LibDem Policy Wonk

Mass Exodus of the True Liberals?

noreply@blogger.com (Antiochian) — Fri, 06 Jun 2014 11:30:00 +0000

The Liberal Democrat Party in its current form is the product of schism. Not a few of the current membership are where they are because of the recombination of the SDP with the Liberal Party. Having come down in a more recent shower, it all looks to me like they have got on rather well together over the decades.

As a student of politics beyond Libdemmery and beyond the UK, the subject of schisms is one that has interested me for a long time, indeed back to Luther and his 95 Theses.

However if we look at the UK we can note in the last 100 years that:

The National Liberals were a split off to the right of the Liberal Party

The SDP was a split off to the right of the Labour Party

The UKIP were a split off to the right of the Tory Party

What next? A split off to the Left of the Liberal Democrat Party?

Or should we say a split off to the centre of the LibDems?

The events of recent weeks have shown that the leadership are self-centred and interested in survival only in the very narrowest sense of survival of themselves. It is possibly the most selfish clique that have ever ruled the roost at any British political party. It certainly helps that the Leader sits in what is deemed to be a safe seat, that the party President sits in one of our safest seats and the Grandee Numero Uno sits in the Lords.

The logistical problem for potential schismatics is that we are essentially Liberal in all our aspects. Even those to the left of the dissident group are economic liberals.. so why should be eschew the name that is most appropriate. Indeed we are the liberal faction of the LibDems while the continuators are crypto-conservative in the true sense that they are non-changing and resistant of change. They have the curious paradox that most accept that a massacre of the deepest and most violent nature awaits them under the current leadership should they persist with their current path through to May 2015 and yet they cannot and will not change. This is truly conservative. To the less charitable they would be called the pusillanimous faction while to the more charitable they would be called the "nice" faction. They don't want to ditch the leader because he is a "nice chap" and they are "nice activists".

Therefore Realpolitik rules the dissidents, while manners rule the continuators.

So where do we stand money-wise... well with party finances devastated by a decadent Euro-election campaign and our funding allocation brutalised by the fact that we lost all but one of our MEPs we now are at the mercy of memberships and donors. The bigger donors are business people (yes..) and know a losing business proposition when they see one. Today they are being told.. donate here.. it will be wasted money because our slogan has gone from "Winning Here" to "Not Winning Here, but We Don't Care". Then we have also lost all the campaigning income and advantages that came from incumbency in all the councils, MEP and council seats we held. The much vaunted membership push will peter out. Essentially it is a financial tabula rasa. Brace yourself for increasingly desperate pleas for money to prop up the Ancien Regime.

So with a blank slate money-wise, policy-wise and membership-wise, the mind turns to the hypothetical. Months ago there were vague burblings about the creation of a National Liberal force to split off "to the Left" of the Tories. In the warped mind of the likes of Grant Schapps this was to be a quasi-liberal Potemkin Village, which would fool nobody. In practice though it might be led by the likes of the Bright Blue crew on the left of the Tory Party. It would also encompass the supposed Orange Bookers of the LibDems. While I don't hold the Bright Blue faction in any disdain, though some of its members have threadbare liberal credentials, I wondered how many of them would be able or willing to make the jump to this outsourced entity. I even wrote a couple of postings analyzing their "potential".

However a Liberal Party already exists, to confound the ambitions of such theoreticians. A visit to their site reveals a party has a fair smattering of councillors around the country and moreover they managed to field more candidates in Liverpool (so recently a LibDem stronghold) than we did in the 2014 council elections. Moreover, if things keep going the way they are they have the possibility to overhaul us into second place in seats like Liverpool West Derby.

Thinking of course like a true investment banker (can't help myself) this looks like what we would call a "shell company" on a Stock Exchange which is ripe for taking over and reconversion to a new purpose. What purpose might that be if not the rehousing of the dissidents, the realists and the thinking portion of the current LibDems?

Too much work, we hear you say.... Is it really though when compared to the almost Sisyphean task of pushing a rock uphill within the LibDem party between now and the next election? Compared to rustling up 75 branches to oust the current LibDem leadership? Then there is the five years after... If the current membership are too polite or paralyzed (pardon my French) to accurately respond to the current debacle.. then who is to say they will not just accept going on post-2015 with the current leader and a rump of 25 MPs?

What does a political party need? A name, a policy, a campaign crew, a modus operandi and members. All of those are to hand. Indeed the fact that so many of the members of the dissidents are hard-core activists rather than mere couch potatoes or fair weather LibDems gives schismatics an advantage. It hits the ground with feet running. Maybe even some of the LibDem sponsors might view a Liberal reincarnation as more worthy of support. It would definitely glean supporters in the Lords and maybe some of our MPs would be on board (particularly those with a stronger policy orientation or merely a heightened survival instinct).

PPCs, councillors (surviving and those ready to reenter the fray), activists and plain vanilla members have shown themselves to be supportive of change.

This is NOT a Orange Book/Yellow Book dichotomy..this would be true liberals, centrists... this is those with the survival instinct reaching out for the lifebelt against those who prefer "death with dignity", mistakenly feeling that loyalty to a defeated leader will someone how secure them redemption in some political afterlife. Political afterlives only exist for the likes of Tony Blair, Bill Clinton and George Bush with book contracts and speaking engagements, not for the likes of the defeated LibDem councillor in Over Toadswallop ward.

So the choice has been made stark. A supposed "majority" of Cleggites have welded shut the submarine hatch and the aged Captain Paddy screeches "Dive, dive" down the communication tube. However we are still on board. We can exit through the torpedo tubes while the leadership maniacally go where no political party in its right mind has ever gone before or we can end up as fish-food.

To quote some Dylan Thomas:

"Do not go gentle into that good night,

Old age should burn and rave at close of day;

Rage, rage against the dying of the light".

Nick Clegg's Crisis of Legitimacy

noreply@blogger.com (Antiochian) — Sat, 31 May 2014 20:21:00 +0000

There is a very good reason why, traditionally, political party leaders that have lost 66% of their party's vote base stand down, its because they have lost 66% of their vote base.. to state the obvious. Having lived all around the world and in various different political systems, I would note that a leader that has lost 20% of the base is usually history (let alone as the epic scale of our recent percentage demise).

Such leaders almost always stand down.. and if they don't then they are subject to a vote, which they almost invariably lose.

In this case the leader has not stood down.. he has not been subject to a vote and instead his supporters take comfort in a barely positive endorsement produced by an ad hoc poll open only to the denizens of this forum.

This produces a crisis of legitimacy that will not go away. For a party that has the word "democrat" in its own name, we cannot expect the voting public to regard our leader's ongoing incumbency as legitimate if he will not subject himself to a vote except via the torturous processes laid out for such a vote (e.g. rustling up 75 associations for such a move).

The loyalists have said so far "see, they cannot get the votes" which in light of the fact that it takes 14 days at least, is extremely churlish on their part.

Any leader confident of his support would throw himself open to a party plebiscite, instead we have obfuscation and classic lines like "I never considered resigned" or Baroness Williams' twist on it that "he considered it and dismissed the idea". This implies that the debate on leadership took place (or not) within the head of the leader himself and by general acclaim of his neurons the case was won and settled.

If a sizable proportion of the membership (not a majority according to the loyalists) do not regard the leader as suitable to lead any more then legitimacy has been questioned and that question will not be lifted or erased by blithe dismissals, no matter how many times they are repeated.

It is time for Nick Clegg to reaffirm his legitimacy, if it truly exists, via throwing himself open to a contest..

Aux armes, Citoyens!

noreply@blogger.com (Antiochian) — Wed, 28 May 2014 08:41:00 +0000

Arms, and the man I sing, who, forc'd by fate,
And haughty Juno's unrelenting hate,
Expel'd and exil'd, left the Trojan shore.
Long labors, both by sea and land, he bore,
And in the doubtful war, before he won
The Latian realm, and built the destin'd town;
His banish'd gods restor'd to rites divine,
And settled sure succession in his line,
From whence the race of Alban fathers come,
And the long glories of majestic Rome.

The Aeniad, Virgil

The "survivalists" find themselves expelled within the party. Unwilling to join the joyous strapping on of the suicide belt by the coterie gathered around the Leader they face the unpalatable task of being left around to pick up the pieces post-May 2015 or hoeing some road outside the party. Why should those that have worked so hard and thought so hard and given so much be sidelined by the personality politics of the current leader?

To some extent we should look forward, gather our troops into their fortresses dotted across the landscape.. keep our policies honed.. our organisation intact.. preserve our own, as his cannon fodder march forth to their unthinking doom in the withering fire..

Past history has shown that some LibDems can win when all about them are losing their heads...if it is to be a massacre of the innocents, there is no reason why we should be so foolish as the "loyalists" and cast ourselves also onto the bonfire of his vanities.

A grouping, faction, tendency should be born, neither Orange nor Yellow, but survivalists.... continuators. Determined not to go gentle into that good night. Leaderless maybe but collectively driven by liberal principles leavened with Realpolitik and a determination to see our policies propagated and prospering. We shall gather concerned members, activists, PPCs, MPs, ex-MEPs, polemicists, policy mavens, fellow travellers and well-wishers. We shall harbour our rations, conserve our strength, write and deliver our Focuses and think big, but practical, thoughts.

We shall target our seats, cultivate our associations and branches, mind our beacons on the hilltops.. protect our own.. until the day when the deadweight of expediency and slavish sycophancy is cast off.

Aux armes, citoyens! Formez vos bataillons...!

What might be achieved over the next year...if...

noreply@blogger.com (Antiochian) — Sat, 24 May 2014 11:25:00 +0000

...we drop the pilot overboard in a timely fashion..

And by timely I mean in the next few weeks. We could muse upon who a new Leader might be but whoever it is I feel it is important that that person NOT become Deputy Prime Minister and that the party takes its distance from the Tories both on policy and style and also physically by NOT having our Leader sit cheek-by-jowl in the House with the PM and his cohorts. We need some distance and their is absolutely NO way that that distance can be made by having constant photo opportunities with the PM no matter much that may have massaged the ego of the outgoing incumbent. Neither is it desirable that our Leader address and justify Tory policy as has been done at DPMQ time.

We will NOT justify policy of anything but our own ministries and we will not justify policy retrospectively if it was not made by LibDem incumbents.

Joint appearances should be kept to a minimum, if not totally eliminated.

There should be a portfolio reshuffle with us gaining, controlling and reshaping ALL those ministries that our ours in our image.

Ministries should NOT be shared with Tories except where they are thematically focused sub-ministries, such as rail transport.

The great failing of the initial Coalition negotiation was that the party regarded the allocation of Ministries in the same way as a (bad) Monopoly player regards the board. We ended up (as the eventual losers in Monopoly do) with a big collection of low-rent properties and lost our shirts every time we went round and landed on Mayfair and Park Lane. No more Old Kent Road for us...

It is not too late to remedy this. The Tory incumbents at Environment and Local Government are the runts of the Tory pack and have shown themselves to be incompetent (the floods) and inadequate over the very long term. This is what we should demand.

Portfolios:

Housing & Development

Local Government ~~and Communities~~

Environment

Energy ~~and Climate Change~~

Business, ~~Innovation & Skills~~

Culture

Pensions

Rail Transport

Scotland

Treasury (the junior minister)

Wales (the junior ministry)

The Admiralty (just have to give a plug for my personal interest)

What? No education?! No Europe?! No foreign aid (sorry International Development)?! No Home Office?! Yes, you read correctly...

Allocation:

Housing & Development - Vince Cable - shrinking the upper threshold for Right to Buy to $350K. Initiating a construction surge in one and two bedroom units to defang the Bedroom Tax issue.

Local Government - Tim Farron - to reactivate the base

Environment - Norman Baker

Energy ~~and Climate Change~~ - Ed Davey, despite his tendency to hobnob with the oppressors of the energy consumer. The new focus should be on shutting out and disenfranchising rogue operators. No rises above inflation. Encourage local government to enter energy distribution.

Business, ~~Innovation & Skills~~ - Jeremy Browne!

Culture, Media ~~& Sport~~ - Nick Clegg

Pensions - Steve Webb

Rail Transport - Anyone but Baroness Kramer (the deaf-mute and invisible current "representative" of the LibDems at Transport)

Scotland - Alistair Carmichael

Treasury (the junior minister) - Danny Alexander

Wales (the junior ministry) - Baroness Randerson

The Admiralty (just have to give a plug for my personal interest) - suggestions?

