Tuesday, 24 July 2012

The legacy of the Games

On 3rd July this year, a report by Lloyds Banking Group claimed that the Olympic Games would bring in  £16.5 billion for the UK economy, creating 62,200 jobs along the way. In the shorter term, it is alleged, the Olympics will improve the public mood and encourage people to spend more money. The report looks at the benefits of the Olympics from 2005, when London was selected as the host city, until 2017. Coincidentally, Lloyds is among the sponsors of London 2012.

However, the Guardian reports today that the usual flow of international visitors and domestic travellers through London has come to a grinding halt, as thousands desert London because of the Olympics, leaving hotels, restaurants and theatres unusually empty in the last few days before the start of the Games. Many of London's five-star hotels are frantically discounting their room rates by nearly half and top restaurants are easy to book. Even house rentals are disappointing. "Many people saw the Olympic rental market as something they could cash in on, but the truth is that the supply has easily outstripped the demand." In addition, thousands of jobs ‘created’ by the Games themselves have been substituted for troops, called in to make up for the pitiful attempt by G4S to provide security at all the Olympic venues.

The official London 2012 website informs us that the building of the Olympic Park has already contributed around £2.3 billion to the economy. Which is handy because £2.2 billion of National Lottery funds were used to create the facilities to host the Games, plus a further £66 million specifically for the Paralympics, thereby "providing a legacy for the people of east London and the wider UK." The National Lottery is also playing a key role in “funding work that will lead to increased participation in sport at a community and grassroots level and deliver improved community services and facilities”. The Lottery will share in the profits made from land and property sales in the future.

And then there's The great Olympic tax swindle by Simon Birch in Tuesday's Independent.  Best just read it in full rather than me attempting to summarise it.

It is also worth noting that earlier this year the royal wedding and the Queen's diamond jubilee weekend were both sold to the gullible British public as wonderful opportunities to bring millions into the UK via, amongst other things, tourism. Three months down the line and the Treasury are actually blaming the two events for the flailing economy.

Monday, 23 July 2012

Olympics may not pull UK out of double-dip recession

The UK has waited years for the Olympics to arrive and, finally, it is here. The 30th Summer Games, which cost the British government a gut-busting £9.3 billion to organise, is hoped could help wrench the country out of a double-dip recession. But analysts are no longer so confident, with many expecting that the games will have a dismal effect at best on the country's flailing economy.

A recent report released by Moody's revealed that any benefits caused by an uplift in games-related tourism might be short-lived, while Q2 GDP estimates by the ONS, which come out on 25 July, are expected to show that the placebo effect of the Olympics is likely to be overshadowed by the eurozone crisis.

MarketWatch, Wall Street Journal

Sunday, 15 July 2012

Shitstorm hits the Coalition

• Cameron says something interesting but is anyone paying attention?
Tim Montgomerie, ConservativeHome -http://bit.ly/Nu5IDz

• Wanted: a Tory leader with Tory values
Iain Martin, Telegraph - http://bit.ly/NGmPD1

• Cameron calls for coalition unity
BBC/Times - http://bbc.in/MqKU2Y

• Only Cameron can rescue the coalition. But does he want to?
Andrew Rawnsley, Observer - http://bit.ly/NGniFm

• The coalition's not a happy marriage, but we must stay united
John Pugh MP, Observer - http://bit.ly/NGn54N

• Will David Cameron be able to keep his coalition, and his own party, together?
Toby Helm, Observer - http://bit.ly/NGnLHE

• Tories versus Lib Dems: the coalition flashpoints
Toby Helm, Observer - http://bit.ly/NGobxz

• 'Stop apologising,' says Clegg
Independent - http://ind.pn/NGoEjk

Saturday, 14 July 2012

Rail network to see 'biggest investment' since the Victorians

David Cameron and Nick Clegg will join forces next week to declare that the government is to embark on the biggest investment in the rail network since the Victorian era as ministers move to demonstrate their commitment to boosting economic growth. In an attempt to show a renewed sense of purpose, after last week's bruising rows over Lords reform, the prime minister and his deputy will announce the electrification of a series of lines and the symbolic reversal of some closures imposed in the 1960s by the Beeching axe.

Richard Beeching, the late chairman of the British Railways Board, became a hate figure for rail enthusiasts when he compiled a report that led to the closure of 2,363 stations and 5,000 miles of railway lines. Fifty years later, Clegg and Cameron will confirm plans to reopen part of the Varsity line, from Oxford to Bletchley. The plans, which are likely to involve £10bn of capital investment between 2014 and 2019, are likely to involve:

• The electrification of the Midland mainline from London to the east Midlands and Sheffield. Clegg is MP for Sheffield Hallam. The Great Western line from London to Swansea, via Cardiff, will be electrified. The Cardiff Valley Network will also be electrified. Electrification is favoured by the rail industry because electric-powered trains are lighter than their diesel-powered counterparts and can accelerate more quickly. They are also less susceptible to breakdowns.

