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Showing posts with label privatisation. Show all posts
Showing posts with label privatisation. Show all posts

Tuesday 28 June 2016

Why bad ideas refuse to die

Steven Poole in The Guardian

In January 2016, the rapper BoB took to Twitter to tell his fans that the Earth is really flat. “A lot of people are turned off by the phrase ‘flat earth’,” he acknowledged, “but there’s no way u can see all the evidence and not know … grow up.” At length the astrophysicist Neil deGrasse Tyson joined in the conversation, offering friendly corrections to BoB’s zany proofs of non-globism, and finishing with a sarcastic compliment: “Being five centuries regressed in your reasoning doesn’t mean we all can’t still like your music.”

Actually, it’s a lot more than five centuries regressed. Contrary to what we often hear, people didn’t think the Earth was flat right up until Columbus sailed to the Americas. In ancient Greece, the philosophers Pythagoras and Parmenides had already recognised that the Earth was spherical. Aristotle pointed out that you could see some stars in Egypt and Cyprus that were not visible at more northerly latitudes, and also that the Earth casts a curved shadow on the moon during a lunar eclipse. The Earth, he concluded with impeccable logic, must be round.

The flat-Earth view was dismissed as simply ridiculous – until very recently, with the resurgence of apparently serious flat-Earthism on the internet. An American named Mark Sargent, formerly a professional videogamer and software consultant, has had millions of views on YouTube for his Flat Earth Clues video series. (“You are living inside a giant enclosed system,” his website warns.) The Flat Earth Society is alive and well, with a thriving website. What is going on?

Many ideas have been brilliantly upgraded or repurposed for the modern age, and their revival seems newly compelling. Some ideas from the past, on the other hand, are just dead wrong and really should have been left to rot. When they reappear, what is rediscovered is a shambling corpse. These are zombie ideas. You can try to kill them, but they just won’t die. And their existence is a big problem for our normal assumptions about how the marketplace of ideas operates.

The phrase “marketplace of ideas” was originally used as a way of defending free speech. Just as traders and customers are free to buy and sell wares in the market, so freedom of speech ensures that people are free to exchange ideas, test them out, and see which ones rise to the top. Just as good consumer products succeed and bad ones fail, so in the marketplace of ideas the truth will win out, and error and dishonesty will disappear.

There is certainly some truth in the thought that competition between ideas is necessary for the advancement of our understanding. But the belief that the best ideas will always succeed is rather like the faith that unregulated financial markets will always produce the best economic outcomes. As the IMF chief Christine Lagarde put this standard wisdom laconically in Davos: “The market sorts things out, eventually.” Maybe so. But while we wait, very bad things might happen.

Zombies don’t occur in physical marketplaces – take technology, for example. No one now buys Betamax video recorders, because that technology has been superseded and has no chance of coming back. (The reason that other old technologies, such as the manual typewriter or the acoustic piano, are still in use is that, according to the preferences of their users, they have not been superseded.) So zombies such as flat-Earthism simply shouldn’t be possible in a well‑functioning marketplace of ideas. And yet – they live. How come?

One clue is provided by economics. It turns out that the marketplace of economic ideas itself is infested with zombies. After the 2008 financial crisis had struck, the Australian economist John Quiggin published an illuminating work called Zombie Economics, describing theories that still somehow shambled around even though they were clearly dead, having been refuted by actual events in the world. An example is the notorious efficient markets hypothesis, which holds, in its strongest form, that “financial markets are the best possible guide to the value of economic assets and therefore to decisions about investment and production”. That, Quiggin argues, simply can’t be right. Not only was the efficient markets hypothesis refuted by the global meltdown of 2007–8, in Quiggin’s view it actually caused it in the first place: the idea “justified, and indeed demanded, financial deregulation, the removal of controls on international capital flows, and a massive expansion of the financial sector. These developments ultimately produced the global financial crisis.”

Even so, an idea will have a good chance of hanging around as a zombie if it benefits some influential group of people. The efficient markets hypothesis is financially beneficial for bankers who want to make deals unencumbered by regulation. A similar point can be made about the privatisation of state-owned industry: it is seldom good for citizens, but is always a cash bonanza for those directly involved.

The marketplace of ideas, indeed, often confers authority through mere repetition – in science as well as in political campaigning. You probably know, for example, that the human tongue has regional sensitivities: sweetness is sensed on the tip, saltiness and sourness on the sides, and bitter at the back. At some point you’ve seen a scientific tongue map showing this – they appear in cookery books as well as medical textbooks. It’s one of those nice, slightly surprising findings of science that no one questions. And it’s rubbish.

 
A fantasy map of a flat earth. Photograph: Antar Dayal/Getty Images/Illustration Works

As the eminent professor of biology, Stuart Firestein, explained in his 2012 book Ignorance: How it Drives Science, the tongue-map myth arose because of a mistranslation of a 1901 German physiology textbook. Regions of the tongue are just “very slightly” more or less sensitive to each of the four basic tastes, but they each can sense all of them. The translation “considerably overstated” the original author’s claims. And yet the mythical tongue map has endured for more than a century.

One of the paradoxes of zombie ideas, though, is that they can have positive social effects. The answer is not necessarily to suppress them, since even apparently vicious and disingenuous ideas can lead to illuminating rebuttal and productive research. Few would argue that a commercial marketplace needs fraud and faulty products. But in the marketplace of ideas, zombies can actually be useful. Or if not, they can at least make us feel better. That, paradoxically, is what I think the flat-Earthers of today are really offering – comfort.

