Ethics

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The government has backed away from compulsory climate change disclosures by business, suggesting it’s now walking away from this issue like it does everything else

Published by Anonymous (not verified) on Thu, 12/05/2022 - 4:50pm in

The FT reports this morning that:

Ministers made a last-minute decision to withdraw plans to force big UK companies and asset managers to disclose their environmental impact from Tuesday’s Queen’s Speech, according to government sources.

The decision to drop the “sustainability disclosure requirements” from a new financial services bill comes amid a wider retreat by the government from tightening corporate governance.

Leave aside for a moment that I think that the measures that the government were going to introduce were inadequate. Note instead that they were at least movement in the right direction. And now note that this has been abandoned. Like audit reform, the issue has been kicked into the long grass.

I have long argued that a truly neoliberal government is cowardly. When it sees a problem what it does is run away from it, claiming that the market is better equipped than it to tackle the issue.

This is what the government has done with Covid. We now have a government in denial about a disease killing more than 75,000 people a year. They won't even let medics test for it.

We also have a government in denial in the cost-of-living crisis. They say growth will deal with it. We are in a recession. They will do nothing else.

More mundanely, they have heralded audit reforms, and now they have announced incredibly weak legislation that no one thinks will actually be legislated in this session of parliament.

And now we can see how it will respond to climate change. When push comes to shove it will say it cannot possibly impose burdens on business, who must be allowed to let the planet burn if that is what markets dictate. This is, I am certain, the start of a trend on this.

We cannot afford any of these failures.

We cannot afford to have cowards running the country.

But that is what we have got.

And the Opposition is not a lot better.

We are in trouble.

The UK is very likely in recession now, and the economy can only get worse, because that’s what the Bank of England wants and will deliver

Published by Anonymous (not verified) on Thu, 12/05/2022 - 4:37pm in

It feels like only a week or so ago that trolls were all over this blog suggesting that I was wrong to say that the UK was likely to be in recession.

They claimed that I did not know that a recession meant a fall in growth for two quarters in a row. They also suggested that this was unlikely in the first quarter of this year. But what they failed to note was that I wrote in the present tense: I said that I thought that by April 2022 the UK was in recession. I was covering the quarter from February (and I really don't care if they want to argue that I have to use calendar quarters because that would be quite ridiculous).

So, let me turn to today's GDP data for March, published this morning. The highlights are:

  • Gross domestic product (GDP) fell by 0.1% in March 2022, after no growth in February 2022 (revised down from 0.1% growth).
  • Services fell by 0.2% on the month and was the main contributor to March’s fall in GDP, reflecting a large decrease (15.1%) in the wholesale and retail trade and repair of motor vehicles and motorcycles industry.
  • Production also fell on the month by 0.2%; these falls were partially offset by construction, which grew by 1.7%.
  • Output in consumer-facing services fell by 1.8% in March 2022, following a 0.5% (revised down from 0.7%) growth in February 2022; non-consumer facing services grew by 0.2% on the month following a 0.1% fall in February (revised down from 0.0%).

So, February was not as good as expected and March is worse and will, in my opinion, be revised downwards in due course. As for April, if anyone thinks the economy grew last month when consumer confidence was plummeting then they are suffering from misplaced optimism, to be kind.

So, as I suggested, it is highly likely that we have already had a quarter of negative growth and, I suggest, that is likely to continue for some time given the cost-of-living crisis, inflation and the state of the world economy, plus the measures being taken by the Bank of England to deliberately make everything very much worse. In that case, it is quite reasonable to conclude, as I did, that we are already in a recession now.

This matters. The government said only this week, in the Queen's Speech, that the way to tackle the cost-of-living crisis was to grow the economy, and claimed that is what they will do. The reality is that the opposite is happening. That is hardly surprising, because they lie continually, and must have known this data was coming. But what it says is that even if growth was the answer to all the problems that we face (and by itself, it is not) that option is not on the table, meaning that they need to do something else. But they have no announced plan to do anything else either. In which case people are going to suffer.

I always presumed that the political mindset that allowed the starvation in Ireland to happen in the 1840s as a consequence of deliberate policy, harshly backed up by the law, would never recur. I am having to reappraise that opinion. The mindset of abuse that caused that starvation to be imposed on millions still exists and is to be found in this government and in the Bank of England, which actively wants things to get worse. That is what troubles me, because I cannot see where this ends right now.

