Not before time George Osborne has outlined what the spending priorities will be if the Conservatives win at the next election. Although in traditional Tory style, his comments lacked any detail, but there there was at least a clear statement of intent, one which I could subscribe to. He said that The Conservative party will prioritise spending cuts rather than tax rises to address the atrocious state of the public finances. George Osborne said “You don’t want to kill off the recovery with heavy tax rises that bring you back to square one.”

Osborne stated that health, schools, defence and international development would be protected from cuts in 2009/10, but beyond that, would only commit to real term increases in health and to match Labour’s commitment on overseas aid of 0.7% of GDP. These cuts are likely to amount to £5bn, not nearly enough, but it is a start. For me there are a number of positive aspect to this statement which I find encouraging.

A politician has finally understood that you cannot simply take the easy way out every time their is a funding gap and fleece the already hard-pressed taxpayer. The Conservatives have made a great play of all the stealth taxes we have had to endure over the past 11 years as well as the increased tax burden. To then add to it, whatever the economic circumstances, would be hypocritical, at least until they have exhausted all other options. There is a huge amount of waste and excess in the public sector and it needs to be brought under control. Personally I believe a saving of £5bn is small beer and this could be much higher, without necessarily impacting on front line services.

I am also encouraged that the Conservative’s are finally willing to open themselves up for Labour party attacks along the lines of “a vote for the Conservative Party will lead to public sector cuts”. Anyone with an ounce of commonsense will know that our current public sector investment is unsustainable, it would have been if there had been no economic downturn, so it sure as hell is now. Increasing taxes will mean there is less money in the economy and therefore it will take much longer to come out of this recession. The best fiscal stimulus in a natural one and that is by allowing people to keep more of the money they earn, not less.

Labour jibes that a vote for the Conservatives will lead to cuts in schools and health are designed to be emotive, but it is clear that the current spending is not sustainable in the short or medium term and, deep down, the electorate knows that. No matter what party is in government, real term cuts are inevitable.

The voters of this country are also shoppers and they know that when times are hard, they have to make their money stretch further, this means cuts in non-essentials, reducing debt and making every penny count. They know that if they are prepared to shop around, money can be saved without necessarily compromising quality, for example buying supermarkets own label products, frequenting discount stores, utlising the intenet to research prices etc. This is because most people do not have the luxury of boosting their income by simply helping themselves to someone else’s money, as is common with governments when they get their sums wrong. The taxpayer always has and I suspect always will be the easiest target for spendthrift governments such as New Labour.

I am also heartened that the Conservatives are prepared to take a position and then defend it. So far they have promised to fix our ‘broken society” and as we all know that is an intangible that they couldn’t be accurately measured on. But a commitment to cut wasteful and excessive public spending is tangible, we will be able to judge them on their deeds, not their words. In fact, the Conservative party, if true to their word, is at risk of becoming a party of conviction and in my view at least, that makes them more electable. I would like to see George Osborne and his team put more work into this commitment and identify some of the areas where they will make cuts….yes, I say cuts, because we will inevitably have to make cuts in real terms. They could make a start with the £20bn a year that the Labour party have committed to spend on new databases that achieve nothing other than infringe the civil liberties of the people of this country, then move on to complete a wholesale review of the unfunded public sector pension schemes which are crippling the public sector finances. For example, it was reported last week that 20p in every £ collected in Council Tax, goes directly towards paying local government pensions.

It is worth reminding ourselves that the vast majority of our taxes go to support or subsidise those less fortunate, therefore, £1 in tax does not mean £1 in benefit to the taxpayer, as all government’s past and present would us believe. And, to help those less fortunate than the majority (soon to become the minority), we need an army of civil servants, many of whom are now better paid than the private sector and have much better pension schemes.

My best guess is that for every £ paid in tax, the average taxpayer will receive no more than 20p in benefits, now that IS a number the Tax Payers Alliance should try and calculate. The bottom line is we, as taxpayers, must insist that we get value for money. If my estimate is right, then for every pound that is taken from us, we get only 20p of value, is there any justice in that. I think not, it is taking social responsibility too far and I suspect that if the true number was ever published, there would be a massive backlash from the taxpayer. 

This is only one solid policy statement offered by the Conservative party that I fully concur with, I hope that in the coming months, we will have more sensible, tangible and worthwhile policy commitments. You never know, they may actually become a party that is worthy of our vote, rather than one which wins the election as a consequence of the electorate voting against New Labour, rather than for the Conservatives.

