Sunday, 30 November 2008

Prosecuting isn't easy

On Friday I watched a little television. It's not something I do very often, but there was a programme on called "The Barristers", the title caught my eye when skimming through the weekly television supplement while seeing to my morning motion. I had heard of it before through Charon QC, an old friend. I thought I should give the programme a try.

Apparently this was the third of four in the series, the first two of which concentrated on the difficulties encountered by aspiring barristers. On Friday there was still some coverage of beginners but most of the programme concentrated on the work of a couple of established barristers engaged in different ways in the criminal law. As my regular reader will know, I am a barrister. My early years were spent mainly in the criminal courts during the day while I built up a practice in civil law through paperwork done in the evenings and at weekends. I have extremely happy memories of those days, long past though they now are.

Up until twenty or so years ago it was normal for almost everyone who wanted to pursue a career at the Bar to cut their teeth in the criminal courts. This might make it sound as though people facing life-changing criminal charges were left to the mercies of the inexperienced but the reality was far from that. There are many short hearings in both Magistrates Courts and Crown Courts at which decisions are taken about the future conduct of a case. The Defendant is not at peril during those hearings and a well-prepared junior practitioner can look after the interests of the prosecution or defence perfectly well. It is good experience in court which builds-up the feel you need for how court proceedings operate, it also often allows juniors to see experienced practitioners in action and learn from their good and bad habits. The use of junior barristers is carefully regulated by their clerks who know it does no one any good to send them out to deal with cases beyond their skill and experience. They might deal with a procedural hearing but they would not be entrusted with the trial until they had proved themselves up to it.

I should give a brief explanation of how the profession works. Barristers are self-employed but join together in sets of chambers. A set of chambers will usually have very senior people, often including one or more QCs, and a progression of people of varying experience. Their practices are administered by a senior clerk and a number of junior clerks. Newly qualified barristers have to serve an apprenticeship (known as pupillage) for a minimum of one year in which they are attached to practitioners of at least five years experience. In order to enter practice themselves, they must find a seat in a set of chambers. It is difficult to find pupillage, finding a seat in a good set of chambers is even harder. Many good people don't find a seat and a few who do get in fail to develop a practice. Overall it is probably fair to say that barristers who have been in practice for five years or more are very competent.

Friday's episode of "The Barristers" taught me something I didn't know. In my day every trial in the Crown Court (the court which deals with the more serious criminal cases) involved a barrister presenting the case for the prosecution and a barrister representing each defendant. On occasions senior solicitors with extensive experience in court would appear for the defence but almost always it was a barrister. On Friday I learned that Crown Court prosecutions are now sometimes dealt with by lawyers employed by the Crown Prosecution Service. Indeed they featured a case in which a lady barrister who is employed by the CPS presented a murder case in court. It seems that this was the first time a CPS employee had conducted a murder trial.

The Crown Prosecution Service was set up in 1986. Until then the police were in charge of prosecuting cases and had a legal department which undertook that function. The change was made because it was thought more appropriate to draw a line between the investigation of crime (the role of the police) and the prosecution of those accused (previously the role of the police's prosecuting lawyers). The change was long overdue because there is a fundamental difference between the responsibilities of an investigator and those of a prosecutor. The job of the police is to investigate crime and charge those they consider responsible. Once a charge has been laid the game changes, the question then is whether the charge can be proved. That question necessarily involved a critical analysis of what the police have done and it does not sit comfortably to have a branch of the police involved in that exercise.

Since the CPS started there have been moves for it to take over all aspects of prosecuting. It was a little while before lawyers employed by the CPS appeared regularly at house-keeping hearings in the Crown Court, then it became normal practice. The next step was for them to present cases to juries. Now that one of their number has conducted a murder trial there will be no stopping them, within a few years it is inevitable that all Crown Court trials will be prosecuted by a lawyer employed by the CPS. I am in two minds whether that will be a good thing.

Every lawyer is expected to act ethically. Of course it does not always happen, but the more independent the lawyer is the more likely it is to happen. Someone employed by the CPS (working in the CPS office, surrounded by the juniors who have worked on the case, influenced by their personal relationships with those they work with every day, knowing their pension depends on their continued employment) might find it difficult to say "I know you have worked on this for months, but there simply isn't a case here". Of course most able people would be able to do so because they know their professional duties require it, but how does that actually work in the office? What happens when they discover that someone they like took offence at their decision? The next case might see a decision being taken to placate the upset colleague even though the right thing to do is to say they were wrong again. Personal pressures of that kind simply do not arise when the decision is in the hands of a self-employed practitioner.

There is also the inevitable question of quality. Someone has to decide who is to present the case for the prosecution in court. If the CPS have to farm-out the work to a self-employed barrister, or a solicitor in private practice, they have thousands to choose from. They can pick the best available. Of course real life doesn't allow them the choice of absolutely everyone because there will be many they have never heard of and know nothing about, nonetheless they will have many very able people available. There are numerous occasions on which very senior practitioners want a small case to fill in a few days and the CPS is able to brief someone at the top of the tree. If everything is kept in-house the field of available advocates is limited and it is inevitable that some cases will be given to people who simply aren't up to the job.

Another aspect of quality is in the recruitment of people to the CPS. And this is where the real problem arises. A criminal barrister in independent practice cannot expect to make a lot of money. Those at the very top do extremely well, but they are people of huge ability and industry who would make a shed load of cash whatever they did. The vast majority of established criminal barrister of ten to twenty years' experience will make the equivalent of a salary of £40,000-£60,000. It's not bad money but it is not a fortune. To get to that position they will have had to prove themselves to be among the best of their generation in order to be taken on in a set of chambers and will then have had to develop a practice over a significant period of time. When the CPS engage their services they can be confident they have engaged someone of real ability.

Who do the CPS recruit? At the moment they appear to be able to recruit some experienced barristers and solicitors, but not many. Mainly they recruit barristers who could not find pupillage or a seat in chambers and solicitors who could not find employment with an established firm of solicitors. That does not mean that the people they employ are without ability, undoubtedly many of them have all the skills it takes to succeed in independent practice, the problem is the others. There will and must be a lot of others. It matters little if qualified lawyers of modest ability are taken on to process paperwork, what matters a lot is that they will progress through the internal promotion ladder and be thrust into court to deal with cases beyond their ability. Once the presentation of prosecution cases in court is the exclusive province of the CPS there is a significant risk that the overall standard of presentation will fall.

More guilty people will walk free.

Saturday, 29 November 2008

Nationalisation and profit, the new chalk and cheese

As we enter a new era of nationalisation my mind goes back to the 1970s when vast swathes of British industry were in "public ownership". The railways, the coal mines, steel manufacture, the telephone service, the supply of gas and electricity, shipbuilding and British Leyland (which made things they tried to say were motorcars) were among the largest and best known of the nationalised industries but there were many more. Now we have three nationalised banks, Northern Rock, Bradford & Bingley and the Royal Bank of Scotland and calls are being made for failing businesses to be supported by the taxpayer as these banks have been. It is a staggeringly different position from just fifteen months ago, but what does it really mean?.

Private ownership is easy to define. I own FatBigot Towers and everything within it. I have the right to use my property as I choose provided that my choice does not contravene the law and if anything goes wrong with my property I have to pay to sort it out, either directly in cash or through a claim on an insurance policy. No one has the right to use my property without my permission and no one other than me is burdened with the need to repair it or pay for replacement when it wears out. It is a two-way process which can be put in terms of benefit and detriment, profit and loss or rights and obligations. However one chooses to describe it, the up-side and the down-side both attach to the owner and to no one else.

Businesses are a little more complex because they often involve a company, indeed every nationalised enterprise has involved a business run by a company. A company is not, strictly speaking, owned by anyone. A company operates by having a sum of capital which it uses to do business and, with any luck, to make a profit. In order to raise capital a company issues shares. It says "pay me £1 and you will be entitled to a share of the profit I make using your £1", a million shares are sold at £1 each giving the company £1million to work with. If it makes £10,000 in profit in one year it might pay a dividend of 1p to each of the 1 million shares or it might re-invest all or part of the profit with a view to making an even greater profit next year. The shareholders do not own the company they own the right to participate in profits if those who manage the company decide to pay a dividend. The chairman and board of directors do not own the company, they manage it and work for it. In fact no one owns a company any more than anyone owns you or me.

A company, however, can own things just as you and I own things. We own our cars, televisions, fridges and all the rest of it. Companies might buy their business premises, furniture, carpets, cars and so on (although in practice many such things are rented) they also buy the things they need to be able to trade. A manufacturing company buys raw materials and turns them into finished products which it then tries to sell, a trading company buys goods from suppliers and tries to sell them for an enhanced price to purchasers. Each company owns the things it buys until such time as it sells them, that much is blindingly obvious. What is not so obvious is that companies with an established business have a further assets, goodwill. Goodwill is what causes people to do repeat business with someone. There are two dry cleaning shops in close proximity to FatBigot Towers, I only use one because I tried that one first and they have always provided an excellent service at a good price. When a new neighbour asks where they should take their curtains for cleaning I point them in the direction of the cleaners I use. That is what goodwill is all about. It is a valuable asset of a business and can be sold just as a machine or a desk can be sold.