• New projects, to be named the Northern Hub, around Manchester to improve services across the north of England.

• Upgrading part of the east coast mainline from London to Newcastle and the spur to Leeds.

• Investment for improved railfreight to key ports such as Southampton and Felixstowe.

Stephen Joseph, executive chairman of the Campaign for Better Transport, said: "We welcome this programme, which with HS2 [the High Speed Two line from London to Birmingham] amounts to the biggest rail investment programme since the Victorians. It will make rail journeys quicker, smoother, quieter and greener and give more people a choice in how they travel. But we are concerned that rail users will face even higher fares to pay for it – the government is still committed to RPI+3% fares increases for the next two years. These projects will benefit the whole country and should not be paid for by already hard-pressed commuters who are already paying some of the highest fares in Europe."

The government's claim of record investment will be based on two politically contentious sources of finance to repay the investment needed: fares and the taxpayer. The farepayer is the biggest contributor, with inflation-busting fare increases helping generate £6.6bn for the railways last year. The 2009-2014 programme said passengers should foot more of the cost of expanding the network, with farepayers nearly doubling their contribution. Ministers have expressed hopes that a more cost-efficient railway will result in lower fare increases from 2014, but there is no sign of that happening. Fares are expected to rise by 3% above inflation until 2015 at least, despite the government targeting a £1bn cut in the annual cost of operating the network by the end of the decade.

The state provided a further £4bn in grants last year, but the taxpayer underpins the massive debts that fund the improvement work. Network Rail, which owns, operates and maintains tracks and stations, has borrowed £27bn over the last decade to fund its investment programme – a deficit underwritten by the taxpayer. The complex funding arrangements will allow the government to say that it is embarking on the biggest investment project since the Victorian era. The £10bn investment in new rail projects is around £2bn smaller than the current five-year spending plan, for 2009-2014, which included a £5.5bn upgrade of the Thameslink route through central London.

The reference to the Victorian era will provide a sober reminder of the risks of relying too heavily on private companies and passengers to pay for the work. Many Victorian railway entrepreneurs were driven to ruin by the high cost of the engineering work. This often happened after they battled against traditionalists, immortalised in the recent Cranford television drama based on the Elizabeth Gaskell novels.

The reopening of part of the Varsity Line, or the Brain Line, between Oxford and Bletchley, will be welcomed by traditionalists and by business leaders who believe it covers a crucial growth area. The line, which used to link Oxford and Cambridge, escaped the Beeching Axe but was closed in 1967.

The Guardian

Friday, 13 July 2012

Serco - the biggest company you've never heard of

This video from the Hungry Beast, broadcast on Australia's ABC network, give's a brief introduction to Serco and the services they run across the world.

Wednesday, 11 July 2012

My Home Life

No, I'm not about to tell all. My Home Life is a nationwide collaborative movement to promote quality of life for those who are living, dying, visiting and working in care homes for older people through relationship-centred, evidence-based practice. The programme is led by Age UK, in partnership with City University, Joseph Rowntree Foundation and Dementia UK. Uniquely, it has the support of the Relatives and Residents Association, together with all the national provider organisations that represent care homes across the UK. 

There's also a Facebook page and a Twitter account for those of you in the loop!

Review on the impact of Universal Credit

The Children’s Society, Citizens Advice and Disability Rights UK are working together in supporting Baroness Tanni Grey-Thompson to produce a review on the impact of the new “Universal Credit” benefit on disabled children and adults. To do this they need your help -  you can contribute to the review in several ways:

• Read about the changes and the groups most likely to be affected
• Take their survey for Tanni’s review
• Respond to the Government’s consultation on the Universal Credit regulations

The changes and the impact on disabled people

Universal Credit will replace all means tested benefits for working age people from 2013, including income based jobseeker’s allowance, ESA, and tax credits.  Some groups of disabled people will get more financial help under Universal Credit but some who claim for the first time will receive considerably less money under Universal Credit than they would get under the current system.

The final decisions have yet to be made, as the detailed regulations still need to be passed through Parliament.  They want the Government to change its plans, so that certain groups of disabled people aren’t hit disproportionately by the changes to the way financial support for disabled people is structured. They have calculated how much different groups of people will get under Universal Credit but to inform our lobbying, they also need to know more about the additional costs disabled people often face in different situations because of their impairment or long term health condition eg the extra costs of transport.