Today’s rejuvenated flat-Earth philosophy, as promoted by rappers and YouTube videos, is not simply a recrudescence of pre-scientific ignorance. It is, rather, the mother of all conspiracy theories. The point is that everyone who claims the Earth is round is trying to fool you, and keep you in the dark. In that sense, it is a very modern version of an old idea.

As with any conspiracy theory, the flat-Earth idea is introduced by way of a handful of seeming anomalies, things that don’t seem to fit the “official” story. Have you ever wondered, the flat-Earther will ask, why commercial aeroplanes don’t fly over Antarctica? It would, after all, be the most direct route from South Africa to New Zealand, or from Sydney to Buenos Aires – if the Earth were round. But it isn’t. There is no such thing as the South Pole, so flying over Antarctica wouldn’t make any sense. Plus, the Antarctic treaty, signed by the world’s most powerful countries, bans any flights over it, because something very weird is going on there. So begins the conspiracy sell. Well, in fact, some commercial routes do fly over part of the continent of Antarctica. The reason none fly over the South Pole itself is because of aviation rules that require any aircraft taking such a route to have expensive survival equipment for all passengers on board – which would obviously be prohibitive for a passenger jet.

OK, the flat-Earther will say, then what about the fact that photographs taken from mountains or hot-air balloons don’t show any curvature of the horizon? It is perfectly flat – therefore the Earth must be flat. Well, a reasonable person will respond, it looks flat because the Earth, though round, is really very big. But photographs taken from the International Space Station in orbit show a very obviously curved Earth.

And here is where the conspiracy really gets going. To a flat-Earther, any photograph from the International Space Station is just a fake. So too are the famous photographs of the whole round Earth hanging in space that were taken on the Apollo missions. Of course, the Moon landings were faked too. This is a conspiracy theory that swallows other conspiracy theories whole. According to Mark Sargent’s “enclosed world” version of the flat-Earth theory, indeed, space travel had to be faked because there is actually an impermeable solid dome enclosing our flat planet. The US and USSR tried to break through this dome by nuking it in the 1950s: that’s what all those nuclear tests were really about.

 
Flat-Earthers regard as fake any photographs of the Earth that were taken on the Apollo missions Photograph: Alamy

The intellectual dynamic here, is one of rejection and obfuscation. A lot of ingenuity evidently goes into the elaboration of modern flat-Earth theories to keep them consistent. It is tempting to suppose that some of the leading writers (or, as fans call them, “researchers”) on the topic are cynically having some intellectual fun, but there are also a lot of true believers on the messageboards who find the notion of the “globist” conspiracy somehow comforting and consonant with their idea of how the world works. You might think that the really obvious question here, though, is: what purpose would such an incredibly elaborate and expensive conspiracy serve? What exactly is the point?

It seems to me that the desire to believe such stuff stems from a deranged kind of optimism about the capabilities of human beings. It is a dark view of human nature, to be sure, but it is also rather awe-inspiring to think of secret agencies so single-minded and powerful that they really can fool the world’s population over something so enormous. Even the pro-Brexit activists who warned one another on polling day to mark their crosses with a pen so that MI5 would not be able to erase their votes, were in a way expressing a perverse pride in the domination of Britain’s spookocracy. “I literally ran out of new tin hat topics to research and I STILL wouldn’t look at this one without embarrassment,” confesses Sargent on his website, “but every time I glanced at it there was something unresolved, and once I saw the near perfection of the whole plan, I was hooked.” It is rather beautiful. Bonkers, but beautiful. As the much more noxious example of Scientology also demonstrates, it is all too tempting to take science fiction for truth – because narratives always make more sense than reality.

We know that it’s a good habit to question received wisdom. Sometimes, though, healthy scepticism can run over into paranoid cynicism, and giant conspiracies seem oddly consoling. One reason why myths and urban legends hang around so long seems to be that we like simple explanations – such as that immigrants are to blame for crumbling public services – and are inclined to believe them. The “MMR causes autism” scare perpetrated by Andrew Wakefield, for example, had the apparent virtue of naming a concrete cause (vaccination) for a deeply worrying and little-understood syndrome (autism). Years after it was shown that there was nothing to Wakefield’s claims, there is still a strong and growing “anti-vaxxer” movement, particularly in the US, which poses a serious danger to public health. The benefits of immunisation, it seems, have been forgotten.

The yearning for simple explanations also helps to account for the popularity of outlandish conspiracy theories that paint a reassuring picture of all the world’s evils as being attributable to a cabal of supervillains. Maybe a secret society really is running the show – in which case the world at least has a weird kind of coherence. Hence, perhaps, the disappointed amazement among some of those who had not expected their protest votes for Brexit to count.

And what happens when the world of ideas really does operate as a marketplace? It happens to be the case that many prominent climate sceptics have been secretly funded by oil companies. The idea that there is some scientific controversy over whether burning fossil fuels has contributed in large part to the present global warming (there isn’t) is an idea that has been literally bought and sold, and remains extraordinarily successful. That, of course, is just a particularly dramatic example of the way all western democracies have been captured by industry lobbying and party donations, in which friendly consideration of ideas that increase the profits of business is simply purchased, like any other commodity. If the marketplace of ideas worked as advertised, not only would this kind of corruption be absent, it would be impossible in general for ideas to stay rejected for hundreds or thousands of years before eventually being revived. Yet that too has repeatedly happened.