So, what happens when a company is nationalised? There are various ways nationalisation can occur but the essence is that the government takes over the shares. It might take them all or only enough to give it effective control, but when we talk of a company being nationalised it means that sufficient shares are held by the government that it can dictate how the company operates. As I said above shareholders do not own a company, but they do have certain powers over how it operates. They can dismiss and appoint directors and pass resolutions requiring the managers of the company to adopt certain trading practices. Such decisions can only be made by shareholders if a sufficient number agree and nationalisation occurs when the government holds a high enough proportion of the shares to be able to appoint directors and dictate commercial policy.

In other words, nationalisation is not about ownership but about control. The rather romantic notion that the people of the UK "own" Northern Rock or that they "owned" the coal mines and the railways prior to privatisation is misleading phooey. The people of the country neither own nor control anything about a nationalised company. The government has the right and power to control how a nationalised company conducts business, to suggest that this automatically confers a benefit of ownership on the 60 million is utter nonsense. That not only explains my dislike of the term "public ownership" it also lies behind the biggest problem nationalisation causes. That problem is that nationalised companies are run by government and, therefore, political rather than business reasons dominate decision making.

There are four main political pressures that prevent governments operating nationalised companies as businesses. First, the fear of failure. If you take on an ailing business because it needs to be saved, anything short of saving it is failure and failure can cost votes. As a consequence the political need is to keep the business going even if it makes losses year after year. Secondly, jobs. Loss making companies are, almost by definition, overstaffed. Shed jobs and you risk shedding votes. Thirdly, the need to appear consistent. Businesses often need to change their strategies at short notice when market factors make their established approach inappropriate. It is not easy for governments to do this because a change of tack can be interpreted as indecisiveness, and indecisiveness can cost votes. Fourthly, the effect of the business on other people. We are seeing this at the moment with the government making moves to force banks to lend even where the bank is not sure the customer is a good bet. They are pressurising all banks not just the nationalised ones, but the nationalised banks will have to do it even if it is bad for their own business.

There is also the issue of profit. Profit is a particularly difficult matter for the present government because almost every minister, and certainly all senior ministers, have condemned the making of profit consistently throughout their political careers. For them profit is a consequence of workers being exploited. We should never overlook that every senior member of the current government entered politics as a dedicated Marxist. They will not find it easy to oversee a nationalised business that becomes profitable (not that I expect any of them to do so). What can we expect if Northern Rock returns to the lending policies which made it a successful building society? Either the government will sell it as a going concern far too early and suffer a substantial loss to the public purse or it will rein-back the profit making and force it to break-even.

Whatever happens to Northern Rock, Bradford & Bingley and any other company the government nationalises over the coming year, we can be certain of one thing. It will cost the taxpayers a hell of a lot of money and all notions of us owning them are nothing more than vacuous guff.

Leaky ignorance is bliss

The Damian Green affair has become more and more curious as the day has progressed. For anyone who doesn't know, Mr Green is the opposition MP arrested yesterday following his receipt of leaked documents from the Home Office which he then made public. Both the leaks themselves and his use of the leaked information occurred some time ago. There are three aspects of the affair which cause my greying eyebrows to head skywards.

Before Mr Green was arrested a number of people were informed by the police of their intention to make an arrest. It is not yet clear whether the identity of the person to be arrested was disclosed but the fact that he was a senior opposition spokesman appears to have been made known. The people informed include the Leader of the Opposition, the Mayor of London and the Speaker of the House of Commons. It later became known that the chief civil servant at the Home Office was also informed. Both the Prime Minister and the Home Secretary have given the impression that they did not know of the intention to arrest an opposition spokesman, a position supported by the police.

There is a curious contradiction in what the police did. I can understand that they might see fit to inform the Leader of the Opposition because the MP in question is a member of his party. I can also understand the Speaker being informed because the intention was not just to arrest Mr Green but also to search his offices, including his office in the House of Commons. The Speaker has overall responsibility for the conduct of business in the House and has a legitimate interest in knowing that an office in the building for which he is responsible is to be searched. But why include the Mayor? The Mayor, Boris Johnson, is a senior member of the opposition party but he has no party responsibilities. He is the chairman of the body which oversees the work of the Metropolitan police but his responsibility for that police force is secondary to that of the Home Secretary, she is the government minister with overall responsibility for all police forces in the country. It makes no sense to tell someone lower down the chain but not tell the boss.

The question arises why the police should tell anyone at all, after all if they are going to arrest Joe Ordinary they wouldn't find it necessary to tell his employer or wife they would just do it. The answer is that it is done as a matter of courtesy where the action the police propose to take would or could impact on public responsibilities and raise questions senior political leaders are likely to be required to answer. Informing politicians of an impending arrest does not involve seeking their permission or giving them an opportunity to debate the matter, it is a one-way street: "this is what we are planning to do, we inform you out of courtesy, thank you and good afternoon."

If there is one senior politician in the firing line for questions about such a politically sensitive arrest it is the Home Secretary. She has ultimate political responsibility for the way the police operate in this country and questions about the arrest of a senior opposition MP are directly within her brief. It is curious indeed that she was kept out of the loop. It is reported that her most senior civil servant was informed that an arrest was to be made, what is not known is whether the police chose to inform him rather than the Home Secretary or dealt with him because she was unavailable. Either way it should make no difference because his responsibility is to report to the head of department on something so important. No doubt we will discover over the next few days whether he took any step to tell the Home Secretary, it would be utterly bizarre if he did not. She would get to know of the arrest very shortly after it happened and, no doubt, would have a few choice words if her chief underling had kept it secret. It is hard to believe she did not learn about it within a few minutes of the police informing him. If that is so, why deny knowledge of it as she has, why not say "I was not informed personally by the police but my department was informed and that news was given to me at [insert time]"?

The second curious feature is that the police thought it necessary to arrest Mr Green. We know that a junior civil servant was arrested almost two weeks ago on suspicion of having leaked information and it is reasonable to infer that Mr Green's name came up during the investigation as the recipient of that information. He could be questioned about it without being arrested. That questioning would almost certainly have to be under caution and in the presence of appropriate legal advisers, but arrest seems a very heavy-handed step to take. Perhaps he was arrested so that the police would be entitled to search his homes and offices but he could be asked for permission for a search to take place and informed that he will be arrested if he refused permission so that a search could then be made anyway. To jump the gun by arresting first seems a peculiar way to go about things, they had no reason to believe he would adopt Enron administrative practices and have a bevy of staff on hand to shred documents at the first sniff of investigation. After all, there has been nothing secret or underhand in his use of leaked information, he has put it into the public domain in the course of legitimate political debate just as politicians of all parties have for as long as anyone can remember.

My third concern is about the acquiescence of the Speaker to a search of an MP's office. Although the BBC report I link to above says that the Speaker was informed of the police's intention to arrest an MP I have heard it said that the Serjeant at Arms was the person informed of their intention to conduct a search on Parliamentary premises and raised no objection. I find this a quite extraordinary scenario. The police have no right to search anywhere in the Palace of Westminster without the permission of the Speaker. Even a search warrant issued by a court is merely a request for permission to search if the premises are part of the Parliamentary estate. Although I did not hear the interview I have read that Tony Benn said at lunchtime that the arrest and search were a contempt of Parliament. I am not sure I would go as far as that because there can be no contempt if permission is given, to my mind the important question is why permission was given.

In the days when the Serjeant at Arms was a hairy-arsed retired Brigadier any hint that the police wanted to conduct a search would have been met with a brisk response, probably "bugger off, raise the matter formally with the Speaker and he will consult the House." Today, as the BBC reports, the response is "There is a process to be followed and that was followed." This might just be unfortunate wording but it gives the impression that the Speaker overlooked that Parliament has the right to regulate itself in every way, it is its own court. That is why there is such a thing as contempt of Parliament, it is also why MPs are immune from legal action over things said in Parliament. That does not mean that it is above the law, merely that, as the supreme law making body, it has the right to protect its position of independence from outside influences.

To search an MP's office is a highly significant act. Not only will he have confidential details of constituents and correspondence of a sensitive and private nature from those he represents, but he might also have documents concerning potential future policy (including policy affecting the police). Overriding the confidentiality of such things requires a greater justification than "There is a process to be followed and that was followed." In my view the Speaker should insist that no search is conducted unless the police can show an urgent need either because certain individual(s) are at physical risk or national security is at risk. Anything less cannot outweigh the need to maintain strict confidentiality for the working papers of MPs, no matter what we think of the MPs in question.