• Find out more detail about the changes ( 31kb)
• Find out about the financial impact on different groups of disabled children and adults (160kb)

Respond to the review

They are particularly concerned that certain groups of people will lose out under universal credit.

They are interested in hearing from people who are in each of the following situations. If you have a disabled child with a long term health condition or impairment, or are a disabled adult in work, or if you live alone and are disabled adult and not have a carer.

There are three surveys, please complete the survey below that is relevant to you.

(Please note that unless your circumstances change your benefit won't be reduced, but you will be able to give valuable information about what the effect would be on new claimants).

Respond to the Government’s consultation

The government is consulting on these changes you can find out about the changes ( 31kb) and financial impact ( 160kb) they will have - and then respond to the consultation. There has been much less focus on the changes in Universal credit than other changes facing disabled people but for some people there will be a much greater financial impact form this than any other change.

What will happen next?

Based on the survey responses we receive, the review will be producing a report in the autumn in advance of MPs and peers debating the changes in Parliament – this report will illustrate the impact of these changes on people’s lives.

Resources and further information

• Briefing document about restructuring of support for disabled people under universal credit (31kb)
• Scenarios: How different types of families will be affected by the proposed changes under universal credit ( 160kb)
• Respond to the consultation on the social security advisory council website
• Universal credit on the Department for Work and Pensions website

Thursday, 5 July 2012

The Barclays ethos infects our culture - purge the entire board!

The bank's directors sit on so many institutions that banning them all would send a healthy shock wave through the City, writes Polly Toynbee

If this is culture change, it's glacially slow. Five years after Northern Rock signalled a banking collapse that impoverished nations, there is no reckoning. Citizens are impotently angry but business as usual prevails. David Cameron emits half-hearted indignation: the banks will be semi-split, and not until 2019. Meanwhile, testosterone-fuelled silverbacks eat what they kill in under-supervised dealing rooms, skimming fortunes from everyone else's endeavour. So far the remedies are cough drops for cancer.

The biggest beast strides off with £100m, plus another possible £20m goodbye money. He is not struck off, nor abashed, not a bit. Is that a master of the universe, that charmless prevaricator with less self-awareness than an ape? These princelings' characters are malformed by a lifetime of courtiers' flattery. Politicians face hourly reminders that they are mortal, but not the denizens of the high towers of finance. The FSA signalled unease about the cultural failings of Diamond's leadership four months ago, yet the board clung on to him even after that £290m fine.

The Financial Times writer John Gapper quotes one ex-banker's thinking: "It would be a very good thing if an awful lot of people lost their jobs in a lot of banks." A purge would indeed send out shock waves. Firebrand Stelios Haji-Ioannou, a major shareholder in easyJet, had the right idea this week in calling for Sir Michael Rake's ejection from the airline's chairmanship, for his role on the Barclays board. If the entire board of Barclays was sacked, not just from the bank but banished from all their multiple other posts and banned from future directorships, consider what a healthy fright would shudder through every complacent institution infected with the Barclays culture, with so many Barclays directors on the boards of regulators and standard-setters.

In the great Barclays purge, let's start with Rake. He loses his chairmanships of BT and easyJet, and his directorship of McGraw-Hill Inc. Away go his seats on the advisory boards of the CBI, Soas, Chatham House and Bupa. Off goes his seat on the board of the Guards Polo Club. He gets the bum's rush from regulatory authorities too: he loses chairmanship of the Guidelines Monitoring Group (overseer of private equity), along with his seat on the DTI's US/UK Regulatory Taskforce. Quis custodiet?

Sir Richard Broadbent, Barclays deputy chair, loses his chairmanship of Tesco. Out goes his place on the board of Relate, and his partnership at the improbable Centre for Compassionate Communication.

Non-executive director Reuben Jeffery III would be sacked as chief executive of Rockefeller & Co. This former George W Bush under-secretary loses his post at the Center for Strategic and International Studies: that derives from his time as special adviser to Paul Bremer, head of the Coalition Provisional Authority in Iraq. Someone wiser might not boast of that epic calamity on their CV. Look now at Sir Andrew Likierman. This Barclays director is sacked as chair of the National Audit Office. What kind of an auditor is he? But above all, he loses his post as highest paid vice-chancellor, dean of the London Business School, where he teaches the next generation the culture he oversaw at Barclays.