The rest of the junior ministers are pretty invisible and ineffective where they are located. It would be better if they were the junior ministers at "our" ministries.

Hoped for Outcome

With economic recovery in train the biggest threat to recovery is the ridiculous and irresponsible over-heating of the property market being fanned by the Right to Buy program. Vince Cable can expand his dialogue on this, shrinking the upper limit and staking out the LibDem claim to be economically responsible. Unemployment is on a downtrend and real incomes are upticking. This will bring credit to us if we create a cogent policy dialectic and this is where Vince Cable would win hands down over the current leader. At the same time we need to stop looking like ciphers or glove-puppets of the Tories. The current leader is unable to effectively make that dichotomy because essentially he is "cut from the same cloth".

Basically the goal is to get support back to 16% by May 2015, maintain all our current seats (losing 2-4 to Labour maybe) and taking 5-10 from the Tories.

Setting Portsmouth (and the Royal Navy) Free of the Dead Hand of BAe

noreply@blogger.com (Antiochian) — Fri, 28 Feb 2014 20:38:00 +0000

Many in the party hoped the issue of the Portsmouth shipyard closing would go away but I haven't forgotten it and nobody else should either. Maintain your rage! It doesn't help that our party while claiming to be a "party of government" and with pretensions to lead rather than just be a junior player does not have a defence policy (let alone a foreign policy).

To refresh those that have already swept it under the doormat of their memory, BAE announced last year that it was cutting 1,775 jobs nationally, including 940 at Portsmouth where it would no longer build new ships, and 835 split across Glasgow, Rosyth and Filton (which is outside Bristol).

Been pondering the fait accompli nature of the response by almost everyone. The action is extremely short-termist and presumes that just because Chinese gunboats are not on the horizon now that they won't be in the future. Dismantling a skillset is different from mothballing a facility. Shipbuilding is a very skilled activity and once its gone its gone. Not everyone can be made into Rosie the Riveter overnight and it is not as simple as riveting anyway.

That leads us to ponder where the fault lies. Clearly the government's shipbuilding campaign is torpid to say the least but it would not take much in the way of contracts to keep Portsmouth ticking over. Two ships under construction (and they don't even need to be particularly high-tech) would achieve the goal. We might remind everyone of the supply vessels that were farmed out to Korean shipyards to build.

Where does the problem lie? Probably where it usually lies in the unholy alliance between defence contractors and the mandarins of the DoD. In this case the culprit is the über-defence contractor, BAe, a creature that should never have been allowed to be created. Let's get inside the head of the bureaucrats (I used to be a rather low-level one). The usual political battle-cry in defence contracting is cost. The best way to get lower costs is a wide tendering process. However if you don't really want to give the contract to some tiddly little firm (not that tiddly little firms are even if the running) then the best way to ensure the contract goes to whom you want to receive it is to shrink the field to as few players as possible. Even better if you can get it down to one. Thus we can see why the mandarins favour the shrinkage of the defence contracting industry in the UK, with its plethora of costly must-have hardware, to be reduced to a subset of one. No-one can criticise you for giving an over-priced contract to the local player when the local player is the sole player.

In other industries, of course, a universe of one would be regarded as anti-competitive and stomped on from anti-trust grounds (excuse me for using US-speak) at the point that the reduction in the field was first mooted. However defence contracting seems to have had a forcefield that has allowed this "rationalisation" to take place with the effect that not only does the public purse pay more through uncompetitive (field of one) tenders but the corporate entity to a certain degree gets to call the shots. When BAe decides to shut a vital shipbuilding facility it is really usurping defence policy from the DoD (not that we agree with the DoD even existing for those who have not seen our views on reviving the Admiralty).

So where has the Godzilla that tramped on UK naval shipbuilding come from?BAe was formed in 1999 by the £7.7 billion merger of Marconi Electronic Systems (MES) – the defence electronics and naval shipbuilding subsidiary of the General Electric Company plc – and British Aerospace – an aircraft, munitions and naval systems manufacturer.

BAE Systems is the successor to various aircraft, shipbuilding, armoured vehicle, armaments and defence electronics companies, including The Marconi Company, the first commercial company devoted to the development and use of radio; A.V. Roe and Company, one of the world's first aircraft companies; de Havilland, manufacturer of the world's first commercial jet airliner; British Aircraft Corporation, co-manufacturer of the Concorde supersonic transport; Supermarine, manufacturer of the Spitfire; Yarrow Shipbuilders, builders of the Royal Navy's first destroyers; and Vickers Shipbuilding and Engineering, builders of the Royal Navy's first submarines. Since its formation it has made a number of acquisitions, most notably of United Defense and Armor Holdings of the United States, and sold its shares in Airbus, Astrium, AMS and Atlas Elektronik.

More specifically as it pertains to Portsmouth the origins of the problem there were related to the many corporate twists and turns at VT Group plc. That company the defence and services company, formerly known as Vosper Thornycroft. The company had diversified from shipbuilding into various engineering and support services, becoming involved in many areas of provision through five main operating groups: VT Communications, VT Education and Skills, VT Services Inc and VT Support Services. VT Group finally exited the Shipbuilding industry in October 2009, after selling its 45% share of the Shipbuilding Joint Venture company BVT Surface Fleet to BAE Systems.

The company was formed by the merger of two shipbuilding companies Vosper Limited of Portsmouth and J I Thornycroft of Woolston, Southampton in 1966 at which time the Company became listed on the London Stock Exchange as Vosper Thornycroft. Vosper Ltd built small boats and J I Thornycroft had a long history of building destroyers and similar sized craft. The company was nationalised by the Labour Government in 1977, becoming a division of British Shipbuilders. It became a commercial company again after a management buyout in 1985.

Vosper Thornycroft flourished even during lean times for warship building, mainly through successful sales efforts in exports and diversification outside of the core shipbuilding business into training and support. In 1998, Vosper Thornycroft acquired the specialist military boatbuilder Halmatic, based in Portchester.

From its formation in 1966, the company was based at the former Thornycroft shipbuilding yard at Woolston in Southampton but in 2003 relocated its shipbuilding operations to new facilities in the famous HMNB Portsmouth Naval Dockyard under the name VT Shipbuilding. In 2008, VT Shipbuilding was merged with BAE Systems' Glasgow-based Surface Fleet Solutions subsidiary to form BVT Surface Fleet. The VT Halmatic boatyard site in Portchester was also sold off to Trafalgar Wharf, with Halmatic also moving into Portsmouth Naval Base.

On 28 January 2009 VT Group announced its intention to sell its share of BVT Surface Fleet to BAE Systems. And that in a nutshell is how we arrived at BAe getting to "play God" with the UK's naval policy.

Its not even as if BAe has been such a great shipbuilder. One need go no further than the exceedingly mediocre performance of the HMS Dauntless (the Lego-like vessel pictured above), with its repeated technical SNAFUs to work out that bigger does not necessarily mean better, as BAe is not immune from delivering lemons. The sister ship, HMS Daring, has had problems as well.. now we just need another of these billion pound each ships to come down with a technical failure and BAe will have hit three lemons in the fruit machine. All of us (and the Royal Navy) are the losers. Whichever way it plays, BAe wins with its sycophants embedded in the DoD.

What would I propose here? To put it bluntly... I would suggest forcing BAe to divest all its naval shipbuilding activities, ideally into at least two competing entities. The one in Portsmouth could be partially capitalised using the money that BAe wants the government to pony up to pay for the redundancies as it downsizes its activities. An outrage if ever there was one.

Before anyone cries foul that we are trying to force BAe to divest assets it wants to keep, we might remind everyone that in May 2004, it was reported that the company was considering selling its shipbuilding divisions, BAE Systems Naval Ships and BAE Systems Submarines. It was understood that General Dynamics wished to acquire the submarine building facilities at Barrow-in-Furness, while VT Group was said to be interested in the remaining yards on the Clyde. Ironically it turned around with BAE Systems getting the upper hand, merging its Surface Fleet arm with the shipbuilding operations of VT Group to form BVT Surface Fleet, an aim "central to the British Government's Defence Industrial Strategy" according the Wikipedia article on the company. That gives us a bit of a chuckle (or it would if it wasn't so tragically opposite to what is really transpiring i.e. the dismantling of the UK's naval shipbuilding capability).

Clearly there are discrete business units that can be created out of this behemoth. The mistake has been in the UK government's current and past thinking that feeding BAe a constant stream of contracts, and rolling over whenever they wanted to perpetrate another consolidation,created a national champion to match the US players. In reality in the defence sphere one does not have super-sized national champions, one just has to have domestic capability. That is what is being foregone by allowing BAe to effectively decide naval policy in its boardroom.

Saving the City from Itself: a UK-Style Glass-Steagall Act?

noreply@blogger.com (Antiochian) — Thu, 27 Feb 2014 22:00:00 +0000

This brings us to the salary question for the class of banks that want to be buccaneering when things are good, and yet need to be bailed out when things go wrong. The old saw of "too big to fail". The clearing banks until recent times were notoriously parsimonious with their salaries and those chaps crossing London Bridge were wearing their one bowler hat that they had bought 15 years before. They had two suits if lucky.

The first cracks came in the 1970s as forex took off and the banks had to start paying their traders markets rates to not have their star traders poached. But poached they were. Then their money market dealers were poached. Then at Big Bang in came equity market makers and corporate finance people who were all paid a pretty penny. The days of banks matching the Civil Service in a race to the bottom on compensation were long gone.

So what are we proposing here....? in the first instance it has been shown by events post-2008 that banks both in the US and here will do whatever they can to resist restructuring their businesses to remove the risks that caused the problem in the first place. Even in the US banks were cheating in the 1980s to get around Glass Steagall which was not repealed until 1999.

So what was this legislation and what is its pertinence? The Glass Steagall Act was an act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment banking business. The Glass-Steagall Act was sponsored by Senator Carter Glass, a former Treasury secretary, and Senator Henry Steagall, a member of the House of Representatives and chairman of the House Banking and Currency Committee. The Act was passed as an emergency measure to counter the failure of almost 5,000 banks during the Great Depression.

The Glass-Steagall Act's primary objectives were twofold – to stop the unprecedented run on banks and restore public confidence in the U.S. banking system; and to sever the linkages between commercial and investment banking that were believed to have been responsible for the 1929 market crash. The rationale for seeking the separation was the conflict of interest that arose when banks were engaged in both commercial and investment banking, and the tendency of such banks to engage in excessively speculative activity.

What if the UK was to introduce a Glass Steagall Act of its own? The purpose would be to remove the risk factor associated with the types of activities that investment banks have been carrying on that led to the 2008 debacle. Forcing the clearing banks to exit this space would be a first step. As a side effect the salary profile of the clearing banks would change as the high-flying earners of the trading desks and other investment bankerish activities would be removed from the clearing banks' books which would significantly lower the temperature of the dialogue about salaries.

We could speculate endlessly about what the publicly-guaranteed banks could be allowed to keep doing but the nub of the matter would be separation of commercial banks from investment banking activities. What might these activities be? Well, I am reminded of the US Supreme Court Justice Potter Stewart when defining the litmus test for pornography and made the classic comment that "I can't define porn, but I know it when I see it". Therefore investment banking activities likewise are frequently self-evident. Once upon a time though it was easy to define these activities as being those that involved exchange-traded securities such as those negotiated on the London Stock Exchange, LIFFE or the LME. These were the least of the problems in 2008. It was the non-exchange traded ethereal, indeed nebulous instruments (frequently derivatives) in a quasi-banking sphere like mortgages that was the Achilles Heel of the system, further complicated by the use of off-balance instruments that eluded the prying eyes of outsiders (and internal risk assessors).

Frankly there aren't that many clearing banks so such a law's catchment area is easy to define. Lloyds has never had much urge to play in these markets, RBS has largely blown itself up and the accretions from RBS and NatWest's glory days are currently being shed (though that does not mean if not legislated against they would not get back into the sandbox again if they thought they could get away with it). Barclays and HSBC are the two banks that are most effected by a superimposed split of these activities. But why couldn't these two banks demerge their investment banking arms into separately capitalised national "champions" that would fill the gap left yawningly wide by the demise of the Warburgs, Barings and Kleinworts of yore.. (well not so yore as it seems).

