Thursday, 30 January 2014

Giving the AAP a fair chance

By Gargi Parsai in The Hindu

If the AAP experiment fails then the people will be back to being reduced to fixed deposits in ‘vote banks’ of established parties

It is a convention in Parliament that when a new member makes a debut speech, fellow members greet him or her with a thumping of desks. Normally the person is heard out without interruptions even if it is a hotly debated issue. The Chair is also indulgent even if the member exceeds the time limit. It’s the same for first-time ministers. They are not pounced upon for fumbling or giving inadequate replies. This camaraderie is also visible when contentious Bills are taken up and which the Opposition helps the government pass, sometimes without discussion.
But the Aam Aadmi Party (AAP), which is learning along the way after forming a minority government in Delhi, is not being given the same chance that the political class would give to “one of its own.” Even those who were indulgent of JP taking the support of the Rashtriya Swayamsevak Sangh to defeat a “corrupt and autocratic” Indira Gandhi and of V.P. Singh who sought the help of all including the Bharatiya Janata Party (BJP) in the wake of the Bofors scandal, are not willing to give space to the new “alternative politics” that the AAP stands for.
Capturing voter imagination

It is grossly unfair that while every government gets five years to implement its manifesto, the AAP government is expected to fulfil its within the first month. Even so, the party has taken crucial decisions on water and power tariffs to give relief to law-abiding citizens; 700 litres of free water per day is being given as a “right” and is on metered usage to encourage people to get meters. Those who exceed the limit (of water conservation) will have to pay for the entire use. Likewise, the decision to reduce the power tariff by half — up to 400 units of usage per month — only restores the balance. Citizens’ cries over abnormally inflated electricity bills generated by private service providers went unheard by Sheila Dikshit’s government. For a housewife, the average saving of Rs.8,000 to Rs.10,000 per month alone on these counts helps take some of the sting out of galloping inflation.
Nursery admission guidelines for private schools as well as the CAG audit of power companies have been upheld by the Delhi High Court indicating that the AAP government’s decisions are solid enough to stand judicial scrutiny. Grievance redress helplines are working, genuine and effective.
The AAP has compelled the so-called mainstream parties to take note of its novel ideas. They are aping it not because they believe in its ideas but because they feel the AAP has caught the imagination of voters with its approach to tackling the menace of corruption and to participatory democracy. That is why the Congress has suddenly gone silent on its “game changer” Food Security Act, and thrust the anti-corruption placard into the hands of Rahul Gandhi. After admitting that the 128 year-old party had much to learn from just-born AAP, Mr. Gandhi recently announced that the party will invite in 15 Lok Sabha constituencies applications from common people to contest on a party ticket — a methodology initiated by the AAP.
The BJP’s prime ministerial candidate Narendra Modi too is now harping on ridding India of corruption.
There can be no two opinions about the overzealous manner in which Delhi’s Law Minister Somnath Bharti took up the case of flesh trade and drug trafficking in his constituency. Even if one overlooks the manner in which policemen on the spot showed hostility to the Minister, Mr. Bharti could have done it differently and at a decent hour without hurting the dignity of the women under suspicion. Neither can one absolve “poet” Kumar Vishwas of his sexist comments. Both need to be reined in. But for agitated women groups to say that it is because of these two men that the entire party needs to be condemned is playing into the hands of those threatened by the AAP’s growing appeal ahead of the general election.
When Mr. Arvind Kejriwal worked on his goal to empower the aam aadmi he perhaps did not contend with the potpourri that would form the fundamentals of his party. So, if you have a Kumar Vishwas and a Somnath Bharti, there are others like a Yogendra Yadav who has been apologetic upfront about inherent contradictions in his political entity. When asked in an interview about people with divergent views such as social activist Medha Patkar and Captain Gopinath of Air Deccan backing the party, Mr. Kejriwal’s answer was simple — “This is the diversity of our country.” In that sense, the party’s initiative towards participatory democracy on the basis of continuous dialogue with common citizens is refreshing.
Open-door politics