The failing state is now out in the open for all to see

Published by Anonymous (not verified) on Tue, 10/05/2022 - 4:51pm in

Prince Charles and Prince William are presenting the Queen's Speech today in their role as Royal Commissioners. There are two either Commissioners. One of them has apparently rejected royalty as unfit for purpose and the other is barred from royal duties by the monarch as he is unfit for office, in her opinion.

Simultaneously we have a criminal, corrupt, lying, incompetent neo-fascist  as a prime minister, who it is said will not leave Downing Street  unless a flame thrower is involved. So democracy looks to be failing.

And we have a media hounding the Leader of the Opposition  for eating at a work meeting, when the Tory who led the charge against him is on record for having a lunch with the Gurkhas the very next day, without apparent work reason. And, the police have, very oddly, only chosen to investigate one of these incidents.

Might I suggest that we are seeing pretty robust signs that we are living in a failing state?

Free speech does not come for free

Published by Anonymous (not verified) on Mon, 09/05/2022 - 5:26pm in

Tags 

Ethics

I worked with the television documentary journalists John Sweeny on several programmes a decade or more ago, covering Russian money, Sark and the Barclay brothers and other issues. I suspect we pushed the BBC to the limits in what was said on occasion but the programmes were broadcast and I was pleased they were.

For the last 75 days I have been following John's Youtube reports from Kyiv, where he want just before the war broke out to follow the story of Putin's corruption to the point where it was obviously going to have a very real cost.

This video was posted today:

John. is now heading home for a break, but his very brief summary of what he has learned is worth watching, I think. Most especially, free speech does not come for free.

Inflation is unnecessary – and is being fuelled by a government that’s refusing to stop it. Why is that?

Published by Anonymous (not verified) on Fri, 06/05/2022 - 4:53pm in

I have just posted this thread on Twitter, dealing with how the government could keep prices down, but ignoring other ways they could help people with the cost of living crisis:

The Bank of England is saying that UK inflation might rise to over 10% later this year, largely as a result of domestic energy price increases, but also road fuel and other costs. There is no way this is necessary. In this thread I explain why and what could be done to stop this…

Many of the costs of supplying energy in the UK are fixed. So, energy company costs of managing and running consumer’s accounts have not changed in this crisis. Nor have the costs of energy transmission changed much.

Come to that, there is no reason why the green levy on energy needs to rise. And actually, it’s bizarre that the government is collecting much more in tax, whether as VAT or other duties as a result of fuel price increases, which tax increases make inflation much worse.

There is also no reason why, at this moment, the cost of electricity is being priced by the government regulator at the cost of the most expensive single way to produce it - which is by using gas.

If the electricity price was instead based on the average cost of its production its price would fall, which would immediately and significantly cut energy bills - whilst still allowing producers a profit. But the regulator won’t do that. They’d rather allow excess profit instead.

And when the government could cut road fuel costs by imposing a price cap and changing fuel duty to keep the price within that limit without overall damaging government revenues it is crazy that they will not do this.

And still we have no windfall tax, or even a hint of it. And that is also bizarre, because the fact is that almost penny of the costs that are fuelling inflation is becoming profit in the hands of exploitative oil and gas producers, plus chemical companies in the food industry.

I stress none of the things I suggest to tackle this would be desirable normally. In the long-term there is no way I’d recommend cutting fuel prices when we need a green transformation. But we’re facing a crisis where people’s well-being, health and more is at threat. These are not normal times.

In the face of a crisis there is an urgent need for unconventional thinking to tackle something out of the ordinary. And what we’re getting from the government and Bank of England is the worst thinking from an out of date textbook that failed its students when it was written.

Unless the government, the Bank of England and the political opposition parties get their acts together now and go radically off-piste to help the millions who will need it we are heading for something really horrible now.

I just hope all these organisations will rise to the challenge, but the reality is that none are showing any sign of doing so as yet. We are being failed, and the cost will be enormous.

Why is no one talking about Covid as a direct cause of inflationary pressure, and about how to address it?

Published by Anonymous (not verified) on Thu, 05/05/2022 - 5:45pm in

There have been many suggestions made as to the cause of the current inflation in our economy, a number of them by me. Two things stand out for me when thinking about them.