Some have speculated that this whole episode is a government driven attempt to silence opposition. I would not put such an approach beyond our hopeless and dishonest Prime Minister but there is no evidence of it, yet. Others have suggested it was an act of revenge against the Conservative Party by the outgoing Metropolitan Police Commissioner. Again, that is not beyond the bounds of possibility but there is no evidence of it, yet. Others still have hinted at it being an attempt by the police to undermine Parliament. This one, I think, I can safely dismiss as absurd.

The true picture will emerge in time. We will find out exactly what prompted the investigation, who took the decision to arrest Mr Green and why the Home Secretary was not informed at the same time as the others I have mentioned. With any luck politicians will close ranks and assert their right to use leaked information because those in opposition need to do it now and those in government will need to do it later.

There is one possibility no one seems to have addressed yet. As I understand it Mr Green was arrested on suspicion of two offences: (i) conspiring to commit misconduct in a public office and (ii) aiding and abetting, counselling or procuring misconduct in a public office. It seems that the only "misconduct in a public office" was that of the person who leaked information to him. Conspiracy to commit that offence would require more than just receiving leaked information, conspiracy requires a plan hatched by two or more people. Aiding and abetting an offence can happen without any positive act of encouragement but counselling and procuring both require you to do something to encourage the crime. Merely receiving leaked documents would not, I think, be an offence and their use in Parliament cannot be an offence. Taking steps to encourage leaks, paying for the information when it is offered or actively planning a method by which confidential documents will be disclosed would be in a different category. I know not whether Mr Green did any such thing and I presume he did not because the presumption of innocence is hugely important. But if he did, the case would have a rather different complexion. It would also take on a different political dimension because the question would arise whether others have done the same, including those in government.

What if it is asserted that Mr Green took active steps to encourage the disclosure of documents not in the public domain? Dare the government let the case proceed and face investigation into their own conduct when in opposition? In these times when domestic burglary gets a police caution (it was an unappealable minimum sentence of three years in the late 1980s), a getaway driver for a gang of armed robbers can get community service (five years), armed robbers themselves can get three or four years (ten if they were lucky even in 1990), is there anything to fear from investigations? Of course there is because it would end careers. If the police decide to proceed it will be interesting to see whether the Attorney General intervenes and uses her exceptional power to stop the prosecution. She would be right to do so but I hope it never gets that far.

Thursday, 27 November 2008

Is there a plumber in the House?

The truth is a funny old thing. Too often people confuse the truth with what they believe to be correct. For example, in the question "is it true that government spending can boost the economy and help alleviate the effects of recession?" the use of "true" has nothing to do with objective truth it is just an alternative way of asking "do you believe that ..." Truth is something which can be measured and does not depend on opinion or belief. Is it true that the Queen is 76 years old? No it is not, she is 82, we can tell that by referring to irrefutable sources evidencing her date of birth. Her age is a matter of fact so a statement about it can be tested and seen to be either true or untrue.

A steadfast refusal to accept as true something which can be shown to be untrue is at the heart of social discourse in the Western world. Much of how we deal with other people is based on a belief that they have not misled us by stating something to be true when it is not. That belief lies behind personal relationships as well as business transactions and it is also important in politics. People throw around the accusation that politicians constantly tell lies when usually all that has happened is that they have sought to put a good gloss on events. Sometimes their "spinning" of events stretches credulity without involving the assertion of an untruth and they lose credibility for overstating their case rather than because they actually told a lie. Having said that there are occasions when politicians do tell deliberate lies, indeed my belief is that the current government does so more than any previous government in my lifetime. There are also occasions when they tell a half-truth by saying something which is not literally untrue but which only shows part of the picture and thereby gives a deliberately false impression.

Because their perception of the truthfulness of particular politicians is an important factor for many when deciding how to cast their vote, the exposure of lies and half-truths is an important part of the democratic process. Today we learned of a most extraordinary event. An opposition MP has been arrested and his home and offices have been searched by the police. It is nothing to do with drug dealing, kiddy-fiddling, bank robbery or planning to blow up Heathrow airport, it is because he is thought to have been provided with information by civil servants. As I understand it from the brief reports available so far the information in questions is of three types: information which contradicted what government ministers had asserted to be true, information which put a ministerial statement in context and showed it to be misleading and information which put the government in a poor light and had not been released by the government itself.

This arrest is extraordinary in every sense of that word. As far as I am aware it is the first time an opposition MP has been treated in this way despite the receipt and use of leaked information being part of the normal cut and thrust of politics in this country and being something the current government engaged in habitually when it was in opposition. More than that it seeks to prevent contradiction of the government even when that contradiction would bring out the truth.

There are 646 MPs of which only 290 do not belong to the party in government. For all its faults and inadequacies the House of Commons is the one place where the government can be forced to justify its actions. The idea that an opposition MP who receives information disclosing governmental jiggery-pokery should be intimidated from using that information for fear of arrest is deeply worrying. One could put that concern in colourful terms by talking of a descent into dictatorship and Zimbabwe-esque intimidation of opposition but I prefer to look at it in terms of how it impacts on practical political debate. If, for example, a minister announces draconian penalties against employers who engage illegal immigrants it is for Parliament to decide whether that is a sufficiently fair and balanced measure to be part of English law. For it to be known that the Home Office itself has employed many illegal immigrants in the recent past helps to put the proposed new law in context. If a huge government department with direct access to immigration data cannot avoid engaging illegal immigrants it might be thought inappropriate to punish small businesses for doing the same thing inadvertently. It would be a very brave opposition MP who uses a copy of a leaked internal Home Office memo on such a subject knowing he might be arrested for doing so. The inevitable result is that laws will be passed without full scrutiny, a course which will be of no benefit because many of those laws will contain fundamental flaws as a result of facts and debate being suppressed.

The position of a civil servant who leaks such a document is different. No doubt his contract of employment prevents him from disclosing anything to anybody other than in the performance of his duties and he would be liable to dismissal for breaching such an embargo. To bring the criminal law into play is, in the vast majority of cases, neither necessary nor appropriate. Sack him, take out an injunction so he makes further revelations under risk of being in contempt of court and leave it at that, prosecution adds nothing.

To use the criminal law against the recipient of leaked information when that recipient has a duty to hold the government to account is to take a very peculiar step. I have noted before that laws often conflict - the right to march in protest can be inconsistent with the duty not to obstruct the highway: something has to give because the two laws cannot both be applied, either the march is allowed in which case the highway is obstructed or the highway is kept clear in which case the right to protest is denied. You cannot have both at the same time. Equally the duty to hold the government to account is inconsistent with a law preventing the use of leaked information by an MP in the House of Commons (I doubt that there is any such law but it seems to be presumed that there is and that it justifies the arrest). Which is to prevail? In the normal run of things any law which would obstruct the proper conduct of proceedings in Parliament must give way because full and open Parliamentary debate is of fundamental importance to our system of law-making. That is why MPs cannot be sued for defamation or prosecuted for contempt of court by reason of things they say in the House of Commons chamber. That principle must mean that no MP should be at risk of prosecution for using any information he has whether it was in the public domain or leaked to him.

It will be interesting to see how the government plays this incident. The sensible thing for them to do is distance themselves from it and let the law take its course but their instinct will be to attack. To do so would almost certainly backfire on them because more and more questions will be asked about why they did not disclose the leaked information. The next week or two could prove very entertaining.

The house price pushmi-pullyu

Let me take you back, a long way back to before I was born. My parents were ordinary working people earning low to average wages but through a few years of scrimping and saving they were able to buy a small house for cash. It was in a poor state of repair and they spent every spare moment and every spare penny making it habitable prior to their marriage (yes, I knew it would surprise you to learn my parents were married).

In today's money they probably earned around £35,000 a year between them and their little house would sell for around £250,000, call it £125,000 if in the same state of disrepair as when they bought it. It doesn't take a genius to work out that saving £125,000 when you earn £35,000 would take more than three and a half years even if you lived entirely for free. In practical terms it would be virtually impossible for a young couple on such earnings to buy that run down property for cash today. They could save hard to provide a deposit but would need to borrow a substantial sum which, in all likelihood, would be repaid over 25 years. Say they borrowed £100,000 at 6% interest, the interest alone would cost about one fifth of their post-tax income. It goes without saying that if they were not paying a mortgage they would probably be paying rent so whether they buy or not a large chunk of income would go in housing costs. Compare it to my parents' situation - buying a home for cash relieved them of a huge financial burden year after year. They still had to count every penny but they did so knowing that their home was secure. In due course that house was left to me and my siblings and provided us with a little additional security.

When I was old enough to understand a little about these things I was very much affected by my parents' decision. I remember how proud they both were to be home owners when previous generations had rented or lived in agricultural tied cottages. Outright ownership allowed them to plan their family knowing my mother would be able to stay at home with the children. Short periods of unemployment did not put the family home at risk. And, perhaps most importantly, they were not beholden to anyone, their home was theirs and no one had a claim on it.