With its origins in Anna Hazare’s anti-corruption movement, the AAP does not shy away from projecting itself as a party in movement mode. Indeed, it is different as a party — not distant, not structured and certainly not white-collared. Those who see politics largely through the prism of a “status quo mindset” and are more comfortable in a “high command” or single leader party structure will perhaps find it difficult to accept the AAP’s open-door politics in which every person counts irrespective of caste, religion, and standing.
In effect, the AAP was truly inclusive when it selected ordinary people, those with no political clout or background, to become MLAs and ministers. With no VVIP paraphernalia — red beacon-light cars, gun-totting security personnel, battery of briefcase-carrying assistants, or the experience — they do not look like nor behave like a conventional VIP.
We have had chief ministers sitting on fasts and organising bandhs, but for the first time the nation saw a chief minister sleeping on a roadside on a chilly Delhi winter night literally metres away from Parliament. He is by no yardstick “mad” as Union Home Minister Sushil Kumar Shinde has called him, but, yes, he certainly has the junoon (passion) to force a change in the political system, say his colleagues. And, yes, the change is beginning: Mr. Shinde’s home State, Maharashtra, and another Congress-ruled state, Haryana, have copied Mr. Kejriwal’s decision to reduce power tariffs. Likewise, the BJP-ruled Rajasthan and the Samajwadi Party-ruled Uttar Pradesh have cut down on security for their chief ministers. In Delhi, the police harassing petty shopkeepers, street vendors, three-wheelers, every passing truck etc. is no longer a common sight.
Mr. Kejriwal’s dharna a few yards away from the Union Home Minister’s office was as much against the Central government usurping the powers of the elected government in Delhi, as it was a flashpoint with the Delhi Police seemingly triggered by action against two police constables on charges of corruption. Mr. Kejriwal has realised that without control over the police, his government cannot deliver on its promise of ensuring the safety and security of women. The fight, therefore, appeared more to draw attention to the situation with regard to the police than to anything else. Otherwise, the AAP is the only party which has set up — much before the Bharti episode — a five-member committee on the Vishaka guidelines to look into complaints by women of harassment. The party has a 30-member gender committee headed by Lalita Ramdas, wife of Admiral Ramdas. The only three women MLAs in the Delhi Assembly belong to the AAP party.
With anti-corruption as its plank, the AAP leadership will have to brace itself for even more testing times in the run-up to the general election. Not only will it have to fend off attempts to bog it down politically, it will also have to hold its own against various lobbies, interest groups, mafias, middlemen and even media barons. To its advantage, however, the ordinary people, to whom it has given a voice and primacy, do realise that if this experiment fails then it will be back to their being reduced to fixed deposits of parties in “vote banks” to be renewed once in five years.