Much has been written about MP’s and their expenses over the past few weeks and little wonder given we expect our elected representatives to always act in the best interests of their constituents, the public at large and above all, with the utmost integrity. Yet, each time an MP has been exposed as maximising their expense allowances, we are informed that the claim has either been an error, or more often has been claimed in “accordance with the rules” and “fully declared”.

I have already stated in previous posts that I am not suggesting that any MP or Minister has acted in a corrupt manner and without evidence to the contrary, I stand by that statement. However, what is clear to me is that it is the the expense allowance programme is corrupt, given it facilitates and even encourages members of parliament to maximise their claims with little or no scrutiny as part of their ‘rewards package’. My prior statement notwithstanding, it is MP’s that are the sole arbiters on the expense system they benefit from, because only they can vote to introduce change. Therefore, it is a bit rich when they are so defensive because the public has the temerity and audacity to find these claims objectionable and excessive, even though we have never been consulted…instead we just expected to foot the bill. Bollocks!

I believe that the only reason Gordon Brown and his cronies are recommending a review of the expense allowances is because they want and expect the committee to suggest that salaries are increased to compensate for the loss of some or all of the current allowances. This is not and never will be acceptable to the public. It is right that MP’s should be reimbursed for out of pocket expenses, that have been incurred wholly and exclusively in the course of their parliamentary duties, but that is it. Anything else would be an abuse. MP’s know what the salary and benefits are before they stand, if they don’t like the package, then they must step aside, there will be no shortage of people clamouring for their seats.

In the past, the basis or motivation for new laws was invariably where the majority of people found something objectionable, offensive or wrong. It is clear to me that the overwhelming majority of people in this country consider the MP expense allowances to be far too generous, self-serving and open to abuse. Therefore, all MP’s have a duty to the public to outlaw such acts, even if it is detrimental to their own interests. A failure to do this is a failure of their duty and obligation to the public. It does not need a committee to determine what is wrong with the expense allowance scheme, public opinion has already made that clear, MP’s must act decisively and NOW, for if they don’t the trust in our Parliamentary system of representation will be irreparably damaged. Trust has already been damaged.

The people of this country have had to put up with interfering Ministers and MP’s introducing a raft of new legislation designed exclusive and comprehensively to erode our liberty, right to privacy and long held freedoms, whilst they (the MP’s) are, for the most part exempted from the same laws. They have lost all sense of reality and completely removed themselves from society.

Over the past 11 years we have seen legislation brought in to protect foxes, whilst having to accept the broken Manifesto promise of a vote on the Lisbon Treaty. We have seen public sector final salary pension schemes protected and enhanced whilst those in the private sector were raided to the tune of £10bn per year. We have seen Ministers living in grace and favour homes, whilst renting out their taxpayer funded London home, meanwhile other hardworking people have had their homes repossessed. We have seen countless examples of MP’s going on free taxpayer junkets with their entourage, whilst many people will be lucky to afford a weekend in Blackpool. The hypocrisy of our current batch of MP’s knows no bounds, but it has got to stop. Our system of parliamentary democracy goes back hundreds of years, but more damage has been done to it by this current group of MP’s than at any time since it started. Members of Parliament must hang their heads in shame, hand back our money, can the expense allowance scheme and agree not to stand for elected office again. Then there may be a small chance that the damage to our democratic process and, the necessary trust in accountable members of parliament, may be rectified in our lifetimes. It is the least we would expect from decent individuals, but then again, few of our current batch of MP’s could be described as decent!

SPREAD THE WORD:

A Conservative MP is seeking a second reading for a new Bill, titled ‘Exercise of Reasonable Discretion’. If passed into law, this will allow every public servant, including MP, civil servants, local government officers, the police etc., a legal defence of ‘reasonable discretion’ in any civil or criminal case brought about as a consequence of their actions. All they would have to prove, is that they acted in good faith, this as anyone in the know will understand, is a catch-all defence.

In essence, it could allow MP’s to argue that they made certain decisions, such as going to war, based on advice where they were required to use reasonable discretion, officials entering into multi-million pound contracts which are subsequently cancelled or overrun, will also be able to claim that they exercised reasonable discretion. It is effectively a get out of jail free card for any public servant. Effectively removing accountability and increasing risk, because of course, if there is no effective punishment, there is no need to be careful. We should all shout as loud as we can to ensure that this type of legislation never sees the light of day.