Today house prices in Britain are falling fast and many people are already finding that their home is worth less than the loan(s) they have secured on it. This is not a practical problem for those who are still in work and able to pay the mortgage unless they have to move. It is, however, a very real practical problem for those who lose their jobs or have to take a cut in income and find themselves unable to keep up the repayments. For them there is no escape, the bank wants its money and the house cannot deliver that money. Bankruptcy or a long-term debt hanging around their necks is a nasty price to pay for the collapse of prices over which they had no control.

In Monday's crisis budget the Chancellor announced that banks will not be able to take court proceedings for possession for a period of three months after default. Like so much coming from the present government it sounds very nice and humane, it sounds as though they are helping people in trouble, but in fact it makes no difference and might even do some harm. The practicalities of litigation mean that a three month delay between default and starting proceedings in the County Court is all but guaranteed. If you start a claim before exploring all other practical ways of resolving the problem the court will stamp on your neck with a heavy boot. A case brought prematurely will either be adjourned for a month or two to allow other avenues of resolution to be explored (and the bank will be disqualified from claiming its legal costs) or it will be dismissed. No sensible bank would risk wasting legal fees or having a case struck-out by launching a claim until it could show the judge that there was no other option.

Where the Chancellor's move could cause harm is in those cases where the householder knows his position is hopeless and wants to keep losses to a minimum. In theory he could just hand over the keys and agree to the bank taking possession and selling the house. The sooner it is sold the more is likely to be achieved at auction because the market is falling and a further month's delay could reduce the attainable price by several thousand pounds. But there is a problem in the homeowner doing that because he would be making himself homeless voluntarily. That would put him way down the pecking order if he needs to seek housing from the council. For years this situation has been catered for by banks taking proceedings quickly and the homeowner not contesting the claim for possession. A Court Order is obtained which allows the bank to sell and proves that the homeowner has been forced to give up possession and has not made himself homeless voluntarily. There is no scope for the Court saying proceedings are premature because they are anything but, they are taken quickly for the benefit of both parties. If the three-month time limit is applied strictly it could cost some householders dear.

Maintaining house prices at their inflated levels will protect those who can no longer afford their mortgages and will allow people to move house without incurring a heavy loss. Some argue that the government should be taking steps to keep prices at 2007 rates for this reason. They suggest that the banks should be forced to lend for house purchase as they have over the last eight or nine years because that will sustain prices and prevent negative equity. To my mind they live in a dangerous fantasy world. I have blathered-on before about how artificially inflated house prices caused by reckless lending are the cause of the whole sorry mess we currently face. America did it through the Community Reinvestment Act which forced banks to lend with little regard to the ability of borrowers to repay and the UK banks did it through voluntarily lending up to 125% of the market value of a property with only the borrower's word that he had the means to repay the loan. This resulted in a huge inflation of property prices above their true value, to seek to keep this bubble in place is to prolong the misery because one day the truth must be faced and the longer it is put off the harsher that truth will be.

As my regular reader will know, I am a simple fellow who is more interested in practicalities than theories. I want everyone to enjoy the security and pride my parents enjoyed from owning their own home and not being burdened by rent or repayments of a massive loan. It allowed them to have more of their limited income available for their own use and gave them peace of mind. To me, it is ridiculous that young couples on modest incomes in 2008 should be excluded from giving themselves security for the future. It was possible seventy, sixty, fifty and forty years ago, then again fifteen years ago after the last massive property crash. Although there will be casualties along the way, the benefit of a whole generation being able to get on the property ladder when they thought it would be impossible or oppressively expensive is of such value to the country as a whole that a continuation of the current downward move of prices should not be stifled.

There is no way to keep everyone happy. Either prices are artificially pushed up to protect those who currently own or they are pulled down to their real underlying value to allow future generations to benefit. To my mind the pullyu end of the antelope must be favoured over the pushmi.

Tuesday, 25 November 2008

Lead us not into deflation

The late President Eisenhower is reputed to have defined leadership as "the art of getting someone else to do something you want done because he wants to do it". Many others have defined it in different ways but I rather like old Ike's description because consent is at its heart.

Consent is what distinguishes a leader from a bully and can take many different forms. You might consent to follow your leader's judgment simply because you have faith in him without having formed a clear view yourself of whether his proposed course of action is wise or unwise. Alternatively you might think his proposal is the wrong thing to do until he has talked it over with you and persuaded you it is the right thing to do. Or he might conduct himself in such a way that you believe it was your idea all along. There are countless other scenarios in which good leadership results in consent to what the leader wants done. By contrast, a bully forces you to do something without your consent for fear that not doing so will leave you open to unpleasant consequences.

Some of us are simply no good at leadership. We don't feel comfortable asking people to do things and we feel even less comfortable trying to find ways to persuade them to do what we want when they are reluctant. I suppose it is a matter of personality as much as anything else, if you are not comfortable with being in charge there is a pretty good chance that your discomfort will be apparent and will make others question you rather than follow you.

One of the biggest contrasts between Tony Blair and poor Gordon Brown is that it is easy to see people consenting to a Blair initiative whereas that option never comes into the equation when poor Gordon speaks. He is not interested in seeking consent. If asked a question to elucidate why he proposed a particular policy Blair was able to explain himself in clear English, poor Gordon simply refuses to engage in any such discussion. Of course there were occasions when Blair would evade questions where he knew his position was weak but most of the time he engaged in debate in an intelligent and civilised way. For poor Gordon every question is seen as a challenge to his authority, a sneaky trick to undermine him, an act of impertinence. At least that is how he appears to treat questioning. My suspicion is that he does not really look on questions in that way because it is just so utterly irrational to do so. More likely is that he does not believe he can carry consent through argument and so uses evasion and aggression to prevent himself having to try.

For much of his decade as Chancellor of the Exchequer the economy appeared to be performing well, at least in the eyes of those who did not question the massive expansion of credit. Evading questions and shouting "I am in charge of the economy, the economy is doing well, therefore I am doing the right things" can work while there is a feel-good factor about what you are doing. Indeed, there is no need to do anything other than say that the proof of the pudding is in the eating, at least in the short term. When things turn bad that reasoning is no longer available to you. The enquiry "surely you should do X rather than Y" suddenly requires an answer because Y is not working. That it might not have needed an answer in the past is neither here nor there, it needs an answer now.

We have heard and read much recently about a lack of confidence in many sectors of the economy, most noticeably in banking but increasingly in other areas too. What is going to make the difference between a small business employing a further person or laying-off an existing employee? The answer is obvious - the confidence of the owners and managers in the future prosperity of that business. And a significant factor in having confidence in the future prosperity of any business is having confidence in the future prosperity of the country as a whole. This is something that goes to the very heart of decision making in business: if I expand production will there be sufficient customers, if I take on staff how much extra will it cost me, if I switch my supplier how will the exchange rate affect the prices I pay? And so on for every possible change a business might think of making. It is only if you are confident for the future that you will take risks, if you are not confident you will retrench and seek to preserve what you have or even make cuts to your expenses to prepare for stormy times ahead.

Political leadership is essential in a recession. Businesses must be persuaded that they want to expand otherwise it will simply never happen and the path out of recession will be long and slow. Poor Gordon cannot give that leadership because he does not engage in the exercise of persuasion. Mr Darling tries but it is becoming increasingly apparent that even he is shocked at the consequences of poor Gordon's tenure at Number 11 Downing Street, and his room for manoeuvre is limited by having his incompetent predecessor as his boss. More evasion and more bullying will make things worse because they will depress confidence and there will be no consent to business expansion. A whole new approach is needed from the government to how they present their position. This is quite separate from the argument that they need to adopt a radically different set of policies. Even if we assume their present course could succeed, I believe that assumption will nonetheless prove false unless it is presented in a way designed to gain consent. In fact I would go further, even the right policies presented in the wrong way can turn recession into depression because of the effect on business confidence.

The task for the Conservatives is to argue a coherent case that builds confidence and consent for their alternative course of action. For a long time they have not needed to put forward much of a positive case, just as the Labour Party under Mr Blair did not formulate policies until a year before the 1997 election. When the Conservatives have done so, as with the Inheritance Tax proposal in their 2007 party conference and the freeze on Council Tax this year, they have gained enormously in the opinion polls. But they know too much detailed policy too early can undermine an opposition because a change of circumstances can lead to an embarrassing abandonment of something they said was important. As the next election approaches they have the perfect opportunity to show the leadership so lacking from the current government. I just hope their definition of leadership is the same as Eisenhower's.

Monday, 24 November 2008

Porgy & Bess at the Westminster Theatre

The crisis budget has provoked some interesting reactions on the radio this evening. As someone who holds a very dim view of the judgment of both poor Gordon and Mr Darling, it has been reassuring to hear my opinion echoed by caller after caller to the BBC. Many who work in the retail sector have commented that their margins have been so tight recently that they expect the reduction in VAT to be used to ease the pressure on the shops rather than to lower prices. Most interesting to me was the widespread appreciation that it will not put a single additional penny in Mr and Mrs Ordinary's pockets and, for that reason alone, is unlikely to act as an incentive for them to spend when they otherwise would not.