Our workplaces are about as family-friendly as a 19th-century mill


Maternity leave, sick pay, the minimum wage – the ability to claim these vital rights has been torched by our zero-hours economy
zoe zero belle
'The idea that you can plan high-quality childcare or a work-life balance in zero-hours conditions is laughable.' Illustration by Belle Mellor
Crack open a conversation about the family in political circles, and it's like Christmas Day in the trenches. Agreement breaks out: there's nothing more important than security, happiness and high-quality childcare in the early years; every child matters; women deserve their place in the workforce, men deserve their time in the homestead; both genders are desperately welcome – invaluable, irreplaceable! – in all settings; and (altogether now) we all want to be more like Scandinavia.
Delving a little deeper, there are some disagreements between the parties, or – for brevity – between Liz Truss, the childcare minister, and everybody else. Labour and the Lib Dems think the answer to universal, high-quality childcare is to find some equitable way for the government to fund it. Truss still thinks that the market would work on its own, if only big government would step out of the way. Her plan is for childcare workers to be better trained, and therefore allowed to manage more children. It is a stupid plan. No amount of GCSEs will increase your number of arms, hands and eyes. Yet she is to be admired for breaking ranks and allowing her neoliberalism free expression. Nobody else will mention market forces devant les enfants; it's almost as if the market were some kind of swearword.
And yet, despite every advance, every warm progressive statement, every assurance of "family-friendliness", conditions for parents at work worsen; discrimination against pregnant women intensifies . The rather nugatory fortnight of paternity leave goes largely unclaimed among low-income workers, while 80% of those on middle to high incomes take it. Most low-waged mothers go back to work after fewer than the 26 weeks of "ordinary maternity leave", most mothers on medium to high incomes take more than six months.
There is a gulf between the promises made to families by politicians, and the life that is delivered. There is also a gulf between rich and poor, which is then biologised by the likes of Iain Duncan Smith and his Centre for Social Justice, who blame "bad parenting" on poor people who don't love their babies enough to want to spend their first year with them. But we're just going to have to do that another day.
I believe the work situation is substantially down to the way we talk about life in gender silos, where "children", "maternity leave", "pregnancy" and "families" are filed under "women", while "industrial relations", "tribunals", "contracts" and "workplace" go under "men". This has blinded us to the fact that many statutory entitlements can never be upheld. Maybe you have the wrong kind of job or the wrong kind of (zero hours) contract; some rights build up over time and you can't prove unbroken service if you've never had a proper contract. Even if you could, your position is too precarious to insist on the rights you do have; and if it all turns sour you can't take anybody to a tribunal because since last July you've had to pay to do so.
The Chartered Institute of Personnel and Development recently released research on the reality of zero-hours work: 75% of workers didn't know how much money they'd have at the end of the week, and 42% were given less than 12 hours' notice about shifts. The idea that you can plan "high-quality childcare" in these conditions, or a favourable work-life balance, is laughable.
By way of illustration, I saw this advert in Costa Coffee (Eastleigh, Hampshire) the other day: "Staff wanted … 20 hours a week. MUST BE FREE 6AM TO 9PM, SEVEN DAYS A WEEK". Never mind, says the Office for National Statistics – only 0.7% of people are on zero hours; but this amounts to 250,000 workers. Norman Lamb, the care minister, has admitted to 300,000 zero-hours workers in social care. A Working Families report this week finds 7% of women and over 2% of men on zero hours.
The CIPD put the number of zero-hours workers at about a million. But try to stay cheerful – they still have rights: sick pay; minimum wage; holiday pay; maternity leave. Sure, it doesn't stretch to the right to request flexible working, which could explain why requests from fathers on low incomes are so often refused. Nevertheless, it's not like working in a mill in the 19th century.
Except that, often, it is. This employment feels too precarious for people to insist on the rights they do have, and anyway those rights are sidestepped by a week-long break in the job (easily within the employer's command). And let's say your employer reneges on your maternity package: well, it will cost you £1,200 to bring that to a tribunal. The drop in sex discrimination claims has been stark: there were 129 in September – the average for the six months before the charge was brought in was 2,055 . "We have to be careful we're not just talking about paper rights," said Sally Brett from the TUC
Back in 2011, Steve Hilton floated the idea across his blue sky that maybe maternity leave should be abolished, just while we were in recession, so business could get back on its feet, without having to worry about a load of uteruses? And we all (well, I) went nuts, saying: "This recasts women as burdens to work instead of assets, and remakes babies as costs for the tidy, solitary little household to bear, rather than a future for us all to invest in." Well, they goddam did it anyway, and you have to admire their cunning: they didn't torch the right; they torched the ability to claim the right. It became a paper right, and now we watch as it goes up in smoke.

