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Monday, 29 December 2014

Milk

Much of upland Britain is maintained in its attractive state thanks to the use of the land as sheep and cattle grazing, and for the related haymaking or silage recovery. Both beef and dairy herds of cattle are maintained. The current prices of beef and lamb make the meat sector remunerative: and the increasing preference for fresh meat in the emergent economies - most obviously in China - bodes well for future meat prices. The sad concomitant of this fact is that the poor in the UK and other formerly industrial countries, faced by declining real purchasing power, are able to eat less prime meat: and for millions of families it is disappearing from the list of available options. The affordable alternatives of sausage and ready meals contribute to the wave of obesity that is engulfing at least half of the beneficiary population and making them less suitable for employment.

At the same time in recent years there has emerged a significant global surplus of milk. While the majority of consumers are still able to exercise a preference for fresh milk, and can check on its provenance, even the supermarket milk supply is subject to global competition. For conversion to butter and cheese the source of milk is irrelevant provided the quality of the milk is guaranteed. Hence while there is a significant segment of customers who want - and will afford - locally produced fresh milk for household use [and especially for children], the demand for bulk milk is not differentiated in that way. Thus the purchase of the bulk of milk from farms is dominated by large wholesalers, who in turn are forced to compete for business from supermarket chains and manufacturers. Simple market forces dictate that the prices offered to farmers decline; and they are now well below the level at which hill-farming for milk is viable. Even many lowland cattle farmers have gone out of the milk business, though many of them were able to operate much larger dairy herds than their uplands fellow-producers.

The potential outcome from this is that the whole way of life of upland farming will change from mixed dairy and meat farming to just meat production [which in its turn will also be subject to the variability of world demand]. Without daily collections of fresh milk from significant regions of the UK  the transport system and the use of local resources such as petrol stations would decline, and the increasingly under-used transport infrastructure would become more expensive for the reduced local population to maintain. There are already manifold signs that this is happening.

With the government under pressure to reduce spending, 'subsidies' for rural populations come under threat: hence rural post offices and doctor's surgeries, sub-libraries and smaller schools are becoming extinct; subsidies to virtually-unused [and unaffordable] bus services are cut and the shrinking incomes of their clientele make more pubs non-viable every month. As these processes accumulate the ability of farmers to maintain the visual character of the countryside diminishes.

There should be a national policy on this disappearance of the national heritage; but it will not happen under the current rule of the political class. Economics will trample over humanity and this example of dereliction and decay will become conspicuous only when it is unaffordable to do anything significantly to correct the damage.

Thursday, 25 December 2014

A Boxing Day Conundrum

I was intrigued by a snippet of News on BBC Radio 3 during Breakfast this morning. Someone has calculated, on the basis of sample data, that 49% of clergy worked on Christmas Day. As a son of the parsonage I would have expected the ratio to be nearer 99% and I am bemused at what 51% of the clergy can have been up to. There are far too many 'retired' priests and bishops - their pensions are draining the Church of England's residual coffers after generations of daft management of the accumulated assets of centuries - but I would have expected that most of those would have volunteered to take services [or to assist] at some of the thousands of churches, chapels and other conventicles that no longer have their own stipendiary cleric.

Christmas is one of the greatest festivals of the church and one would expect - and hope, even - that the clergy would want to have been engaged. How very sad is the situation that seems to be indicated by the raw fact.

Another sad and silly situation in churches that commentators now almost always expect choirmasters and organists to be separate people. In the great days of English choral singing the organist and choirmaster were one person, who was heard but not seen during services. Such men [rarely women] were excellent choir trainers: and once trained, the choir got on with it while the boss accompanied the singing and played the voluntary. Now in the great majority of cases some show-off jackanapes demonstrates daily that they are not competent to train the choir and trust them to deliver, so they appear waving their arms in front of the choir thinking to receive plaudits for their incompetence. This is one of the many ways in which the third quarter of the twentieth century showed a serious decline in standards of professional competence.