Just 24 hours after it emerged that Geoff Hoon was claiming a ’second home allowance’ for his Derbyshire constituency home, whilst renting out his London pad and living in a taxpayer funded ‘grace and favour home’ it transpires that Alistair Darling is doing something similar. Yet another example of Ministers who are expected to set an example hiding behind the rules of a corrupt expense allowance programme that they get to craft and then vote on!

As I alluded to in my posting yesterday, it appears impossible to find any MP that does not have his or her snout in the trough, they all seem to be at it. At a time of higher taxes for mere mortals, MP’s seem to be protecting their own positions with unjustifiable and very generous tax free expense allowances, that bear no relation to ‘out of pocket’ expenses.

MP’s expense allowances bear absolutely no relation to those in the private sector. For example, most people working in London will travel, at their own expense, to and from work, often leaving in the very early hours and getting home late. I for example, used to leave at 5.00am in the morning and get home at between 8.00 and 9.00pm….everyday for 9 years! My petrol was paid, but I then had to declare this as a benefit in kind. Most people in the private sector will receive an overnight allowance if they are staying in London, a relocation allowance, or a small one-off grant to cover the rental of a small flat etc. Not so for MP’s, they get annual allowances for virtually everything.

How ironic that the very people that bear a good deal of the responsibility for the economic mess we are in should seek to make the taxpayers pay for their mistakes (increased taxes, stealth taxes, bailots etc), whilst feathering their own nests with unjustifiable expense allowance benefits. Why do we all sit here and take it,  whilst these self-serving, pompous hypocrites are sneering at us in that contemptuous way that serving MP’s have got off to an art? Meanwhile, Gordon Brown says he has far more important things to deal with than MP’s expenses, well he has a point, but, if his ministers are milking a corrupt expense allowance programme, how are the public to have, or maintain, any trust in their honesty, integrity and judgement?

MP’s must not be allowed to hide behind the fact that they operated within the rules or that their claims had been “openly declared“. One of their own MP’s referred to the fact there is a “court of public opinion” and indeed there is. Members of Parliament have quite rightly declared open warfare on those that seek to minimise their personal and business tax obligations through complicated offshore tax schemes, many of whom are operating “within the rules”, but failing to contribute in a fair and equitable manner. Yet MP’s are doing exactly the same thing, hiding behind the rules that they set up and voted on, yet expecting everyone else to do their part. It is hypocrisy of the highest order, yet we have not witnessed one apology (other than for mistakes), nor have we seen immediate action to curtail this abuse and worst still, no resignations or signs of embarrassment.

This appalling abuse has got to stop right now, the public are very, very angry and there will be a backlash as soon as that public opinion has been mobilised into action. Parliamentary Commissioner for Standards, John Lyon must act, by ordering MP’s and Ministers to repay these unjustifiable allowances, whether or not they were within the rules. Meanwhile MP’s must start to demonstrate that they are ‘in one’ with the people of this country and not the self-serving hypocrites that their action suggest. Little wonder that the electorate is so disengaged from politics and the politicians.

Has anyone noticed how politicians are becoming more and more cocky when their expense claims are made public? The latest Labour Minister to get caught with his trousers down, metaphorically speaking, is Geoff Hoon. But he doesn’t even have the decency to be embarrassed.

He has reportedly been claiming a second home allowance for his Derbyshire home, whilst renting out his London property and living in a taxpayer funded ‘grace and favour’ property. Hoon, uses the same excuse as his other cabinet colleagues, stating that it is allowed to do this according to the rules governing parliamentary expenses. He then pours scorn on his detractors by claiming he doesn’t believe that he has profited out of the arrangement. Does he really take us all for being so stupid that we would believe such a ludicrous statement?

It is not the politicians that are corrupt, because, as so many have lectured us, it is all within the rules governing expenses. But I defy any of them to state that the system itself is not corrupt and who votes on MP’s salaries, benefits and pensions? Yes, exactly, you don’t have to be corrupt to fleece the public, so long as the system is corrupt and the rules obeyed. When David Cameron says “we are all implicated and we must all find a solution“, you just know they are all at it. Little wonder that the public believe our Members of Parliament are self-serving, inward looking chancers who seek to maximise their personal finances at the expense of (no pun intended) the taxpayer and in their usual contemptuous and arrogant manner.