The speed-gun myth


Stuart Wark 
 
 But what does "pace" or "speed" actually mean?
In recent times, the proponents of various fast bowlers often base their argument around the figures generated from the speed gun. While the overall speed readings are very interesting, it would appear misleading to rely solely on these figures, as they don't actually come close to telling the whole story about how "fast" a batsman will consider a bowler to be. It was not uncommon to hear commentators literally jump with excitement about the extreme pace of a certain Johnson delivery that caused a batsman significant problems, only to then see a speed-gun rating show that it was actually slower than the previous ball that the batsman had played easily.
In the most recent Ashes series, a recurring theme among the commentators was that James Anderson was tired and "lacking a yard of pace" compared to his spells during the English summer. This would appear to be supported by raw statistics that show he took 22 wickets at an average of 29 in England, whereas in Australia he took 14 wickets at nearly 44. However, a review of his average bowling speeds across both Ashes series makes for interesting reading.
In the first Test in Nottingham he averaged 84.9mph; in the fifth Test in Sydney he averaged 84.5mph. Anderson's average bowling speed per innings was remarkably similar across the ten Tests, and only varied around three miles an hour. His highest average speed per innings was actually in Perth, the "eighth" Test, where he averaged 85.5mph. Whatever the reasons for his relatively poor performance in Australia, it can hardly be argued that it was due to him "lacking a yard of pace".
At this point, I understand that many readers will no doubt be striking their foreheads on their monitors and shouting, "You idiot - he is a swing bowler and doesn't rely solely on pace." This is precisely why the speed gun is an unreliable measure. Ultimately, does it matter how we judge the "pace" of opening bowlers? Unfortunately, and this was primary reason for this article, the speed gun is becoming a concerning aspect of team selection. It was only a few weeks ago that Australian coach Darren Lehmann outlined that bowlers need to be bowling at 140kph to be considered for the Test team. Clearly the speed gun is becoming a determining factor that helps fast bowlers get selected.
There is a former Australia Test opening bowler, still only 27 years old, who has taken 202 first-class wickets at an average of 25.10, and took 5 for 105 in his last first-class match, but appears to have been forgotten about in terms of national selection. Trent Copeland doesn't bowl at 140kph, and therefore doesn't appear likely to add to his three Test caps. However, players who have faced bowlers such as Copeland, Chadd Sayers or even Glenn McGrathwill note that they are "faster" than they appear. A few years ago McGrath's deliveries were measured as being slower than those of Greg Blewett. However, if you asked opening batsmen which one was "faster", without any reference to the speed gun, Blewett would have struggled to gain a vote.
Phrases such as "hitting the bat hard" or "bowling a heavy ball" are used to describe bowlers who manage to bowl "faster" than someone with an identical speed-gun rating. From discussions with many batsmen over a number of decades, I have concluded that certain bowlers seem faster than others because they force batsmen to make a late adjustment when the ball is not quite where they expect it to be.
From the point when the bowler hits his delivery stride, the batsman starts moving into position to play a shot. With only half a second or so from the bowler letting it go until the batsman plays the ball, the batsman has to move on instinct into the correct position. A bowler who delivers a "heavy ball" is generally one who consistently hits the bat slightly higher than expected, thus leading to a batsman feeling a less than ideal contact and subsequently having less control over the shot.
Likewise, if a bowler has an unusual or strange action that prevents a batsman getting an early sighting of the ball, they will appear faster. The great South African Mike Procter was rated by Tony Greig as one of the "top five" paceman of his era; Greig thought Procter bowled at a similar pace to Andy Roberts, John Snow, Dennis Lillee and Jeff Thomson. However, it was interesting that in one of the early speed tests, conducted in 1979, Procter came second-last among 12 bowlers, and only managed to beat Pakistan medium-pacer Sarfraz Nawaz. At that time Procter was in his early 30s, but he played first-class cricket for another decade, and he opened the bowling for the WSC World XI.
While the actual speeds recorded in this trial cannot be fairly compared to those of current bowlers, due to differing measuring techniques, the comparative nature of the test showed that Procter was a long way behind Thomson, who led the field. However, opening batsmen of that era would clearly not agree that Procter wasn't a genuine fast bowler. He is an example of how speed can be disguised, as his "wrong foot" action meant that batsmen were not picking the ball up early.
When Brett Lee was bowling at 135kph, batsmen perceived him as far "slower" than McGrath at the same velocity, as Lee had a flat and predictable trajectory. This meant that a batsman was in position to play a shot earlier than against McGrath, who tended to achieve extra bounce or movement off the seam that forced batsmen into a late readjustment. This then made the batsmen perceive the bowler as being faster than a pure speed reading would have given them cause to do.
It would appear clear that Anderson's lack of effectiveness in Australia related more to his inability to move the ball consistently, rather than him being tired and "losing pace", as some commentators argued. Speed is not easily defined, and success does not always equate to high speed-gun measurements. The current No. 1 bowler in the world, Vernon Philander, is a great example of this, but it appears that he would not get a run for Australia as he bowls at a "mere" 130kph.
I hope the Australian selectors and coaching staff are willing to recognise that the speed gun alone does not define the effectiveness of an opening bowler, or just how "fast" he may be.