Tuesday, 23 December 2014

Britain's Balance of Payments: Disaster

The latest balance-of-payments data for the UK demonstrate the plenitude of the failure of Gideon Osborne's purported plan to 'restore' the British economy. The data are the worst ever: imports are up, exports are wallowing and 'remittances to overseas direct investors' are alarming. Those remittances include the tribute that British customers pay to the foreign owners of the gas, electricity, water and railway industries that were snatched from the British public and sold cheaply in order to enable the Thatcher government and its successors show less of a deficit on public spending.

When he took office as Chancellor of the Exchequer Osborne declared his intention to rebalance the economy: away from consumption by the public sector to more private investment, away from a deficit to a surplus on overseas trade driven by strong growth of exports. None of this has been achieved. Public services have generally declined as government spending has been cut and capped. The benefits system has continued to suck in more of the nation's turnover even as benefit payments to individuals and households have been kept in check.

Investment has stagnated. Perhaps most alarmingly, as the government continues to close 'dirty' power stations no new investment has been made in power generation for seven years. Provision has been made in legislation and agreements with companies to compensate the alien owners of power systems for any risk that may remain in new construction [gas or nuclear] - from the pockets of British consumers, of course - but nothing has actually been built: or begun.

Look at the new trade figures, out today. Read what it says about it in the papers.

Then remember Winston Churchill's warning to the USA in 1941: that if Britain's resistance to the Nazis failed the whole world [including the USA] would sink into a new dark age, made darker by the lights of a perverted science.

Gideon and his Treasury team are guiding Britain into a new, darker age. With his own 'good' degree in Economics and surrounded by a like-minded cohort of acolytes he is driving the nation along the path set by the perverse pseudo-science of Economics. He has no idea of the immensity of the responsibility that he carries for this developing disaster. That in no way exculpates him from the damage that he is doing.

Thursday, 18 December 2014

Gideon Squeezes Harder

A minor element in the News today is the information that local authorities are braced for more cuts to their allocation from central government. This is particularly important because for several years local councils have not been able to make compensating increases in local taxes and charges - notably rates - when government cuts the direct funding of their budget for things that the councillors consider it important to deliver to their constituents. Within the past week the government has tried to remove the 'nice little earner' of penalty charges for parking from the array of sources: that will get the coalition partners a few votes in May at the cost of real human misery.

The coalition government had previously offered most local authorities the sop that if they do not charge more in local levies, the state will make up some of the deficit from central funds. Now the pruning of the national expenditure has reached the point where the Chancellor can no longer push some pennies in their direction and tell them to make do with that.

Soft services, starting with libraries [again] will be cut back. Care for the aged and disabled will be rationed more tightly. School maintenance programmes will again be delayed. Jobs will be held open for longer, and more vacant posts will quietly be frozen. As always, the spin spivs have stories ready with which to claim that the modern world is coming to the rescue of the old: this week's example is that there is a prospect of getting a computerised national libraries ticket, so that anyone from anywhere can go to a town whose library has a book that they want to read, and borrow the copy. In this world of funding cuts and petty theft, ensuring the security of the stock under such a system would be hugely expensive; and insuring it would be unaffordable. Most people do not have the IT skills, the energy, the time or money for the fares to be able to access such a system; and the costs of running it remotely after the cuts would be prohibitive.

The Tories claim that future cuts in public spending will have to be greater than those so far made by the coalition if the deficit is to be cleared; and that the pace of cutting will have to be speeded up. Labour also promise cuts, but in a much gentler pattern that would never lead to ending the deficit on annual spending by the state. Either proposal would result in massively worse public and social services. The reduced police force would be had-pressed to monitor dissident movements or to contain riots.

Whatever comfortable view of British society David Cameron has adopted from Eton, Oxford and the Witney constituency stands to be corrected quickly and brutally. Milliband may have a slightly fuller perspective from the very limited time that he has spent in his northern constituency, but he has no preparation for the realities that will scream for redress if the present destructive policies are continued.