I will spare you the details of each Barclays panjandrum, but for these: Naguib Kheraj, vice-chair of the bank and chair of the Aga Khan Foundation, is sacked from the NHS Commissioning Board, where he oversees Andrew Lansley's redisorganisation. Marcus Agius, former Barclays chair, sits on the BBC Trust. Alison Carnwath, chair of Barclays remuneration committee, which set Diamond's pay, sits on 12 other boards. Thus the banking culture of hyper-excess spreads, suggesting it's what everyone does, the way of the world. So the BBC director general's pay span into the stratosphere, or the London Business School tells students how to feel entitled to mammoth rewards.

We need know nothing of these directors' individual talents or deficiencies: they are all responsible for a bank that went out of control. Whether they were all "physically sick" together with Diamond when they heard the news of Libor-cheating in their trading rooms that inflated bonuses, who knows. But here is an establishment web, a hard-wired network of interests intertwined with regulators and ethics-setters where a thorough sacking would send an electric culture-change signal.

Don't hold your breath. The Bank of England has just shovelled another £50bn quantitative easing into the pockets of the banks, the bourne from which no cash returns, while the British Chambers of Commerce again this week called for the money to go instead to a national investment bank for small business.

Ed Miliband made sure Labour owns the turf on reforming capitalism: George Osborne's sneering smears only rebound as Labour pulled further ahead in polls. But to escape his past, Ed Balls needs to jump into the future. With the EU adopting a financial transaction tax by December, Labour should call for the UK to join, raising £30bn a year. Call for total bank separation now, not in seven years. Ban bonuses. Turn the UK from tax haven to safe haven of financial probity.

Financial writer John Kay reminds how cleaning up UK casinos, contrary to warnings, made London the most honest and popular city for high rollers. The Lloyd's scandal strengthened London insurance by cleaning up to flourish. Would finance flee? Broker Tullett Prebon warned it would leave, but couldn't get their traders to go. Call out Cameron for refusing to join EU regulation. Labour needs to jump ahead to where the voters are. Then Ed Balls can shed memories of Gordon Brown's City-worshipping days.

Written by Polly Toynbee  for The Guardian
Illustration by Satoshi Kambayashi

Monday, 2 July 2012

Construction industry fails to re-ignite the economy

The Office for National Statistics says the goods trade deficit has widened to £10.103 billion - the second-largest gap since records began in January 1998. That compared to a deficit of £8.734 billion in March. Exports to non-EU countries fell 10.3 percent on the month, driven by lower sales of chemicals and cars. 

Meanwhile, construction output has fallen at its fastest rate in three years, dropping 4.9% to £7.8bn in the first half of 2012. A recent report showed national construction levels will fall by by a further 3% during 2012 with 45,000 skilled workers and trades people expected to lose their jobs. Two more  established local firms have gone bust, Philip James Ltd of Leicester and Triangle Builders in Bootle, laying off workers and leaving suppliers looking to be paid.

Wasn't the construction sector supposed to stimulate growth in the economy? Britain's economy has now stagnated for a year and a half, confirming that this is the slowest rebound from recession in a generation. Last month, Alison Perry, managing director of Triangle Builders, was awarded an OBE in recognition of her contributions to the building trade in her role as chairman of the National Federation of Builders (NFB). In this post she advised David Cameron about how to boost the construction industry.

Today, sources at firms who are owed tens of thousands of pounds they are now unlikely to receive, said they were angry that 47-year-old Mrs Perry had accepted the honour when it must have been known that the business was at risk. Mrs Perry was unavailable for comment.

Sunday, 1 July 2012

Ed Vaizey hails "thriving library service in England"

Despite a report earlier this week predicting that public libraries could disappear by the end of the decade, the culture minister, Ed Vaizey, has hailed the "thriving library service that we have in England" as he announced a series of initiatives at Thursday's Future of Library Services conference.

Unveiling plans to boost cultural activities in libraries, automatically enrol primary school pupils in their local libraries and an ambition to put Wi-Fi in libraries across England by 2015, Vaizey claimed that the Chartered Institute of Library and Information Professionals' prediction of 600 library closures "regularly quoted in the media ... is very wide of the mark".

"A truer picture of building closures would be about a tenth of that," he said. "I remain resolutely optimistic about library services. I have never, even in opposition, depicted the library service as being in crisis." He added that "even while there have been closures, sometimes services merge or move to community management, and it's important that we are able to have an intelligent debate about this. And it's also important to remember that many libraries are also opening."

Library campaigner and award-winning children's author Alan Gibbons rejected Vaizey's positivity, calling it "a masterpiece of Life of Brian optimism, the massaging of reality and evasion".

"The reason this nightmarish scenario [of 600 library closures] has not occurred has been because local communities have mounted commendable resistance, reducing councils' room to manoeuvre. This has included legal actions, pickets, protests, read-ins and a lobby of parliament. None of this agitation is reflected in this blandest of speeches."