The royal family need a new boiler and the right want us to pay for it

Nothing symbolises stagnation, immovable social barriers and hierarchy quite like the royal family. No wonder George Osborne is leaping to their defence
Royal family at Buckingham Palace
The royal family gathered on the balcony at Buckingham Palace. The public accounts committee has questioned how well the royal finances are administered. Photograph: Leon Neal/AFP/Getty Images
When you are on a limited income, a boiler packing up, a leaky roof, dodgy guttering or a basement full of asbestos can tip you over the edge. If you are mortgaged-up, you cannot let your property fall into disrepair. If you live in social housing or are renting privately, you may find you receive little help; landlords and councils will keep you waiting and do the bare minimum. Rising food and fuel bills mean that, despite our much-trumpeted growth, too many are left with the "heat or eat" dilemma.
So can you imagine what it is like to be the poor old Queen? The boiler in Buckingham Palace is 60 years old. And you will get no Camilla cracks from me: I've moved on.
What, though, is the Queen to do? Obviously the answer is not pay for it herself out of her own enormous fortune because … well, she is the Queen. We – her largely indifferent subjects – should be ecstatically happy to pay for her repairs. Instead, though, "we" – in the shape of the public accounts committee headed by Margaret Hodge – are nosing round asking awkward questions about the royal finances, which is really rather vulgar. It is "bizarre", Jacob Rees-Mogg has told us, that this committee should query the pittance of royal expenditure when we should be looking at cutting other public spending.
It's not that bizarre, as every public body has had to trim itself down, or at least not flash the cash around quite so obviously, in the middle of a recession. The royals, though, have maintained staffing levels and those staff have carried on spending, cutting only 5% over the last six years. Last year, the monarch received a sovereign grant of £31m and the family can raise money when they choose to. They only open up Buckingham Place for tourists two months of the year, even though they were advised years ago to keep it open longer. Nonetheless, via entry fees and renting it out to JP Morgan, they made £11.6m last year.
Still, everyone loves our dutiful Queen and republicanism remains at a low ebb. But I wonder, as she hands over more duties to Prince Charles, and Kate and sprog will have to be wheeled out more, whether this spectacle will continue to persuade us on the "value for money" front. Which is surely why that expert in fairness and accountability George Osborne has intervened. Why should the royals have to dip into their million-pound emergency fund to repair their own palaces? Gideon feels the committee "is being unfair to the way the royal household has managed its finances".
The inimitable Nadine Dorries has also been on the case. She feels embarrassed "listening to Margaret Hodge reel off the list of repairs that need doing to royal buildings". Nadine embarrassed? This is serious. She then surpassed herself by saying: "What the royal family does for us is beyond explanation."
Indeed. Why is the Treasury stepping in here, except to defend, as ever, the super rich? While the number of the undeserving poor grow – scroungers, shirkers, people who steal food that has been thrown away out of skips – it is no coincidence that the number of deserving rich expands.
This is Conservative ideology at full throttle. We cannot increase tax on those with big incomes because they are the motors of growth and may leave. We are simply to accept that such concentrated wealth is a global trend. To say otherwise is some kind of anti-business communism. The anger towards bankers as the undeserving rich has dissipated as we are fed constant tales of vital entrepreneurs. Those at the top should not have to open their books, as they themselves are an actual asset. The vastly wealthy are now called "wealth creators".
The monarchy is part of this charade and we are to be grateful as we pay £1m to do up the house of the Duke and Duchess of Cambridge. Or rehouse Princess Beatrice. We provide the help to buy. We pay for their DIY, but they need more.
At the very least, one would have thought that the palace and its Tory courtiers would want to appear more frugal. Instead, the royal energy bill is that of the average British household. Multiplied 2,280 times. This kind of spending, and the apologists for it, fail to acknowledge a world of foodbanks and steep decline in social mobility. For if anything symbolises stagnation, immovable social barriers and hierarchy, it is the royal family. They embody the exact opposite of hard work, aspiration and innovation and all the guff that we are told will make things fairer.
Of course the chancellor defends those born with enormous financial assets. This government, after all, bought the American model that extreme and visible inequality is a price worth paying for the dream of social mobility.
The reality is different. We actually subsidise those born to rule at a time of gross inequality and zilch mobility. These people have no shame. They believe themselves to be the deserving rich. So put your hands in your pockets to mend the ancient boilers of billionaires. And feel thankful. Yes, this really is "beyond explanation".

Thursday, 23 January 2014

I despise men after I've had sex with them


Even if I like the man at first, once we've had sex, I start to feel disgusted by him
Couple in bed
I feel emotionally distant after sex. (Photograph posed by models.) Photograph: Alamy
I often find myself despising the men I have sex with. Whether on a one-night stand or with someone I initially like, after a few dates, once we have sex, I feel emotionally distant and a little disgusted by them. I have hadrelationships where these feelings fade to the background after a while, but they never go away.
Our sexual desire and our ability to enjoy intimacy is always influenced by the messages we received when we were young. Even if sex was not directly discussed, children usually manage to glean a sense of how their parents or carers feel about sex, nudity, eroticism, sexual experimentation and so on.
You may have internalised feelings of disgust about sex long ago. Many of us are brought up believing it is "wrong" or "dirty", that "nice girls don't do it", that "all men are untrustworthy", or other negative notions. These beliefs can make it very difficult for a person to reach a high level of comfort with adult sexuality, even within marriage.
Examine your long-held beliefs and your targeted disgust, and spend time pondering where they may have come from. Perhaps you can pinpoint exact moments in your sexual awareness or development when such ideas formed. Once you have identified the source of your disgust, you can work to rationalise and correct. Replace your negative feelings about sex with positive affirmations such as "sex is healthy", or "sexual desire is normal". Say these out loud every day until you believe them.