I heard only one caller praising the government and he appeared to have forgotten to take his tablets today. His contribution to the debate was to say how brilliantly poor Gordon has handled matters over the last eleven years and to list such matters as free television licences for the elderly, increased winter hand outs to help with fuel bills and other benefits which have increased in cash terms while in fact falling in real terms. He said how his local shopping centre was heaving with people today as though this means everyone is spending more. It was quite sweet to hear a true believer in magic money, a genuine old-school Labour man who thinks the government can borrow with impunity and everything will be well.

One of the final contributors was someone who works for House of Fraser and said they will be passing on the reduction in VAT to customers. Their position is a very clever piece of marketing, he said they will hand customers the saving when they get to the till. I am not quite sure how this will work because the prices they display on the shelves must be accurate to prevent them risking prosecution, but it is a nice idea that people might be enticed into House of Fraser by being told they will receive a discount at the till. Being handed a shiny new ten pence piece when purchasing something for £4.70 so as to reflect the new price of £4.60 will soon take the gloss off the move, but in the meantime they will no doubt be able to drag a few more people in through the doors. Last week we had Marks & Spencer holding a one day special sale with 20% off everything, this week we will have House of Fraser reducing prices by just over 2%; I know which I would find more attractive.

Listening to Mr Darling this afternoon I was reminded of Porgy & Bess and the lyrics of perhaps the best known song from that opera. Porgy, a crippled beggar, wins the girl and sings "I got plenty of nothing and nothing's plenty for me". He wins the girl in rather odd circumstances. She is a prostitute and her pimp goes on the run after killing a man, she refused to flee with him and only Porgy is prepared to give the old tart a shoulder to cry on. She lived high on the hog while punters were aplenty then the liar and cheat who used her for years lets his instincts run free and has to scarper for the hills for fear of the hangman's noose. She realises her former comforts were fleeting and ephemeral, built on empty promises and the hope that her trade will sustain her for ever. She is left with nothing and finds a natural ally in a man who also has nothing. Poor Gordon the pimp's reign of spendthriftery gave false hope to Bess the economy. Now she is being tended by the crippled beggar of a Chancellor.

Plenty of nothing. Ira Gershwin cannot have imagined his lyrics would be so apt for the UK economy more than seventy years after he wrote them.

Incidentally, the pimp returns and Porgy kills him. He is arrested and while incarcerated Bess runs off with Sportin' Life, a man who knows a lot about cocaine. Did Gershwin predict the next Chancellor of the Exchequer?

Sunday, 23 November 2008

From tax and spend to tax and spin

The Ministry for Propaganda has been very busy today in advance of tomorrow's crisis budget. Following the leaking of the thoughts of poor Gordon and his friend Mr Darling over the last couple of days they appeared on television screens today to say nothing of substance but assure us all, under no probing questioning from the BBC at all, that only they can cure the country of its economic ills.

Having failed to say whether they would cut VAT, they then told the BBC off the record that this is indeed their plan and that it will fall from 17.5% to 15%. Others had already commented on the likely ineffectiveness of this. John Redwood pointed out that a small cut in prices through reducing this tax is unlikely to be noticed when many shops are discounting goods by far more already and that for those on low incomes much of their necessary expenditure is on items which are not subject to VAT at all. Via Mr Tyler I have been alerted to the insights of a real shopkeeper who explains the ability of stores to decide how to pass on the cut, and Mr Croydon highlights just how piffling the reduction is.

Now don't get me wrong, I'm all in favour of cutting VAT, I just don't see how it can make a significant difference to the rate at which the UK economy goes down the plug hole. It makes me ask why they have chosen to follow this path. Perhaps I am being unfairly cynical but it seems to me that cutting VAT is the most easily spun option available to the government. It can be presented in all sorts of interesting ways, each of which makes the cut seem so much more than it really is.

Reducing a tax from 17.5% to 15% is a cut of one seventh, indeed the reduction is one sixth of the new rate, these are chunky proportions. Will we hear one of the more dishonest ministers, perhaps a Blears or a Harman or even poor Gordon himself make this sound like: "Government cuts prices by one seventh"? That it reduces the actual shelf price by only one forty-seventh is unlikely to figure in government announcements.

Another possible approach is: "Government cuts sales tax by 14%". This works rather nicely. The tax is 17.5% and it is being reduced by 14%, it makes it sound as though there is hardly any VAT being charged any more.

Try this one: "Hardworking families faced the threat of a bleak Christmas. Those little extras that make Christmas so special threatened to be out of their reach. We have taken a direct measure to make them affordable just when people need that help the most."

Or this: "Hardworking families now have greater choices over how to spend their money."

And we can be sure to be assaulted by this combination of half truths and three-card trickery: "International conditions have forced up prices, we are protecting hardworking families and shopkeepers by taking direct action to bring prices down."

There is just so much more they can do with a sales tax reduction than they could ever do with shaving a penny off income tax. None of it has any substance but we are in a pre-election period and appearance is everything. Every different angle of spin put on this inconsequential measure will buy them a few more votes.

Let's get back to real life. Imagine you own a shop. Your livelihood depends on you being able to buy goods at one price and sell them for a higher price. You have to pay the operating costs of the shop building and the wages of your staff. Recession hits and fewer people come through the door. What can you do? You could raise your prices and hope the reduced number of customers will be prepared to pay more, or you could reduce your prices to get more customers at a smaller profit margin. For the vast majority of shops only the latter is a realistic option. So you reduce your prices. Just a bit at first then a bit more. People return to your shop but not enough so you cut your profit margin further and then find sales increasing to a bearable level. You are just about able to stay in business. You know that the new price you are charging, let's call it the benchmark price, is one customers are prepared to pay so you then turn to reducing your costs. Out of the blue the Chancellor of the Exchequer says he is going to reduce sales tax from 17.5% to 15%. You know you can still sell at the benchmark price so the reduction in sales tax acts as a reduction in your costs. You might have to pass on some of that because your customers will expect it, but you will not have to pass on much because your new benchmark price has been established. There is no significant financial benefit for your customers but you get a little extra breathing space, a little extra time in which you hope trading conditions will not worsen.

All the spin about a reduction in VAT being a benefit to Mr and Mrs Ordinary is just guff. The reduction is of benefit to the economy, almost all tax cuts are, because it reduces the costs of businesses. For some it will make the difference between survival and folding, for others it will just delay the inevitable collapse and for the others it will allow a modest increase in profits above the deflated level the recession has caused. What it will not do is any of the populist, headline-grabbing things the government will claim.

The way the leaked VAT proposal was being analysed and reported clearly did not suit the government. Too many people were saying it would provide little benefit for the lowest paid whilst those with money to spend would gain the most. Something had to be done. The evening news programmes were approaching and then, as if by magic, it became known that Mr Darling would announce a proposal for the top rate of income tax to be increased to 45% for those earning £150,000 or more. Nick Robinson announced this in hushed and reverential tones on Radio 5 and one by one the usual suspects crept out from under a Stilton to spit venom at the wicked rich people. The more balanced commentators noted that the effect on tax receipts was likely to be so small as to be irrelevant but the government's paymasters in the unions and their core vote among the non-thinking love a bit of toff-bashing. Nothing distracts the BBC away from criticising a badly thought-out tax cut than a suggestion that evil fat cats will be screwed for more. A fine piece of news management by a government dedicated to announcing policies in Parliament first.

I await the year's second crisis budget (remember the 10p tax mess?) with interest.

Be gentle with me Darling

Over the last few weeks the dire state of the British economy has been exposed more and more every day. That really is a most extraordinary sentence. But it is true.

Recession was denied all through the summer now it is present and biting hard. We need go no further back than the budget in March to find the government boasting of low inflation, stabilised banks, government borrowing and debt at lower levels than predicted four months before in the 2007 pre-budget report and expected growth of the UK economy of between 1.75% and 2.25% in 2008 followed by 2.25-2.75% in 2009 and 2.5-3% in 2010. The full budget speech is reported here, today it seems utterly detached from reality. Every single prediction or forecast has been blown out of the water. Every criticism of the previous Conservative government for economic performance prior to 1997 looks like praise in light of the current situation. Mr Darling got everything wrong, absolutely everything, not a single figure he quoted about the state of the British economy between March 2008 and March 2009 bears any resemblance to the true position today.

