Friday, 19 December 2014

Tory Thinking in NW Hants - Schools as an Unnecessary Evil

There would appear to be two types of Tory constituencies. There are those where the cares and concerns of the villagers are solicitously dealt with and then there are those where the voting populace  are regarded more like sheep that should take what they are given and be grateful for it. 

North West Hampshire is one of those seats where the second school of thought applies and it can be best summed up as Noblesse N'oblige Pas

The Background

NW Hants is a curious construct with its large horde of WWC residents bunched in the metropolis of Andover, with a bunch of chintzy small villages (of Tory persuasion) and then two large villages, Whitchurch and Overton (of LibDem voting tendencies). Andover was a small coaching town for centuries and a regional market town (with its Hardyesque appendage Weyhill) and had only 5,000 residents until 1950. The legacy of WWC preponderance comes from a brainwave of the GLC that was decided on an "overspill policy" (read ethnic cleansing) of the East End that would shift hordes of people out to Hampshire. 

For some bizarre reason (something in the water?) these East Londoners (with a requisite tug of the forelock) went native and started voting Tory out of gratitude for being dumped in the middle of nowhere, with minimal amenities, but at least clean air. 

So the town burgeoned to its current size of around 55,000. So what to do with the Great Unwashed? Obviously the Tories don't want them in their villages. So what happened was that the chintzy villages to the south of the town were made safe from contamination by pushing all the development to the north and east of the old town centre.

To further distance these people from the "better parts of town" a network of mind-boggling roundabouts (the Black Holes of Andover) connected by wide depopulated double carriageways (the Boulevards of Broken Dreams) and then a bunch of Big Box stores and industrial parks were put between the centre of town and the new estates as a "cordon sanitaire". New residents were to be as isolated and transportless as humanly (inhumanely) possible. 

Schools - That Unnecessary Evil

Then came the wretched issue of schools. The town had long had a grammar school which was converted into a comprehensive (the John Hanson school). Problem was this was in the Tory-leaning Western side of the town.. what to do? Of course, sell the land to developers and move the school even more to the west, in fact so far west that it is on the very farthest side of the town from where the bulk of the population had been planted.

The solution to this was to keep growing the town to the east and north, keep talking of putting a school over there and then just ignore.. Wash and repeat! 

There is a small school on the east side of town though, called the Winton Community Academy which has had a somewhat chequered history having been put in special measures in 2012 and the headmaster resigned in 2013 because results fell short of the government "floor target". Department of Education statistics show it as having a capacity of 1,055 students but only having 465 at the current time. John Hanson is shown as having 980 places and 868 pupils. 

The curious thing is that Winchester, at slightly over 44,000 in population has three Year 7-11 schools (Kings, Westgate and Henry Beaufort). But then again Winchester is a Tory marginal... got to keep the populace happy there as they are not so subservient. So we have the bizarre situation that the middle class of Andover ship their children by bus every day the 24 miles to Winchester and pay the hefty bus fares themselves. 

To put this into perspective, Westgate in the Ofsted survey comes out in the highest quintile with 84% gaining five or more GCSEs, while John Hanson ranks in the third quintile with 58% gaining five or more GCSEs.

Why is this tolerated? Primarily because John Hanson in Andover is nigh on full to bursting and as long enough parents ship off their children at their own expense (myself being one of those parents - with my daughter going to Westgate) then its saves the County the effort (and expense) of building a school on the eastern side of the town.

Le Piece de la Resistance

Even better is yet to come. Space was put aside for a school in the area known as East Anton.... now... cunning devils, they have worked out that they can let developers build 350 homes on the land allocated for the school! Here is a map...

However, after decades of the population on that side of town being taken for granted, the worm may be turning. The planning application ran into heavy flak with the LibDem town council members prominent in the opposition, whereas in the past it would have been pushed through in a "let them eat cake" style, and instead it has now become an issue to be debated next year. 

State of Play

So sociologically speaking we have:

  • Parents in the A category sending their children to private schools
  • Those in the B category either using private schools or busing to Winchester schools
  • Those in the C category either within walking distance or being bussed to John Hanson
  • Those in the D & E categories being bussed to John Hanson, because it is way beyond walking distance
Any bussing comes with a high inconvenience factor for the pupils and their families and with a high cost to the County and road congestion (but we do have those wonderful roundabouts and boulevards to ease that...).

So after decades of riding roughshod over the townfolk the Tories of Test Valley Borough Council, and their confrères on the Hampshire County Council, are finding that getting away with NOT building a school, while they keep insisting on pushing development of housing estates into the greenfields, is running into long overdue opposition.  

Saturday, 24 May 2014

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

...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.


Housing & Development

Local Government and Communities


Energy and Climate Change

Business, Innovation & Skills



Rail Transport


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... 


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. 

Friday, 28 February 2014

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

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.  

Thursday, 27 February 2014

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

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. 

Saturday, 22 February 2014

Parsing the Bright Blue Crew into the National Liberals

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) 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. 


Friday, 21 February 2014

Casting the DoD into the Recycling Bin of History

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. 

Monday, 17 February 2014

National Liberals - Threat or Opportunity?

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: 

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:

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...

Sunday, 16 February 2014

The City - Legacy of Big Bang and Labour Sycophancy

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

Friday, 14 February 2014

A Light-Hearted Observation of the PPC Assessment Process

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..