The question here is what would be the effect of enforcing a split upon UK banks, removing their investment bank divisions' prime source of succour (the "too big to fail" guarantee implicit from being joined at the hip with a clearing bank). What can be done to ensure the survival and prosperity of two of the best capitalised local team members left to compete on an uneven playing field created in the image of the bêtes noires, the US investment banks (for several of which I have worked in the past) with their seeming free rein in the regulatory Freistadt of Canary Wharf? Clearly not... but that then leads us on to the subject of a further post in which we look at how a most productive capital markets sector for the investing populace and the British economy can be put together side-by-side with an international financial hub. It may seem a Solomonic task to create a nation-serving capital market. It has been a bugbear of non-City types and politicians for hundreds of years. However it is not, in my opinion, insuperable.

Parsing the Bright Blue Crew into the National Liberals

noreply@blogger.com (Antiochian) — Sat, 22 Feb 2014 13:30:00 +0000

I wrote the other day on the logistics of the National Liberal experiment of Nick Boles with the conclusion that it was in some ways doable, but needed serious fleshing out as a concept, let alone a plan of action. Ostensibly to the public eye nothing much has happened with the scheme since it was first publicly aired many months ago. That is not to say that Mr Boles has not been beavering away (cue the cuddly animal) on a strategy to make the concept into reality.

So to help him out.. or moreover the rest of us..I took Bright Blue's parliamentary supporters from the BrightBlue website and put them into a spreadsheet. The goal, only half-cooked, at this time was to speculate on what material the National Liberal concept had to work with.

The metrics that felt most appropriate were the name of the MP, the constituency detail, whether said constituency was marginal or not, which party it is facing, how one might rank the MP as a social liberal, as an economic liberal and on a scale of one to ten as a classical liberal "type". Then I added some notes.

The problem was not the first few categories but the latter ones. Their seat and which party is the challenge are obvious and while the seat's marginality may be matter of opinion one can make a learned guess and as a sometime psephologist I ventured my ten cents worth. The problem comes with assessing the true liberality of these individuals. Some I had pegged as desirables, e.g. Rory Stewart, even before Nick Boles had ventured his scheme. Many of the others though came down in the last shower (the 2010 elections) and are so low-key as to be mere shadows crossing the screen in the cinema of Westminster. Some are the political equivalents of deaf/mutes e.g. George Hollingbery or we might mention the incredible lightness of being Steve Brine. Many of the other names were unknown to me, hence the yawning blanks. It would be useful if others could offer their opinions on just where on the political spectrum these MP truly lie.

Some are all too well known like Michael Gove, who far from having "liberal" credentials, has reserved himself a special place in LibDemonology for his stay at Education. Theresa May must be a right wing plant in Bright Blue as her "go home" buses fit nowhere in any liberal (big or small "l") vision of how one should behave. And as for Maria Miller, liberals may be nostalgic for the past but reminding us all of the expenses excesses of late last decade is not the sepia tinted picture we want to see.

So what of the strategy... well, a glance at the marginality column shows that closet liberals are an endangered species in the Tory party with more of the Bright Bluers being in dangerous positions for May 2015, than those who are can rest on their laurels of a safe seat. Ironically its Boles and the heavyweights who are most safely positioned, with the other free-thinkers sitting perilously under multiple Damoclean swords.

Fear not though for there are ways in which this could play out... this is of course spoken as a Machiavellian not in a partisan way.. oh, no..

Clearly the Tory party would not want to "demerge" (to use a banking term as I am after all a banker) its safest seats into a "spinco" called the National Liberals. You generally only outplace assets that are marginal (or undervalued) anyway. Thus most of the non-marginal MPs would (and should) get short-shrift if they think they can indulge in any free-thinking defections whether officially sanctioned or not. Of course, Boles would have to make the jump... and maybe Rory (to give the entity some intellectual heft)... but the others from the safe seats should not even be allowed by Lynton Crosby to toy with the idea of digging a tunnel out of the Tory stalag on pain of excommunication.

The marginals though are a different story. If played right the marginals could be a case of saving the unsalvagable. By my count some 25 of the Bright Blue crew are sitting on dodgy seats. Though two of those are retiring, so the number we are talking would be 23 off the starting blocks.

This would be the material that Boles has to work, with with 2-3 LibDems thrown into the mix (plus some other LibDem seats they might care to challenge in). The obvious modus operandi (at least for one election - 2015) would be to have the National Liberals stand unchallenged by the Tory branches in those seats. The logic would be that these NL candidates would be either Tory Lights or Liberal Heavies depending on which side of the spectrum you are looking at them from. This would mean the NL candidate would be up against either a LibDem challenger, a Labour challenger or a UKIP challenger.

Given their druthers some of the old Tory vote might go to the UKIP but that was probably going to the UKIP anyway (making the marginal Tory MP even more nervous of staying Tory). The Labour voters would be well and truly confused. In most cases the seats we are talking about were LD-facing for the Tories anyway. Now the Labour voter sees no Tory on the slate and instead two liberals of varying colours plus a Labour candidate and a UKIP person. The tactical voting possibilities are endless. If part of the old LD vote was protest then it could also go anywhere, but most likely not to the UKIP. Its enough to make Ryan Coetzee's head explode. Ironically the only LibDem with the sangfroid to deal with such a challenge would be Lord Rennard.. Then again maybe he would join the National Liberals...

The Tory HQ could limit the potential upside for the new spin-off party by only allowing them to contest their own seats, LibDem seats and a few Labour seats with maximum nuisance value (without Tory candidates standing against them). There would also have to be a compact.. secret of course.. written in stone.. or invisible ink.. that the NLs would go into coalition with the Tories after the election. No free-thinking allowed on that score. For most it would be six of one, half a dozen of the other.. they are in coalition now (even the LibDem defectors)..so why not?!

Many of the Bright Bluers are toast in any circumstance so there is not much to lose in such a strategy for the Tory HQ poobahs. Some NL candidates could be let loose on some Labour marginals as well... the one thing that is clear though is that the Bright Blue movement is pretty much an English one, with little Welsh and no Scottish component in the mix. Except for a couple of outliers (Penrith, Stourbridge, Keighley and West Worcestershire) it is also largely a movement of the South.

The end result of all these machinations could be a C/NL/LD coalition, with Labour and the UKIP being bested by a fast-moving political shell-game. We can merely speculate about it here for if the Tories are giving Boles the time of day on this scheme then it will need more than sound-bites to get it happening.

Casting the DoD into the Recycling Bin of History

noreply@blogger.com (Antiochian) — Fri, 21 Feb 2014 10:21:00 +0000

I won't mince words too much here. I have written already about the desirability of reestablishing the Royal Navy as the Senior Service. Navy people would argue it has always been "senior" but let's face it the disastrous merging of the services into the DoD back in the 1960s took status away from all of them. It may have suited US aims of neutering the UK (and the UK was was lying on the operating table with legs akimbo in the early 1960s... pardon my bluntness) but it was a severe mistake that has led to a long-term muddying of the waters. It turned the sometimes public jostling, before that time, for attention, funds and strategic prioritisation between the services into more private internal jostling within the corridors of the faceless Ministry that the DoD engendered. It also allowed the likes of Liam Fox to foist their Atlanticist interests upon the UK.

How should it ideally be? Really quite simple.. Dissolve the Department of Defence... Reinstate the Admiralty (with a Cabinet position), separate out a Ministry for the Army and a Ministry of the Air. Separate the intelligence services, re-establishing Room 39 for the Navy. Defence procurement would cease to exist with purchasing being carried out by each of the services according to their own requirements.

And, of course, the First Lord of the Admiralty job would go to a LibDem.

National Liberals - Threat or Opportunity?

noreply@blogger.com (Antiochian) — Mon, 17 Feb 2014 15:00:00 +0000

Canadians absolutely hate it when Americans call them "nice". LibDems on the other hand seem to regard such an epithet as a mark of honour. And yet, one sometimes wonders if the "niceness" is the Party's feet of clay. The current agonising in the deepest bowels of the Party over whether to defenestrate Nick Clegg shows that the Machiavellians/Survivalists are still massively outnumbered by the "Nice Guys'.

Several months back a flurry was created when Nick Boles, pictured below, the Tory MP for Grantham (how is that for irony) floated the idea of the relaunch of the National Liberals. It was an idea that is easier said than done firstly because the name is already taken and secondly because such a task to be successful would require a lot of organisation, none of which has been evident so far.

First we might hark back to Wikipedia "The National Liberal Party, known until 1948 as the Liberal National Party, was a liberal political party in the United Kingdom from 1931 to 1968. It broke away from the Liberal Party, and later merged with the Conservative Party.

The Liberal Nationals evolved as a distinctive group within the Liberal Party when the main body of Liberals were maintaining in office the second Labour government of Ramsay MacDonald, who lacked a majority in Parliament. A growing number of Liberal MPs led by Sir John Simon declared their total opposition to this policy and began to co-operate more closely with the Conservative Party."

In the above case it was a third party having a schism and the difference with the current proposal is that the Boles proposal would involve the Tory Party doing the splitting with an unknown number of MPs peeling themselves off and creating a liberal wing of the Tory Party, lifting up their skirts and flashing their knees at Orange Bookers in the LibDems and luring the right-wing of our Party into this new combination.

Its an intriguing idea. It is in essence the potential apogee of the group known as Bright Blue. This group consists of the liberal wing of the Tory Party. If we give credit where credit is due it has quite a lot of the intellectual heavyweights of that party on board. Here is a list:

http://brightblue.org.uk/index.php/about/parliamentary-supporters

Not all of those names would strike a LibDem as left-wing Tories. Michael Gove is a favorite dart-board in LibDem circles and Maria Miller has "issues" at the moment that potentially make her unwelcome in any camp. David Willets is known as "two-brains" in some circles so maybe he compensates for some of the lesser lights in an averaging up exercise. Interestingly Ann McIntosh and Tim Yeo, the latest poster-children for intolerance in the Tories towards free-thinking MPs are not members of this group. They would definitely look like potential National Liberals to me. Guy Opperman is missing from Bright Blue, even though he seems a rather liberal chap and Dominic Raab is definitely a libertarian if not a liberal. He has done more to oppose NSA snooping than many in our own crew. Anyone who opposes the NSA is a friend of mine.

Some in our Party saw the Boles' initiative as a continuation of Grant Shapps' attempts to lure Jeremy Browne out of the LibDems in the wake of his disgraceful firing by NC and the vitriolic campaign against him from within. Browne resisted the Shapps blandishments with aplomb. We suspect however that the Boles' initiative is self-generated. LibDems took it as a cunning Tory plot to divide and rule. However being of the Antipodean persuasion myself, like Lynton Crosby, I cannot see how creation of new stalking horse parties is something in the Crosby playbook. In Australia, third parties have had only severely limited success (the DLP from 1956 to the 1970s) and the Australian Democrats from the 1980s). In neither case were these created by fiat of the party from which they split. Far form it, the DLP split from Labor cast that party into outer darkness from 1956 to the 1972 and even longer in some State governments. So Australians playing splits with their own party would be a dangerous game indeed. We suspect Crosby is NOT behind the Boles move.

The irony of ironies is that David Cameron himself seems to be more liberal than most of his MPs and is not a Bright Bluer, understandably.

Would the Bright Blue crowd decamp by design or accident to a new set-up? How would this happen? When? Would they glean any LibDems along the way? What would their policies be?

The National Liberals in their original manifestation were essentially a very small group, united in their dislike of the personality politics of David Lloyd-George and his dalliances with the Labour Party government. The Bright Blue crowd are pretty large and seem to be economically and socially liberal (something not all LibDem members can attest to being). Would they all go? Would their branches go with them? Would there be a non-aggression pact? By that we mean the Tories would not contest NL seats and vice versa. For this to happen there would have to be agreement from within the Tory party. Would they also make up a list of seats that they would contest to confound the LibDems? These would probably be seats where the LibDems were coming in second in 2010. That could be a dangerous game that might steal votes from the Tories too, letting LibDems slip in. Would the NLs stand in some of the safer (Tory-facing) LibDem seats as a means of splitting the vote? Would the Tories not run a candidate in those seats? Would they not stand in Labour-facing LibDem seats to confound Labour from gaining more seats? The possibilities are endless... Would our Party be on speaking terms with these interlopers?