This is further evidence, if any more was needed, that MP’s are completely removed from reality. We have Jacqui Smith claiming for two washing machines, whilst everyone else has to make do with one and now, Geoff Hoon benefiting from two taxpayer funded properties, whilst many people are losing their homes as a consequence of this governments poor handling of the economy. If they (Labour Ministers) are too inept to see that this is wrong, then why the hell are they still in Government? No wonder this country is in such a mess with the majority of MP’s more interested in their own purse than the public purse. I am very, very angry and so should everyone else be. It is high time that the public made clear that they cannot and will not tolerate such contempt from the very people that are supposed to be serving and representing us. This Government has introduced more laws than any other administration, restricting our freedoms and liberties and criminalising what had previously be acceptable, whilst at the same time, exempting themselves from the same standards and laws.

You don’t need the ‘Committee on Standards in Public Life’ to determine that this current expense system for MP’s is a rogues charter and corrupt. By referring this issue to the committee, Gordon Brown has merely delayed the outcome. Moreover, it is a virtual certainty, that he and his fellow ministers want the committee to look at the entire rewards system, doubtless so they can propose a phasing out of the current expense system to be replaced by higher salaries. NO WAY! MP’s cannot reward themselves with higher salaries based on the fact that they will be losing money because they are no longer in receipt of benefits received by way of a corrupt system. If MP’s are to be provided with ANY increase, it must be based on results, not rhetoric and empty promises, that way we, the public, can be absolutely certain that they have no chance of getting the extra money, because not one of them has ever delivered what they said they would. Smith, Hoon and McNulty must be required to repay every single penny of their second home allowance back immediately if the public are to retain any confidence in its MP’s. Further, if anyone else has claimed a second home allowance, regardless of party, in similar circumstances, they must also be ordered to reimburse the taxpayer. In addition, MP’s must give up the right to determine their own salaries, pensions and benefits, they have proven that they are not fit to do so, this responsibility must be passed to a committee of elected members of the public.

In another example of this government paying lip service to the rights and freedoms of the individual, The Joseph Rowntree Reform Trust, suggests that some 25% of government databases are actually illegal, either under Human Right Legislation or the Data Protection Act. As you would expect from a government that has slowly eroded our liberty and privacy, there is no apology or commitment to put things right, instead we are expected to accept a bland statement as follows: “It takes its responsibilities seriously and will consider any concerns carefully, adapting existing safeguards where necessary.” Take the rebuke the government received in December from the European Courts, in relation to the DNA database, have they done anything about it? No! In fact, the government doesn’t even know how many databases they have!

This year the government will spend £16bn on databases and they are committed to spend a further £105bn over the next 5 years. Has no-one reminded them that there is a deep recession going on? This government has indicated that it will have to raise taxes to balance the books, this includes increasing national insurance by 0.5%, raising income tax to 45% for those earning over £150k and an increase in VAT to 18.5%. This is in addition to the double whammy on fuel duties as a consequence of the fuel escalator and the shafting we were given when this government adjusted the fuel duty to take eliminate the “benefit” of the reduction in VAT to 15%. They will now gain that money back when they increase VAT back to 17.5%, because the duties will not be adjusted.

We are expected to pay additional taxes to this pathetic administration at a time when we must all trim back our costs whilst the government are continuing to spend £billions on unnecessary databases which only service to destroy individual civil liberties and right to privacy. It is the state gone mad. Take one of ‘their’ databases, Onset, this is a profiling tool which examines a child’s behaviour and social background to identify potential child offenders. What? They are now going to use information from ContactPoint and then profile it to work out who tomorrow’s criminal are likely to be. How long do you think it will be before they are using all of the data gathered from the various databases to work out how adults might behave? One thing they do not need a database for is to profile an MP’s likelihood to maximise their expenses, quoting their adherence to the rules, rather than the spirit of the arrangement. It doesn’t bear close scrutiny, yet their couldn’t give a toss what we think, so long as they have claimed as much as they can, without breaking the rules.

But, don’t think that the Conservative Party will do anything to redress these massive state powers that have been ceded to ministers through the introduction of ever more draconian legislation, the Conservatives have said virtually nothing. Cameron hasn’t got the backbone to deal with this issue, no he prefers to talk about “social cohesion” and tell us that we must all accept higher taxes, even though he doesn’t know how much money he could save by curbing public sector excess and waste. Gordon Brown maybe deluded and an idiot, but Cameron is also demonstrating that he is a bit of a prat, because he can’t see how angry the people of this country are, not just with the government, but the opposition who have sat idly by and allowed it to happen.

The reality is the majority of the people in this country are so complacent, they haven’t got a clue that this massive land grab of state power will affect each and everyone of us in the future, irrespective of whether we have done anything wrong. This is so clearly not about fighting crime and terrorism and anyone that believes otherwise is at best, naive and more likely, plain stupid.  No government will ever hand these powers back, so unless we start to fight back now, we will have to accept that each and EVERY aspect of our lives will be recorded and monitored. That is not a free democracy, it is a police state. Me, well quite frankly, I have had enough!

