Ed Balls, the bank levy and the Titanic

Last autumn I wrote about Labour's plan to give parents of three and four year olds 25 hours a week free childcare ("Labour's free childcare policy", 24th Sept, for the curious).  Ed Balls said the childcare scheme would be funded by increasing the Bank levy.  This was a curious state of affairs since he had previously said similar taxes would pay for other policies including VAT cuts and Regional Growth Funding. I described the Bank levy then as "the gift that keeps on giving".

I've rather missed the Bank levy in the last six months and am pleased to find it's back. It is a guarantee of political amusement.

Yesterday Balls announced a compulsory jobs guarantee for the young unemployed which will be partly funded by "a one-off levy on bankers' bonuses". As the Guardian notes this morning, Balls' plan immediately "came under attack from some think tanks, who said it was too complex and unlikely to be securely funded". Well maybe. But that isn't the funny thing.

What's funny is that Balls said (according to the Graun) that the levy on bonuses "will not be used for any other purpose". Putting aside the VAT cuts and Regional Growth Funding for which the levy had previously been earmarked, this came as news to Balls' colleague Stephen Timms, shadow employment minister. Timms was asked to explain how Balls' promise of exclusivity squared with previously-announced plans to fund 25,000 new homes using, er, a Bank levy. He had to concede that funding for the 25,000 new homes "may have to be rethought".

I particularly like the use of the word "may" in that sentence.  That's "may" as in, "Following the sinking of the Titanic, plans for a lavish dinner to celebrate arrival in New York may have to be rethought".

I like Balls, who is master at defending the indefensible.  But is Labour prepared for Government?

Tony Hall - Subscribing to BBC3

BBC Director General Tony Hall announced yesterday that in a few months BBC3 will become an online-only channel.  As someone who has never knowingly watched BBC3, my reaction to this is one of near indifference. But consider.

The BBC is paid for via the licence fee. There are many arguments against the licence fee, the most cogent being that it is effectively a broadcasting poll tax which takes no account of ability to pay. There's nothing the Corporation can do about that, but it has tried assiduously to disarm another objection - that the licence fee forces people to pay for something they may not in fact use - by providing programmes to suit every taste. There will be few TV watchers who can't find anything to enjoy, and as commercial TV has gone downmarket, the BBC has followed it conscientiously. It's been an impressive attempt to outflank the Corporation's opponents.

Last night I watched the final episode of Outnumbered on iPlayer. As it happens, I have paid the licence fee, but I could have watched it legally without having done so. That's an annoying anomaly. But by sticking BBC3 online Tony Hall has gone one step further.

It's one thing to make available online a programme that's previously been broadcast on TV, where the licence fee for that device has paid to produce the programme. However making people pay, via the TV licence fee, for something that isn't even going to be broadcast on TV is another matter.

It seems to be blindingly obvious to me that the future of the BBC lies in subscription. By that I mean, that's where we'll end up, for good or ill. As soon as it became possible to watch programmes on a computer the argument for the licence fee became impossible to sustain.  Making programmes to watch on computers only is, in that context, frankly ridiculous.

According to a report in the Torygraph today, Tony Hall "would like the licence fee to be extended to iPads and other tablets, as well as smartphones and all other devices capable of gaining access to BBC content". If true, this is a mad proposal.  Firstly, can you imagine any politician telling people they needed a licence to have an iPhone?  Electoral hari kiri.  Secondly, "all other devices" would presumably include laptops and PCs.  Would we be the only country in the world stupid enough to licence ownership of computers?  What about the computer user who doesn't watch BBC programmes?

All this leads me to the rather gloomy conclusion that if Hall understands the import of the BBC3 decision at all, he has drawn the wrong conclusion from it. For the licence fee to be justified the bare minimum requirements are that the licence should be for the device via which the content is accessed and that without the licence it shouldn't be possible to access the content legally. Ironically the BBC itself drove a coach and horses through this principle by coming up with the iPlayer. Post the BBC3 shift online, that argument is in tatters, and the news that Hall is seeking to square the circle by licensing the other content accessing devices looks to me a desperate flailing around to avoid the inevitable.