What is the timing of all this and the mechanism? Post-2015 or before? First step would be to secure a name. The current working title was seemingly snatched from the history books without checking that it was available. Only the most deeply political wonks would know that there does indeed exist a party of that name:

http://nationalliberal.org/

While it seems to have a footprint in Havering.. it doesn't seem to have much reach beyond that. I guess they could cut a deal with them, purge the vehicle and use that as the operating platform for the "defectors". Bright Blue with its organisers, managers and marketing crew could just be backdoored into the nearly empty National Liberal vessel.

Depending on how many Bright Blue people were willing (or ordered) to jump ship, the new structure could go down the launch ramp either with a full complement or skeleton crew. Nick Boles would hope he wasn't captaining the Marie Celeste. Maybe that is why the concept is taking so long in the gestation.

So what is the threat? Well quite a lot of LibDems are not happy campers at the moment with the Coalition being the bête noire of some and Nick Clegg being the lightning rod for others. Of our current MPs, there could be a small group who might defect to a NL grouping. Jeremy Browne would be an easy to conjure with name, others are harder to identify as so few of our current MPs seem to have colours pinned to their masts. Leech? Some of those in the most marginal seats?

Certainly having two Liberal parties slugging it out in May 2015 will mightily confuse the electorate. The danger is that the NLs can project a more cogent Liberal agenda than the LibDems with our policies having been so shape-shifting over the last four years. We could be attacked on not being Liberal enough... which is what we are constantly flagellating ourselves for internally on a daily basis. Its a claim that could be made to stick.

What is the opportunity? Hmmm.. well, our party at the current time does remind me of the old adage that a camel is a horse designed by a committee. Its structure and thinking is a compromise from the days of the SDP/Liberal merger. As I wrote recently the PPC selection process is quite amateur and not designed to chose good MPs, let alone ministerial material. If a merger was ultimately engineered between these NLs and the LibDems then there would be an infusion of thinkers into our party and a reinvigoration of our ranks of MPs with a more rounded crew. Frankly the Bright Blue crowd has more ministerial potential than our rank and file MPs.

A merger with this new entity would be years in the future though, after one or two terms of slugfest.

In the shorter term a National Liberal launch could steal some of our votes (while reinvigorating the political centre where most voters dwell).. it could unite our party (yet also spur the ousting of NC)... it could mean a Tory/National Liberal Coalition post-2015... with us being the nose pressed up against the glass and NLs in and us out...

So the ball is now in Nick Boles' court.. the initiative is his for the moment...

The City - Legacy of Big Bang and Labour Sycophancy

noreply@blogger.com (Antiochian) — Sun, 16 Feb 2014 19:24:00 +0000

Let's face it, bankers have always been better paid than the Great Unwashed and it has grated for a long time. However there are bankers and bankers. Upon upon the army of John Cleese lookalikes who trudged across London Bridge in the morning were primarily wage slaves of the clearing banks.

Their salaries were not exceptional (and minus the bowler hats and leavened with a big infusion of female bankers) that situation is pretty much unchanged. In fact, as the grey ghosts of Lutyens buildings around Bank station indicates, most of these bankers have been turned into provincial call centre jockeys or planted in office parks on the outskirts of Milton Keynes and Peterborough.

The real money was with the merchant bankers at the likes of the long-gone Kleinwort Benson, Warburgs, Hambros, Barings and Morgan Grenfell. That crowd were never seen by the Great Unwashed and keep a low-profile except to the extent that their top hats (until the 1950s) stuck above the crowd. I recall seeing the last of the breed, the Government broker (from the firm of Mullens) walking along Lothbury in the mid-1980s.. Last sighting of a rara avis..

Then came Big Bang in October 1986.... what seemed innocuously like the breaking of the cartel of fixed commissions became a Bonfire of the Vanities. The parties most burnt in the Bang and then the Crash a year later (one of the only examples where a bang proceeds the crash... think about it) were the hordes of banks that had bought LSE brokerage firms which were little better than ill-managed under-capitalised corner stores.

Out of the wreckage though came the merger of the survivors and moreover the rise of the US banks (and the US bank wannabes). These had always been kept at bay in the City, locked out of the Exchange until Big Bang and hobbled at home from being commercial bankers by the strictures of Glass-Steagall. The Eurobond boom in the 1970s powered by petrodollars had opened quasi-banking opportunities that they pursued away from the beady eyes of the SEC and the Comptroller of Currency in Washington D.C..

Now the American and Continental banks came into their own. The scarifying of the remnant British-owned brokers and merchant banks by the Crash of 1987 and then the recession caused by the collapse of the housing surge created by Nigel Lawson (to counteract the Crash) meant that the City sailed into the 1990s with a skeleton crew of domestic financial institutions besides the clearing banks. Even the clearing banks were in retreat as their purchases during the run up to Big Bang were shuttered in the wake of the Crash. Who remembers BZW axed by Barclays, W. Greenwell dispatched by Midland Bank, County Securities decimated by NatWest and James Capel in a long-term decline under HSBC's tender mercies. Ironically, Lloyds was the only bank not to play the broker game in 1986. Scores of other brokerage firms that had been the heights of the City's financial foothills are sent to the trash-bin of history.

Out of this came the whole culture of American banks (for the European banks were run by US trained MBAs who sang from the same hymnbook). The US started down the disastrous path towards unwinding Glass Steagall with an unholy alliance between Bill Clinton and Citibank powering the process.

The investment banks replaced the merchant banks and a wave of high-paid puritanism descended over the financial sector. Dalliance with the Square Mile was declared undesirable and the bulk of them decamped to Manhattan-on-the-Thames known as Canary Wharf where a version of Wall Street was recreated. The theory going that Midtown could be recreated here with no slipping out to the wine bar or Sotheby's and other decadent pre-Big Bang behaviour. This reached its apogee in 2008 and we are all still paying the price.

So that brings us to now. The City is not much healthier now than it was two years after the 2008 debacle. Something is clearly awry. The US banks have been diminished in numbers and the survivors are laying low because at home there are powerful forces braying for Glass Steagall to be reimposed. The French, German, Belgian and Dutch banks were put through the wringer and now play lesser, if any, roles. Vast swathes of instruments related to mortgages and their ilk have disappeared as playthings of the dealing desks. Prop-trading desks have decamped to outsourced hedge funds in Mayfair.

Recently we have witnessed the assault of Ed Milliband on the banking industry. Agonising over bankers' salaries is a discussion of the wrong issue. As we all know US politicians and the Washington "deep state" are in the thrall to Wall Street. This has meant that Frank-Dodds (a puny shadow of Glass Steagall that is the financial legislative equivalent of "peace in our time") has been passed but remains a toothless tiger. However many forces called for Glass Steagall to be revived (most notably Paul Volcker, the best head of the Fed in the last 50 years). The forces of evil have deeper wallets than the forces of economic sanity. Washington may be wrapped around the finger of Wall Street (and by that we mean four or five investment banks, not the thousands of brokerage firms ground daily under the thumb of the SEC) but the UK government is not.

Perversely it was Labour who was in thrall to the fast money crowd of 1992 onwards. And it was in this relation that the debacle was born. The current Coalition government is farther from the City than any Tory-led administration has ever been. Why? Because old Etonians no longer rule the roost. They are more likely to own the franchise of a wine bar frequented by solicitors and junior staff members of auditing firms than sit atop the towers of Canary Wharf in the board room eyrie of some Wall Street investment bank.

This distance between the Tories (and an even greater distance, to our shame, the LibDems) and the City potentially enables a big rethink of what we want the City to look like. Most of the analysis of the debacle of 2008 has been spot on. The culprits, the faults, the political mistakes have all been analysed and their is very little dispersal of opinion on where the problems lay. The Crash of 2008 had nothing to do with stockbrokers... nothing to do with commodity traders.. nothing to do with insurance brokers.. the blame lay pure and simply with banks engaging in activities they should not have been engaged in. The solution was identified as stopping banks from engaging in risky activities. The banks said they could downgrade these activities. The widespread suspicion is that some of these activities which were off-balance sheet in many cases have just been put at some arms-length distance or hidden away somewhere, awaiting a moment when the regulators aren't looking (or when Labour gets back in) to be dusted off and put back in motion.

This post is essentially a scene setting for further thoughts in posts to come on how the City might be given an over-arching rule (separation of commercial and investment banking) a sort of UK version of Glass Steagall.. and then be essentially left to its own devices with a "light touch" and a return to caveat emptor and, at the risk of sounding naive, dictum meum pactum.

A Light-Hearted Observation of the PPC Assessment Process

noreply@blogger.com (Antiochian) — Fri, 14 Feb 2014 20:15:00 +0000

Hmmmm.. or is it all that light-hearted...? As a management-type I cannot but be boggled by the outdated and outmoded PPC assessment process that the party uses..

The process clearly throws up some interesting candidates and we have (and have had) some very "original" MPs (Clement Freud, Ludovic Kennedy). However the antiquated nature of the process speaks to another age.

It goes to explain a lot about what happened in 2010. It clearly is designed to have councillors jump through some familiar hoops to produce Über-councillors for the national stage. The fact that this process does NOTHING to line up potential ministerial talent goes a lot towards explaining the current crew we have as part of the Coalition team.

I left with the feeling that at least one of these famous Liberals, would not have passed for he was "lacking resilience".

So what of the process.... hmmm... well, the process is the hands of veterans of the party. They come freighted with years of moving and shaking in the corridors of local government, and seemingly not much to do with the modern world of politics and particularly not management. They reminded us of, dare I say it, babushkas, those gate-keepers of all that was good and virtuous about the Soviet Union (yes, I was being ironic).

Not since I left university in 1981 have I had to do so much hand-writing in one go. Too bad if you suffer from writer's cramp, if not writer's block...It was more than just the computer age not having dawned, it was that the multiple choice question had not yet surfaced as an innovation in party headquarters.. oh, despair...

These, of course, had to be marked and that clearly doesn't put the babushkas in a good mood.

But then onto the group exercise... despite the fact that we are looking for politicians here that shall decide policy on Trident, discuss bombing Syria, agonise over smoking in cars and hold back or fling open the doors to Eastern Europe's heaving masses, instead we discuss supermarket planning applications, not as a national policy, but as it happens in local government in the rotten borough of Shifty Magna.

Is that a BIS logo is the background? Aha, must be a national issue after all...

And then there was the relations with the media (i.e. TV) section.... despite having appeared on TV around the world and even given interviews in Spanish (for Bloomberg TV) the part was a veritable debacle as one had to justify why (despite us not having the Environment ministry under our control due to ham-fisted Coalition negotiations) that the floods were not our fault... I left with the vision of the interviewers' perfect candidate:

Loquacious, photogenic.... original.... and a councillor in Mould-in-the-Wold..

The "Not the Official Target" List

noreply@blogger.com (Antiochian) — Tue, 26 Nov 2013 19:37:00 +0000

Opinions in the party seem to run the whole gamut from "we're all doomed" to a quiet optimism that we shall hold most of our existing seats, with Lord Ashcroft's polling suggesting our MPs score highest on esteem from constituents, which has to help in engendering the "incumbent factor".

I have spent some time gazing at the target list (created by Andy JS) lately and wondering a few questions.

The first question is what this list looked like in 2009...? Obviously some of these seats weren't on that list because we held them! And some that were not necessarily our top targets were won...

This list is predicated by swing needed to win and merely for reasons of shifting demographics and rising or falling of branch numbers (and councillor numbers) we shall have more or less oomph in some of these places than we did last time. I have written before about the intriguing decision to make Newbury (which we held until 2001) a target seat. You have to look farther down the list to find this seat than one would normally for a target, I still don't get it..

In any case, most of the Labour seats near the top of the list would seem to be out of reach. This tempted me to ponder my own target list.. what we need to achieve this outcome is some more economic recovery, UKIP fading a little (but not too much), some Labour infighting, and more airspace between us and the Tories. All of that is eminently doable or guaranteed (Labour infighting, in particular). Nick C has started to steer the supertanker more to the centre left. Now we need to pad out our policy offering and make our ministers look like they make a difference.

I thought I might cast my bread upon the water and list my winnable seats out of this target list:

1. Camborne & Redruth
3. Oxwab
5. Ashfield
7. Truro & Falmouth
8. Newton Abbott
13. Harrogate & Knaresborough
16. Montgomeryshire
20. Weston super Mare
21. Hereford & Herefordshire South
22. Devon West & Torridge
23. Winchester
25. Cornwall South East
29. Richmond Park
38. Romsey & Southampton North

I would welcome challenges on these and also some suggestions on other "less than obvious" winnable seats and why.... let the battle begin..