Judge the Royal Mail sale in three months, said Vince Cable. Time's up


Today's share price confirms the company was grossly undervalued, cheating the taxpayer out of billions of pounds
Royal Mail vans
'It turns out that the sale of Royal Mail was, in fact, completely botched.' Photograph: Dan Kitwood/Getty Images
"There's no way we will sell Royal Mail 'on the cheap'," promised the government in its Royal Mail: Myth-Busters factsheet, issued before the sale of most of our stake in the public asset, last October. Many commentators at the time thought the sale was irrational and the company grossly undervalued.
When shares finally opened for conditional trading, their price jumped from the government's valuation of 260p-330p each to more than 450p. The business secretary, Vince Cable, dismissed this as of "absolutely no significance … it is froth and speculation". He asked to be judged on what the price looks like in three months' time.
Well, three months have come and gone and the price of the shares is, at the time of writing, sitting pretty at over 600p each, with a high of 610p a few days ago – an 80% climb on their original price. This suggests that the company was undervalued by a giant £2.8bn: six times the projected saving this year by the imposition of the bedroom tax; six times the amount of money the government hopes to save by the imposition of a levy that is causing misery to thousands of vulnerable people and their carers up and down the country. And Royal Mail could have further to go yet. JP Morgan predicts the price will settle at about 700p a share. Earnings-per-share forecasts bear this out – they estimate a 30% gain this year.
So, now that it turns out that the sale of Royal Mail was, in fact, completely botched and has cheated citizens of billions of pounds' worth of value, where is the apology? Where are the resignations? If something like this had happened at local government level, there may have been questions of criminal prosecution. Why do our representatives in Westminster feel that they don't have to apologise when they get it so disastrously wrong, that they don't even have to give an account of themselves? They can simply ignore criticism; wave it away as if it were an unsavoury smell.
Goldman Sachs and UBS, the companies paid a stonking £16.9m by the government for managing the privatisation, were questioned about the price discrepancy by a parliamentary committee in November. They denied any impropriety, claimed the 330p price was correct according to their research and described the whole fiasco as a "well-executed transaction". Less than a week later, Goldman Sachs issued a note to its investors, advising them that the price of the shares would settle at about 610p.
When it emerged that the very companies advising on the sale were offered millions of shares in Royal Mail, shares which today represent a potential profit of over £35m, the Department for Business, Innovation and Skills said there was no possibility of conflict. This was because shares were offered to the investment arms of the banks and there are"Chinese walls" in place between them and any employees working on the sale. When it transpired that one of the biggest potential private beneficiaries from the flotation was hedge fund management company, Lansdowne Partners, and that George Osborne's best man, Peter Davies, was part of their management team, more denials came: "At no point was George involved in, or even made aware of, the allocations," said a Conservative spokesman. More "Chinese walls". Sir Paul Ruddock, Lansdowne's former chief executive, was awarded a knighthood last year after donating £500,000 to the Conservative party, although he denies the two are linked and stresses that his knighthood was for his services to arts.
Royal Mail has already announced its first post-privatisation price rise on business rates, explicitly to "help secure the sustainability of the Universal Service". Meanwhile, Royal Mail's chief executive, Moya Greene is rumoured to be in line for a £1.5m pay packet. After all, she has magically doubled the company's value in three months, hasn't she? Vince Cable is vowing to do his best to block such a package. Oh, the bitter irony … Vince Cable "playing boss", three months after selling the service, at a bargain basement price. Talking tough on a single payoff, three months after presenting City investors with a bumper £2.8bn bonus. Of our money.