On Monday he will make his second budget speech of the year, this one dressed in the sheep's clothing of a pre-budget report. Because poor Gordon announced with pride that under his stewardship the government will announce policies to Parliament rather than leak them to the press, we already know what Mr Darling is going to say on Monday. We know it because it has been leaked to the press. Neither Mr Darling nor poor Gordon knows what type of tax cut will go down best so they have leaked two in the hope that commentators will commend one over the other. Their first idea is to reduce income tax the other is to reduce VAT. Whichever is chosen they hope it will be enough to increase consumer spending in the run-up to Christmas and avert the loss of many thousands of jobs in retail businesses.

In one respect I can see how a tax reduction can help. As soon as "recession" is shouted from every newspaper and television news report people feel a need to retrench. They might be safe in their jobs but no one can be sure so attention switches from spending on optional items to saving in case the worst happens. Not only is the new television put on hold but the weekly supermarket shopping trip finds own-brand items being substituted for more expensive alternatives and the ham for Saturday lunch at £1.20 for 100g being replaced by luncheon meat at 53p. Lots of little savings occur at every level of the family budget so that an extra £50 can be found to reduce the credit card debt and an extra £100 to make an additional payment against the HP on the car. Reducing tax can encourage a loosening of retrenchment. Ham is again on the table and beanz still meanz Heinz.

Mr Darling's problem is that he cannot control what people do with the extra few pounds they no longer have to pay in tax. Some of it will undoubtedly be spent but not all, not by a long chalk. This is not just a consequence of the prevailing mood of retrenchment, it is also a consequence of increasing realisation of the reason for this recession. Despite government waffle about it all being caused by events in America, the message is getting through that the UK has been living a lie for many years. The increased wealth of which poor Gordon boasted throughout his time as Chancellor is being exposed as pretend money. "My house has gone up £10,000 in value, I'll borrow £5,000 for a new kitchen and still be better off" has turned into "my house has gone down £10,000 in value and I'm an extra £5,000 in hock". This hits people hard. What appeared to be a net gain of £5,000 now appears to be a net loss of £15,000. In fact the extra £10,000 added to the value of the house was just a pretence, it was bubble value not true value and losing it makes no difference to real wealth so all that has happened is that the householder has borrowed an extra £5,000. But that is not how it feels, it feels as though he has lost a lot more. He also worries about how much more his house will fall in value and how that will affect his future. It is these feeling which will dictate his spending patterns today.

Any reduction in tax has to battle against the increasing realisation that the whole country has been living beyond its means. Encouraged by a government that needed the additional tax arising from fictitious wealth to pay for its profligate spending plans, far too much was borrowed and far too little was saved. Today we find that the spending plans remain set in stone and the modest tax reductions announced on Monday will be said to be purely temporary, Mr Darling is taking a little less this year and is making clear that he will want it all back with interest in a year or two's time. That is not a sound foundation for sustained spending by Mr and Mrs Ordinary. It might make a little difference in the short term, by which I mean until Christmas, but thereafter retrenchment will continue and possibly deepen because of the threat of substantial extra tax in 2009-2010.

What Mr Darling cannot change is the need to remove billions of pounds of fictitious wealth from the British economy. Much of that will come from reductions in house values. Tell someone his £300,000 house has gone up 10% and he is happy, tell him his £330,000 house is now worth £300,000 and he starts to worry. That worry translates into action, cautious action, non-spending action, repaying debt action, saving not borrowing action. The one thing Mr Darling could do to maximise the benefit to the economy of modest reductions in tax is make them permanent by cutting government expenditure. Cull quangoes, garotte gimmicks, annihilate advisers, incinerate identity cards, reduce red tape, bin bureaucrats. Tell the people you are doing that and they can see light at the end of the tunnel because they have an extra £20 a week not just for a year but for the foreseeable future. The pressure to retrench will be reduced and retail businesses might see a benefit. Leave the massive waste of the state unaffected and the people will see the tax cuts for what they are, jam today paid for on a credit card with a very high rate of interest. And, more than that, leave in place an enormous state machine which grew to its present size on the back of perceived but non-existent wealth and taxes have to rise even further in the future to pay for the machine from a diminished pool of available money.

No doubt he will put a fine gloss on Monday's announcements. Many will be fooled into thinking he is doing the right thing. They are the same people who applauded his predictions in March. He and they were wrong then and they will be wrong on Monday.

Saturday, 22 November 2008

Save the last dance for me

Thus far I have resisted the temptation to discuss the issue that divides the nation. No, not the recession, the mental health of the Prime Minister or the prospects for an early general election, I mean the real issue : John Sergeant and his uncooperative feet.

Anyone meeting me would probably be surprised to learn that I am a trained dancer with certificates and medals and, on one terrifying occasion, an appearance on the West End stage. Tap is my thing. Maxi-Fords, ripples, time-steps, pick-ups, cut-aways and wings hold no fear for this fat man although the gruesomely difficult step-over is, sadly, a thing of the past. I even invented a step once, a 16-beat turning riff, although I'm not sure I can still remember how to do it. Dancing requires you to move in ways you never thought possible but with practice even the most complex steps can be mastered by anyone possessing reasonable coordination. It is good exercise, provides endless new challenges and gives a lot of people a lot of fun. My dodgy ticker no longer allows me to dance with vigour for fear that a triple pick-up timestep with double-shuffle will result in a luggage label being attached to my big toe and a trip to the local crematorium. Nonetheless gentle jigging about is still possible from time to time and injects a little pleasure into my otherwise miserable existence.

When Strictly Come Dancing started in 2004 it was an early summer show running from May to July. A second series followed later that year and since then it has run from early October up to Christmas and been one of the BBC's most popular shows. The format has been sold overseas and the American version, Dancing with the Stars, is huge. I haven't watched "Strictly" regularly since the third series because I found it became rather formulaic, although the competitors changed the performances didn't and the judges' comments became entirely predictable. Now I watch the last two or three weeks by which time those who can't dance or don't care to try have usually been eliminated and the remaining competitors perform to a very good level. For me the entertainment value lies in the quality of the dancing not in the early rounds of scoffing at uncoordinated performing seals. When the continued presence of John Sergeant on the show started to cause a stink a couple of weeks ago I looked at his performances on the BBC website and had no difficulty in including him in the performing seal category.

Recent heavy voting for him has been criticised as making a mockery of the show as a dance contest. Last week the actress Cheri Lunghi was voted out despite being an excellent dancer and I suspect that spurred Mr Sergeant into withdrawing before further injustices were meted out to those of ability and dedication. I do not suggest he hasn't tried and his final waltz on tonight's show was a very passable effort for a 64 year-old and was performed with elegance and great dignity.

The issue thrown up by these events is rather interesting. The BBC throws the vote out to the public and hopes that the votes cast will not result in perverse results yet it has no control over how people will vote. Some will vote purely on their assessment of the quality of dancing, some will vote for their favourite actor/actress/singer or whatever, some will vote for one person in the hope it will result in the elimination of someone they don't like, some will vote for a contestant who has been treated harshly by the judges and, no doubt, some will vote for a non-dancer who provides great entertainment value. Hundreds more reasons could lie behind decisions to phone in. Every reason is equally legitimate because the matter is open to all and when a vote is open to all you are stuck with what the voters choose to do, no matter how strongly you might feel they are doing the wrong thing.

In the second series of Strictly Come Dancing there were several contestants who had little control over their feet. Three were eliminated early on but one, Julian Clary, made it to the final. In doing so he got further than the athlete Roger Black and the singer Aled Jones, both of whom were very accomplished dancers. I do not recall many complaints at the time, presumably because Mr Clary was hugely entertaining both in his lacklustre dancing and in his observations about his own performances and the show in general. No dancer who witnessed his attempt at a jive could see it as anything other than an exhibition of comic mime and I had no difficulty in enjoying it for what it was.

I wonder whether the outrage about John Sergeant lasting so long is a sign that the show has outlived its usefulness as an entertainment. Perhaps Bruce Forsythe's retirement at the end of the current series would be a good opportunity for it to come off the air before it takes itself too seriously. I don't really care one way or the other, but one thing is essential for the good of the nation, Bruce must receive the knighthood he so richly deserves.

Friday, 21 November 2008

The danger of the telly tax

If there is one thing guaranteed to make an American laugh it is the British television licence. If you don't believe me try it next time you meet one. Generally they don't know about the telly tax and assume the BBC gets its money from advertising and from selling programmes, formats and DVDs. Just in case any Americans are reading this, I must advise you to sit down and keep all liquids well away from your mouth while I explain the BBC and the television licence.

The BBC is not allowed to carry advertising for anything other than its own products so it suffers a budgetry handicap compared to commercial broadcasters. To fill the gap the government hands it lots of money every year, this money is raised by a poll tax imposed on everyone in the UK who owns a television set. It doesn't matter whether they watch BBC programmes, indeed it doesn't matter whether they watch television at all, the mere possession of a set gives rise to a tax liability in the sum of £139.50 for the current year. A television set incapable of receiving colour pictures is taxed at a lower rate, currently £47. And here's the really good bit - it is a criminal offence to fail to pay this tax. Fail to pay £10,000 of income tax and you get charged a bit of interest and a modest lump sum penalty, fail to pay £139.50 in television tax and you get a criminal record. In both cases you still have to pay the tax.

