Apparently,

In the early 1980s a council tenant’s average income was 73% of the national average. Today two in three tenants living in “social housing” are among the poorest 40%.

These two numbers are NOT COMPARABLE. One is a measure of the average income, the other is a measure of the proportion of poor people. Idiots.

I thought that two of the key problems in a recession is rising unemployment, due to companies going bust. So how exactly does bribing companies to take new staff on who have been unemployed for longer than 3 months actually help?  If Cameron was serious about tax cuts, then he should offer help to companies to not fire people or some sort of insolvency protection, rather than trying to tackle to long-term unemployment problem that this country has. If you really want to help, Dave, help stop businesses going bust in the first place by either giving them a big tax cut (e.g abolishing employer NI) or increasing the money in people’s pocket by reducing VAT (to 10% and bugger the EU), dramatically increasing the lower rate tax threshold or reintroducing the 10% lower rate. Timid tax cutting policies will only have the opposite effect to that desired - by not having enough impact because they are of too limited scope. One must be bold, and if you are worried about “fiscal responsibility”, cut the vast public sector budget in Labour’s client state.

But of course, he was only pushed into this “tax cutting” agenda because of the media - everyone knows that in politics, the first to announce tax cuts is the one that actually gets the most political advantage (that was what happened with Obama, for example). And that’s why Dave tried to pre-empt the budget report this week, by pre-pre-pre-announcing his policies before the weekend (some 3 or 4 days before the first of a string of announcements), trying to out-smart the Labour media machine at their own game.

In fact, one such cost-cutting measure to pay for a decent tax cut could be to abolish all of the media studies university courses and public sector paid (whether directly or indirectly) media advisors. That’ll save billions. Otherwise, we will end up with pre-announcements of an announcement of a meeting to decide when to announce a date to announce a new policy.

Ever since the banks were bailed out, I was worried that the government could not resist micromanaging their way through this mess. The difference between the Libor - the rate that banks lend to each other - and the BOE base rate - the rate that the BOE lends at - cannot be clearer. Generally speaking, banks don’t borrow from the BOE but from each other, so the rate that they pay for credit is the Libor and not BOE base rate. Yet our government do not understand this and are embarking on a policy of interference and micromanagement. The 1.5% cave in is all the evidence we need:

It was a difficult meeting… Right at the start the chancellor’s people thrust unflattering newspaper headlines under the executives’ noses. We then had to make it quite clear that just because rates fall it does not mean we can afford to do the same with our products… The issue was unresolved.

Bankers do not care about headlines. They only care that their business is viable and sustainable. Admitted, there is sometimes a correlation between bad headlines and poor business performance, but this it is not the place of the government to point this out. But what is perhaps more worrying is that it is “treasury officials” that are pushing the banks into a very political corner. Civil servants should not be worried about the papers - why are they doing political dirty work? Does this not break the rules?

A couple of weeks ago, I sent a FOI request to Colchester Borough Council to try and find out some information about the £4m lost somewhere in Reykjavik. Below are the responses:

1. What financial advice was received by Colchester Borough Council on investments from 1st October 2007 until 10th October 2008?

CBC use Sector Treasury Services to inform our treasury management policy and strategy. This takes the form of half yearly meetings, monthly credit updates, ad hoc credit updates, ad hoc updates relating to all forms of treasury management.

2. What companies, individuals or government departments are responsible for advising Colchester Borough Council on financial matters?

CBC use Sector Treasury Services to inform their treasury management policy and strategy. In addition we comply with Government guidance and legislation on treasury management.

3. What councillors were aware of the large investment (or impending investment) made to Landisbanki before the 6th October 2008?

Under Treasury Management Policy documents, the policy and strategy is set by the Council and the implementation of this is delegated to officers. Under the current policy, short-term borrowing and investment is authorised by Council officers.

4. Who was present at meetings when the decision was made to make the investment? Copies of all relevant meeting minutes should be included, if available and possible.

There were no specific meetings relating to this investment, since it formed part of the day to day Treasury Management activity, delegated to officers. Members of the finance team discuss Treasury Management activity on a daily basis.

5. What was the purpose of the money deposited in Landisbanki - was it short term storage (e.g council tax receipts due to be spent) or long term investment/income?

The council has short term surplus cash mainly due to: timing differences as to when Council Tax & NNDR are collected and required to be paid over; S106 monies received but not spent; delays in Capital Programme spending. This investment was a short term cashflow one.

6. What credit rating agencies were used to judge risk associated with investments, particularly those made in Landisbanki.