The banking industry's biggest problem isn't bonuses or market share


The only way to make the sector pursue long-term viability instead of short-term greed is to change the rules of the game
Miliband banking speech
‘The fact that the political class, including Miliband himself, cannot even imagine state-owned banks ditching the business model that caused this crisis is a testimony to the power of the financial industry lobby.’ Photograph: Stefan Rousseau/PA
Last Friday, in another of those agenda-setting speeches for which he has rightly become famous, Ed Miliband took on the biggest of what he describes as "the broken markets" in the UK economy – the financial market.
Taking his "cost of living crisis" theme to another level, the Labour leader emphasised that the issue is not just about oligopolistic firms fleecing their customers; it is also about the lack of jobs with decent wages that can support decent standards of living. The problem with the British banking industry, Miliband pointed out, is not just about the concentration of financial power in the personal account market, but also in the business loan market.
According to Miliband's analysis, the dominant banks are not lending enough to small and medium-sized enterprises because they form a cosy oligopoly (controlling 85% of small business lending) that does not want to take any risk; enterprise loans are inherently riskier than mortgage and personal loans. Given that small businesses create most jobs in the UK (as they do in all countries), lack of finance for them is limiting the creation of decent jobs. The solution, he argued, is to introduce more competition into the small business lending market by capping the share of individual banks.
This proposal has caused much controversy. However, one thing is certain: it is going to be slow-acting. It may be years before proper "challenger" banks emerge, given the time necessary for the review by the Competition and Markets Authority – which takes over the roles of the Competition Commission and Office of Fair Trading from April – and for the process of selling branches.
But there is a quicker and simpler solution to this problem. It is for the government to use its ownership of two of the big four banks, RBS and Lloyds, to direct more lending to small businesses. Thanks to the bailout following the 2008 financial crisis, RBS is 81% owned by the government. This means it can tell RBS what to do. It also owns 33% of Lloyds, and while this does not give it a total control over the bank, it is well above what is normally considered a "controlling stake" in an enterprise.
Now, if you can basically tell two of the four largest banks what to do – say, to increase lending to small businesses – why go through the rigmarole of calculating their market shares and forcing them (and the other two) to sell off some of their branches?
The usual refrain is that Westminster cannot make RBS and Lloyds do things differently because, in order to survive, these banks need to behave like other competitors: generating as much profit and paying their staff as much.
This argument may be right if the existing business model of British banks and other financial companies is fine. But it is not. It is a business model that has caused the biggest financial crisis in 70 years and created imbalances and inequalities that threaten the future viability of the British economy. The fact that the political class, including Miliband himself, cannot even imagine state-owned banks ditching such a model is a testimony to the power of the financial industry lobby.
From the day when RBS and Lloyds were bailed out, the Labour government was at pains to emphasise it would run them along the same lines as before nationalisation. The only thing for which Labour and, subsequently, the coalition government have used the government's dominant shareholding position has been to restrain bonuses. But this is really missing the point.
The problem with bonuses in the financial industry is not about their levels – if someone makes a huge contribution to the economy, he or she should be richly rewarded. The main problem is that these bonuses are given to people for doing the wrong things well – things that harm the economy in order to enrich the shareholders, the top managers of banks and other financial firms.
So the real question is how we make banks and other financial firms pursue the right goals, rather than how much people should be paid, whether in bonuses or salaries. And the only way to make them pursue different goals from those they pursue now is to change the rules of the game.
Unfortunately, few regulations have been introduced since the crisis that have materially changed the goals of financial companies. The result has been "business as usual".
All those complex and risky financial products that were at the centre of the 2008 financial crisis – such as mortgage-backed securities, collateralised debt obligations, credit default swaps and other financial derivatives – are back in vogue again.
The credit rating agencies, whose incompetence and cynicism in rating those financial products has become legendary after the crisis, are still operating in the same way.
Thanks to Help to Buy, the mortgage-lending market is nearly back to its old self. Now you can get loans that are 95% equal to the value of the house – not quite the 125% you could get before the crisis, but nearly there.
In the absence of measures to encourage longer-term shareholding – for instance, by granting more votes or tax advantages – short term-oriented shareholders are still reigning supreme, putting pressures on banks to generate short-term profits, whatever the consequences.
The main problem with the British financial industry is not the level of bonus, or even the concentration in the banking sector; it is that the industry is pursuing goals that are detrimental to the long-term economic viability of the country, in the process enriching only a tiny minority and sapping human and financial resources from the rest of the economy.
Unless those goals are changed through better regulation, the industry will remain harmful to the rest of the economy, whatever we do about bonuses and market concentration.

Wednesday, 22 January 2014

Cost of living? What about the cost of being dead?