Subscription. Be afraid.

Ukraine news - President Putin not gay after all

So President Putin probably isn't gay after all.  Not gay in the sense of blithe and happy.  Not gay in the derogatory sense used by teenagers to denote something a bit pathetic.  He might still be gay in the homosexual sense, but it now doesn't seem like a good idea to suggest it, as many did after the furore in the run up to the Sochi Olympics.  Have a Google for "Putin gay" images, and you will see that the Photoshop-literate have given their sense of humour a good workout in recent weeks.

Disturbingly, those pictures of Putin with the horse didn't need any doctoring.

This can't have pleased President Putin terribly, and one can only too easily imagine the conversation.  "So they think I am gay do they?  Pass me the map comrade.  Where did you say Crimea was?"

Let no-one doubt that, whatever Putin's proclivities, he is no Judy Garland-loving interior-decorating panty-waister. No.  He is the kind of man to send in the tanks.  And there's nothing we can do about it.

Many commentators on both Left and Right have made this point.  After the West's failure to intervene in Syria, referred to by Jonathan Freedland as the "global shrug", no-one can seriously have thought that we might have used military force to stop Putin.  And of course you can argue that's a good thing.  Military conflict could lead so easily to nuclear war.  But that means that Putin - and other leaders like him - can do what they want with impunity.

How has this happened? Western revulsion post-Iraq has killed the appetite for intervention. You can argue that loss of appetite is due to a focus on the way the invasion was sold to British and American electorates, narcissistic in its refusal to see that the possibility of self-determination for Iraqis post Saddam might just trump our domestic politics; but we are where we are. We intervened there. Lots of people got very angry about it. Politicians are nervous. When Syria came up, Ed Miliband led his troops into the No lobby, and that was that.

Deterrence does not mean taking military action when something happens you don't like. It doesn't even mean readiness to take military action. It means the other people not being entirely sure whether you'll take military action or not. President Putin on the other hand was absolutely sure we would do nothing. That is a foreign policy failure.

Although I'm absolutely sure Putin is Not a Nice Man, I have some sympathy with the Russians. Ukraine used to be part of their empire. It's still part of their sphere of influence. The country has strategic military significance for them. Many Russian speakers live there. The outgoing Ukranian President was one of their people and was, apparently, democratically elected. The West can't really expect Russia to stand by when he is bullied from office by demonstrators who, however numerous, aren't representative of the country as a whole.

We get a curious picture from the media. Reporters like to interview people who speak English and with whom they can identify. So we get vox pops with Ukrainian web designers and academics. Thus a curious analogue of our own fixation with metropolitan elites arises. The people outside of Kiev are marginalised, the demonstrators encouraged, and it's quite late on in the day we discover that, funnily enough, to the east of the capital there are lots of other people who take a different view. Who knew?

If I were an opponent of President Yanukovyich, surveying the catastrophic scenes in my country, I might well find myself wishing that I had waited for the next election for a chance to throw out the regime.

PS  David Cameron yesterday described the proposed Crimean referendum on joining Russia as "unconstitutional".  Hmmn.  Would be unconstitutional in the same sense that hounding President Yanukovyich from office was unconstitutional?

Harriet Harman, fruitcakes and Newsnight

The funniest thing I've seen on BBC TV for years was last night's Newsnight interview with Harriet Harman, in which Laura Kuenssberg grilled the MP over her time as Legal Officer to the National Council for Civil Liberties, a period in which, apparently, one organisation affiliated to the NCCL was the Paedophile Information Exchange.

The interview was funny in the first place because if anyone in public life strikes me as a sex-free zone it is the hapless Ms Harman; I cannot think of anyone less likely to have got into bed, as it were, with the furtive gentlemen of the PIE. Or indeed with anyone else (but she is happily married to Jack Dromey, so that's obviously a failure of imagination on my part).

It was also funny because no matter how hard Kuenssberg pushed her, Harman would not admit that the affiliation was a mistake. No one seems to have told her about holes and not digging.