While the return of flat-Earth theories is silly and rather alarming, meanwhile, it also illustrates some real and deep issues about human knowledge. How, after all, do you or I know that the Earth really is round? Essentially, we take it on trust. We may have experienced some common indications of it ourselves, but we accept the explanations of others. The experts all say the Earth is round; we believe them, and get on with our lives. Rejecting the economic consensus that Brexit would be bad for the UK, Michael Gove said that the British public had had enough of experts (or at least of experts who lurked in acronymically named organisations), but the truth is that we all depend on experts for most of what we think we know.

The second issue is that we cannot actually know for sure that the way the world appears to us is not actually the result of some giant conspiracy or deception. The modern flat-Earth theory comes quite close to an even more all-encompassing species of conspiracy theory. As some philosophers have argued, it is not entirely impossible that God created the whole universe, including fossils, ourselves and all our (false) memories, only five minutes ago. Or it might be the case that all my sensory impressions are being fed to my brain by a clever demon intent on deceiving me (Descartes) or by a virtual-reality program controlled by evil sentient artificial intelligences (The Matrix).

The resurgence of flat-Earth theory has also spawned many web pages that employ mathematics, science, and everyday experience to explain why the world actually is round. This is a boon for public education. And we should not give in to the temptation to conclude that belief in a conspiracy is prima facie evidence of stupidity. Evidently, conspiracies really happen. Members of al-Qaida really did conspire in secret to fly planes into the World Trade Center. And, as Edward Snowden revealed, the American and British intelligence services really did conspire in secret to intercept the electronic communications of millions of ordinary citizens. Perhaps the most colourful official conspiracy that we now know of happened in China. When the half-millennium-old Tiananmen Gate was found to be falling down in the 1960s, it was secretly replaced, bit by bit, with an exact replica, in a successful conspiracy that involved nearly 3,000 people who managed to keep it a secret for years.

Indeed, a healthy openness to conspiracy may be said to underlie much honest intellectual inquiry. This is how the physicist Frank Wilczek puts it: “When I was growing up, I loved the idea that great powers and secret meanings lurk behind the appearance of things.” Newton’s grand idea of an invisible force (gravity) running the universe was definitely a cosmological conspiracy theory in this sense. Yes, many conspiracy theories are zombies – but so is the idea that conspiracies never happen.

 
‘When the half-millennium-old Tiananmen Gate was found to be falling down in the 1960s, it was secretly replaced, bit by bit, with an exact replica’ Photograph: Kevin Frayer/Getty Images

Things are better, one assumes, in the rarefied marketplace of scientific ideas. There, the revered scientific journals have rigorous editorial standards. Zombies and other market failures are thereby prevented. Not so fast. Remember the tongue map. It turns out that the marketplace of scientific ideas is not perfect either.
The scientific community operates according to the system of peer review, in which an article submitted to a journal will be sent out by the editor to several anonymous referees who are expert in the field and will give a considered view on whether the paper is worthy of publication, or will be worthy if revised. (In Britain, the Royal Society began to seek such reports in 1832.) The barriers to entry for the best journals in the sciences and humanities mean that – at least in theory – it is impossible to publish clownish, evidence-free hypotheses.

But there are increasing rumblings in the academic world itself that peer review is fundamentally broken. Even that it actively suppresses good new ideas while letting through a multitude of very bad ones. “False positives and exaggerated results in peer-reviewed scientific studies have reached epidemic proportions in recent years,” reported Scientific American magazine in 2011. Indeed, the writer of that column, a professor of medicine named John Ioannidis, had previously published a famous paper titled Why Most Published Research Findings Are False. The issues, he noted, are particularly severe in healthcare research, in which conflicts of interest arise because studies are funded by large drug companies, but there is also a big problem in psychology.

Take the widely popularised idea of priming. In 1996, a paper was published claiming that experimental subjects who had been verbally primed to think of old age by being made to think about words such as bingo, Florida, grey, and wrinkles subsequently walked more slowly when they left the laboratory than those who had not been primed. It was a dazzling idea, and led to a flurry of other findings that priming could affect how well you did on a quiz, or how polite you were to a stranger. In recent years, however, researchers have become suspicious, and have not been able to generate the same findings as many of the early studies. This is not definitive proof of falsity, but it does show that publication in a peer-reviewed journal is no guarantee of reliability. Psychology, some argue, is currently going through a crisis in replicability, which Daniel Kahneman has called a looming “train wreck” for the field as a whole.

Could priming be a future zombie idea? Well, most people think it unlikely that all such priming effects will be refuted, since there is now such a wide variety of studies on them. The more interesting problem is to work out what scientists call the idea’s “ecological validity” – that is, how well do the effects translate from the artificial simplicity of the lab situation to the ungovernable messiness of real life? This controversy in psychology just shows science working as it should – being self-correcting. One marketplace-of-ideas problem here, though, is that papers with surprising and socially intriguing results will be described throughout the media, and lauded as definitive evidence in popularising books, as soon as they are published, and long before awkward second questions begin to be asked.