The whole thing is completely barmy. There probably was a time when it made some sort of sense because television broadcasting was in its infancy and had to be paid for somehow. Only a few could afford television sets and only they benefitted from the new medium, so it was fair enough to require them to pay for the privilege. When commercial television stations became established in the 1960s they carried advertising but the television licence to pay for the BBC could still be justified on the ground that the output of the BBC was more wholesome and nourishing to mind and spirit than that of the vulgar people peddling tawdry goods between their shabby shows aimed at the working classes. None of that applies these days, not least because of the BBC's determination to aim its output at the lowest of brows.

I could moan about the compulsory telly tax (and I do), I could moan about the criminal law being used to enforce it (and I do), I could moan about the vast amount of BBC programming which adds nothing to that available from commercial broadcasters (and I do), I could moan about the amount of money the BBC wastes compared to commercial broadcasters (and I do), but none of those moans is my moan du jour. Soup of the day on the moaning menu is that funding anything by way of tax allows politicians to interfere. We saw a fine example of that this week when the House of Commons Select Committee on Culture Media and Sport questioned senior figures from the BBC about the recent incident in which two highly paid loudmouths left obscene and offensive messages on the telephone answering machine of an elderly actor and broadcast the whole sorry episode on a BBC radio show.

It is unlikely that this could have happened at all on commercial radio but if it had the likely outcome would have been immediate dismissal of the presenters, a full and genuine apology on air from the chairman of the radio company and a suitable act of atonement such as payment of a substantial sum to a charity nominated by the victim of the abuse. A line would have been drawn under it in clear and decisive terms so as to minimise damage to the business of the radio company. MPs might well have expressed their disapproval, they might even have called executives from the company before the Select Committee, but they would not have been able to claim any right to dictate editorial policy or tell the executives how they should deal with staff who made a mistake. Because the BBC is funded by tax and MPs vote on the level of that tax they feel they have the right to pontificate on how the BBC should be run. The maddening and saddening thing is that they are correct. Parliament has not only the right but the duty to scrutinise how taxes are spent and to insist on proper standards of management and accountability being present in organisations funded by tax. If only Parliament had the courage to exercise that right and perform that duty with regard to matters under the direct control of the government we might all have something to cheer about, but that is a topic for another day.

The question for today is how it can possibly be justified for politicians to have a legitimate role in editorial policy and internal management decisions of a broadcaster - just one broadcaster out of many in a Britain of hundreds if not thousands of television and radio channels. Many would suggest that the BBC is influenced in its editorial policies by a desire to keep the government of the day happy for fear of its income being cut. There might or might not be something to that although it does not really matter because the vice lies not in whether the BBC actually panders to the government, but in the fact that it could feel the need to do so by reason of the mechanism by which it is funded. In the same way that justice must not only be done but must be seen to be done, so the editorial policy of broadcasters should not only be independent of influence by government it should also be seen to be independent of such influence.

This point extends far beyond questions of the quality of BBC programming, whether it should run as many television and radio channels as it does and all the other matters raised whenever the position of the BBC is discussed. My point is over-arching, very simple and (I would suggest) unanswerable.

Don't take that attitude with me

One of the law's most important fictions is that every person is equally valuable. It is only by making this assumption that rights can be protected impartially. If you drive recklessly and kill a pedestrian the law will not impose a different punishment according to the "value" of your victim; nun or prostitute, policeman or professional criminal, Tom Hanks or unknown extra, each victim is worth the same. Similarly, however rich or poor we are, however successful or unsuccessful, well known or obscure, we all have the same legal rights which the courts will strive to enforce without regard to who or what we are.

The law's approach is, of course, a fiction just as it is a fiction in our individual lives to suggest that every life and every person is equally important. I learned recently that someone I know is in intensive care after falling and hitting his head. He has been in a coma for a week. I know him only because he is a builder I have employed recently. Ten weeks ago I had never heard of the man, eight weeks ago he was someone I had met once, six weeks ago I made a contract with him, four weeks ago he first impressed me with his work, two weeks ago I knew quite a lot about him and his family. Had his accident occurred ten weeks ago I would probably never even have heard of it and if I had my only reaction would have been "oh, how sad". As I got to know him better the impact of the news of his accident would have been greater and greater. But it would not be on the same level as hearing of a similar fate befalling an old friend and that would not be on a par with serious injury suffered by a close relative. For me, and for everyone, some people are more important and more valuable than others. I think that is a simple and incontrovertible fact.

When ranking the importance of people in our lives I think most of us would put ourselves first. There is nothing selfish and greedy about this, it merely reflects the fact that we have to be alive in order for anyone else to have any impact on us. It follows from this that we can expect everyone to value their own life more than they value the lives of others. There is, of course, a sound argument for parents putting the lives of their children before their own where one or other has to perish, but that is a rare and exceptional circumstance. In the normal run of things parents can provide best for their children by strengthening their own position. To my mind this is just human nature. We have a survival instinct because each of us only has one life and we engage in social interactions to further our lives. The more remote the people we engage with socially, the less important they are to us.

At the heart of all our lives is us. Me in my case and you in yours. If it is right to say that human nature compels and impels us to survive, why is it that some believe they cannot cope? I am not talking about those with mental illnesses or physical handicaps who require assistance by reason of their condition, but about those who see no prospect of providing for themselves despite having nothing other than their frame of mind to hold them back.

I am sure this is a new circumstance in human history. When our predecessors were living in caves and went hunting it seems unlikely anyone thought themselves incapable of knocking a small animal on the head and sticking it on a fire. It might well be that George in the big cave had a particular skill at killing sheep and enjoyed a daily crown roast with a medley of seasonal vegetables and blackberry jus while Gilbert in the shabby cave made do with stewed rodent and a few boiled twigs, but sitting at home painting on the walls and starving to death was not an option. So why is it that we have a persistent underclass today for whom work and self-reliance are alien concepts?

The easy answer is to blame the welfare state. There is certainly logic behind this approach because an absence of welfare handouts would force people to provide for themselves. But it cannot be the whole explanation because for every person with no qualifications and limited skills who sits at home waiting for a benefit giro to come through the door there are several with no qualifications and limited skills who sweep the streets or push a handcart of meat around a wholesale market or sit on a production line taking things off a conveyor belt and plopping them into cardboard trays. The wages for these thankless and uninspiring occupations are modest and might not exceed to any significant degree the amount of money these workers could receive by sitting at home, yet they choose to work whereas others do not. The true differential between the idlers and the workers is a state of mind.

I have no doubt that state of mind develops and becomes institutionalised by a combination of (i) the availability of benefits, (ii) being told by tree-hugging do-gooders that they are victims of capitalist oppression and (iii) the small difference between what they could earn and what they receive from the state. Pulling the plug on benefits, as some suggest should happen, would only address the first point. It would reinforce the second and the third would only become relevant if there is a job available for them. We cannot assume that there are sufficient employment opportunities to provide for all those who would be left penniless by the withdrawal of benefits. It is not just a matter of how many "menial" jobs exist but where they are and whether those who would need them could get where they would need to go, Tebbitt bicycles are not necessarily available.

In saying this I do not mean to suggest that the country should just carry on with things as they are. In the same way that the stultified state of mind developed, so can it change; but it can only change by undoing all strands of the rope that ties people to a life on the dole. The aim should be to change the state of mind, to change the attitude that is so contrary to human nature. One necessary step is to broaden the financial gap between welfare and work. Welfare must return to its roots as a safety net providing subsistence rather than being a viable career choice. Work must be rewarded by a massive rise in the income tax threshold. And a central task of social workers and benefit offices must be to encourage self-reliance rather than the victim culture. There might still be a shortfall between the number seeking work and the work available and it might be necessary to provide assistance for those who need to move to find work, but the first task is to change the "it isn't worth it / I can't be bothered" attitude.

If we do not value ourselves sufficiently highly to want to provide for our needs through our own efforts there can be no hope that we will act positively towards other people. A deflated sense of self-worth does not carry with it an inflated sense of the worth of others. I believe the only way to rid the country of the underclass is to change the attitude of those in it. Many an asocial yob has been turned into a hard working man by being shown that he can cope, that he can hold down a job, that he can learn a trade, that his fate is in his own hands and, most importantly of all, that being trapped in welfare dependency is more a state of mind than anything else. There might be some for whom there is simply no hope, but they are very few and far between. The problem is with those who are persuaded they have no hope when in fact they are perfectly capable of coping with life and standing on their own two feet. Human nature gives us a survival instinct, the system should encourage that instinct not suppress it.