The first is that so far no evidenced cause that can be addressed by an interest rate increase has been offered. Brexit, Covid reopening, supply chain problems, profiteering, war disruption and sanctions are all plausible contributors to the inflation. None can be addressed, let alone solved, by an interest rate rise. In fact, by adding to inflationary pressure (increasing interest rate rises is an inflationary price increase, after all) such an increase can only make things worse.

Second, I have so far not seen anyone suggest that the failure of Covid policy is to blame. I am doing so now.

Let me be explicit about what I mean. My suggestion is that the relaxation of the social distancing, home working, mask-wearing, quarantining and sick pay rules that existed until Covid was declared to be ‘over’ are a significant factor in this inflation.

As evidence, I note that when former Bank of England employee and Monetary Policy Committee member Adam Posen argued that there was a moral duty on the Bank to create a recession now he said that this was because labour shortages would otherwise create an environment where wage rises were inevitable and would become locked into the economy, resulting in stagflation. His claim was that it was Brexit and other migration rules creating this labour shortage. I suggest he is wrong, at least in part, and maybe largely. I suggest instead that it is Covid that is creating these labour shortages.

I would also add that as yet I do not think that this is creating an environment where wage increases are even adequate, let alone close to becoming locked in. In that case, I do not think he got much right. But let me explore the issue I have raised and its short and long term consequences.

In my opinion, the evidence that too early release from lockdown and the abandonment of many of the measures to mitigate and prevent the spread of Covid, plus the abandonment of home working by many employers, has meant many people are now not willing or able to work any more. They have left the workforce as a result. As the ONS has noted, those aged above 50 and so more at risk of Covid have been especially inclined to leave the workforce since the end of Covid restrictions.  As they have also noted:

Overall economic inactivity has increased by 522,000 persons in October to December 2021 compared with before the pandemic (October to December 2019). Most of the increase was because of those aged 50 years and over, contributing 94.4% (493,000) to the overall change.

These people have not just quit, but they are not going back. Add to them the number moving on from jobs because they realised during lockdowns that they just could not face returning to former employments and we see the reason for the wave of resignations now commonplace in the UK and also in the USA. Vacancies exceed the number available to fill them by so much because people have decided that the risk of working is not worth taking, based on this data. Brexit is not the problem. Covid is. Posen has it wrong.

Nor are these people moving to self-employment, where numbers are significantly down from the pre-pandemic era. They really are quitting.

If there is in that case a reason for wage rate pressure then it is within the control of the government to address it. It could encourage home working, require proper workplace ventilation, require quarantining and provide statutory sick pay so that it can happen. The shortage of skilled workers that is both harming the ability of the economy to meet need and causing wage pressure could be solved. It really is that easy.

But there is more to this than this simple short term suggestion implies. Long Covid is a reality. More is being learned about it every day. What seems certain is that almost no organ is immune from risk when a person has had Covid, and as importantly, successive bouts of Covid. Nor does age appear to provide much protection, although co-morbidities from existing risks result in greater prevalence in those who are older, almost inevitably. This makes the decision of those leaving the workforce entirely rational in that case. My question is, what happens if long Covid begins to seriously impact on health and morbidity?

We have seen the consequences of a health crisis creating a labour shortage in history. Following the Black Death in the Middle Ages a shortage of fit labour fundamentally shifted the balance of economic returns within the economy towards workers and away from capital. The shock was big enough to effectively end the feudal era (and I am aware I am offering a very brief snapshot of the era here).

I hope we face nothing like the Black Death. A functioning NHS should prevent that risk. But there is a possibility that we might see a real change in the health of the overall population in coming years. We are already seeing life expectancy fall. If both those able to work falls, whilst demand for care rises, and at the same time the pressure is created to meet existing material standards of living without changing the reward ratios between labour and capital then an impossible economic scenario is created. Like it or not, in that case the wages of labour will rise, but so too will inequality between those in and out of work, whilst care might become almost impossible to deliver.

Alternatively, the reward ratios in the economy would have to change. The return to labour would overall need to rise, including that provided by redistribution, and the return to capital, and most especially land might have to fall significantly, whether by imposition through tax, or by market adjustment, or both. If that readjustment did not happen the stresses in society in the face of increasing long Covid might become impossible to manage.

Add into all this the need for the management of climate change, which also demands major economic reorganisation and a reduction in the economic return to land, which has been exploited to push it to current unsustainable levels, and the mix is literally revolutionary in the demands it might make, although the Covid and green demands might be aligned (perhaps unsurprisingly as both might indicate the consequences of pushing nature to its limits).