Breaking the Banks - Williams & Glyn's Bank and TSB

noreply@blogger.com (Antiochian) — Tue, 26 Nov 2013 19:04:00 +0000

I wrote some time back about the policies that are occurring sotto voce on the watch of Vince Cable of firstly liberating the TSB from the dead hand of Lloyds Bank and now the imminent recreation of Williams & Glyn's Bank out of the smoking ruins of RBS, the once great Royal Bank of Scotland. This admirable trend raises two questions. The first is why is Vince Cable being so coy about this trend (dare we call it a policy?) and the second question is why not more (and what next)?

The obvious next target would be liberating the once great NatWest from RBS's deathlike grip.

I spoke of the TSB development back when it first launched. It had some teething problems but seems to be puttering along.

Now its the turn of the Williams & Glyn's construct to go down the launch ramp. Originally the plan was for 318 branches of RBS to go into this spinout. That was to be made up of 311 RBS branches in England (supposedly focused on the Northwest) and seven Scottish branches of NatWest. The most recent number being touted is 314 branches. I have not been able to find a list of these branches to identify how regional this bank will really be but its head office will be in Manchester. There have been vague mutterings of the new bank aiming to service small business. It will have a 5% share in the SME market, and 2% of the current account market.After the recent revelations of RBS's predatory attitude to small business the separation will be timely indeed.

In way of some background we would note that Williams & Glyn’s was created in 1970 when RBS merged its two subsidiaries Williams Deacon’s Bank in England and Glyn Mills & Co in Scotland. In 1985 Williams & Glyn’s was absorbed into RBS fully. RBS, which is currently 81% taxpayer-owned, was forced to put the branches up for sale in order to comply with European rules around its 2008 government bailout. In reality the RBS structure should never have been allowed to be put together in the first place. A need for a an anti-trust rule in banking is clearly an issue that Vince Cable should be voicing more concern on. If he won't then I hereby offer the suggestion that the LibDems need an anti-concentration policy in banking and should bring it in as soon as possible.

The business to be hived off into the new entity had total assets of £19.7 billion, customer deposits of £22.2 billion and risk-weighted assets of £13.3 billion, as at 30 June 2013. It generated an operating profit of £168 million during the first half of 2013, providing a post-tax return on period end notional equity of ~16%. A key point to note is that 4,500 employees are moving over to the new structure and the full complement will be 6,000 when a new head office is instated with all the bells and whistles (forex desk, money market desk, IT etc) that go with a full-service bank.

The new owners of this entity were announced in September of this year after a bidding process of fluctuating intensity with various suitors (notably Santander) popping up then disappearing. The winning bid was put in by consortium of Centerbridge Partners, Lord Jacob Rothschild’s RIT Capital Partners and Corsair Capital, whose chairman is former Standard Chartered head Mervyn Davies, and includes the Commissioners of the Church of England. Standard Life is also in talks to join the group, along with a number of other domestic and overseas investors.

The business will be run by chief executive John Maltby, Lloyds former commercial banking chief, alongside chairman Philip Green, the former chief executive of United Utilities. Lord Davies, the former trade minister who is vice-chairman of Corsair, will be a non-executive director.

While it is being styled as a spinout in fact the separation is only a technical splitting out of a business division in the short-term. The Corsair consortium will run the Williams & Glyn’s business with RBS, preparing its technology platform, separating accounts, and rebranding the unit. The pair must also establish a new trading company, and acquire a banking licence. It will be run as a division of RBS until separation. This will be engineered through the new bank floating on the London Stock Exchange in late 2015.
The Church of England's First Commissioner Andreas Whittam Smith said the new bank would uphold “the highest ethical standards”. That would be a welcome change!
The funding of the new entity deserves some attention as a potential model for further dissection of the RBS remnants. The new bank will receive a £600 million investment through a bond issue, which will be fully subscribed, with the consortium paying £330 million in cash and the RBS markets division putting up a further £270 million. If you think RBS are selling out (yet) you are mistaken for RBS, will retain a significant minority investment in Williams & Glyn’s, of no more than 49% at the point of IPO. In essence, the consortium will act as a major cornerstone investor ahead of the eventual float.

On top of the £600m, the investors have agreed to pay up to an additional £200m dependent up on Williams & Glyn’s share price performance in the 18 months following the IPO. The performance top-up of £200m will help fend off complaints of the government (and its factotum, RBS) of having sold too soon.

Hopefully if all goes to plan the proceeds of selling part of the RBS stake at the IPO and later, will flow back into RBS and hopefully ameliorate the taxpayer's misery with these leftovers of Labour's flirtation with the City's worst elements.

Well may we ask as LibDems though as to what assurances there will be that W&G shares, TSB shares, the final tranches of Lloyds' shares and hopefully NatWest shares (and RBS shares many years into the never-never) will be prioritised for distribution to the public (a la Maggie Thatcher, dare I say it) instead of clients of Goldman Sachs (a la Vince Cable, dare I say it)?

And what is our policy on forcing RBS to divest NatWest? Such a disgorgement (love that word when it comes to miscreant banks) is only right and fitting in putting RBS back into its rightful perspective and getting the payback for the public in this lifetime rather than that of some future government. Vince is doing good stuff (except when he tarries with the Vampire Squid) and yet is seemingly a shrinking violet when it comes to trumpeting such moves and the LibDem role in expediting them.

The March to a Deal with Iran Began on 30th of August

noreply@blogger.com (Antiochian) — Sun, 24 Nov 2013 14:19:00 +0000

We awake today to find a deal done with Iran. The train of events that led to this began on the 30th of August with the defeat of the motion for bombing of Syria toute de suite by Obama, Cameron and, alas, Nick Clegg and Paddy Ashdown.

At the moment the party seems to be intellectually divorcing the virtuous turn of events from the actions of those of our MPs who voted with the Tories to start flinging bombs.

Make no mistake, there is absolutely NO WAY that the accord with Iran could have been achieved without the failure of Cameron's motion. The bombs would have started flying and the fuel would have been thrown on the Sunni-Shia (Alawite) divide that is at the root of so much Middle East misery. After being suckered by Blair (and Bush) into the Iraqi adventure (which our party fortunately and wisely eschewed) it was greatly disappointing that we had any truck with the "bomb first" faction just ten years later.

At the time of the "failure" of the vote various pundits spoke of the irrelevance of Britain. They could not have been more wrong. It was by what we did not do that the chain reaction led to a deal with Iran.

The danger in our party not having a foreign policy any more is that it can be more easily railroaded into "coalitions of the willing". It's time for foreign policy to become a subject of lively debate, even in off-off-conference smoky rooms, where the leadership never deign to visit.

Remember if you don't stand for something, you'll fall for anything...

Naval Intelligence Redux - Room 39 Reborn

noreply@blogger.com (Antiochian) — Thu, 21 Nov 2013 10:19:00 +0000

While rummaging around collecting research on the Naval Intelligence Division (NID) I stumbled upon an intriguing article on a website called FutureIntelligence.co.uk. Maybe I am just out of the loop but it was news to me even though the contents were over three years old. Traditionally Room 39 was the euphemisim for NID when it was located at the room of that number at Admiralty House on Whitehall.

Not unsurprisingly the government didn't want to trumpet the development as it was a de facto recognition that an action taken as long ago as 1965 had seriously compromised the Royal Navy's ability to operate safely. In effect, naval intelligence had been compromised.

The article revealed that the Naval Intelligence Department was being brought back to life. While the article goes on with the light hearted spin that the NID was the stamping ground of Ian Fleming during the Second World War. it carries with it a message that essentially the decision to merge the NID with other services' intelligence units had been a mistake. As I have written elsewhere, it was not the least of the mistakes made at that time as pertains to the Royal Navy. In that piece I advocated the re-establishment of a separate Naval Intelligence Division and locating it in Gosport, a traditional Navy town.

The NID was scrapped in 1965, when it became part of the Unified Defence Staff. The article in Future Intelligence cited insiders saying the reason for Naval Intelligence’s revival was a result of a number of embarrassing incidents in the Gulf culminating in the seizure of 15 naval personnel by Iranian Revolutionary Guards in the Shatt Al-Arab waterway in March 2007 that first shook the Royal Navy and have now stirred them into action.

During the incident a party of sailors and marines searching a suspicious ship were detained by eight Iranian boats. The British party had got back on board their boats when the Iranians approached.

The article then cites a source as saying "It’s become pretty clear that some intelligence has to be circulated about conditions on the ground in certain places and that policy has to be looked at again in some areas.”

“The current orders to deal with an incident like that in 2007 still tell naval personnel to re-embark vulnerable craft like the open topped inflatables used to board that ship. It makes much more sense for them to stay behind the safety of bits of metal and wood.”

The source added that it would be the job of Naval Intelligence to also collect information on the likelihood of hostilities and the potential tactics used. It seems surprising that it took 45 years to realise that the merged intelligence division was not up to snuff. Moreover with my suspicious mind working I wonder just how much of the intelligence the Unified Defence Staff were working with was "Garbage in, Garbage out" with a strong element of US input (and dare I say it, control) when the US has been scarcely a paragon of military intelligence over the intervening decades. USS Cole anyone?

Recently I have been reading a thesis by Anthony Roland Wells, entitled STUDIES IN BRITISH NAVAL INTELLIGENCE, 1880 - 1945, University of Durham, the author of which subsequently became a Royal Navy Officer before going over to the US side. In summing up the between the wars situation he says: "The decline of naval intelligence was symptomatic of the lack of direction in several areas of British Defence thinking from 1919 to 1939."

He goes on to comment: "Where the N.I.D. should have shone during the inter-war period was as the main adviser to the Naval Staff, and through them
to the Board, the C.I.D., and thence the government of the day, since in theory it was the only repository of data and the independent and objective commentator, and if need be, critic of and for naval policy. This was not to be. Hence many of the decisions made at all these levels, were often based on little or no sound data, untested hypotheses, and inaccurately analysed findings of past naval actions, some of which were irrelevant to the present, and certainly the future..."

Essentially the inter-war lessons were not learnt and not only was NID sidelined, but it was in fact extinguished.

That is until now...

Future Intelligence also reported that a spokeswoman from the MoD denied that the re-emergence of Naval Intelligence had been caused by any particular incidents but that it had happened because of an awareness of an increased need.

The spokeswoman confirmed "that 30 extra officers would not (now?) be joining the Joint Naval HQ Northwood".

“It will be headed by a Captain RN based at the Joint HQ at Northwood, Middlesex, and accountable to C-in-C Fleet through Commander Operations. The name of the Captain is yet to be announced.”

What this whole incident reinforces is that Naval Intelligence was the baby thrown out with the bathwater in 1965 (by Labour) and that decades of Labour and Tory governments kept the Royal Navy blinkered on the intelligence front in the interests of some unknown agenda (Atlanticism?). Additionally the Navy headquarters should NOT be at Northwood anyway.

I reiterate again the Royal Navy is too important to be left in the hands of feckless and negligent Labour and Tory ministers in the future, as it has been in the past, and that the Liberal Democrats should demand the re-establishment of the Admiralty and have a LibDem MP appointed as Minister (indeed First Lord of the Admiralty).

Picking up the Tab for a New Britannia - Gladly

noreply@blogger.com (Antiochian) — Mon, 18 Nov 2013 17:23:00 +0000

In my launch piece on Royal Navy policy I threw out a comment on building a new Britannia that I left danging for future elaboration. In some ways me tossing a new royal yacht into a Royal Navy policy is not entirely accurate for whomever in British industry or diplomacy that has ever been involved with the vessel in its glory days knows the Britannia was much more that a floating hotel suite to keep the royals out of the grotty local hostelries. It was in fact a veritable one-vessel marketing armada that burst through more trade barriers than any of the privateers that nation encouraged to prowl the high seas during the post-war decades.

The chairman of the company of which I am the CEO used to be a mining executive in Ghana during the 1980s and 1990s and commented to me that the biggest impact that was made locally by the British on trade and influence always seemed to emanate from the arrival of Britannia in Accra where an invite on board was "to die for" in local business and political circles. These anecdotes about around the world.

It is also no surprise that it is industrial and trade interest groups that would like to see a new Britannia sailing the waterways of countries where we wish to make trade or diplomatic inroads far more than royalists pining over a departed manifestation of imperial might. For these reasons the debate on whether the Royal Navy or the Royal Household budget should be funding a replacement is moot because it should really be DTI leading the charge and footing the bill for the new vessel. Moreover the new vessel should be built at the Portsmouth shipyard as the first vessel to go down the slipway under renationalised ownership.

