Faced with unbelievable rises in train fares - from £102.90 to £252.00 - sometimes I do wonder if officials are delusional. According to Michael Roberts, chief executive of the Association of Train Operating Companies:

commuting by rail was considerably less expensive than commuting by car – even allowing for falling petrol prices – and journey times are usually quicker too

Never have I known the situation that he describes.

Using the train, it costs me £20 return to work with a monthly season ticket and a whopping £44 pounds if I get a day ticket. It costs me £12 in petrol per day if I drive, and I have a large petrol car. Ok I have to insure it, at a cost of £80 more per year than I would need anyway (the extra needed to commute). That would make commuting by train a whopping £1920 more expensive than driving. OK, some might argue that I need to buy the care. Fair enough - apart from that I need to buy one anyway, as quite frankly, public transport is a disaster - especially when transporting a family. So it will be the difference between the depreciation if I did and didn’t commute. Since the car only cost me £6000, it’s fairly clear that £2000 extra depreciation per year is a tall order - I fully expect the car to last at least three years even if I did the extra 120 miles per day commuting and it will be still worth something. For arguments sake, I reckon it would depreciate £1000 per year more if I commute with it. That still gives me a net gain of £920 per year, which is more than enough to pay for servicing and maintenance. In fact, I reckon I would be £500 per year better off if I commuted by car.

When will officials, and MP’s, realise that public transport in this country is not cheaper than driving? 

It reminds me of the conversation I had with Chris Grayling MP in 2006, who was then the Shadow Transport Secretary. After listening to a speech from him where he spouted nonsense about how trains were cheaper than cars, I put to him my particular example. For the particular journey I had done that day, it was cheaper by a factor of two to hire, insure and put petrol into a car than it was get the train (as that was how I got to this meeting). And it took much less time - by a factor of two. He did not listen to what I had to say - he replied stating that I had to buy, insure and maintain the car as it wasn’t only the petrol I had to take into account. He went on to inform me that because the trains went from city centre to city centre, it would take considerably less time. Um…. let me repeat…. to hire, insure and put petrol in a car was cheaper by a factor of 2! The hire company are making a profit from my hiring it, so it must be even cheaper still! And my journey did not start or stop anywhere near a city centre, adding a considerable time to my journey, as the public transport to/from the station (buses) are always much slower than the equivalent journey by car. All I can say is, God help Work and Pensions if he is still there in a year or two…

It drives me wild that politicians and officials are simply not willing to admit the truth - that travelling by train is too expensive in Britain today. 

But why do I get the train? Driving on roads (the A12) whose capacity is considerably smaller than the volume of traffic is much more unpleasant than being crammed into a train, whose capacity is considerably smaller than the volume of passengers. The stress of driving into and out of London is simply not worth saving £500, or even £1000, per year.

Today I learned that the Lib Dem Colchester Borough Cllr. Paul Smith - the same Cllr. Paul Smith responsible for losing Colchester £4m - offered to take a pay-cut if he did not perform well. Hurrah! He volunteered to be the “guinea pig” for a scheme which could be extended to other cabinet members if it proved a success. However, it was thrown out as “unworkable” by the council’s strategic overview and scrutiny panel.

Apparently, it would be too difficult to figure out whether he had done well or badly over the course of a year. Some might say that the judging process should take the following form:

Q. Did he preside over a £4m loss?

A. Yes!

Q. Should he therefore forfeit some of his pay?

A. Yes!  

But of course, this is history - it is his future performance that will be judged. Furthermore, it the decision to invest £4m into Icelandic banks was taken entirely by the council officers. But that does not mean Cllr. Paul Smith is completely blameless - he is indeed presiding over a situation where officers can take decisions, without informing the councillors, that could dramatically change the future financial situation of the council. Perhaps this is normal - but we can still question whether it is right.

However, the question of why the plan was rejected comes down to his assessing his future performance. Is he really that good at covering his tracks that it is impossible for his peers to judge him? Is his official role really that opaque that it is hard to define a firm set of objectives for him to achieve? I have never held a political office, so it is difficult for me to judge really what a councillor can and can’t do, but even I know that there must be both good and bad councillors. Is it really that hard to judge how well councillors in general perform, or is it something specific to Cllr. Paul Smith?

