Private and public debt

I’m catching up late with this, but this is indeed an excellent post (and, indeed, blog) on the Office for Budgetary Responsibility’s revision of its forecasts on what is going to happen to private debt over the next few years. As public debt is being reduced, private debt is now likely to expand.

Inevitably, government cuts to public services will lead to people paying for them separately, thus squeezing household finances further and driving up household debt; while an economy actively flirting with depression will cause further problems to household debts as people lose their jobs, on top of the impact of the falling value of real incomes, as people seek to maintain living standards as far as possible. That’s not rocket science – except, it would seem, to a government intent on blazing a path back to the 80s.

This may well spell bad news for the 2012 pensions reforms: rising private debt, on top of household savings apparently resuming pre-recession trends, is likely to cause further pressures on peoples’ ability to save (more) for their retirement. At the same time, rising debt is likely to increase pressures for people to have access to their pension pots early. This has already been the subject of a Treasury consultation. Evidently, pensions are not savings per se – rainy days are what savings are for; pensions are for your retirement – but seeking to encourage people to save more while engaging in policies that are driving up their debts is an unhealthy and short-sighted combination.

At the wider, political level, we may well here be sowing the seeds of a future financial crash – but it is clear that the intentional driving up of private debt, despite the lessons of what the economy has been through in the past few years, itself underlines the sharply ideological nature of this government’s intensifying onslaught.

[Edit 1 April: And for living proof that, if you sit an infinite number of bloggers down in front of an infinite number of keyboards, you will get, if not the works of Shakespeare then more or less similar posts, within almost literally seconds of posting this, I discovered that Duncan Weldon over at False Economy had made most of the same points, and better, and with more links, too. Damn!]


Ofcom becomes Off-com

Ofcom today confirmed plans for a 28%+ cut in its budget over the next four years – with the vast bulk being front-loaded: 22.5% of that cut will come in 2011/2012, with a cut of £27m, taking the overall budget to £116m.

We need to see Ofcom’s forthcoming Annual Plan – due out ‘shortly’ – to see what this means in practice (although the confirmation of the dimensions of the cut seem to indicate that this draft is likely to be substantially unchanged), but (on the back of the experience of year-on-year budget cuts) Ofcom believes it can nevertheless maintain its ‘capability and effectiveness’ in delivering ‘effective and targeted regulation’ and, as if to prove ‘business as usual’, it chose today to launch a new consultation on Openreach’s wholesale pricing. Though this tells us little other than that the regulator is on-message.

Ofcom is already in the process of finalising cuts to 170 jobs – 19.5% of its workforce as at 31 March 2010 (see Table 6) – and it’s difficult to believe that this will not have an impact on regulation in the sector. Cuts to Ofcom’s governance structure and the closure of its Consumer Panel have already been made, while I note that those employees remaining in the companies defined benefit pension plans are faced with the loss of future accrual on top of a two-year pay freeze. We are also likely to see the loss of Ofcom’s role in encouraging digital participation and rationalisation of its research programme.

Time will tell. The earlier removal from last year’s Digital Economy Act of a greater role for Ofcom in promoting investment in the industry is already a critical loss since this would have counter-balanced the existing statutory duty to promote competition which is proving problematic to the shape and direction of the industry. The impact of a smaller – perhaps more focused – regulator on the dynamism of the industry is yet to be seen, as will be its ability to compel the government to see through its ambitious plans for the communications industry (about which this blog has previously been critical – see, for instance, here). The signs are clearly not hopeful – but the ideological gap between what I’ve just said about the role of the regulator in driving the industry forward and the practical reality of the government’s market-driven approach is immense.

Back in residence…

Following last week’s return of the resident female to the Loch Garten osprey nest, today saw the return of the resident female to the site at Loch of the Lowes: after hopes were raised earlier in the day by an unidentified visitor, the ‘right’ bird turned up later in the day (still not confirmed by the Scottish Wildlife Trust, which runs the site, but confirmed by twitchers here and here – the Peter Finch referred to in the latter is a former Loch of the Lowes SWT site manager involved with organising the first round-the-clock watches over the site).