China’s memory manipulators



It would be sensible, for a start, for us to make the apparently trivial rhetorical adjustment from the popular phrase “studies show …” and limit ourselves to phrases such as “studies suggest” or “studies indicate”. After all, “showing” strongly implies proving, which is all too rare an activity outside mathematics. Studies can always be reconsidered. That is part of their power.

Nearly every academic inquirer I talked to while researching this subject says that the interface of research with publishing is seriously flawed. Partly because the incentives are all wrong – a “publish or perish” culture rewards academics for quantity of published research over quality. And partly because of the issue of “publication bias”: the studies that get published are the ones that have yielded hoped-for results. Studies that fail to show what they hoped for end up languishing in desk drawers.

One reform suggested by many people to counteract publication bias would be to encourage the publication of more “negative findings” – papers where a hypothesis was not backed up by the experiment performed. One problem, of course, is that such findings are not very exciting. Negative results do not make headlines. (And they sound all the duller for being called “negative findings”, rather than being framed as positive discoveries that some ideas won’t fly.)

The publication-bias issue is even more pressing in the field of medicine, where it is estimated that the results of around half of all trials conducted are never published at all, because their results are negative. “When half the evidence is withheld,” writes the medical researcher Ben Goldacre, “doctors and patients cannot make informed decisions about which treatment is best.”Accordingly, Goldacre has kickstarted a campaigning group named AllTrials to demand that all results be published.

When lives are not directly at stake, however, it might be difficult to publish more negative findings in other areas of science. One idea, floated by the Economist, is that “Journals should allocate space for ‘uninteresting’ work, and grant-givers should set aside money to pay for it.” It sounds splendid, to have a section in journals for tedious results, or maybe an entire journal dedicated to boring and perfectly unsurprising research. But good luck getting anyone to fund it.

The good news, though, is that some of the flaws in the marketplace of scientific ideas might be hidden strengths. It’s true that some people think peer review, at its glacial pace and with its bias towards the existing consensus, works to actively repress new ideas that are challenging to received opinion. Notoriously, for example, the paper that first announced the invention of graphene – a way of arranging carbon in a sheet only a single atom thick – was rejected by Nature in 2004 on the grounds that it was simply “impossible”. But that idea was too impressive to be suppressed; in fact, the authors of the graphene paper had it published in Science magazine only six months later. Most people have faith that very well-grounded results will find their way through the system. Yet it is right that doing so should be difficult. If this marketplace were more liquid and efficient, we would be overwhelmed with speculative nonsense. Even peremptory or aggressive dismissals of new findings have a crucial place in the intellectual ecology. Science would not be so robust a means of investigating the world if it eagerly embraced every shiny new idea that comes along. It has to put on a stern face and say: “Impress me.” Great ideas may well face a lot of necessary resistance, and take a long time to gain traction. And we wouldn’t wish things to be otherwise.

In many ways, then, the marketplace of ideas does not work as advertised: it is not efficient, there are frequent crashes and failures, and dangerous products often win out, to widespread surprise and dismay. It is important to rethink the notion that the best ideas reliably rise to the top: that itself is a zombie idea, which helps entrench powerful interests. Yet even zombie ideas can still be useful when they motivate energetic refutations that advance public education. Yes, we may regret that people often turn to the past to renew an old theory such as flat-Earthism, which really should have stayed dead. But some conspiracies are real, and science is always engaged in trying to uncover the hidden powers behind what we see. The resurrection of zombie ideas, as well as the stubborn rejection of promising new ones, can both be important mechanisms for the advancement of human understanding.

Wednesday 27 April 2016

Jeremy Hunt doesn’t understand junior doctors. He co-wrote a book on how to dismantle the NHS

Frankie Boyle in The Guardian


The health secretary’s name is so redolent of upper-class brutality he belongs in a Martin Amis book where working-class people are called Dave Rubbish

 
Jeremy Hunt: overtly ridiculous. Photograph: Mark Thomas/Rex Shutterstock




One of the worst things for doctors must be that, after seven years of study and then another decade of continuing professional exams, patients come in telling them they’re wrong after spending 20 minutes on Google. So imagine how doctors must feel about Jeremy Hunt, who hasn’t even had the decency to go on the internet.

Consider how desperate these doctors are: so desperate that they want to talk to Jeremy Hunt. Surely even Hunt’s wife would rather spend a sleepless 72 hours gazing into a cracked open ribcage than talk to him. Hunt won’t speak to the doctors, even though doctors are the people who know how hospitals work. Hunt’s only other job was founding Hotcourses magazine: his areas of expertise are how to bulletpoint a list and make dog grooming look like a viable career change.

Of course, the strikers are saying this is about safety, not pay, as expecting to be paid a decent wage for a difficult and highly skilled job is now considered selfish.
Surely expecting someone to work for free while people all around them are dying of cancer is only appropriate for the early stages of The X Factor. Sadly, Tories don’t understand why someone would stay in a job for decency and love when their mother was never around long enough to find out what language the nanny spoke.

The fact that Hunt co-wrote a book about how to dismantle the NHS makes him feel like a broad stroke in a heavy-handed satire. Even the name Jeremy Hunt is so redolent of upper-class brutality that it feels like he belongs in one of those Martin Amis books where working-class people are called things like Dave Rubbish and Billy Darts (No shade, Martin – I’m just a joke writer: I envy real writers, their metaphors and similes taking off into the imagination sky like big birds or something). Indeed, Jeremy Hunt is so overtly ridiculous that he might be best thought of as a sort of rodeo clown, put there simply there to distract the enraged public.