The council uses data from Fitch (as supplied through Sector) or if no data is available from Fitch, then data from Moodys or Standard and Poors. The agreed Council policy sets out the total amount that can be invested with a counterparty and the maximum length of time that any monies can be invested. At the time of investment, Landsbanki had a Fitch rating of A, F1, B/C, 2. According to our policy, this meant that at the time of the investment we were permitted to invest up to £5M for up to 3 months.

Given these answers, I see two particular issues. Firstly, no Councillor was aware of the officers placement of £4m of tax payers money into an obviously dodgy bank. Secondly, and more importantly, said £4m was placed in the bank due to issues with short term cash-flow - that means that the Council had too much money coming in at once and had to put it aside to pay for future services. The question remains as to what will happen when they theoretically need to dip into the £4m to pay for services…..

Yesterday evening, for the first time in my life, I went to a football ground. Not to watch or play football, but to listen to a speech by Dominic Grieve MP, the Shadow Home Secretary. And I was extremely impressed with him. Not only was his speech 1st class, the 30 minute chat I had with him impressed me even more. His knowledge of a plethora of issues was well  in-depth and informed. He even managed to sidestep the awkward comments and conversations that can be so common when speaking to some of the older clientele.  But there was one thing that he said, which had nothing to do with policies or fixing the Labour mess, but represented precisely what Labour truly stand for. And that is media manipulation.

I have already blogged about how I believe Labour, Gordon Brown specifically, used the timing of the US elections to political advantage. By calling the Glenrothes election 2 days after the US election and 1 day after a massive 1.5% interest rate cut (although that could not be predicted, the date of any possible cut was known. Lucky, but as we all know, you make your own luck in life), the news agenda was dominated by these events rather than the fate of Glenrothes. However, a quick look at the papers reveals that the day before the election, there was apparently no chance that Labour would win (see for example here, here and here). And apparently, Nick Palmer, the Labour MP for Broxtowe said

I don’t know any Labour MPs who are expecting us to win - the range of opinion is from “Well, we’ve given them a run for their money” to “Bloody byelections, what can you expect?”

Yet only a couple of days earlier, according to Dominic Grieve, there was not a single Labour Minister that thought they would loose. Most thought they would win by a healthy, but reduced, margin. It seems that the Labour spin machine was in, well, full spin. By letting it be known that they thought they would loose, Labour have managed to turn the headline “Labour reduce their lead by half” or “Despite Brown bounce, Labour still on course for election loss” to “Labour’s tale of the unexpected” from the Beeb. In fact, a swing towards the Conservatives of the same magnitude in the general election could result in a small, but very real, majority for them.

Despite what I would call a disastrous result - despite all of the resources in the World thrown at the seat, they still lost half their majority - the media are full of “Brown Bounce” stories because he fed them with a “we are going to loose” line the day before the election. It’s a perfect manipulation of the media.

I certainly don’t remember hearing about the convenient timing when the date was announced, the media all ran with the same story the day of the election (that Labour will loose) and now the media are full of the Brown Bounce. And this is the culture that is true New Labour - no strong policies, just media manipulation and plenty of coverage. And is has got to end. The media must be independent, free to investigate and report on their own. They should not be bullied into running the politician’s particular spin that day. Enough of the “Tomorrow, the Home Secretary will announce…”; enough of the same stories blanketing all of the news papers; enough of the bullying tactics. If a particular policy is not strong enough to win on debate and strength of arguments alone, it is probably the wrong policy.

Why is the media so obsessed with Obama, when we have our very own election to worry about? Yes, the Glenrothes bi-election is today, which possibly will signal the end of the Brown premiership and bring about a general election, yet the Torygraph has a dozen “comment” articles about Obama yet only one (very short) article on Glenrothes.

With literally hundreds of BBC reporters in the USA, and I am sure Brown was aware of this many weeks ago, the bias in coverage is easily explained. What were the beeb thinking of? I even saw one interview with the great grand daughter of the first self made black American millionaire. Like she had actually done anything in her life that was interesting, or more importantly, had anything to contribute to the debate.

And as I said above - Brown must of known what aunty beeb (and others) were up to. And that is why he chose to have the election 2 days after the USA election. This debacle is yet another example of how Brown is perfectly willing to abuse his powers for party political gain. The sooner we have fixed term parliaments and the decision of when to hold bi-elections made by the Electoral Commission the better. The primary concern about when to hold elections should be to ensure the playing field is as level as possible with respect to external events.

But this attempt at a media blackout may backfire on Brown. It means the campaign agenda is no longer set by the national media, but by what happens on the ground. And the SNP are excellent at these kind of campaigns. Let’s not forget, if Brown looses that election, the media focus will have done a full circle and have its sights firmly aimed back at Brown.