The really sad thing about this is that the committee that rejected his plan is chaired and co-chaired by the Conservatives. How much political capital will he get from this? After all, the introduction of performance related pay to our councillors has a certain “ring” to it that Joe Public could appreciate. I am sure that the decision to reject performance related pay was taken for very good reason. It probably is difficult to judge the performance of councillors, or perhaps Cllr. Paul Smith in particular. However, I can see it now at election time - the headlines on his campaign material could be “Tories reject holding councillors to account”. The explanation of this decision, or future decisions of the council, could easily be achieved if more councillors blogged… Let’s hope they will.

According to Cameron:

“To pay for Labour’s spending would mean substantial tax rises over and above those that the Chancellor actually told us about… If we are to avoid substantial tax rises in the future — tax rises that will hamper the recovery — we must slow the growth of government spending.”

What is wrong with this so-called opposition. It should not be about “slowing the growth of government spending” but accelerating the cuts in government spending. Using the terminology of “slowing the growth”  assumes that there will be growth. Why make that assumption? Government spending was £318bn in 1997 whereas in 2007 it was £549bn. Surely isn’t there room for contraction of government spending?

A few million here, a few tens of million there. The bonuses earned by our bankers are a King’s ransom for some, but chicken feed for the banks. Gordon Brown, as it is him that is behind this fiasco and its “rescue” (and not his Darling puppet), has insisted the banks should not pay “cash” bonuses this year to their executives. But the bonuses are chicken feed. They have not caused this problem in any way - the money that that the banks have lost is trillions, not hundreds of millions. Not even billions.

So what has actually caused this problem? Not enough regulation perhaps? Apparently, Brown has been calling for Worldwide regulations for years. Bullshit - as is shown in his Mansion House Speech where he calls for the exact opposite. Despite Brown’s talent for being economical with the truth, is more regulation the answer? 

I would say, and so would a number of others, is that the problem was that banks have been lending to people who cannot service the debt. They have been lending to high risk individuals - according to the BBC this morning, even those without a job. Under whose bidding? Well, Gordon Brown’s, of course. In his pursuit of equal opportunities for all, whether it’s in the best interest of those that are given the opportunities or not, Gordon’s economic policy, far from allowing the practice of it, has been actively encouraging lending to high risk individuals. It’s everyone’s right to own a house - after all, one can extract more tax from the population if more of them own a house.

And guess what the other string of these new proposals to “help” the banks? Yep - in order to accept the government’s money, the banks have to increase lending to those without very much capital (i.e small businesses) and individuals who wish to purchase houses (in a market that is currently in freefall). The root cause of this crisis - a large and sustained increase in access to credit - is the very policy that Gordon is attempting to sell to the world as the fix!

And what about that regulation? Has there been a failing in regulation? Perhaps - if banks were not involved in the practice of buying and selling packaged up debts, then the good and bad debts would not have been mixed together and there would not be the same crisis in inter-bank lending. If the practice of consolidating debt was banned, those banks that did not purchase bad debts would be insulated. Whilst there would still be a crisis, as the lending in the first place would still have taken place, the banks that only traded in “good” debts might still be able to borrow money. Perhaps better regulation could have reduced some of the severity of the crash, or changed the nature of it, but regulation alone is not the answer.

The crux of the matter is that banks need to go back a few decades and reduce access to credit, so that those that can service the loans are the only ones that are lent to. But of course no politician - even those in the Conservative Party - has the balls to tell the poor that they can never own their own home. So I worry about the nationalisation of the banks - with such large shares of the banks, can ministers stomach the one thing that will stop a crisis like this ever happening again? Politician’s imply they want to punish the bank’s executives for taking too many risks, but the real risk of the last decade was lending to the poor.

Update 15.06:

It appears that my hunch of Government’s not understanding the route of the problem is correct. And it seems that I was also correct about ministers not wanting to leave well alone, content only if they can micromanage from the bank’s policy so that it meets their own agenda. You see, another condition of the money is for the bank’s to return to lending at the 2007 levels. Labour will not admit the fundamental problem was caused by lending to those that cannot afford it.