I sympathise a little with Hunt – he was born into military aristocracy, a cousin of the Queen, went to Charterhouse, then Oxford, then into PR: trying to get him to understand the life of an overworked student nurse is like trying to get an Amazonian tree frog to understand the plot of Blade Runner. Hunt doesn’t understand the need to pay doctors – he’s part of a ruling class that doesn’t understand that the desire to cut someone open and rearrange their internal organs can come from a desire to help others, and not just because of insanity caused by hereditary syphilis.

The government believes that death rates are going up because doctors are lazy, rather than because we’ve started making disabled people work on building sites. Indeed, death rates in the NHS are going up, albeit largely among doctors. From the steel mines where child slaves gather surgical steel, all the way up to senior doctors working 36 hours on no sleep, the most healthy people in the NHS are actually the patients. This is before we get to plans for bursaries to be withdrawn from student nurses, so that we’re now essentially asking them to pay to work. Student nurses are essential; not only are they a vital part of staffing hospitals, they’re usually the only people there able to smile at a dying patient without screaming: “TAKE ME WITH YOU!”

The real reason more people die at weekends is that British people have to be really sick to stay in hospital at the weekend, as hospitals tend not to have a bar. We have a fairly low proportion of people who are doctors, don’t plan to invest in training any more, and are too racist to import them. So we’re shuffling around the doctors we do have to the weekend, when not a lot of people are admitted, from the week, when it’s busy. This is part of a conscious strategy to run the service down to a point where privatisation can be sold to the public as a way of improving things.

Naturally, things won’t actually be improved; they’ll be sold to something like Virgin Health. Virgin can’t get the toilets to work on a train from Glasgow to London, so it’s time we encouraged it to branch out into something less challenging like transplant surgery. With the rate the NHS is being privatised, it won’t be long before consultations will be done via Skype with a doctor in Bangalore. Thank God we’re raising a generation who are so comfortable getting naked online. “I’m afraid it looks like you’ve had a stroke. No, my mistake – you’re just buffering.”

When I was little, I was in hospital for a few days. The boy in the next bed was an officious little guy who took me on a tour of the ward. He’d sort of appointed himself as an auxiliary nurse and would help out around the place, tidying up the toys in the playroom, and giving all the nurses a very formal “Good Morning”, which always made me laugh. I got jelly and ice-cream one evening (I’d had my tonsils out) and they brought him some, too. Afterwards, he threw his spoon triumphantly into his plate and laughed till there were tears in his eyes. Then he tidied up and took our plates back to the trolley. What he meant by all this (we’d sit up at night talking and waiting for trains to go by in the distance) is that this was the first place he’d known any real kindness and he wished to return it. For most of us it will be the last place we know kindness. How sad that we have allowed it to fall into the hands of dreadful people who know no compassion at all, not even for themselves.

Tuesday 9 February 2016

This NHS crisis is not economic. It's political

Aditya Chakrabortty in The Guardian


As the health services endures its biggest squeeze, talk of it being unviable is wide of the mark. We cannot afford to do without it


 
Patients wait for spaces in A&E at Royal Stoke university hospital in Stoke-on-Trent. A&E waiting time targets have been watered down in recent years. Photograph: Alicia Canter for the Guardian


How many times have you read that the NHS is bust? No need for answers on a postcard: I can tell you.

Over 2015, the number of national newspaper headlines featuring “NHS” alongside the words bust, deficit, meltdown or financial crisis came to a grand total of 80. Call this the NHS panic index – a measure of public anxiety over the viability of our health service. Using a database of all national newspapers, our librarians added up the number of such headlines for each year. The index shows that panic over the sustainability of our healthcare isn’t just on the rise ­– it has begun to soar.


During the whole of 2009, just two pieces appeared warning of financial crisis in the NHS. By 2012 that had nudged up a bit, to 12. Then came liftoff: the bust headlines more than doubled to 30 in 2013, before nearly tripling to 82 in 2014. Newspapers such as this one now regularly carry warnings that our entire system of healthcare could go bankrupt – unless, that is, radical change ­are made. For David Prior, the then chair of the health watchdog the Care Quality Commission - and now health minister, that means giving more of the system to private companies.

This means that the press and political classes are now discussing a theoretical impossibility. Think about it for a moment, and you realise the NHS can’t go broke. It’s not an endowment with a set pot of cash, but a giant service with a yearly budget. Unlike a business, it doesn’t need to raise money from sales – as taxpayers and voters, we have the final say over how much funding it gets. This panic isn’t economic at all, but politically created.

The balance to be struck with the NHS, as with all public services, is between how much cash we sink into it and how much we expect in return. Give the NHS less money, get less healthcare. Give it more, and the opposite happens. As Rowena Crawford at the Institute for Fiscal Studies says: “Financial stability just requires that healthcare demand and expectations are constrained to match the available funding.”

And that right there is the rub. Because the NHS is enduring the sharpest and most prolonged spending squeeze in its history – even while the government pretends no such thing is happening and the public expect the same service. Our health service is where all the paradoxes of austerity come home to roost.