Thirdly if you had to pick anyone to represent the self-righteous tendency of the Left I think Harman would be a pretty strong selection; and to see her default political anschauung so utterly disabled by a piece of crass stupidity in the 1970s was as nice an example of things going-around and then coming-around as you could hope to see. The wheels of justice grinding slow, but exceedingly small.

Actually I can just about see how PIE might have got under the NCCL's radar. I remember once being in the office of one of Ms Harman's fellow travellers amongst Left-wing lawyers, and there on the shelves was a memoir published by a PIE luminary, if that's the word, devoted to the joys and possibilities of adult/child sexual relationships.  "What the flip (I paraphrase) is this?", I asked, appalled.  "Oh, they were trying to see if there was any way there could be a human rights angle on paedophilia", my friend said casually.  Whose rights would those be, I wondered, shaking my head. The child's? Or the adult's?

But then these were the 1970s, and even a decade later a close family member of mine recalls being asked to sit on a sub-committee of the Haldane Society of Socialist Lawyers - a similar organisation to NCCL with considerable membership crossover - devoted to exploring the possibility of abolishing the police. This in about 1989.

Fruitcakes then, and fruitcakes still.

North Korea, Jonathan Freedland and the global shrug

They're making me laugh again over at the Guardian.

This time it's Jonathan Freedland, writing a rather strange comment piece entitled, "It's easy for dictators: these days the world lets you carry on killing". This is in the wake of the UN report into human rights atrocities in North Korea by a retired Australian judge, Michael Kirby.

Freedland writes that "the Kim dynasty has been inflicting agony on the people it rules for nearly seven decades . . . But how confident can (Kirby) be that action will follow (publication of his report)? . . . It's a similar story in Syria.  Less than a month has passed since a report laid out comprehensive evidence of the suffering of detainees at the hands of the Assad regime . . . Yet did that report spark a worldwide demand for action? . . . It did not . . . the chief response was a global shrug".

"Maybe", Freedland continues, "this is what is means to live in the post-intervention era. Few even call for action - in North Korea or Syria - because we know it's not going to happen.  In the 1990s, those outraged by the Balkan war could believe that, if they only shouted loud enough, they would eventually get the international powers to act . . . Now, after Iraq and Afghanistan, that belief has vanished . . . Few speak now of the notion that once seemed set to reshape international relations, the 'responsibility to protect'.  It makes today a good time to be a dictator, a butcher or the torturing head of a brutal regime.  The world will let you carry on killing - even when it knows exactly what is happening".

I described Freedland's piece as rather strange, and I find it so even as I think it is absolutely spot on. Why? Because if any organ in British public life is responsible for fostering the culture of the "global shrug" it is the Guardian, for which Freedland has written weekly columns for over a decade.

It is taken as read at Farringdon Rd that the Iraq invasion was a bad thing, a view which has gone unquestioned in the newspaper since the departure of David Aaronovitch, even though the invasion got rid of a horrible dictator and opened the way for Iraqis to create their own future (unbelievably, there are still people who think that issue of whether British politicians lied is one which trumps the removal of the Butcher of Baghdad).

Of the columnists who have promulgated the Guardian's view, none has been more energetic than Freedland himself. A search on the Graun's website under "Jonathan Freedland Iraq" produces more than 8,000 hits.  You can take your pick from Freedland's dozens of articles excoriating the invasion.  I quite like this one from 2004.

You're right Jonathan.  Today is a good time to be a dictator. And no UK journalist I can think of did more than you to create the climate of opinion which has made that possible.

Currency union - how Alex Salmond can still win

At the end of January I suggested that after a Scottish yes-vote, there would be a currency union.  That was before George Osborne, Danny Alexander and Ed Balls stuck their heads above parapet and declared that there wouldn't be.  In the face of which it now looks a pretty big claim.

I'm not going to do an about face straight away - maintaining a position for just three weeks isn't what you would call steadfast - but it's worth considering why there might not be a currency union, what that does to the Nationalist case, and whether it makes a blind bit of difference to the outcome of the referendum.