Thursday, 20 November 2008

The BNP and vegan butchers

News that a list of members of the British National Party has been published on the internet has met with a mixed reaction. For those who don't know, the British National Party has a rather narrow approach to matters political. It argues for the UK to be self-governing in every respect. In that it is not unique, a great many members of the Labour and Conservative parties are adamantly opposed to the UK being ruled by the Eurocracy of Brussels and the UK Independence Party has self-governance as its main policy. Where the BNP differs is in its approach to immigration and race. Although it tries to hide the fact with weasel words, the BNP is opposed to persons of dark pigmentation living in the UK. It supports forcible expulsion of those whose skin is other than blotchy pink. If you don't burn at the first flicker of sunlight in March you aren't welcome here.

It is always amusing listening to members of the BNP being interviewed. They have a stock line to put: "the BNP is not a racist party", which always elicits the question: "so would you welcome black or asian members in the BNP?" to which the answer is always stony silence followed but some deep throat clearance and a pathetic attempt to evade answering the question. Because the question is so simply any evasion gives the game away and more often than not the evasive answer provides a more damning indictment of the BNP than a simple "no". They just cannot stop themselves using such terms as "indigenous population", "established culture" and "true British people". At least they would appear honest if they said "no nig nogs here thank you, whiteys only, that's what we want". They could then be dismissed as the comic fringe they are. Instead their prevarication makes them appear not just narrow minded but sinister and positively dangerous, thereby giving partial justification to the other extremist elements that want their party banned and the individual members to be treated like syphilitic paedophiles at a children's naturist convention.

The current fuss has reminded me that membership of the BNP is considered officially incompatible with certain types of employment such as being a policeman or a prison warder. The justification claimed for this is that someone holding discriminatory opinions cannot be trusted to act impartially towards those who are the object of his bigotry. This is a rather strange concept. Anarchists can become police officers, policemen who support Arsenal can patrol at Spurs' matches, greenie policemen can give tickets to drivers; indeed policemen with any opinions at all are expected and trusted to leave those opinions to one side when performing their duties except where their opinions are against those of dark pigmentation AND they join a particular political party. Holding such opinions without being a member of the BNP is no bar yet once they've paid their subscriptions they can no longer be trusted. It's all rather flimsy. I wonder whether there is any evidence that policemen who are members of the BNP have in fact acted with bias against our dusky bretheren. If they have it is their conduct and not their opinions which should be the subject of disciplinary proceedings. My guess is that the arbitrary ban is nothing more than a political gesture, devoid of any factual basis and designed to do nothing other than grab headlines.

I am not opposed to the holding of certain beliefs being a bar to employment where the beliefs make it impossible for someone to do the job properly. Employing a vegan as spokesman for an "eat more meat" campaign would seem likely to fall into that category, but employing him as a butcher would not. If he is prepared to work as a butcher and has the skills required for the job the mere fact that he believes eating meat to be a thoroughly bad idea is neither here nor there. One cannot assume he would turn customers away or put arsenic in the sausages and there is no logical basis for assuming that a policeman's political beliefs would cause him to fail in the duties his work entails.

This is not just a matter of freedom of speech. That aspect of it is being covered by many other bloggers and I have nothing new to say on the subject. My concern is that loose thinking is preventing able people doing jobs they want to do and which they could do well. I can see no justification for such an arbitrary disqualification. Give them the job if they are qualified to do it, if they do not perform their duties impartially they won't be doing it for long.

Wednesday, 19 November 2008

Much ado about hanky-panky

I can understand why those who work as pimps should be targeted by the law. Some of them are pretty harmless and give their girls a bit of protection in case a punter gets threatening or refuses to pay, but many extort a large percentage of the girls' earnings under threat of violence. Making it illegal to traffic people for prostitution is also a nasty business, often involving coercion of girls into a trade they had no intention or desire to engage in. Quite rightly both activities are unlawful already. Today our hapless Home Secretary announced plans to make it illegal to use the services of a prostitute if she is operated by a pimp or has been trafficked into the UK for the purpose of prostitution. To make matters worse, the offence is committed whether or not the punter knows of the pimp or the trafficking. It is a most bizarre proposal. To make it all the more bizarre, the maximum penalty will be a fine of £1,000 thereby putting it on a par with other serious crimes such as failing to pay the television tax and smoking in a pub.

What intrigues me is how the offence can be proved. At the moment paying for consensual sexual services is not illegal, if the proposed new law is brought in that will still be the case but there will be an exception where the prostitute is managed by a pimp or has been trafficked. On the face of it, therefore, it will be necessary for the prosecution to prove three things: (i) that sexual services were provided, (ii) that money changed hands or was due to change hands in return for those services and (iii) the provider of those services has a pimp or has been trafficked. In theory the law could be framed so as to presume that every person selling sex falls into the special categories, in which case only points (i) and (ii) will have to be proved and the defence will then have to disprove the third point, but that is unlikely to survive a challenge under the Human Rights Act because it imposes an impossible burden of proof on a defendant.

Undoubtedly a small number of cases will be easy for the prosecution because the girl will give evidence herself about how she operated, although I wouldn't put any money on an appreciable number of pimped girls doing this. The very nature of most pimps is severely discouraging towards anyone attempting to ruin their business. Furthermore, many of the girls need the money even if they don't like the way their pimp treats them and will prefer to keep earning a living rather than give evidence against a punter they don't know and will probably never see again and thereby run the risk of exposing their pimp who, in turn, will expose them to a right good smacking.

Perhaps the most obvious situation in which the proposed new law will be used is when a brothel is raided and a number of illegal immigrants are found in close proximity to pale and sweaty middle managers in a state of undress save for a small intimate rubber item. It might well be possible to persuade a court to infer that the girls have been trafficked if no other explanation for their presence in the country is forthcoming, but I doubt that it will be as easy as the Home Secretary might wish.

The biggest problem the prosecution will have if it seeks to rely on inference rather than direct proof is that the offence is one to which ignorance of the true facts is no defence. In other words, the punter only commits an offence if the girl was pimped or trafficked and then he cannot excuse himself by saying he did not know she was pimped or trafficked. Since the evil being legislated against is the pimping or trafficking and the punter would be innocent of any crime if the girl is not pimped or trafficked, establishing this element of the offence is particularly important. It is all the more important where the defendant will be condemned even where he has no knowledge and no means of establishing whether the girl is pimped or trafficked. For the prosecution to say "it is no excuse that he does not know" is not very appealing when the case they present shows they do not know either.

On another practical note there must be doubt whether the police would be prepared to devote substantial resources to investigating the background of a prostitute where only her punter is charged and the maximum penalty is a £1,000 fine. It would be rather different where an alleged pimp or trafficker is in the dock, but to target resources at a middle aged saddo just to keep Jacqui Smith and simple Harriet happy does not seem at all sensible.

To secure a conviction for a criminal offence usually requires proof both that the accused person did something and that he had a particular state of mind when he did it. To be guilty of theft you must have the intention to deprive someone of property permanently, to be guilty of murder you must have the intention to cause serious harm, to be guilty of handling stolen goods you must know or believe them to be stolen, and so the list goes on. Merely doing something without having a guilty mind is not usually enough. There are exceptions, many exceptions, but I cannot think of one in which the thing which makes conduct illegal is outside the control of the defendant. For example, driving in excess of the speed limit or with more than the permitted level of alcohol in your system both involve criminalising something entirely within the control of the defendant even if he had no intention to speed or to be over the limit. Before killing an animal of a protected species someone can find out whether the object of his brutal desire is indeed of a protected species. I might be wrong (it is many years since I practised in the criminal courts except on planning and regulatory matters) but I cannot think of any example of the law criminalising conduct because of a state of background facts which the defendant neither knows nor has any reasonable prospect of being able to discover.

A very obvious situation comes to mind which illustrates just how bizarre this proposal is. Assume two pasty middle managers visit Madame Fifi's Sauna and Hanky-Panky Parlour. Two girls are available, one middle manager goes to Room 1 with Chantelle the other takes Tatiana to Room 2. In burst the police and both men are arrested. It turns out that Chantelle is an illegal immigrant from Russia and was forced into prostitution after being smuggled to the UK by the Russian Mafia. Tatiana is actually Joyce Stubbins from Canvey Island and works two days a week to save for a new caravan. Each man has done exactly the same thing. Neither of them has any means of knowing the background of the girl who was to be the temporary object of his fleshy lusts. Yet one is guilty and the other is not. It really is a complete nonsense, an absolute lottery, arbitrary and ill thought out law at its very worst.

And what will it achieve? How many more pimps and traffickers will be identified and prosecuted as a result? Of course there is no need even to waste time asking that question because the answer is a big fat zero. If the desire is to stop men using prostitutes for fear of losing out in the lottery draw it might have some effect, but it will only do so at the expense of imposing a ridiculous, unfair and random law.

Making the criminal law used to be a serious business involving careful consideration of the consequences the proposed law might be expected to have. These days we have Jacqui Smith and simple Harriet thrusting the contents of their combined half-brain on the populace without regard to anything other than the desire to prove just how very shallow they are.