The comfortable notion that the ghettoised majority of Muslims who hold British passports will maintain 'British values' as tighter bounds are set to the benefits system will not survive for much longer: and their lack of empathy [or even of passing acquaintance] with their 'white' fellow-disbeneficiaries will exacerbate tension that will too easily be dubbed 'racist'.

Oh dear!

Saturday, 13 December 2014

Political Idiocies: Privatisation and Competition

As every user of a traditional open market knows, there are great advantages for the customer if traders in many areas of business have to compete. On a larger scale, examples like Marx and Spencer versus Waitrose [on food] and versus Next [on clothes] are beneficial to customers and healthy for capitalism.

But some manifestations of the Economist-driven obsession with competition are counter-productive. One of the most obvious is the encouragement of competition to Royal Mail. Royal Mail is obliged to meet an obligation to deliver at least five days a week to every postal address in the land [with the specific exception of a few exceptionally remote addresses]: historically this was tantamount to creating a natural monopoly. It would be an insane waste of resources to construct a system that would also have the resources to compete with Royal Mail for every address in the country, every weekday. But in allowing 'competition' in urban areas and their immediate hinterland a huge unfair advantage is conferred on Royal Mail's competitors. And now at least one of them has proved to be under-resourced to meet the current demand: so while Royal Mail is 'rationalising' its service delivery and cutting its workforce, flashy competitors are failing to deliver as promised: but they are not under the universal service obligation, so failing to deliver what they promise to their customers does not draw down regulatory sanctions - as it could with Royal Mail. So in the aggregate the service is worse.

Equally bad is the failure of the National Air Traffic control computer for southern England. By making the 'company' 51% 'private' government has attempted to evade responsibility for notorious under-investment. Yesterday chickens came home to roost, and once such a process begins it can only continue to let down airlines and their passengers - the paying customers for the service. In many cases privatisation has simply allowed foreign owners permanently to tax British consumers: in others, like NATS, supposed responsibility for the false economy of underinvestment has been transferred to a firm; but all users suffer for it.

Well done, political idiots who believe Economists!

Wednesday, 10 December 2014

Why Build on Brownfield?

Every spiv in and out of government is at some time bitten by the bug that says "Let just a little bit of the Green Belt be used for housing".

Political Economy has a very good answer to that. Homes built are added to the national wealth just once; they can be counted as part of the 'output' of the years in which they are first sold, to occupants or to landlords.

But in every future year that land is out of production for farming, or for leisure activities that can be replaced by farms; as happened to a huge acreage especially in the Second World War.

The facts and figures for High-Speed Two indicate the costs of building railways. In my youth I never understood why the depredations of Dr Beeching were not shown as negative on the national balance sheet. The cost of building railways, per mile, is horrendous: so the loss to the national wealth of tearing them up should have been shown. National income probably showed negative growth in that period.  The same is true of steelworks, dockyards and other installations that had a long potential future existence until they were wantonly destroyed in the pursuit of short-term policies, chiefly under the Thatcher regime.

Inflating the amount of money that can be borrowed per house adds nothing to real national production. The lending officers of building societies and the estate agents with the highest 'productivity' add nothing to real national production: their labour in not substantially productive, regardless of how much 'profit' it turns in to churn on through the consumer-driven economy. This is quintessentially true of resales of houses that were first built on greenfield sites.

Restoration of the many despoiled old urban areas of the UK remains an urgent task; and the need for homes is desperate. Looking to the green belt to provide easy pickings [usually for the better-off members of society] is distracting and destructive.

Monday, 8 December 2014

Prelate and Premier

Today the Archbishop of Canterbury is publicising a report, prepared under the direction of the Bishop of Truro and the excellent Frank Field MP, that heavily castigates the extent of the need of British families to resort to food banks in this year of grace 2014.

The need is largely due to the fact that families are literally penniless in many thousands of cases where benefits are due to be paid, but there are institutional and bureaucratic delays in the release of the extremely modest funds to which the families are entitled. But there are many other causes of the distressing circumstance where a parent literally cannot feed a child - or herself - of which only a minority are fecklessness, cretinism, intoxication or narcotic catalepsy. Society is failing, and the economy is failing; and government has no remedy.