The spiralling price of funerals is a symptom of the triumph of the market and the accompanying poverty of civic life
belle funeral
There is 'always the tacit suggestion that if you cared a tiny bit more, you would pay a tiny bit extra. It is, again, the things we don't talk about that cost us the most, the reckoning that happens in the dark.' Illustration by Belle Mellor
"F uneral poverty" – that's the phrase they use at the National Association of Funeral Directors. Like "fuel poverty", "heat poverty" and "child poverty", this is just a long way of saying "poverty": another way to express the situation in which an event or thing that everybody will sometime need is nevertheless hopelessly out of reach of a fair proportion of them. One in five people can't afford funerals – given that the "cost of dying" now averages £7,622, the number of people who are knocked sideways by it financially, for years afterwards, probably considerably exceeds 20%.
That phrase "the cost of dying" has sacrificed accuracy for tact. This is the cost of being dead: the funeral, the cars, probate, the flowers that say "Best Dad Ever", the burial or cremation. If you factor in the costs before death, it's eye-popping. People rarely drop down dead. They have protracted illnesses, they seem like they're going to die and then don't; all emergencies are real, and to count the cost of anything would be sacrilege, and a fast track to bankruptcy.
This inability to tether the process to reality is an offshoot of being unable to talk about death: any discussion of the realities around it is seen to cheapen it. Death, when it eventually arrives, comes at the end of galloping spending, like typhoid at the end of a winter of malnutrition. If they say it costs seven grand, that is a good deal less than it has actually cost.
Why is this news? Because it's not simply expensive, it is "inflation busting", having gone up by 80% since 2004. It sounds like a lot; in fact, energy costs are still worse, having more than doubled over the same period. But that comparison doesn't help, merely ramming home the unaffordability of life in a world where costs soar and wages plateau.
There are a couple of reasons specific to the funeral business for these price rises, however, and both say something about the market generally. First, the cost of a burial plot has increased, as the cost of land has gone up. This makes it a postcode lottery, in which a death in rural Wales will be slightly less crippling than one in Wimbledon; but all postcodes have stayed in the slipstream of inflation, whether their land value has gone up or not. This is at the outermost ripple of the situation we've created for ourselves in which our land is worth much more than anything we earn or do or produce. Can we afford to be buried? Can we afford town halls? Zoos? Can students afford to live near universities?
Basically, no. Those days when a city was built to serve its inhabitants, with the commonly used areas in the middle and the private housing round the edge – those days when the centre of town contained things useful to a population, things like fire stations and schools? Those days are over. Those days have been sold to a Russian oligarch, whose nationality is, of course, not relevant from a racist point of view; it is there to underline how physically distant are the people whose interests are being served by the new equations.
An interesting side point is that councils, ratcheting up burial costs to keep pace with the value of the land, rack up cremation costs at the same time. Well, duh, why wouldn't you? You're in charge; it's not as though anyone can shop around. And here, bad ethics have chased out good ethics, since the latter are the instincts from which the private sector protects itself with competition. Councils shouldn't have to dream up checks and balances to stop themselves ripping off the communities they serve.
But even where competition does thrive, in the funeral industry itself, you see the spectacle of the ceremonial rip-off, wedding economics done sotto voce. Everybody makes poor financial decisions when they're recently bereaved. We put a notice in the Times for my dad, saying, "After a short and ultimately quite half-hearted fight with cancer, Mark Williams has died". Dropped 400 quid making a weak joke at a dead man's expense. And in the Times!
But that doesn't excuse the relentless upselling of the funeral director, the stupid lacquers and extra-price finishes, and always the tacit suggestion that if you cared a tiny bit more, you would pay a tiny bit extra. It is, again, the things we don't talk about that cost us the most, the reckoning that happens in the dark.
"What do people do," John Humphrys asked on BBC radio's Today programme, of Kate Woodthorpe from the University of Bath, "if they just can't afford a funeral?" The council does it, naturally – someone has to. The deceased themselves are too dead to fail. Humphrys and Woodthorpe then reminisced, briefly, about the days when a "pauper's funeral" was a source of shame, when people's own sense of propriety prevailed.
This is a classic manoeuvre – you take financial pressures that are quintessentially modern and then nostalgically lament the fact that people don't deal with them as they would have in the olden days. Expensive heating? In the olden days, they would have worn more jumpers. Unaffordable funerals? They would have saved harder. Food poverty? They would have eaten more potatoes.
All those things may be true, but that era was never characterised by acquiescence. The same people who were too proud for a pauper's funeral would have been too proud to be priced out of their own civic space, out of their own life cycle.