Whatever the government tries to tell us, the new travel database has little to do with securing our borders and more to do with controlling and monitoring the activities or each and every British citizen. In fact, with the new telecommunications database, which will monitor every email, text message and mobile phone call, this governments access to our personal data will be akin to a prisoner having a tag fitted, except, it will be on 61m people.

For those that believe the travel database won’t affect them, then think again, as many as 1800 government and private agencies will have access to our personal travel details. Anyone that believes this information will only be used by government agencies with responsibility for border controls is at best naive. Let me give you a couple of examples of what this information could be used for.

If you have children of school age and decide to take them out a week before their school break to save money for your annual holidays, then you should be aware that the travel arrangements will be recorded. The school could then, theoretically at least, access this information and commence proceedings against the parents. Yes, you can argue parents shouldn’t do this, but it is worth nothing that as many as one third of all parents do.

Suppose you regularly go abroad for your booze and fags, these journeys will now be recorded, as will your luggage. As a consequence, if the HMRC deem that you go too often they could seize the goods, seize your vehicle, fine you, prosecute, you or all four!

Maybe you earn air miles as a result of your business or work. If you use air miles or some other voucher to pay for a personal flight, then this will be recorded. How long do you think it will be before the HMRC cotton on to this and send you a bill for this ‘benefit in kind’?

Perhaps you are lucky enough to win an incentive from your company which includes overseas travel or, maybe you have been invited by a supplier for a conference or the like. Strictly speaking, you should ascertain whether or not this would be considered a ‘benefit in kind’, if so, you must declare it on your tax return. If you get it wrong, forget to include it on your return or try and get away with it, HMRC will know, because the details of the trip, including the cost and who paid for it will all be recorded. Do you really think they won’t be looking?

Lets say you have saved up for a trip of a lifetime, or perhaps one of your relatives have contributed to the cost, the HMRC will be able to check the cost of the travel arrangements against your earning and if it is above an accepted average, it could trigger an investigation. Granted, it may be perfectly innocent, but the onus will be on you to prove how the trip was funded, this may mean you having to detail your income and outgoings for

decades. If you have a perfect record AND you can prove it, then you have nothing to fear. If, however, a relative, has gifted you money, whether for the trip, or at some other time, unless it is below the annual gift threshold, then the gift could be subject to tax. If you haven’t paid the tax, you can also expect, at the very minimum, a fine, but they may also prosecute. So, you still think the travel database won’t affect you?

Remember, these new controls will include monitoring how much you spend whilst you are abroad, so if you normally buy a few gifts, electrical items, DVD’s, clothes etc., and you don’t bother declaring them, then think again. Because they will know how much you spent, where and, of course, if you declared these goods when you returned to the UK. How many of the “nothing to hide, nothing to fear” brigade can claim to have a perfect record I wonder?

So, if you have never carried out any of the above and you don’t intend to, you are almost certainly in the minority, therefore it may not affect you.

Unless, of course, there is something that I have missed out and you can be certain, that this Government is well ahead of the game. They have even looked at it as a revenue generating scheme by threatening anyone who does not register their travel details with a fine of up to £5,000, as always with this government, it is always stick and no carrot.

For example, this database and UK Border Controls will also start to collect fingerprints, how long before they require other bio-metric data, remember, the Government wanted to include this information on ID Cards, but because there was such an uproar, they are intending to collect it using other means,

in this case, anyone that travels abroad and that is most of us. This Government are just hoping that we are too stupid to notice that they are simply gathering this information via another means. We have seen the government agencies sell our personal data to private companies, one example is the DVLA who have provided parking companies with the name and addresses of vehicle owners, so that they can be hounded for parking fines. How long before they are selling our travel arrangments to airline companies and the like?

Our government consistently lie to us about why they need so much data, constantly harping on about terrorist threats and so on. The reality is, determined terrorists will always be able to get in through our porus borders, they know how to get virgin passport; spying on the travel arrangements of 61m people will NOT prevent terrorists (who may be here anyway) from entering the UK, nor will it stop people being smuggled into the UK. Instead, all it will do is allow the state to terrorise the people of this country. Is this really what you want?

The LibDems, and no I am not a supporter, do at least appear to want to roll back government intrusion with their Freedom Act, lets hope that they will have some success and the electorate will start to understand just how intrusive government has become into our everyday lives.