Every returning osprey is a success story – a migration of 3,000 miles twice per year between Scotland (and Scandinavia) and western Africa across the Sahara is a hazardous enough journey, especially for a species relying solely on its ability to catch fish, but the story of the Loch of the Lowes female is a fantastic one. This is now its 21st season, when ospreys tend to have just eight, and, should the season go well, we may see the 50th chick raised from the site: 48 have already been successfully fledged, including two last year when the female appeared to be on her way to checking out. Given that Scotland (largely) has just 150 breeding pairs of ospreys (though that figure may be a little old…), that’s some contribution to the re-establishment of the species in this country.

So, we just need the blokes to turn up and another rollercoaster season of soap opera and, no doubt, copious quantities of anthropomorphism (not on this blog, though!) can get underway…

Marching on together

There are probably as many reasons to march tomorrow as there are cuts. Of all the reasons set out in the megabytes of bandwidth devoted to this, I liked Accidental Academic‘s perhaps the best.

The TUC’s largest mobilisation for decades will see hundreds of thousands on the streets of London demonstrating opposition to the government’s ideologically-driven cuts programme and in support of a better economic alternative. Sadly, I’ll not be among them – for reasons which include a certain indolence in getting myself organised in time; and weekends being sacrosanct, combined with a lot of travel at the minute from my Perthshire eyrie. Both reasons which are insufficient in themselves, and outweighed by the number of reasons why I should be out there. Though I will be there in the spirit (or, otherwise, in the Armchair Army (First Chairbourne Division)).

The False Economy and March for the Alternative websites have done a terrific job in the mobilisation in providing reasons for people to get out there, and the use of Twitter (@March26March) has been terrific in adding a steady drip feed of messages to stiffen resolve and provide backbone. The TUC has dealt well with the organisational and logistical difficulties in rallying this number of people in one place – as have thousands of ordinary trade unionists up and down the land.

Above all, probably, is the simple message that taking billions out of an economy faced with recession – and this week’s OBR report provides more proof that this economy is on the slide, compared to where it was six months ago – is neither sensible nor a strategy. ‘Marching for the alternative’ sounds to me  a campaign theme that it’s been pitched exactly right and it’s clear what the TUC is marching FOR, as opposed to what it is marching AGAINST.

And the campaign theme? Well, James’s Sit Down for me (obviously!); for everyone else: Marley’s Get Up, Stand Up (equally clearly). But for everyone, whether in the armchair army or the mobile marching one, how about dusting off Billy’s Between the Wars? The call for ‘sweet moderation’, when confronted with an ideological onslaught of the simplest, most caustic public-sector-bad, private-sector-good type being exhibited by the Tories and their yellow Tory mates, remains a strongly relevant call to arms for middle Britain.

For those going tomorrow, have a great day: and have a sing out for me! And make it massive (hat-tip: @kmflett).

Twitter 1, BNP 0

My Twitter feed has been alive all day with news of, and activity around, the BNP’s planned hosting of an event in Polmont tomorrow at which party leader Nick Griffin was due to speak (thanks @vicki_jamieson). To their credit, @MacdonaldHotels – the owners of the venue – have cancelled the booking, leaving the BNP with nowhere to go.

Fuller details are contained over at Eric Joyce MP’s blog (hat-tip: @johannabaxter). Joyce is right to acknowledge the role of Twitter in mobilising anti-racists to put pressure on the hotel group concerning the booking – and this is self-evidently a tribute to the immediacy of the power in this direction of social networking. And a terrific achievement for anti-BNP forces it is, too.

But this is not the first time this has happened recently. The STUC has also taken on Best Western group over a booking it took for the BNP in Leicester (the STUC involved itself as a result of the work of Satnam Ner, a trade union activist from Prospect – the union for professionals). The STUC reports a positive outcome to its representations to Best Western over the event, as well as the likelihood of the continuance of ‘a good working relationship’ as a result of its actions. I’m not sure that Macdonald Hotels has such a working relationship with the STUC – but evidently the example set by STUC/Best Western is a strong one within the sector.

Such action take once is innovative; twice, then it has become a trend. Hotels across the UK not taking bookings from the BNP at all is the goal – and the mobilisation power of social networking means we’re one step closer to achieving exactly that.