In summary, I think we are missing a cause of inflation in the UK, and so a need for a better economic response to Covid that might well ease labour market shortages.

Long term, we need to think seriously about how to reorganise our economy. There is no doubt that Civid is here to stay. The thinking on what that means for the economy has hardly begun, but needs to do so, now.

Student debt policy shows that the government really does not care about piling debt high on the shoulders of generations to come

Published by Anonymous (not verified) on Wed, 04/05/2022 - 5:20pm in

I watched government minister Victoria Atkins MP talking in a Channel 4 election debate last night, during which she claimed we must not borrow now because that would only leave a debt burden for future generations to repay.

Leaving aside the fact that there is no such thing as government borrowing, because all the government actually does is provide savings schemes for people who want to place money on deposit with it which very large numbers seemingly want to do, this argument also makes no sense, as there own policy makes clear. As I said on Twitter this morning:

The government cannot both create a deliberate and rapidly rising debt mountain for current and future generations of students and simultaneously say it is worried about doing so. In any case, only one of those statements can be true, and student debt policy makes quite clear that the government is entirely happy to put young people into debt.

In that case I suggest we entirely ignore the claim that we cannot take on debt now because it might impose a cost on future generations. Not only is that technical nonsense, because government deposit taking activity has never been repaid and very likely never will be, it is just not also a correct reflection of this government’s policy.

Johnson has no idea about how to help those in poverty when there is so much he could do

Published by Anonymous (not verified) on Wed, 04/05/2022 - 4:24pm in

I have posted this thread on Twitter this morning:

Susanna Reid interviewed Boris Johnson on ITV yesterday morning. He had no answers to her questions on the recession we are now facing, but there are plenty available. A thread….

The most telling question Reid asked was about what he would do to help a pensioner whose fuel bills appeared to have increased fivefold, swamping any increase in pension she had received many times over.

Already living on less than £200 a week, this pensioner had almost no chance of covering her additional costs of living and had resorted to travelling on buses all day to be warm and avoid having to heat her own home.

Johnson had no answer to this question. He blustered about the £150 council tax rebate and the bizarre £200 energy loan scheme. He then, falsely, claimed credit for introducing free pensioner bus passes.

After that he could only claim that it was essential people accept hardship so the government balances its books whilst having to pay £83bn of interest a year, which as a matter of fact it is not doing, because most of this is down to dubious accounting and may never be paid.

This failure by Johnson was telling. Reid was angry about it. Twitter was furious. And as everyone agreed, Johnson utterly failed to address an issue that it was obvious he would be asked about.

So what could be done for this pensioner, presuming we care, which Johnson clearly does not?

The £20 a week Johnson took away from so many people when Covid was claimed to be over would help. This could be restored now for pensioners and those on Universal Credit.

Benefits including pensions could and should also be uprated now by the full current inflation rate, not the much lower rate of last autumn.

VAT on domestic energy could be reduced to nothing. Fuel duty on diesel and petrol could also be reduced temporarily to keep both within a price cap to cut inflation. That cap would reduce price pressure on many other products, including food.

The government’s national insurance increases could be removed and then reversed for those on lower pay. This is already an unfair tax. Increasing it for the lower paid was always a mistake.

Interest rate rises should be cancelled, and those that have already happened should be reversed. After all, interest rate rises put up the price of money, and that’s inflationary, so increasing them has to be the wrong policy now.

Government investment in new jobs and green energy should increase. We are going to need those jobs very badly as a recession develops, as it is right now.

We could, and should, have a windfall tax on energy company profits because there is nothing remotely moral about profiteering from the poverty that is being imposed on others and these companies can already borrow all the funds they need for investment.

Then there should be tax increases on wealth and high incomes - because those who enjoy both are the people really driving inflation, and both have also been undertaxed for far too long – which is why we have such an unequal society, as this crisis is showing.

Finally, the government should be willing to borrow or use quantitative easing to tackle this crisis, just as it used QE to tackle Covid. Borrowing is cheap. People want to lend to the government.

What’s more, there’s no pressure on future generations as a result, because young people are not going to thank us for growing up in poverty with the high risk of joblessness they now face as result of the gov'ts approach. It’s wrong to say cuts help next generations as a result

Johnson had no answers for Susanna Reid. But as I show, there are many available. It’s time we heard about all of them from politicians, and then saw them in use.