In way of some background we should refresh that the demise of the vessel (or rather of its replacement) was an example of Tory inaction and Labour parsimony. Britannia was obviously not cool enough for Tony Blair as he could not park it and his ego in the White House rose garden where he felt his destiny belonged.

In 1997, John Major's Conservative government committed itself to replacing the Royal Yacht if re-elected, while the Labour Party declined to disclose its plans for the vessel. Following Labour's victory on 1 May 1997 it was announced that the vessel would be retired and no replacement would be built. The Conservative government argued that the cost of the vessel was justified by its role in foreign policy and promoting British interests abroad, particularly through conferences held by British Invisibles. When cancelling the replacement of the vessel, the new Labour government argued that the expenditure could not be justified given the other pressures on the defence budget (from which it would be funded and maintained). Proposals for the construction of a new royal yacht, perhaps financed through a loan or by the Sovereign's own funds, have since made little headway.

Schemes since that time to revive the project have fallen foul of small-mindedness, leaks, anti-Royal Family sentiment (which wasn't doing so well in the wake of Diana) and the feeling that the Queen was not as steady on her sea-legs as she had formerly been. The small-mindedness comes with the UK political territory but the arguments about the Queen no longer wanting to be a sea-dog fly in the face of the new generation(s) appearing on the scene and the fact that the boat can have other, more important, uses than mere accommodation. The Britannia was a unique selling tool.

At this time when bogus arguments for shuttering Portsmouth's shipyard are being trafficked around, it would be a very neat solution for our party to enunciate a policy (with strict cost controls) of a new Britannia built at Portsmouth. Industry could help with the cost or moreover, as it will be a floating showcase, provide furnishings, carpeting and fittings that display the "Best of British" in arts, crafts and technology. This would go down REALLY well in Portsmouth and across a swathe of the country where we have Tory-facing challenges in 2015 as well as being well-viewed in British industry.

Getting left with the tab at Kool Britannia

noreply@blogger.com (Antiochian) — Sun, 17 Nov 2013 15:03:00 +0000

I was pondering the other day a good simile for the mess that Tony Blair, Gordon Brown et al. left for us to clean up in 2010. There is a conceit to the current Labour efforts to distance themselves from the whole panoply of buzz and spin that emanated from the collection of sleazeballs that surrounded Number 10 in that period.

The one that particularly grates for me is Cool Britannia (or should I spell "Cool" with a "K"?).

The whole concept reminded me of the type of night out one encountered in one's twenties when one of a gang of friend's would suggest going out to a new eating spot.. which for the sake of argument we shall call Soho's latest hotspot, Kool Britannia. This new place has a celebrity chef and is cutting edge and we are all told the evening out can be done within our usual cheap and cheerful budget.

We arrive, the background music is good... the food tastes fine.. the decor is funky and cutting edge.. the people in the line outside "ooh" and "ahh" at our good fortune to have been able to get into this "must have" destination. Sometime around dessert time, the member of the group that suggested the place, lets call him Tony for the sake of simplicity, announces he has another date and has to dash.. Tony's a cool guy.. bit of a minor public school twit.. but he bathes in the reflected glory of his American millionaire friend, George and always get his friends into the coolest places...

So Tony does some quick maths in his head. Takes the cost of an average dish on the menu, guesstimates the wine bill (divided by thirteen) and throws down his share and departs. His Scottish friend (we all know how canny they are with cash), who we will call Gordon, is delegated to work out the bill when the rest of the group finish up the meal. Tony of course forgot to factor in that he had had the lobster main course... while everyone had pasta... but as pasta was below the average dish price this should "all net out". Tony also forgot to factor in the service charge/cover/tip. He's a busy man so we should excuse him his forgetfulness..

Then the fights begin. Several want to shave the tip to make up for Tony's shortfall. Others don't have enough cash to make up their share. The restaurant doesn't want to accept credit cards or breakup the bill. Gordon ends up telling the rest of the group they have to pay a lot more than they have ever had to pay before on a night out with Tony and his ilk.

The group disperses into the night grumbling about Kool Britannia being a clip joint, Tony being a sponger and Gordon being not as good with money as had long been rumoured. Understandably, none of the disenchanted group will ever go to Kool Britannia ever again. They swear to give Tony a bollocking the next time they see him but his mobile is now disconnected and rumour has it he is selling snake oil nostrums in the US. Even George doesn't talk to him anymore, as he is hiding from his own friends that feel he bilked them.

Despite the thronging crowds at the launch, the enthusiasm has waned fast, Kool Britannia has gone into receivership owing a heap of cash to some buddy of Tony's who works at Royal Bank of Scotland.

Tony had a friend called David, who also apparently is now selling snake oil in New York. David had a brother called Ed, a feisty little chap who talked a good game, but was always that annoying younger brother type. He keeps calling the group trying to tout some new eatery he has a stake in... probably best to put him straight to voicemail.

Ah well, we live and learn...

Syria Policy - An Alternative Policy to Simplistic Bombing

noreply@blogger.com (Antiochian) — Sun, 17 Nov 2013 13:38:00 +0000

The party's leadership were all too keen to start flinging the bombs in line with Cameron's Atlanticist program but have they exercised their minds over a more comprehensive solution to the Syrian debacle since? The answer is "no" because no sooner were they thwarted on the bomb run (a frustration which ironically produced Syria's chemical disarmament), than the leadership returned back to stony silence on the Syrian conflict. The fact that the US doesn't have a strategy and the Tories don't have a strategy doesn't mean that we do not need to be similarly clueless. With Ming Campbell exiting the stage in 2015 (at least from the Commons) the party's foreign policy stance will be even more threadbare than it is currently.

In some ways though the current Syrian schemozzle dates back to actions of a previous Liberal administration, that of Lloyd George which in the midst of World War I cooked up a secret deal with France known as the Sykes-Picot agreement. This was followed by the San Remo conference in 1920, that furthered muddied the waters. Haggling over the future of the Mosul province ended up with the Kurds being denied independence, with the Kurds being delivered into an ill-starred Iraqi "kingdom" rather than being carved out as a separate mandate. All of this was to keep the nascent oil discoveries in Mosul out of Ataturk's hands. Subsequently the ineffectual actions of the French in the late 1930s, ended up with Turkey grabbing the Sanjak of Alexandretta from the French Syrian mandate and forestalling the creation of an Alawite (a sub-sub sect of Shiaism)entity along the Mediterranean coast which would have obviated the Alawites ending up in (and controlling) the post-colonial entity that was Syria.

The Alawites are a mere 12% of the Syrian population but dominate the administration (with other minorities, such as the Druze and Christian groups, and even the Shias) because the French trusted them in the Mandate military over the Sunnis.

The ultimate result of this is the Syria we have today in which an Alawite minority (and their coalition of other minorities) led by the Assad government are engaged in a life and death struggle against Sunni forces to avoid the almost inevitable ethnic cleansing of Alawites et al. that would follow a Sunni victory. In Syria the actions of Assad have to be seen in the light of the 1400 years of oppression suffered by the Alawite sect.

Ironically the tide has turned in Assad's favour since the chemical disarmament. We should not discount though that the Gezi Park uprisings in Turkey weakened Turkish resolve to tacitly support Syrian rebels, which also helped to give Assad a boost. The West has also seemingly been less anti-Assad leaving Saudi Arabia as the lone supporter of note for the rebel forces.

Is Assad regaining total control of Syria's historical territory in the best interests for the long term or does it just delay an inevitable outbreak of the same problem all over again at some future date? In the meantime there has been a massive death toll, displacement of population and damage to a nation, which despite some oil resources is not rich by any means. This is not a Kuwait that can pick itself up from a debacle and dust itself off.

It might seem strange to advocate a Bosnian solution but frankly the Bosnian solution is one that works. Syria is in many ways a repeat of Bosnia, but without NATO intervention to bring about the ultimate resolution. In the end of the the Bosnian War, the outcome was ethnic separation and a rejection of post-WW1 border delineation along random lines. Syria needs the same as part of a peace negotiation. Syria needs to be broken up and the ethnic groups that were so blithely overridden in 1920-22, and again at independence, need to be given territory for their own self-determination.

Who should power this evolution? Certainly not the Americans for we should remember an important thing, which is that the US hates partitions... Bosnia's solution was ethnic borders and that was only engineered through the European intervention.. I worked for a US thinktank in the early part of last decade and the guru who ran it was rabidly opposed to the breakup of Yugoslavia. I asked an economist who worked with me there "what's up with him?" and he said "he is a Lincolnian".. that pretty much said it all.. the US is scarred in a deeper way than one might imagine by its civil war. And retrofitting the justification for one part of a nation denying another part a desire for their "own way" requires one to oppose breakup of nations ad aeternam..

Most of us who know anything of the history of the Middle East would agree that Britain and France badly executed their split up of the Ottoman Empire's Arab extensions. However the US is again rabidly determined to avoid the breakup or Iraq and Syria, when setting the Kurds free and making space between the Sunni and Shias in Iraq makes sense and likewise in Syria.

Assad is fighting like hell's fury to hang on because he doesn't want to be Paletinisanised in a post-Alawite regime when what should really happen is that the Alawite territory (amusingly called Alawitestan) should be created while the Kurdish part of Syria should be attached to an enlarged Kurdistan. Since 2012, much of Syrian Kurdistan has been controlled by Kurdish militias as part of the Syrian civil war and in November 2013 representatives from Kurdish, Arab Christian and other smaller minorities declared a de facto government in the region.

Neither should one forget the interests of the Druze, who have gone backwards in status from the days of the French Mandate when they had been doled out some hope of self-determination that never eventuated as they were corraled into the Baathist state. The Druze are a monotheistic ethnoreligious community, found primarily in Syria, Lebanon, Israel and Jordan. Druze beliefs incorporate elements from Abrahamic religions, Gnosticism, Neoplatonism, Pythagoreanism, and other philosophies. Druze is an offshoot of Ismailism, a branch of Shia Islam, and thus ripe for persecution in any sort of Sunni-dominated state, should Assad fall.

The central Sunni Arab section of Syria would become its own state. As to whether it descends into Wahabi/Al Queda-inspired fanaticism depends upon how the US manages its client, Saudi Arabia, which has shown itself over and over again to be lukewarm on constraining radical strands. Nobody else panders to them in the same way the US does, so whatever evolves there is up to the US.

The old map below is a fascinating example of the ethnic patchwork from the days of the French Mandate. It includes the now Turkish province of Hatay, where an Alawite majority were railroaded by a rigged 1938 plebiscite into annexation by Turkey, weakening for the Alawites, their own claims to an independent state post-Mandate. And lo and behold, that is what happened with the Alawites being forced into a Greater Syria construct.

And here is the key to the ethnicities:

So what of partition? The US would instinctually oppose such ideas.. One almost gets the feeling the US prefers the ethnic mishmash of the current Syrian make-up as a counterbalance to a Saudi-inspired Sunni (read Wahabi) state. But frankly who cares what they want. They have been authors of so many botch-ups in the Middle East that they are now beyond enumeration. Ironically the break up of Austro-Hungary into nation states was an invention of Woodrow Wilson who, notably, was a Southerner (from Georgia) and thus not freighted with Lincolnian baggage... Those who do not know history are destined to repeat it.

The Russians should make common cause with the Europeans on this and sideline the US if they want to be a dog in the manger. The Alawites should have their homeland on the coast (just as the French had pondered pre-WW II) with Latakia (the Russian naval base) as its capital. The Druze should likewise be freed from the danger of Sunni oppression in a post-Assad regime by getting their own state. There are roughly 700,000 of them in a part of the country that could make a small new state. As for the Kurds in the far north-east corner, they would obviously make more sense combined with the Iraqi Kurds in a standalone Kurdistan. Strangely the US has fought this concept tooth and nail to avoid offending Turkey, while Turkey is equally furiously cutting deals with the Kurdish powers-that-be in Iraqi Kurdistan to secure energy supplies, be it oil or natgas. The US yet again is stuck in a time warp while its client-states have moved on.

Having said that not everyone in the US is unprepared to ponder the inevitable we did however find this fascinating map that was published by the New York Times recently.