Meanwhile, on the same day, the Prime Minister warns his cohorts that Britain's "prosperity" would be at threat if Labour and/or the Liberal democrats will the forthcoming general election. One may ask, "What prosperity?" As the government promises some £55billion a year of cuts to public expenditure by 2020, on top of the approximately £35billion annual 'savings' so far achieved, it is legitimate to ask what of the economy, and of the social structure, will survive?

The Chief Constable of Lincolnshire has asked the Home Secretary to explain how that huge county can be policed if the foreshadowed cuts are made: we can expect no direct answer to that question.

Clegg has no answer.
Milliband has no answer.

And now Alex Salmond reckons that he can exploit an electoral stalemate next May to pursue his obsessive agenda in defiance of the democratic vote of the Scots people in the recent referendum.
In his speech announcing his intention to disrupt the UK parliament, Salmond repeated the assertion - which is almost certainly true - that the one way for him to forfeit the trust of his followers would be to enter into any sort of pact with the Conservatives.

The rump of the LibDem party is also likely to decide after the May election that their role in any future government will be with Labour.

In the unlikely event that UKIP get enough seats to swing a hung parliament, they will exact a tremendous toll for coalition with the Conservatives.

What hope have we?

Thursday, 4 December 2014

And Now He's Cross

The BBC has been very naughty. Its news teams have told the country that by the end of the next Parliament - if Gideon Osborne is elected to get away with it - public spending will be at its lowest for 80 years. The fact that this is a reasonable extrapolation from his own figures is not relevant, from his perspective on this political argument.

The population of the UK is around 50% greater than it was in 1935 and it is growing rapidly. The amount of money that is taken in as taxes and returned to the people through schools, the Health Service, benefits and other channels, is massively greater, per head, than it was in 1935. So the removal of health, help and support from every citizen [whether or not they are deserving of all that they get] would be dramatic. It is not achievable, because the state would have been brought down by rioting mobs long before the target was hit. Once people have nothing - literally nothing - to loose, they will ally with others in the same position; and the depleted, demoralised police force will be incapable of stopping the destruction.

 One has to go back to 1848 to find any comparable situation to that which could exist in the UK by 2018. The situation then was that the 1834 Poor Law reform had taken effect, the Workhouses had been built and were fully functional, and [at least in principle] all the cash benefits that had been available under the Speenhamland System had been withdrawn. Many of the marginally-employed found it very hard even to put bread on the table for their families: and the Liberals [not least, the new capitalist class] blamed the high price of corn, not the low wages that they paid, for the distress that was evident among the working poor. Capitalist-funded orators ranged the country arguing against the landlord class and the farmers, who benefitted from the high price of food. By the mid eighteen-forties the Russian Empire, the USA and Canada had all become capable of exporting large quantities of grain; but Britain kept it out by imposing the tariff specified in the Corn Act. The Anti-Corn-Law League invested heavily in the campaign to keep industrial profits high and wages low, and hundreds of thousands of people signed the petition demanding repeal. There was a clear threat that violent riots would be staged if the demand was not met. Tens of thousands of middle-class and aristocratic men signed up as special constables; rather looking forward to being licensed to crack a few riotous heads. Among them was the exiled Louis Napoleon Bonaparte, who was soon to return to France, be elected President and then declare himself Emperor Napoleon III.

Sir Robert Peel's government duly climbed down, the Tory party was rent apart, and the Corn Act was repealed. This settled Britain a low-wage country, which enabled our industries to remain competitive on price even as German and American firms adopted newer technology to produce better products. The cost of becoming dependent on imported food only became fully apparent in the losses to the mercantile marine in the First World War; and the UK only began to pay high prices for food when it entered the EU and the Common Agricultural Policy in 1973.

Politics in 2015 will enter a new and frightening period. Labour is largely responsible for the mess that we are in: the Tories and the LibDems have not understood it, so have made it worse.

Stick with this blog: it is depressing, but it says it as it is!