Roe v Wade: it is not men’s right to decide

Published by Anonymous (not verified) on Wed, 04/05/2022 - 3:26pm in

Tags 

Ethics

For all practical purposes, I am a child of the 1970s. Against my parent's wishes, and certainly in a fashion way beyond my mother’s comprehension, I did as a result embrace the women’s liberation thinking of that era. Influenced and educated as I was by fortunate choices of girlfriends at that time, equal pay, equal rights for women, the right to abortion on demand and, in a very real sense, the right to women's liberation in both the home and workplace became not just slogans, but matters of lived experience, shaping my everyday domestic and working life.

I have not one moment's regret about that. Nor have I ever had reason to change my mind on any of these issues. The example provided by my parent's generation and which I witnessed in the power relationship between my parents, was wrong. This is a world where all should be equal and where discrimination between men and women should simply not exist, any more than misogyny should.

The threat to women's rights in the USA, represented by the threat of reversal of Roe v Wade, with consequences that would inevitably flow well beyond the borders of the USA, is therefore alien to all I believe in. It is, quite simply, a woman's right to choose whether to carry a child, or not. This feels like, because it is, a matter that is beyond question. But men are questioning it.

The challenge to abortion rights is not mainly from women. Of course, there are exceptions to that, but this is a male-driven agenda, to reclaim power over something that is not theirs to control.

It is, also part of the fascist agenda, in which misogyny is deeply implicit.

Both are ideas alien to me. Neither should be in any way acceptable in. the 21st century. I do, of course, accept the right of men to have an opinion on this issue: I am expressing one right now. But I do not accept the right of men to in any way impose that opinion on women.

Have we really not learned this as yet? If not, we need to be very worried.

The UK has a constitutional duty to impose direct rule on the BVI to bring its role as a secrecy jurisdiction to an end

Published by Anonymous (not verified) on Mon, 02/05/2022 - 6:35pm in

The FT has noted that:

The acting premier of the British Virgin Islands, Natalio Wheatley, has rejected as “unacceptable” the reimposition of direct rule from London, setting up a confrontation with the UK over the central recommendation of an official inquiry into corruption and maladministration in the Caribbean tax haven.

He is wrong. And the fact that he does not recognise that the BVI is so systemically corrupt shows that, because that is what it is. That he comes from an old political family within the islands, also suggesting that he is part of the architecture that created this systemic problem is also indicative of why he is wrong and change must be imposed. It is apparent that the required changes cannot come from within the BVI now.

Let me offer some theory to support this argument. In 2009 I wrote a paper for the Tax Justice Network that has had some significance since then, not least in still shaping most of the work of the tax justice movement in putting a focus on secrecy, as it has also done for most regulators. The preamble to the paper noted:

The summary was quite short:

What the paper did was develop a schematic summary of the new language that I proposed to explain the offshore world, which when fully developed looked like this:

An example demonstrated the idea in this way, showing how abuse existed in a secrecy space resulting from the interaction of many secrecy providers operating from secrecy jurisdictions:

What I suggested was that there was a systemic, deliberately created, interlocking network of secrecy jurisdictions and secrecy providers (banks, lawyers and accountants) who created a secrecy space in which abuse could take place beyond regulation. The book that I co-authored that resulted from this work is still one of the most cited in academic offshore literature.

The BVI is an enormous player in the creation of this secrecy space. It hosts 370,000 companies of which almost nothing is known. That is by continuing choice. The result is massive opacity in the world that undermines fair competition and effective markets and simultaneously permits corruption. I stress, this is deliberate.

The UK has the right to intervene for this reason. It is responsible for the maintenance of good governance, law and order and stable international relations in the islands. Law and order has obviously failed: the premier and a senior official are under arrest in the USA. Good governance has failed, as indicated by the choice to supply corruption services. And this is a foreign affairs issue. The companies the BVI creates are deliberately intended to undermine the law, order and tax systems of other states.

The BVI remains a key component in the creation of the secrecy space. It has to be taken out of action. But I stress, direct rule without ending this secrecy would make the UK responsible for it. And that would be intolerable, so direct rule c9mes with conditions, which is that BVI secrecy  goes.

What does that mean? Full beneficial ownership of all companies on public record plus full accounts on that same record. That’s the minimum demand for the BVI.

The UK must take control of the BVI now. It has a constitutional duty to do so. But if it does it cannot duck its own duty to end BVI secrecy. We will be watching.

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