There are economic reasons for not having currency union, as you might expect.  As Sir Nicholas Macpherson, Permanent Secretary to the Treasury, wrote to George Osborne last week, "Successful currency unions are based on the near universal belief that they are irreversible".  Moreover "Scotland’s banking sector is far too big in relation to its national income, which means that there is a very real risk that the continuing UK would end up bearing most of the liquidity and solvency risk which it creates".  Thirdly the rest of the UK "would be at risk of providing taxpayer support to the Scottish financial sector and sovereign. An independent Scottish state would not face the same risk as it is inconceivable that a small economy could bail-out an economy nearly ten times its size . . ."

"Finally," Macpherson concludes, "Treasury analysis suggests that fiscal policy in Scotland and the rest of UK would become increasingly misaligned in the medium term. Of course, if the Scottish Government had demonstrated a strong commitment to a rigorous fiscal policy in recent months, it might be possible to discount this. But recent spending and tax commitments by the Scottish Government point in the opposite direction, as do their persistently optimistic projections of North Sea revenues, which are at odds not just with the Treasury but with the Office of Budget Responsibility and other credible independent forecasters".

Alex Salmond's supporters counter these arguments with the views of their own Fiscal Group (including, as the Nationalists always say, two Nobel prize winners).  This group's report suggests a currency union is perfectly possible.

Which it is.  I don't think anyone seriously disputes that a currency union could take place, and I'm absolutely sure there are economic arguments in favour as well as arguments against (the most obvious reason currency union might be good for rUK is the threat of transaction costs for some cross-border businesses, although the Yes campaign would probably argue these would be offset by lower English tax rates post-independence).

But to assume that the existence or otherwise of a currency union will depend on economic arguments is naive of both sides, particularly so of Alex Salmond.  It will depend instead on realpolitik.

The Nationalists will demand a currency union.  Westminster will refuse.  The Nationalists then say they won't accept Scotland's share of the national debt.  That is also possible, but consider this.

Without a currency union Scotland will have no central bank, no lender of last resort and no control over interest rates. This is serious for many reasons, one of which is that, as Macpherson noted, Scotland has an outsized banking industry employing an awful lot of people which will be threatened by being inconveniently sited in a country other than the one with which it does most of its business; post-independence the Bank of England will not be bailing that industry out.

(Interestingly, a couple of days after I posted this, Lloyds, technically a Scottish company, announced that its new 600-branch TSB business is to be incorporated in London instead of Edinburgh. There's a report here. The banking sector is not taking any chances)

Like the rest of the UK, Scotland will be running a deficit, and it will have to borrow on the money markets from day one.  How is it going to do this if it has just walked away from all its existing debts?

A couple of weeks ago the Treasury did something rather strange.  It announced that post independence it would assume responsibility for Scotland's debts come what may.  This was billed as a sop to the markets, but I wonder whether it was something more.

According to the NIESR, Scotland's share of our historic debt is in the region of £150 billion.  It is only about a tenth of Britain's total historic debt, and, to put it in context, roughly the amount Britain had to borrow in one year at the height of the last recession.  It might be possible to imagine David Cameron shrugging his shoulders and saying, "So walk away.  The money markets already know that we're on the hook for the total sum.  It'll make no difference to our bond yields.  Walk away from the debt, but no currency union.  Ever".

Actually I can't imagine Cameron shrugging his shoulders. That isn't his style. But it is George Osborne's style.  And behind this Treasury manoeuvre lies the MP for Tatton.

Alex Salmond is a master tactician and a brilliant poker player. But he is a poker player with a truly terrible hand, and his ability to wing it has run out of road.  His response yesterday was angry and incoherent. Westminster's ruling out currency union was "demeaning and insulting". Anyone would think a country no longer in the UK had some kind of right to a currency union.

There is, as someone pointed out in the Guardian this morning, an element of "we're getting a divorce but I want to keep using the car" about all of this.