This may seem an odd thing to say. Isn’t the NHS one of the very few parts of the public realm to be sheltered from this decade’s cuts? Didn’t David Cameron promise before the last general election to “protect the NHS budget and continue to invest more”?



  David Cameron addresses the Tory conference in October 2014. Photograph: Facundo Arrizabalaga/EPA

The figures suggest otherwise. True, the NHS is seeing a rise in its funding. Between 2010 and 2014, health spending went up 0.8% each year, adjusting for inflation. A plus sign in front, granted, but a teeny-tiny one – since its creation in 1948, the health service has never had it so bad. Over this decade as a whole, that allocation will amount to 1.2% a year, which is way down on the average 3.7% that health spending grew each year between 1949 and 1979. And, coming after the 6.7% extra that Gordon Brown was shovelling in annually by the time of the banking crash, it feels like a recession.

So on the one hand, you have a healthcare system that can cause even the most secular of Brits to get religion, that can drive Telegraph-reading colonels to channel their inner Nye Bevan – hell, that even beats Justin Bieber to a Christmas No 1. And on the other you have a Tory prime minister who wants to cut public spending but knows that harming the NHS will be electoral poison.

Put the two together and what do you get? A dangerous muddle of overspending, frontline service cuts and political self-denial.

Cameron pretends the NHS isn’t on austerity rations and expects it to do the same work to pretty much the same targets. The various parts of the NHS try to do just that with a budget smaller than they need, with the result that they begin missing targets and making cuts even while breaking their budgets.

Take the A&E waiting times. Under Labour, the old rule was that 98% of patients must be seen within four hours. Soon after Cameron moved into Downing Street in 2010, the target was watered down to 95% of patients – even so it is now routinely missed. The number of patients stuck on trolleys in A&E, while staff try to find them beds is now at levels that “no civilised society should tolerate”, according to the Royal College of Emergency Medicine .

Even while falling short, arm after arm of the NHS is now in the red: 95% of hospital and other acute care providers in England plunged into deficit in the first half of the financial year starting in April, joining 80% of ambulance providers and 46% of those in mental health.

Demoralised staff can resign, go on an agency book, pick their shifts and earn more

You might treat all this as argument for NHS staff to be more productive. Except that, as John Appleby of the King’s Fund thinktank argues, they are. He calculates that, had NHS activity only gone up in line with government money, between 2010 and 2015 it would have treated 3.7 million fewer outpatients and 4.5 million fewer A&E patients than actually got seen.

This is productivity as doing more with less, which is almost always unsustainable. A real increase in productivity would come from doing things differently. There’s certainly scope to do that – by doing more phone consultations with GPs, perhaps, or upgrading technology. One joke among NHS professionals runs that, in all of China, there’s but one factory left still making fax machines, and that its only client is the NHS. But this sort of change is never going to come in an organisation now in a frenzy of cost-cutting.

One example of NHS austerity’s screwy logic is its sudden reliance on expensive agency staff. This, says Anita Charlesworth of the Health Foundation charity, is a direct result of staff pay freezes and overwork: “If you’re a permanent member of staff and you’ve had no pay rise and you’re demoralised and disengaged you can resign from the NHS, you can go on an agency book, you can pick your shifts, you can pick your wards and you earn more.”

The result is that agency staff costs are rising at over 25% a year.


Meanwhile, NHS England pretends it can cap hospital deficits for the year at £2.2bn – even though in the first six months alone that had already hit £1.6bn . Some of Britain’s biggest and most renowned hospitals are now actively planning on ending the year in the red. And Appleby points out that everything from patient time with doctors and nurses to repairs of your local hospital’s roof is being sacrificed in order to do the same work with less money.

“I can see another Jennifer’s ear coming,” Appleby says, referring to the five-year-old with glue ear who waited a year for a simple operation and ended up being used by Neil Kinnock to attack John Major on health spending. “Only this time it probably won’t be something as innocuous as glue ear. It might be a child who dies of cancer because their medical care has been so drastically cut.”

As societies get richer and older, they spend more on healthcare. Compared with nearly everyone else in western Europe, the UK spends much less of its national income on health. By the end of this decade, we will be even further behind. Meanwhile, pundits will continue to claim the entire system is unaffordably expensive, even while the public still want and need doctors and nurses, their medicines and operations.

This is the paradox of austerity: pretending that you can scrap and scrimp on the services and institutions that make you a civilised country, without making your country less civilised.

Thursday 21 January 2016

Wait for a bus and then tell me the market knows best

Deregulation of buses in 1986 was a disaster for those unable to afford a car. Municipalisation is the key to a fairer system

Owen Jones in The Guardian


 

Liverpool’s Queen’s Square bus station. Since 1986, ‘bus trips in big cities outside London have collapsed from 2bn to 1bn a year’. Photograph: Christopher Thomond for the Guardian


Of the issues differentiating the metropolitan mindset in the capital from opinions voiced elsewhere, the starkest is probably transport. We hear much about the overcrowded rail network in London and the south east, where fares are among the most expensive in Europe. Of course we do: much of the national media works from London. And we have warm words for the buses in the capital, where since Ken Livingstone’s first mayoral administration, starting in 2000, the mayoralty and Transport for London have assumed regulatory powers, determining prices and frequency with dramatic success.