Cheers all round.

The Postmistress

Sarah Blake has written an intriguing and ambitious novel, full of what is ultimately unfulfilled promise.

Ostensibly about the relations between three women – a radio reporter in London during the Blitz and two women listening to her in a small town on the US eastern seaboard, one of whom is emphatically not the eponymous postmistress – this is a novel that is really about words and people’s ability to communicate with one another. The writer takes so many artistic liberties – a somewhat shaky geography of Europe, a trip through the Continent which pays scant attention to the reality of the war situation, a war poster which, although familiar now on thousands of coffee cups but which would never have been seen by wartime Londoners, and (as the author blithely confesses) a key role for a piece of technology to which the person involved simply could not have had access – that the book almost completely fails in terms of the realism of its plot development. Character development is also unsatisfactory, with only Frankie Bard, the radio reporter, realised in any rounded way – albeit that sometimes her naivety appears to sit poorly alongside her achievements in having got to such a position in journalism.

Ignoring all that, what we are left with, however, is the author’s love of words – stemming no doubt from the poetry which is evidently a key part of her own life. Ms Blake occasionally over-reaches herself, perhaps as a result of a lack of experience as a novelist, but the key parts of the novel are beautifully described – for instance, the vibrant colour of a US coastal town as people enjoy a last summer of innocence ahead of the inexorable advance of war contrasts well with a bleak, desperate London staggering under the Blitz. Where the novel works best is the scenes with Frankie delivering her reports in the studio – scenes that are charged with genuine tension, seeking as they do the involvement of the US in the war effort, with a hush descending over the words on the page as in the studio preparing for transmission – which are authentically realised. Frankie’s scenes in the underground stations and her railway journey through Europe are evocatively and, leaving aside the practical aspects of the latter, realistically and movingly captured. The author has an evident, if perhaps nowadays anachronistic, love of radio as a means of communication and the angst with which her central (perhaps only) character views her work – Is anyone out there listening? Are these words having the effect I crafted them to have? What happens to the characters beyond the fragments of stories captured and presented? – is not only an important part of the development of her character but something which continues to have resonance to those involved in communications (including modern day bloggers!).

Ultimately, we have a  novel about words – beautifully (for the most part) put together on the page but frequently lacking a reason to be. That’s a shame, since the central theme (fate, or destiny, and people’s perceptions of a controlling force in their lives which actually isn’t there, just other people who do have an influence, for good or evil) is an interesting one in the specific setting of the power of radio in World War 2 and, in the hands of a more experienced novelist (and I would potentially include a later career Sarah Blake in that), it could have created a powerful work. As it is, it clearly falls short of the ambition the author has for it – and I suspect that is a disappointment not least to Ms Blake herself.

CPI indexation: a saving or a cut?

A couple of days after Liberal Conspiracy disclosed the – denied – revelation that BBC journalists are being instructed to use ‘savings’ rather than ‘cuts’ in their coverage of government announcements, it came as something of a surprise that call me Dave spoke to his party conference promising ‘less debt, more saving’: it seems to me that less debt, more cuts is exactly what the ConDems are all about.

But – taking the promise at face value – if we can look forward to a government that seeks to encourage saving, then perhaps we can look forward to this government, after all, turning away from the proposed switch to indexation of pensions in payment by the Consumer Price Index rather than the Retail Price Index. The sleight of hand switch to a lower value indexation for future pensions increases in defined benefit schemes announced last July is no less than a government-inspired theft of workers’ occupational pensions. It will rob pensioners of thousands of pounds, with the loss rising with every year of retirement, leaving them more dependent on means-tested state benefits and taking crucial spending power out of the economy. And if the government can do that, to those who are pensioners already as well as to future ones, and in the face of pensioners’ expectations as to what they have been paying into all their working lives and frequently in spite of private scheme-based agreements on how indexation will be dealt with, why should they bother with a pension?

A DWP consultation on this issue as regards private sector occupational schemes closed last week: if the government is serious about encouraging more saving, it will have the courage to do away with this proposal and respect pensioners’ continuing rights to a pension indexed in line with RPI.