The Arrogance of Power

Amidst massive public opposition, this government decided to send out troops to war in Iraq, now they have used a clause in the Freedom of Information Act to block the release of details of meetings in which the war’s legality was discussed. This decision was made by Justice Secretary, Jack Straw and supported by his cabinet colleagues. Straw claims that releasing the minutes would do “seriously damage” to Cabinet government and this outweighed any public interest considerations. Just who the hell does he think he is? This government sent our troops to war, far too many soldiers have lost their lives as a consequence of that decision and the war has cost £billions, yet I haven’t met a single person that supported it. So, in spite of the fact that the government went against public opinion, justified the war on what were at best ‘flaky’ grounds and our soldiers are dying every week, this government does not believe we have the right to know why, how they reached their decision and on what evidence? Does this suggest that this pathetic excuse for a government with spineless cabinet ministers believes that, whilst the people of this country are objective and mature enough to vote them in, that we lack the maturity, gravitas and objectivity to form our own opinions on what this government did in OUR name? Does the arrogance of this government have no limits?

Whilst there may be some justification in using a ministerial veto where national security is in question, it is an abuse in the extreme, to use it simply to save the blushes of those that were party to a decision to take this country to war. Is there a more serious decision for a government to take, than committing their country to war, what possible justification is there in hiding the justification? This is what Jack Straw had to say “there is a balance to be struck between openness and maintaining aspects of our structure of democratic government.” Forgive me Mr Straw, but the commonly held definition of ‘democratic’ is ‘constructed upon the principle of government by the people’. Perhaps what Mr Straw meant to say was authoritarian?

If that was not bad enough, The Conservatives are  quoted as saying the decision was “right” since the release of the minutes would make ministers more reluctant to discuss controversial subjects in future, impeding good government. That is utter crap. We are ALL supposed to be responsible for our decisions, unless or until we are judged to have been incapable of knowing right from wrong at the time. So what gives Cabinet ministers an exemption from common law or makes the Conservatives believe they should be? If ever there was clear evidence of MP’s believing they are a cut above the rest of us, and exempt from the same rules that the rest of us have to abide by, this is it. From the mouths of a senior cabinet minister and a spokesperson for the Conservatives.

David Howarth, Justice spokesman for the LibDems said the decision was “more to do with preventing embarrassment than protecting the system of government“. That just about sums it up, this veto was used to save embarrassment, to protect reputations. In a New Labour democracy, we are not entitled or trusted to form our own opinions on the basis of the facts. What particularly disgusts and shocks me is the fact that Cameron’s conservative party should also support this veto, Cameron should be ashamed and, if he is so contemptuous of the British people, Cameron does not deserve to be elected prime minister of this country.

How can the government of any modern democracy refuse to entrust the electorate with the reasons they decided to take us to war? If the government has nothing to hide, then why do they refuse to release the minutes? Surely if they were fully justified in sending our troops to Iraq, then the minutes will attest to that fact? Of course, Jack Straw is not a particular fan of open government, but this was a decision that had to be agreed by the current cabinet, many of whom were not party to the original meetings. Why did the Cabinet support the use of this ministerial veto based on the grounds of vanity? Perhaps they truly are spineless, maybe they are contemptuous of the British public, or simply willing to cover up for their former masters and colleagues? I don’t know, but something stinks!

Amongst all the dramatic events of this week, Gordon Brown has decided to announced a review into the cost of the final salary pension schemes offered to MP’s. Now, here is a man of action, we all know that when Mr Brown wants to grab the headlines with some ‘good’ news, he either announces a review or an inquiry. In the case of the former and, arguably the latter, nothing happens. In other words, say something, do nothing….the unnofficial cry of Gordon Brown and his Labour party.

Over the past 10 years or so, any final salary schemes within the private sector have had to be curtailed or withdrawn. In fact, some pension schemes have even collapsed completely because of the increased costs associated with Mr Brown’s tax attack on private sector and personal pension schemes. This tax grab has contributed in excess of £100bn to Treasury coffers over the past 10 years and ensured that many, many people that have contributed to pensions for most of their life, now have to struggle or rely on state handouts or means tested benefits. A real man of the people our Mr Brown.