Travel outside London, however, and Britain’s deregulated bus system reveals itself as the source of widespread, justified disgruntlement – an overpriced, inefficient, poor-quality mess. According to a report to be published this week, since deregulation in 1986 – unleashed with the promise that “more people would travel” – bus trips in big cities outside London have collapsed from 2bn to 1bn a year. In London, on the other hand, where everything from how much we pay to which routes exist is decided by the mayor and Transport for London, bus use since the 1980s has gone in the opposite direction: from around 1bn to more than 2bn trips a year. Britain’s bus privatisation disaster is a story of profit before need, and a discomfiting tale for those who believe the private sector automatically trumps the public realm.

I asked Twitter for bad experiences of buses, and turned my feed into one long howl of anguish. Chronic delays, “virtually no evening travel”, old “clapped-out buses”, infrequency, poor punctuality, extortionate prices: these were common complaints. “No evening and barely a weekend bus service in Helmsley, North Yorks,” complained one. “Need a car to live here.” Another cry of frustration: “Costly, cash only, fragmented among several providers, no unified ticketing, virtually ends at 1800 hours, v[ery] poor on Sunday.”

It is the less well-off who suffer most. Fewer than one in three of the poorest tenth of the population own their own car. With our bus system in such a state, it is unsurprising that those with the least money are three times more likely to use a cab than the richest.


Our journey towards the great British bus disaster is uncovered in meticulous detail in the report, by Ian Taylor and Lynn Sloman. “Bus users in Britain inhabit different worlds,” they note, ranging from London’s centrally regulated bus system to rural dwellers who “live in a third world with a skeletal service or, in some places, no service at all”. Whatever Margaret Thatcher’s programme of deregulation in the 1980s offered, the opposite happened: fares rose, services worsened and bus use fell.

Private bus companies have one motive, after all: making profit, rather than catering to the needs of their users. Between 2003 and 2013, £2.8bn ended up as dividend payments in the bank balances of shareholders, rather than invested in improving bus services. About 40p in every pound of their total revenues comes directly from the taxpayer: yet another example of Britain’s publicly subsidised “free market” economy.

Bus services are a hopelessly confused patchwork of provision. Some tickets you can use with different providers, some you can’t. You may find enough buses at peak hours but struggle to catch one at other times. If you live in a rural area, you may struggle to find any buses to catch at all. Local authorities can pay for services deemed crucial for local communities, but they do so at great expense. Often the buses themselves are from another age: cold, noisy, rickety vehicles driven by woefully underpaid drivers. Those who can afford to insulate themselves by using their own vehicles can minimise the inconvenience, but that’s not an option for the less fortunate.

Our rail system, we debate. We know that a decisive majority of Britons want to see our railways publicly owned. But where is the debate about rescuing Britain’s bus services?

Bringing buses into accountable, municipal ownership would transform the system. Consider France, or Germany where apparently 88% of local public transport trips are on publicly owned trams, trains or buses, but also look closer to home. In 2013, after running a £8m surplus, municipally owned Lothian Buses in Edinburgh reported satisfaction rates of 96%, beating all competition in Britain. Nottingham City Transport – majority shareholder the city council – has satisfaction rates of 92% in “one of the least car-dependent cities” in Britain.


Here’s what municipalisation can achieve, say Taylor and Sloman. A “comprehensive network” for all communities, without allowing private companies to cherrypick the most profitable routes or obliging local authorities to intervene at “disproportionate cost”. Rather than having a bewildering array of fares, there could be “simple, area-wide fares” that – as in London – could be used across all transport services, from trains to buses, with daily costs capped. Instead of passengers being stuck for the best part of an hour at a freezing bus stop after changing buses, timetables could be coordinated, and public money be spent improving services, not frittered away as shareholder dividends.

We hear so little about buses, undoubtedly, because in London they are good enough for the middle classes to use, while outside the capital those with sharper elbows often avoid them. But here is surely an issue for Labour to champion. Those who suffer the most are often in areas where Labour could do well to try to win support, such as Cornwall, and in many Tory-dominated rural communities. Municipal ownership, with bus passengers encouraged to help run services, would improve the lives of many poorer citizens. There would also be fewer cars on the road. Whether or not Lady Lindsay of Dowhill ever really said “Anybody seen in a bus over the age of 30 has been a failure in life”, the stigma could be overcome for the public good.

Putting the great bus privatisation disaster on the agenda would be another reminder that the inherent superiority of the market is not a foregone conclusion.
This is a rich country. If we cannot even produce a decently functio
ning bus service for our citizens, we need to start asking ourselves some serious questions.

Sunday 3 January 2016

What is TTIP? The controversial trade deal proposal explained

Julia Kollewe in The Guardian

The EU claims it will create millions of jobs and bring down the cost of living – but others say it is a threat to public services such as the NHS
 

An anti-TTIP banner is held aloft at a rally before the G7 summit in Munich in June. Photograph: Wolfgang Rattay/Reuters



If you are not yet familiar with the acronym TTIP it is likely you soon will be. TheTransatlantic Trade and Investment Partnership is a proposed trade agreement and the subject of an ongoing series of negotiations between the EU and US aimed at creating the world’s biggest free trade zone spanning the north Atlantic.

It would dwarf all past free trade deals: the European commission reckons it could boost the size of the EU economy by €120bn (£85bn) – equal to 0.5% of GDP – and the US economy by €95bn – 0.4% of GDP.