Unlike Alex Salmond, George Osborne is a strategist. Only a strategist would co-ordinate the Treasury's pledge on the debt months before it could possibly become a live issue, and raise the issue of currency union in time for wavering Scots to get angry but then to calm down sufficiently to see the problem. Tantalisingly, Osborne has left the Nationalists time to come up with a Plan B. But this too would be a trap, because the adoption of a Plan B would open Salmond to the accusation that he is making policy up as he goes along.

There is one other matter of realpolitik worth considering.  It is that post-independence there will be no electoral advantage to be had in England in being nice to Scotland. Even if the economic arguments overwhelmingly favoured a currency union (and they don't, not overwhelmingly), politicians don't necessarily do the sensible thing, not when their voters are telling them otherwise.

You might imagine that weaknesses of the Nationalist case which the scrapping over currency union reveal would be desperately damaging to Alex Salmond.  But it might actually make no difference at all. I heard some vox pop Scotiae on The World Tonight last night. The level of ignorance and disengagement was quite staggering.  It was of the "What fur wud they tak awa' the poond?" variety. Such people, with no understanding of the economic issues which make or break the case for independence, have a vote.  And their resentment at the home truths currently emanating from Westminster is very easily exploited by Alex Salmond.  He might have lost the argument, but could still win the war.

Slavery and the Jamaicans - whose compensation is it anyway?

Opportunities for cynicism abound as news breaks that Leigh Day, an activist firm of solicitors in London, are to sue the UK Government on behalf of descendants of Jamaican slaves.

Slavery, to be clear, was not invented by the British.  It is thought to have existed across the overwhelming majority of cultures for over 10,000 years.  The British did not even invent it in Africa.  Five hundred years ago, long before the Europeans started interfering on a grand scale, there were parts of Africa where 50% of the population consisted of people enslaved by other Africans.  What the Europeans did however was approach slavery on an industrial scale, buying slaves in Africa and shipping them to the other side of the Atlantic.

Once the worm turned the British were instrumental in the fight against the slave trade, banning it throughout the British empire in 1807, encouraging other countries to do the same and finally devoting considerable naval resources to stopping the transatlantic trade by force.  In the following 50 years the British navy seized 1,600 slave ships and freed over 150,000 Africans aboard them.

It would seem fair to suggest that Britain's record on the slave trade is no worse than most and a lot better than some.

The plaintiffs in Leigh Day's cases will be ordinary Jamaican individuals.  They were not slaves themselves. The Torygraph today features one such, an elderly (please note) Jamaican called Willie Thompson, whose great-great-grandmother was sold for work in the sugar cane plantations.

Some facts.  Mr Thompson would almost certainly not have been born were it not for slavery.  Otherwise his great-great-grandmother would have had to meet his great-great-grandfather in Africa, give birth to his great-grandmother (or father), who would then have had to meet his great-grandfather (or mother), also in Africa, give birth to his grandmother (or father), who would then have had to meet his grandfather (or mother), in Africa, who would then have had to sire his mother (or father), who would then have had to meet his father (or mother), who would also have had to sire Mr Thompson.  In Africa.

It is of course beyond unlikely that this should happen.  Far from suffering from slavery, Mr Thompson in fact owes his life to slavery.  And the fact that he is living in Jamaica, not in Africa.

To illustrate how lucky Mr Thompson is, the average male life expectancy in Jamaica is about 74 years.  In the Democratic Republic of the Congo, by way of example, it is slightly under 50.

So Mr Thompson is dead lucky.  But he wants the British government to compensate him for the undoubted suffering of his great-great-grandmother.  Leigh Day are a very effective law firm.  I'm pretty sure they will succeed in gouging some pretty fat compensation out of the UK government, netting themselves some fat fees in the process.

Although actually of course it's not the UK Government's money at all. It's ours, yours and mine. Personally I don't remember profiting very much from slavery.  It would be strange if I had.  It was illegal for one hundred and fifty years before I was born.  Yet Mr Thompson thinks some of my tax should be given to him.

So people who did not suffer from slavery (who in fact have benefited dramatically as a consequence) are now looking for a payout from people who did not profit from it either. Funny old world.