature has been used to underwrite these debts and therefore, I believe I deserve a full account of precisely what has been taken on in my name, the risks, returns and the conditions, if any. The government and the Bank of England keep using terminology that is foreign to me, why… have they got something to hide? Surely if they are going to use our money to bail our both the banks and the city, we deserve an explanation in laymans language, not just a doomsday scenario designed, in my view, to frighten us all into submission and asking as few questions as possible.

I don’t trust this government, they have consistently lied to the public, manipulated figures and misled us whenever they could get away with it. Then there is the Bank of England, which is run by bankers and economists, the former (bankers), the government would have us believe are in part responsible for this mess and the latter (economists), should perhaps have seen this disaster coming. Whatever the situation, this government is spending billions of pounds our money and we don’t know what chance we have of getting it back. We don’t know if they have secured any form of agreement in return, such as a loosening of consumer and business borrowing facilities, nor do we really understand the government or BoE’s primary objective, so at least, we could measure whether they had been successful on our behalf or not. No doubt this is the whole point, if they don’t tell us what they are trying to achive, we won’t know if or when they fail!

In spite of all this intervention by so called experts, the stock market has plummeted by some 7% at the time of writing this post, so something isn’t working. Worst still, we are given to understand that the Bank of England has intervened in the stock market to slow the decline, so does this mean that we have also had massive paper losses. My message to the Government and the Bank of England is that it is time to come clean with the shareholders of UK Plc…right now!