Meanwhile, MP’s continued to benefit from what has been described as one of the best pension schemes in the world. Even taking into account that  our MP’s have a gold-plated pension scheme, the total cost is marginal when compared with the actual cost to the taxpayer of funding the generous, final salary schemes offered to public sector workers. The additional cost last year, to the taxpayers of this country, for the pension scheme our members of parliament enjoy was £12m. Quite a lot of money when you consider that this top up is paid out of future tax revenues, rather than an annuity. However, the estimated cost of the public sector final salary scheme is, by contrast, staggering and rising fast! 

Pension schemes for local government officers and MPs are funded but, five million people, including civil servants, teachers, NHS staff and members of the Armed Forces, are enrolled in schemes for which no money has been set aside. In 2006, the Government estimated the cost of these unfunded liabilities was £650bn, it has since been estimated that our public sector pensions deficit is £1,071 billion. Now that IS a big number!

According to the Treasury’s own figures, the annual cost of paying public sector pension schemes is 1.5% of GDP and this is expected to rise to 2% over the next 50 years. Lets put that into perspective, the annual cost to the taxpayer of these unfunded public pension schemes is currently £22bn, or if you prefer, equivalent to a reduction in direct taxation of 4p in the pound, or to put it another way, £900 for every family in the UK. But, over the next 3 decades, it is estimated by the IEA that this will increase to £76bn a year, enough to complete more than two banking bailouts or 250 new hospitals every year.

So, Mr Brown, lets see some action, not reviews. Yes, by all means he should tackle the issue of MP’s final salary pension schemes, but he must also, finally grasp the nettle in relation to public sector final salary schemes. A failure to do so will result in either, a significant increase in taxation or, an inability to honour the existing scheme. Average salaries within the public sector are now higher than those within the private sector, similarly pension schemes are on average, some 15 times more valuable within the public sector. 

Ultimately the taxpayer is expected to fund this financial burden, in addition to an ever increasing headcount within the public sector and it does not take Einstein to work out that it is simply not sustainable, in a booming, let alone a contracting economy. It is high time that public sector pensions were brought in line with the private sector, in terms of the type of benefits and the way they are funded.  It is time to act decisively, no doubt Mr Brown will once again, shy away from anything so commendable. Say something, do nothing

Despite all the political grandstanding surrounding the proposed bonuses to be paid to RBS staff, there is little that can be done about it and the government knows it. Don’t get me wrong, I am completely against the payment of bonuses to staff when the very fact that they still have a job is down entirely to the intervention of the government with taxpayers funds.

However, the fact remains that the vast majority of the staff will have some form of contractual entitlement to a bonus; the senior bankers know this and so do government ministers. For example, it is estimated that some £500m is due to be paid to ABN Amro staff and this was a pre-condition of the original sale of the business to RBS. If senior managers don’t honour their employment contracts, then they could very quickly find themselves in breech of contract and you can rest assured that there will be a massive queue of lawyers offering to take up their cases.

Gordon Brown is reported to be “very angry“, well, bully for him,  what difference will his temper tantrum make? None! Treasury minister Yvette Cooper said any contractual or legal obligations on banks to pay bonuses at a time when they were making huge losses must be “challenged“. Yeah right Yvette, you know that there is little or nothing that can be done about it, which is why you squirmed so much when John Snow put some eminently reasonable to you on Channel 4 News last night. Alistair Darling is quoted as saying “I have spoken to the chief executive of RBS, and made it quite clear, and he agrees, that no-one associated with these huge losses should be allowed to walk away with large cash bonuses.” Quite right Mr Darling, but this is a legal issue, not a place for political rhetoric.

Even David Cameron demonstrates how out of touch he is by stating “As the principal shareholder, you are able to say what is and what is not acceptable.” True Mr Cameron and that is precisely the point, but you cannot do it retrospectively, if you had any business experience you would know that, unless of course, you are simply taking us all for fools.

The truth is this government rushed into “saving the banks from collapse” and in doing so, they left any commonsense back in the office. So keen were they to be seen as the saviors of the banking world, they did not complete any form of due diligence. I know that ministers and civil servants can often be accused of rank incompetence, but this goes off the scale. No experienced businessman and I mean not one, would blindly invest into a business, however urgent the need, without completing a full review of the business. As one contributor stated on one of my recent posts on the RBS fiasco;

Due Diligence is only half of the required formula for meeting the requirements under “Standard of Care” or “Due Care”. Due care is the second half of the diligence formula and equally as important. For without it, the standard of care can not be measured.

Performing Due Diligence identifies where investment risks or exposures lie, due care is exercising the requirements discovered under due diligence to protect or mitigate exposure from those risks.

Not only has the PM missed the first but importantly government has neither the resources, skills, or initiative to deal with the second which is what ultimately leads to failures.