Is breaking up Syria difficult? After so much devastation it would certainly be better to have a series of new states in the area that are not engaged in fratricidal civil war than rebuilding a pacified Syria just to have it explode again in ten years from now for exactly the same reasons. Was it preferable to have Bosnia broken into constituent parts or have it as a bloodbath... if only Bosnia had been preempted by such a breakup then a vast mass of lives and destruction would have been saved. The exact same goes for Syria.

And if you need any reminding of why we need to have a policy on Syria that is more than just a visceral follow the US leader, I found this tongue-in-cheek poster on line, which despite its bluntness pretty much sums up the disgraceful, unthought-out response of the bulk of the parliamentary party in late August's vote.

Nice Place to Visit.. But You Wouldn't Want to Live There

noreply@blogger.com (Antiochian) — Fri, 15 Nov 2013 17:37:00 +0000

One is tempted to laugh, but then again crying might be the better response looking at the rather superior Islington-dinner-party view of housing estates in the Guardian newspaper's survey of the "10 best council housing estates":

http://www.theguardian.com/culture/gallery/2013/nov/16/architecture-housing?picture=422505580#/?picture=422505615&index=4

Before one dismisses out of hand this exercise in highfalutin architectural patronising of the residents of what are mainly high-rise slums one should think of the reality of these "gems".

When some pensioner was mugged in the stairwell of the Park Hill estate in Sheffield did she get a frisson of relief in that she is at least getting mugged in an architecturally significant slum. Likewise did Erno Goldfinger's light touch with concrete provide inspiration for generations of inner suburbanite youths.

As for Davy Place at Loddon in Norfolk, the only thought that comes to mind is "where is my bulldozer when I need it". How one can swoon over a particularly mediocre English take on the American "ranch" home, specially adapted by being crunched together in a series of alleyways crossed with an allotment, is beyond me. When compared to Poundbury (below), it's no contest.

While some of these buildings may have moved on to better things, being hipster magnets now, the smaller (lesser?) examples of these "Cool Britannia" buildings still provide daily misery for their occupants and are arguably worse than some of the Victorian slums they replaced, if for nothing else than their deficient community relationships compared to the dim alleyways and smoky by-ways of the inner cities pre-WW2 where at least the residents' were mainly at eye-level.

Before dismissing this as a rant against 1950's architecture I would note that I am highlighting this because the very people that write such articles and revel in such structures still represent the oligarchy of planning in this country and given their druthers would have all the rest of living in such things.. while they are firmly ensconced in their Georgian rehabs in inner northern London.

Coalition with Labour? Even Harder to Divide the Spoils....

noreply@blogger.com (Antiochian) — Mon, 11 Nov 2013 23:24:00 +0000

If you thought coalition negotiations with the Tories were tough going then just wait until you have to do them with the many-headed Hydra of Labour.

One has to chuckle at those of the more Leftist slant within our party who departed in disgust when we ended up in bed with the Tories. Ironically the portfolios that the departees most care about would have been off-limits to the Liberal Democrats because these too are the hotly contested favorites of the Labour faithful and delivering them over to the "wet behind the ears" LibDems would have caused massive recriminations on their side. As it was the talks with the Tories involved us being thrown fish the Tories didn't want on their plate, but that LibDems go weak at the knees at the very mention of, such as Scotland and energy.

So it's a case of be careful of what you wish for because any putative talks on a Coalition with Labour will run into ructions not on opposed interests, but on the common ones. So verily I would liken the task to the Judgement of Solomon (pictured below) which was only solved by the true mother renouncing her beloved. How many in our ranks will go into shock to see Energy and Climate Change slip out of our hands to be replaced by the role as Secretary of Basketweaving and Advanced Macrame?

The problem here goes beyond common interests with Labour, but over-focus on interests within our party. At a recent party event I attended I was dismayed by the narrowness of the discussion... it might have been a Green Party event.. I love green issues but... while the Greens can proudly say that they do not have (nor want) policies on a lot of things, that is fine as they are focussed on what they do and at least in the UK they don't have pretensions to be a party of government.

I see wide swathes of public policy where we not only have weak or non-existent policies but we don't have spokespeople any more (as we did in opposition) because we have "left that to the Tories". Good examples are defence, foreign affairs and finance. It was amusing to see a survey recently in which party members were polled on what ministries we should hold in future coalition talks and the top polling post was that of International Development. That role reminds me of a past US vice president who described his role as "not worth a bucket of warm spit". Maybe we have (lots of) members whose idea of self-actualisation is drilling water wells in South Sudan BUT... the broader public are not going to change their votes for a party for which this is the main priority.

Now that Nick has seen the light (presumably under goading from Ryan Coetzee) on the need to make some airspace between himself and David Cameron (note how much rarer the joint photo ops have become) and space between us and the Tories on the issues of repressed contention (immigration, privacy etc) we still are not challenging on the areas which we have ceded to Tory domination. However, if we were to end up with Labour in a coalition then would the roles that we have wanted to grab in the last four years (energy, climate change etc) be ones which Labour would want to hold for itself? We would have a far better chance of ending up with financial regulation, defence and maybe even the Foreign Office in a coalition to our Left. Are we ready for that?

I might also mention that if Scotland votes for "in" and Labour "win" the election (and end in coalition with us) then there is no way we get to keep Scottish Secretary role... anyone care to brush up on Northern Ireland....? That's what will come of being in coalition with a party with which one has too much in common!

A Trickle Down Solution to the Spare Bedroom Tax - Using Some Basic Maths

noreply@blogger.com (Antiochian) — Mon, 11 Nov 2013 11:12:00 +0000

Quite a goodly chunk of the recent South Central Regional conference was devoted to the debates on the HS2 (already covered in one of my policy posts) and the so-called Bedroom Tax. While I have discussed the Bedroom Tax before, I thought it good to elaborate on theme most particularly in relation to the housing policy (or lack thereof) of the party at this time.

As for the actual debate, I found it pretty amusing, not for what was actually said (though there were a few laughs), but because the arcane discussion of clauses to include and exclude reminded me of the Marx Brothers' famous Contract Scene. On YouTube here for those who have never seen it:

http://www.youtube.com/watch?v=G_Sy6oiJbEk

The 800 lb gorilla in the room for me was that the debate was about the amelioration or different modes of application of the tax, and even of its morality, without virtually any mention of the root cause.

As I noted in the previous posting, the problem is the failure in recent decades to construct sufficient one bedroom units. Even now when I read about new social housing developments, the promoters proudly boast of the number of two- and three-bedroom units that the new complexes and estates will contain. This of course does not solve the problem that the Bedroom Tax seeks to rectify (punish?).

There is a number floating around of 660,000 units effected by the Spare Room Subsidy (I shall rather tongue-in-cheek use the official spin). So let's just use this number.. what this implies is that there are 660,000 singles or potentially a maximum of 1.32mn people (in couples) occupying two bedroom (or more social housing). Or in another potential calculation there might be a couple with one other dependent occupying a three bedroom housing unit where there is thus a spare room (so maybe even 1.8mn people).

The exact mix of how the 660,000 units is made up is not a number I have been able to find. But it should be a key number for this debate. So for the reasons of argument we shall posit that there are 660,000 units that are made up of:

400,000 units of two bedrooms or more occupied by a single or a couple

260,000 units of three bedrooms (or more) occupied by a couple and a dependent

This is a lot of units by any measure. In fact if the social housing stock was properly configured and allocated we might have a very substantial number of people in right-sized housing that are currently languishing on waiting lists. Moreover, we are currently building units to house the wait-listed people who could conceivably be catered to within the current housing stock.

What should be our policy beyond mere hand-wringing? Well, Labour have come out and made some hefty projections of how much social housing they would build per annum over a five year term. Like so many of the policy initiatives at their most recent conference it had the look of shooting from the hip: typically unfunded, unelaborated and unnuanced.

What would be the effect if we committed to the construction of 200,000 units over the term of the next five year parliament? What if that commitment was ONLY to construct one bedroom units? What would be the effect?

Well, if two hundred thousand singles and couples were moved into right-sized accommodation, then 200,000 units with two or more bedrooms would be freed up. Thus the maths is relatively simple, ergo:

200,000 new residences
rehouses between 200,000 and 400,000 people
and frees up 200,000 units of two or three bedrooms
for potentially 200,000 couples with one dependent or two dependents (i.e. 500,000 or 600,000 people)
or 200,000 single parents with one or two dependents (i.e. 400,000 or 600,000 people).

So by building 200,000 net new one bedroom units provides net new housing for between 400,000 to 600,000 people.

The effect of the number of those hit by the Spare Room Subsidy might be even greater. For as couples and singles move into one bedroom accommodation, two bedroom residences would become available for those couples with one dependent to move down from three bedroom units, thus freeing up spaces for larger family groups to occupy.

OVER AND BEYOND all this, we still have a residual problem of those aged over 65 who are occupying over-sized space. While the Subsidy is clearly designed to give them a free pass, it might also potentially allow a single 66 year old sitting in a two or three bedroom unit until they are into their 80s. Only actuarial calculations (or put more bluntly the Grim Reaper) will fix this problem and the lead time is open-ended..

Clearly tempting such an individual (who might indeed have taken in a lodger or relative) to downsize is going to be a tough task, except if one was able to offer sufficiently tempting one bedroom units that they would voluntarily cede the space they are currently occupying.

All this should be read in context of my previous scribblings on the subject of replacement of the more mediocre examples of the social housing stock that were created in the 1950s and 1960s that are now no longer "fit for purpose".

And I shall finish by noting that verily as I was leaving the conference in High Wycombe that Saturday, what did I spy right in front of me at the exit gate?

... but my favoritest thing in the world... four mediocre 1950s (?) one bedroom units taking up the space that could easily be occupied by 12 (or indeed 20) modern one bedroom units... I rest my case..

Recruiting Posters?

noreply@blogger.com (Antiochian) — Sun, 10 Nov 2013 20:56:00 +0000

In a more light-hearted vein and prompted by this week's rolling over by the powers that be in the face of the Portsmouth shipyard closure, I took two old Navy recruiting posters and gave them a new twist:

Why Naval Policy Should be Better Off in LibDem Hands

noreply@blogger.com (Antiochian) — Fri, 08 Nov 2013 16:51:00 +0000

I don't feel I owe Nigel Farage anything (does anyone?) but he proved useful this week when his appearance on Question Time (which was otherwise less than scintillating) dished up the news nugget that the Ministry of Defence had given supply ship construction contracts to Daewoo Shipbuilding and Marine Engineering's yards in Korea in a £452m contract for four tankers in early 2012. Quite rightly one can feel that this was an event that goes quite a way towards explaining this week's "rationalisation" of the Portsmouth naval shipyard.

This sent me scurrying for the back story and indeed it was back in February last year that the the original deal was announced by the then Tory Defence Minister, Peter Luff.

The story was reported here:

http://www.dailymail.co.uk/news/article-2105100/Navy-buys-Korean-ships-fuelled--452m-contract-tankers-goes-Far-East.html#ixzz2k4JwMLCM

Interestingly at the very end of the article, the writer made the comment:

"Last month the Mail told how BAE Systems was considering closing the naval dockyard in Portsmouth as part of a review of its warship business, bringing to an end 800 years of shipbuilding".

I am not in the business of affording the mail with prescience but they certainly got it right there. Maybe one of their Tory cronies was using them to break it gently to the public, but then again the article was nothing but gentle.

While recent days have seen the government hiding in the Fuhrer Bunker sending our hand-scribbled messages saying "don't blame us, its a commercial decision", as usual a bit of scratching shows that the thin gruel of the current shipbuilding program was going overseas verily as the Portsmouth shipyard was already under threat. This is the disgrace of the current turn of events.

Frankly while I am not warming to BAE I can also say that the real blame now most definitely lies with the Tory-controlled MoD. Sounds like an even better reason for the re-establishment of the Admiralty as a separate ministry for it is pretty obvious that the mandarins of Whitehall would NOT have got their way if the relationship between decision makers and the Royal Navy had been at less of a remove as it is in the monolithic and army-centric MoD.

The author of this bright idea was Peter Luff who was then Minister of Defence and is now heading towards retirement in 2015. Meanwhile the country is potentially left without a naval shipyard.

At the time the Mail reported that "Critics said the decision was a blow to Britain’s declining shipbuilding industry and to the proud naval tradition of what was once the world’s greatest seafaring nation".