According to the BBC, Kent CC has around £50m in the failed banks of Iceland. According to the 2007-8 budget statement of Kent CC:

At 31 March 2008 the Council has earmarked and other capital reserves of £60.3m as shown on page 20. 

This does not look good. Has Kent CC really put all of their eggs in one basket? If so, are Kent CC breaking government guidelines, where capital should be spread around amongst institutions? 

And there was me thinking that Conservative Councils were supposed to be competent…. let’s hope Colchester or Essex isn’t in a similar position, although Colchester is currently run by a Lib-Lab coalition.

** Update

It seems that they have not put all of their eggs in one basket, but the following nonetheless does make for sorry reading:

 Investment Strategy  

 The main aspects of our investment strategy will be: 

 7.19 Diversification 

 Up to now all of the investments made have been in cash based investments.  To give the opportunity to add to returns last year we introduced new asset classes into the portfolio to give the potential for increased returns.  With the potential for increased returns there is inevitably an increase in the amount of risk which we will take.  We intend to control the risk by: 

  Diversifying the investments made to take a number of positions and seeking to make investments in uncorrelated asset classes; 

 Use of pooled funds rather than direct investments; 

 Comprehensive due diligence being undertaken on any new investments made; 

 Allocating only a small part of the total portfolio to higher return, higher risk products; and 

 Approval by Members. 

To date we have not used any non-cash investments but we need flexibility moving forward. 

 

7.20 Types of Investments 

The available asset types at our disposal will be:  

Cash deposits – less than 365 day deposits with banks and building societies;  

Callable deposits – less than 365 day deposits with banks and building societies.  As at 31 December 2007 these stood at £117 million; 

Callable range accruals – over 365 day deposits with banks where the rate of interest paid depends upon LIBOR staying within a pre-arranged range.  We have undertaken two such investments worth £10 million; 

Money Market Funds – with Butlers support the JP Morgan Liquidity Fund is the preferred vehicle, but we have never used it as rates have not been competitive and fees are payable.  We also monitor the Goldman Sachs Liquid Reserve Fund and the Fidelity International Cash Fund; 

 Fixed Income and Corporate Bonds – a number of pooled funds exist and these would be considered with advice from Butlers; 

 Property – through the Superannuation Fund we have considerable experience now of indirect property investment via pooled funds.  These are also suitable for treasury funds.  Included in this category would be investment in infrastructure funds; and 

 Absolute return products – many leading investment managers now offer products targeting an absolute return, such as say RPI +3/4/5%.  To achieve such returns the fund manager invests in a range of underlying assets.  Again this type of investment is available via pooled funds with relatively small investments being permitted. 

I propose a simple but effective way to ensure the destruction of the Labour Party - not just in the short term, but lasting for decades. Personally, I believe what the Labour Party has done to our country, both in the last 11 years and previously in the tax’n’spend unionised claptrap of the mid to late 20th century, is unforgivable.

It starts with encouraging, or hoping for, a leadership challenge in the next couple of months. Just when the country needs to be guided through tough economic times, in the event of a leadership challenge, the Labour Party will turn inwards. It will begin a bitter battle with itself, with factions briefing against factions, each with the belief that they are the only ones capable of carrying forward the torch of victory; they are the only ones that can lead the country out of its current (self-made) state. Whilst we are all hypocritically assured on numerous occasions that the current economic woes are of global nature - for example, the Labour defence of the housing market is because we live “in a world where British families can’t buy or sell a home because US bankers lent money to impoverished Americans.” - this does not wash with the population. Facing economic troubles, the last thing the population wants is a government unable to govern, especially when this inability could make matters much worse. The impression the population will have is that with strong leadership of this country there could be light at the end of the tunnel, but with a factionised and paralised government, we are all doomed to a recession that was ultimately avoidable. So any serious leadership challenge, whether successful or not, would almost guarantee a loss of power for Labour.

The next fatal blow to Labour’s electoral success is the leadership successors. Faced with Milliband, who is obviously too immature and naive for high office given his performance in the last few days (how he became Foreign Secretary is beyond me), with Harman whose political ineptitude is unsurpassed, or with a Union puppet, it seems clear that even if the disaster known as Gordon Brown was replaced, it wouldn’t get any better.