In the normal course of events, due diligence would have uncovered that there were, amongst other things, contractual liabilities to pay bonuses; this would have included an estimate as to the likely cost. Had the government and its advisors acted with a reasonable level of care, arguably, this whole situation would have been avoided. Government could, for example, have included conditions which required staff to sign a waiver in relation to their bonuses. Alternatively, they could have been made redundant and re-employed on new contracts, the business after all was likely to collapse. Those that were expecting large bonuses, but had been party to significant losses, could have been warned that if they attempted to exercise there ‘bonus guarantees’ they could expect to be dismissed with immediate affect and could face a claim if they had acted recklessly or without a reasonable level of care.

I am not an employment lawyer, but I am convinced that there were (’were‘ being the operative word), any number of imaginative ways in which government ministers could have avoided this massive kick in the teeth to hard pressed taxpayers if they had acted with foresight and were in receipt of legal advice. Instead, once again, the rank incompetence of government ministers has cost UK taxpayers £billions.

There have been justified cries for the bankers to pay back their bonuses and even suggestions, quite rightly in my opinion, that traders should be sued for bonuses paid on what have subsequently turned out to be ‘questionable or toxic’ investments. These are perfectly justifiable initiatives, but what about the government ministers, surely they are equally culpable? Leaving aside the issue of regulation and so on (pre-bust), government ministers ordered a massive injection of taxpayer cash into banks without fully understanding the liabilities and obligations therein. At best, it demonstrates incompetence of the highest order and at worst, that they do not appear, based on the evidence currently available, to have demonstrated a reasonable standard of care.

This current political grandstanding and rhetoric is nothing more than a smokescreen designed to divert attention from the incompetent management of the whole banking crisis by members of this government. New Labour ministers have proven themselves to be incapable of humility, unable to accept any form of personal responsibility and aggressive towards anyone who would question their intent. That is arrogance in its most basic and crude form, the people of this country must not let them get away with it, government ministers must be held to account and accept moral and legal responsibility for their actions. Anything less would be an outrage to the people that will have to pay the price over the coming decades.

At a time when we should all be considering tightening our belts, the government of Big Brother Britain has decided to set up yet another database to spy and record details of British citizens travel arrangements. Once again, this has is being justified on the pretext of national security. Quite apart from the fact that this government has proven itself incapable of introducing working databases on budget, the fact remains that it is entirely unnecessary. This database has nothing to do with security and everything to do with government control over its citizens. There is simply no way that this government can justify spying on 60m people in order that they can track, at most, a few thousand potential terrorists.

This is in addition to the governments intention to record every email, text message and telephone call, plus our Internet browsing habits. It is high time the British public started asking why on earth this government needs so much information on its citizens. It is estimated that the Big Brother Britain database for spying on calls and Internet traffic will cost £12bn, it is therefore, reasonable to assume that this latest database will cost at least 50% of the costs, therefore another £6bn, minimum. These two databases are equivalent to the cost of 300 new hospitals!

Once again, thus far, the opposition parties have been noticeable by their absence, they should be refusing to support this oppressive, civil liberty busting voyeurism of this Labour government. They should be promising to scrap such databases or repealing legislation that permits the collection of this data. There has been a complete lack of any justification by this government, presumably to ensure that there is as little publicity as possible whilst they try and sneak this programme through the back door.

Wake up Cameron, wake up Clegg and wake up people, this is becoming completely unacceptable, in terms of our liberty, right to privacy and of course, the excessive cost at a time when we can least afford it. We are already spied on by some 4m cameras, information on our children, their welfare, schooling, carers, health and so on is already being stored in a government database. This government is introducing a cradle to grave spying programme on its own citizens, it is time to say enough is enough. It has already been noted that we are one of the most spied on nations anywhere in the world, alongside places such as North Korea. Surely that must ring alarm bells for even the most complacent British citizen?

This latest database will store names, addresses, telephone numbers, seat reservations, travel itineraries and credit card details of travellers. The notion that if you have nothing to hide, then you have nothing to fear is total nonesense. Why? Because is presupposes that the people that have access to this information will use it for legitimate purposes. How can we be certain when this government has already allowed thousands of agencies, public and private access to our personal information that is already stored? Enough is enough, stand up and be counted people, and Mr Cameron, get off your backside and say something, either you support this destruction of our civil liberties, or you must fight against it, show some backbone, prove to the people of this country that you are not a lighweight. Say no to Big Brother Britain - RESIST!