The anonymous critics (maybe Tories?) also were reported as having accused: ".... the Government of ‘shameless hypocrisy’ after David Cameron criticised India earlier this month for snubbing British industry when it awarded a £13billion deal to supply 126 fighter jets to France".

Clearly DC is not averse to playing the role of the pot calling the kettle black. But once again where were the leaders of the LibDems on all this? Throwing up their hands and saying "not our bailiwick!" as they did this week? Or hiding somewhere and saying "thank god, we don't have a defense policy of our own"?

The four Military Afloat Reach and Sustainability (Mars) tankers, from which helicopters will be able to operate, are due to enter service from 2016. They are, ostensibly, being bought ‘off-the-shelf’ from South Korea and will maintain the Navy’s ability to refuel warships at sea and will provide support for amphibious and land forces close to shore. They are intended to replace single-hulled Royal Fleet Auxiliary ships, which were built in the 1960s.

The new 37,000-ton vessels are 650 ft long and can pump enough fuel to fill two Olympic-size swimming pools each hour.

The Ministry of Defence covered its posterior by saying that several British companies expressed an interest in building the tankers but none submitted a final bid for the contract.

A source close to the Defence Minister initially said there was no capacity to build the tankers in UK dockyards. The Daily Mail said this claim was denied by shipbuilding firms. The source also said there was ‘no proven track record’ of building tankers in the UK, even though the Royal Fleet Auxiliary Ships had clearly been built in the UK back in the 1960s.

The Mail quoted a defence industry deepthroat saying: ‘The MoD made it clear they wanted a commercial tanker and from day one it was as plain as the nose on your face that no UK company could compete against the low labour costs.’

At the time, Luff said British firms "would benefit from £150 million of associated contracts including providing navigation systems and equipment for the tankers". Gosh, isn't this an old saw we have heard before. Does this claim, more than 18 months on stand up to any sort of scrutiny?

In an example of tautological gymnastics that was clearly one of the reasons he is no longer Minster of Defence he said, the deal "demonstrated the best value for money for the taxpayer and that ‘complex’ warships would still be built in Britain". When in fact he is saying that a commercial tanker, which is much simpler to build than a "complex" vessel is better off built elsewhere. By inference, Britain is keeping the value-added work and the Asians can built the simple stuff. When it looks like Britain will pretty soon not be building anything.

Let's ask the workers at Portsmouth whether they feel insulted to be building "mere" tankers when the alternative is the dole queue and the extinction of more of the skills base.

Our party has a policy on apprenticeships that it has been trumpeting lately and yet how does that gel with shutting down one of the major engineering skill-bases in the south of the country (not to mention the cuts in Scotland). Even if Nick et al. cannot get their brains around a naval policy maybe they could see a light to stir them from their slumbers and go into bat for the foreshadowed damage to apprenticeships that the closures in Portsmouth (et al.) will result in.

To reiterate the obvious yet again.. we should have a policy that the Portsmouth yard should be returned to Royal Navy ownership/control and that, if the Tories aren't interested in the Navy then the portfolio be given to the LibDems to manage.

After all could we do any worse of a job than Fox, Luff and Hammond...?

Renationalise the Portsmouth Naval Shipyard

noreply@blogger.com (Antiochian) — Wed, 06 Nov 2013 08:22:00 +0000

One of the more obvious and strategically disastrous side-effects of the bloated and ill-starred carrier program is that the Portsmouth Naval Shipyards are now threatened with closure. Its hard for our party to respond to this action: which is bad for the nation, really bad for the Royal Navy and atrocious for our seat of Portsmouth South, when the best we can offer as an alternative is our half-page pdf defence policy.

http://www.libdems.org.uk/siteFiles/resources/PDF/Election%20Policy/18%20-%20Defence.pdf

Thus how can the party effectively respond to this retrograde development, except by the valiant efforts of Gerald Vernon-Jackson, the Leader of the Council at Portsmouth (a city controlled by us) and our MP there Mike Hancock. But, it is not difficult for me at all to respond.

This is exactly the type of short-sightedness that prompted me to write a few weeks ago advocating the re-establishment of the Admiralty as a separate entity to the Ministry of Defence and the return to using the title of First Lord of the Admiralty.

In response to the latest developments the party should be arguing for nationalisation of the BAE-owned facilities in Portsmouth. If BAE want to be a dog in the manger on this and not cooperate then suitable actions to "encourage" them to see the light should be taken. This is a perfect opportunity for the party to go in to bat for the interests of our constituents in Portsmouth (and potential ones in seats like Gosport). BAE should realise (or be taught) that the relationship between defence contractors and the defence establishment is symbiotic NOT predatory.

I would attribute a direct linkage between the closure announcement and the cost overruns in the carrier program. The first of the carriers, Queen Elizabeth, is due to begin sea trials towards the end of the decade. A decision will not be taken until 2015 about whether the second carrier, Prince of Wales, will ever be operational; it could be sold or mothballed. The carriers were planned to be built by a consortium that included BAE.

This appears to be yet another example (HS2 anyone) of a "big toys" strategy that creates much collateral damage in its wake. The projected cost of the two carriers has risen by a further £800m to £6.2bn, according to a Financial Times report. The latest increase means the bill for the 65,000-tonne ships will be almost double the £3.5bn estimated when the project was agreed by the Labour government in 2007.

The Guardian today reported that the Ministry of Defence said how BAE "rationalise their business" is a matter for the company. "Negotiations between the MoD and the Aircraft Carrier Alliance regarding the rebaselining of the Queen Elizabeth carrier programme are at an advanced stage," it said. "No final decisions [on the programme] have been taken." If the Admiralty had been re-established as we proposed elsewhere, could be realistically expect such a blase response as the Ministry of Defence offer here.

Apparently if shipbuilding is wound down at Portsmouth, the Ministry of Defence will have to bear costs that could run into hundreds of millions of pounds under a 2009 agreement guaranteeing BAE a minimum of £230m a year in shipbuilding and support work over 15 years. The agreement can be cancelled, but the Ministry of Defence would be liable for closure costs and compensation to BAE for its lost investment. Renationalising the shipyards (in lieu of compensation to BAE) is the solution.

Beyond those directly effected there are an additional 2,900 BAE staff employed in the Portsmouth area on tasks that include maintaining, servicing and upgrading the Royal Navy ships at the naval base. The Guardian reports that their jobs are not expected to be affected by the announcement. The only rattling of the sabre these days is BAE making these threatening noises towards the clueless Ministry of Defence. BAE should be told if it doesn't play ball then the other functions related to servicing the Royal Navy shall also return to the Admiralty's control.

The Tories' Minister of Defence Philip Hammond tried to deflect concerns about the rising costs by announcing that he has renegotiated the project to build the carriers on terms more favourable to the taxpayer. And seemingly in a fit of pique BAE have come out with this threat to shutter Portsmouth (and some Scottish yards).

A report a few days ago in the Financial Times, suggested the government would move that further cost overruns beyond the new £6.2bn baseline for the carriers will be split 50-50 between the Ministry of Defence (MoD) and the contractors – whereas previously they had fallen mainly on the government.

An MoD spokesman said: "Negotiations between the MoD and the Aircraft Carrier Alliance regarding the re-baselining of the Queen Elizabeth Carrier Programme are at an advanced stage.

"No final decisions have been taken and the department will make an announcement in due course." The shipyard announcements are clearly BAE's attempt to get ahead of the carve and blackmail the government into a backdown on the over-run sharing.

This all has the look of the old private sector shakedown where the latest ructions over the price escalation in the carriers threatens to kill one of the two carriers. So what do they do? Claim inadequate work, and then get the government to take some kneejerk measures to save the day, i.e. subsidies or holding fire on pushing back against cost overruns.

I would prefer to think that the carrier project is in the wrong hands and that the shipyards would be better off back in Royal Navy ownership. Its time to take the Portsmouth yards back into Royal Navy hands and say goodbye and goodnight to BAE.

Naval Policy - Projection Through a Base Strategy

noreply@blogger.com (Antiochian) — Sun, 03 Nov 2013 20:30:00 +0000

With the rather shambolic retreat from Empire in the decades following the Second World War, little thought was given to a Weltanschauung of what Britain's remaining possessions and its military would look like. Too often the shots were called by the US as part of the Special Relationship.

The Special Relationship has stood the test of time but has done very little for Britain in the meantime, beyond entangling us in various ill-fated military adventures in the Middle East. The real test of matters was the Falklands War where the US effectively sat on its hands and made soothing lip movements, as the graduates of their School of the Americas ran their extermination machine within Argentina (in what was euphemistically known as the proceso de reorganisacion nacional) and went gallivanting into the Falklands. They were later to claim they had received mixed signals from the US on its attitude to an invasion.

Ironically, Britain had provided military largesse to the US in the 1960s in the Indian Ocean bending over backwards to allow the US to have control of the island of Diego Garcia (in the British Indian Ocean Territory) even going so far as expelling all the inhabitants to Mauritius (the Chagossians) to clear the way for the US to import Filipinos en masse to work as gastarbeiters at the base it built there.

In any case the US is now in steep decline. Its reputation is in tatters on numerous fronts, and its welcome is less than effusive in many places. The US stands on the cusp of its own "post-Suez moment". Been there done that.. Britain is fifty years ahead of you..

Great Britain, on the other hand, still has a reach that stretches around the globe in colonies and territories that it still controls and where the local residents have little or no interest in being micro-sized independent nations.

I had to laugh in the wake of the successful blocking of the Syrian bombing putsch by Obama when the UK supporters of the bombers claimed that its showed Britain's irrelevance and "lack of projection". These critics have scarcely been heard since, now that the rejection of the bombing motion has actually led to the dismantling of the entirety of the Syrian chemicals arms complex within the space of a mere two months, and without a single bomb being dropped. Funny that...

These belittlers of Britain fail to note that the nation has a much better reach (and reputation) around the world than the US does. However, as I noted in my recent musings on Naval policy, the UK has let its premier service be sidelined under the Special Relationship and subsumed into the Ministry of Defence and left at the mercies of the likes of Liam Fox (and friends)..thankfully now departed..

In that previous note I mentioned the concept of the Navy's projection and mentioned the possibility of building a Naval base at Port Stanley. One of the most remiss aspects of policy since the 1982 war has been the avoidance of development plans for the Islands for fear of creating offense. One is reminded of Basil Fawlty's admonition to his staff about the German guests to "not mention the war".

Instead the islands have been developing under their own steam with the population growing, industries evolving and cruise ship visits taking off. Ironically, international cruise lines in the southern summer are using the place more than the Royal Navy is...

With the retreat from Army presences on Continental Europe, and the many and various US adventures, the strategy for the Armed Forces is somewhat in disarray. The LibDems have a policy statement on defence that is a mere half-page pdf. When we challenged one of our MPs on this last week he was rather flustered to hear that policy was (literally) so thin.

In recent days the public have been let in on the secret that the aircraft carrier program has suffered a massive blowout to over GBP 6bn due to overruns.. and moreover the carriers are still over six years away.

The alternative to a carrier strategy (though ideally an adjunct) is a base strategy. The Royal Navy website has Portsmouth (a LibDem seat), Plymouth and Clydeside listed as the roster of bases. This is rather thin gruel indeed for one of the world's premier navies. It is even more damning when one takes into account that we have far flung territories that constitute a ready made set of potential base locations. With the Army in decline why should the Royal Navy not be in ascendancy capitalising upon the nation's traditional strengths and interests?

A base at Port Stanley would peg out the South Atlantic as a sphere of influence and also provide a base at which our NATO allies could resupply. Moreover it would provide a major boost of hundreds, if not thousands, of new residents.

Such a base would also make the Falklands more impervious to sabre-rattling from its neighbour to the West. If the Falklands had been a significant base in 1982, would the adventurous junta members ever have dared their attack?

Going beyond the Falklands we might signal here a further thought that a sale of Diego Garcia to the US for a suitably large amount of money might enable us to disengage from a nation that clandestinely used our territory for illegal renditions over the last decade. A British naval base could be built on one of the other islands.

Alternatively they could depart and we retake control (reinstating the Chagossians) and make the Diego Garcia facility into a British naval base in the Indian Ocean.... then we shall see who lacks projection on the international stage..

We shall end with the thought that as a party of government, should we abdicate defence policy to the other partner when the best they can serve up is the likes of Liam Fox? He may be gone but the lack of direction carries on... Nature abhors a vacuum and there is no reason why the LibDems should be as compliant on defence (and foreign) policy as has been the case hitherto.