Whilst it would be easy to accuse me of wishing troubles on the country for purely party political gain, one must remember that a 3rd Prime Minister in 15 months could not govern without a mandate of his or her own. So in the event of a leadership challenge, an early election - maybe as early as May 2009, or even October 2008 - would be almost certain. But wouldn’t it be more damaging for the country if we were faced with another 2 years of Brown, followed by the possibility of that 4th term?

Further nails in the coffin of Labour winning an early election would be that almost certainly cost a fortune, giving the hard-left unions who currently hold the purse strings the ultimate over the manifesto. We can already hear the cries of “increase taxes on the rich”, which is code for increase taxes on everyone, resonating with the electorate.

Just think about it, an early election brought about by a leadership contest would leave Labour (even more) millions in the red, a heavily factionised party hell-bent on briefing against each other, a critical loss of the Scottish heartlands (the resurgent SNP would severely cripple Scottish Labour), a hemorrhage of support in England, probably another leadership contest and deliver a landslide to the Conservatives.

In such an environment - with a disfuntional opposition probably worse than the 1997 Conservatives under Hague - then the new Conservative government could set in place a series of reforms that would transform the political and electoral spectrum of the United Kingdom for decades. By working with the resurgant SNP, the Conservatives could set in motion a true devolution of power. By splitting up the union of Wales, Scotland and England, the ‘West Lothian’ question would be answer once-and-for-all. It would remove Labour’s power base from the English parliament - of the 350 Labour MPs in parliament, 67 of them are from Wales and Scotland. Whilst in the first two terms under Tony Blair there would have been a Labour majority, there would not have been that historic third term.

Another reform should be the increasing the fairness of electoral wards. Currently, Labour wards have an advantage of a smaller electorate - in 1997 5200 fewer per constituency, in 2001 6400 fewer per constituency and in 2005 6200 fewer per constituency. Indeed, in 2005, the Conservatives would have needed a lead of 11.7% votes to gain a majority.

Faced with a factional and bankrupt Party, and a significant electoral disadvantage, would Labour survive in the long-term? The final blow of removing two of the four Labour heartlands from the equation (the others being the North East and the areas surrounding Liverpool/Manchester) could easily lead to a Party split in two, resulting in four major political parties and the dominance of the Conservatives for decades to come.

The question is, would it be morally correct to do such a thing?

A few weeks ago I wrote about moving to Colchester and how even though there was a PPC, there was no website. Well I have just been informed there is a new one here. It’s also added to my blogroll.

Why are they so corrupt? Or have they always been corrupt, but the media have been not too interested? In the days of unpaid politicians, were they any more corrupt?
In June 1922, the Conservatives were able to show that David Lloyd George was selling Knighthoods and Peerages to the highest bidders. As a direct result of this, the infamous Honours (Prevention of Abuses) Act 1925 was brought into statute, which is precisely the law that the police failed to charge anyone under just recently. Then there are the pocket boroughs, whereby land owners were able to nominate politicians to do their bidding. For example, at the beginning of the 18th Century, the Duke of Devonshire and Lord Darlington both had the power to nominate seven members of the House of Commons. Then there were rotten boroughs, where towns had reduced in size to allow bribery to dictate the member of parliament. An example was the coastal town of Dunwich in Suffolk, that had mostly fallen into the sea by 1831 and only had 31 voters. And of course, these rotten MP’s would be in it for their own good.
But actually, you can go back a lot further in European history and still discover political corruption. One need only look at the Ancient Greeks (500BC), whose politicians were guilty of lies, cheating and, curiously enough, were generally lawyers. Aristophanes, a political satirist, took every opportunity to make fun of the Athenian establishment in his anti-war play (familiar, anyone?) called The Archanians. Then there is the play called The Knights, which is an outright attack on one of the most powerful politicians in Athens.
So even the Greeks, who incidentally invented the word Rhetoric, had their fair share of media trouble. And the politicians back then were as corrupt as they are now. I am not surprised when I hear of politicians with their snouts in the trough. I just wonder, is it really a few bad apples, or are they just the ones unlucky enough to get caught?