It would create several million jobs dependent on exports, Brussels says, while consumers would enjoy cheaper products and services. The average European household of four would be around €500 a year better off as a result of wage increases and price reductions, according to the study commissioned from the Centre for Economic Policy Research in 2013.

The plan is to cut tariff barriers – levies imposed to control cross-border trade – to zero and other non-tariff barriers by 25-50%. The study insists this is a realistic prospect. The business sectors that would benefit most include industries based around metal products, processed food and chemicals, and especially the motor industry.

In the UK (and elsewhere), the main beneficiaries would be big businesses, as smaller firms are less likely to trade outside Britain. The UK could benefit to the tune of £10bn, which means the average household would be £400 a year better off.

The main aim of TTIP is to reduce regulatory barriers to trade, in areas ranging from food safety law to environmental rules and banking regulations. Opponents argue it will water down important EU regulations.

Food safety has become a major stumbling block in the negotiations as both sides prepare for the latest round – the 10th – which takes place from 13 to 17 July in Brussels.

The talks have been conducted largely in secret, but opposition to TTIP is growing on the ground. More than 2 million people in Europe have signed an online petition against the proposed deal. Campaigners have been outspoken about TTIP’s potential dangers and have painted it as a threat to European democracy.
In Britain, MPs on the all-party business, innovations and skills committee havedenounced the government’s firm support for TTIP amid fears for the NHS and other public services.

Concerns are mounting that TTIP could lead to more privatisation, with the prospect of US corporations providing vital UK public services such as transport, education, water and health.





As highlighted in this Guardian video, another major concern is whether standards will drop. For example, the EU bans cosmetics tested on animals but the US does not. Another question is what happens if EU countries want some protection, for instance Italy for its Parma ham, and the UK for its pork pies.
One of the most controversial elements of the trade proposal is the Investor State Dispute Settlement (ISDS) provision. ISDS provisions have been included in many trade deals since the 1980s, to encourage overseas investment in poorer countries. It means private investors can ask a tribunal of international arbitratorsto judge if a government has treated them unfairly – and can get compensation.

Over the past decade some big, mainly American companies, such as tobacco conglomerate Philip Morris, have used ISDS to claim rights. The provision would in theory allow private investors to sue governments for the loss of future profits due to decisions made by national parliaments. Critics say it could be used to attack the UK’s NHS by making privatisations of specific services harder to reverse.




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TTIP: the key to freer trade, or corporate greed?


Some say the US/EU trade deal that could be agreed this year will open up markets and promote UK growth. Others fear it will drive down wages and promote privatisation

Philip Inman in The Guardian


Cheap American olive oil could, in a few years’ time, be sitting on supermarket shelves next to the Tuscan single estate varieties loved by British foodies. At present a prohibitive tariff on US imports effectively prices them out of contention.

But a groundbreaking trade deal could lower the $1,680-a-tonne tariff on US olive oil to match the $34 a tonne the US charges on imports from the EU. Or the tariffs could disappear altogether. Either way, Greek, Spanish and Italian olive farmers must fear the Transatlantic Trade and Investment Partnership (TTIP), a deal that aims to create a level playing field between them and massive US agri-businesses.

Trade deals were once seen as a panacea for global poverty. In the 1990s, the World Trade Organisation was formed to harmonise cross-border regulations on everything from cars to pharmaceuticals and cut tariffs in order to promote the free flow of goods and services around the world.

There was always a fear that, far from being a winning formula for all, lower tariffs would favour the rich and powerful and crucify small producers, who would struggle to compete in an unprotected environment.

The effects of the North American Free Trade Agreement (Nafta), signed by the US, Mexico and Canada in 1993, appeared to justify that fear: it became in later years a cause celebre for anti-poverty campaigners, angered by the plight of Mexican workers. Not only were they subjected to low wages and poor working conditions by newly relocated US corporations – and, as consumers, to the relentless marketing power of Walmart, Coca Cola and the rest – but the major fringe benefit of cutting corruption remained illusory.

This year the US hopes to sign what many believe will be Nafta’s direct successor – TTIP. Should it get the green light from Congress and the EU commission, the agreement will be a bilateral treaty between Europe and the US, and, just like Nafta before it, outside the ambit of a gridlocked WTO.

Supporters say it will be an improvement on its predecessor because the main proponents are a liberal US president and a European commission that considers itself concerned with workers and consumers. Why, the commission asks, would 28 relatively affluent member states with concerns about high unemployment, stagnant wages, welfare provision and climate change agree to a charter that undermines workers’ rights, attacks public services or reduces environmental regulations?

TTIP is also billed as an agreement between equals that allows both sides to promote trade: it is claimed that the UK’s national income could be raised by £4bn-£10bn annually, or up to £100bn over 10 years. That amounts to a 0.3 percentage point boost to GDP, which would have pushed this year’s expected 2.4% growth to 2.7%.


  An anti-TTIP demonstration in Berlin this year. Photograph: Wolfram Steinberg/EPA

But it strikes fear into the hearts of many, who believe it to be a Trojan horse for rapacious corporations. These corporations, hellbent on driving down costs to enhance shareholder value, spell the end for Europe’s cosy welfare states and their ability to shield fledgling or, in the case of steel and coal, declining industries from the harsh realities of open competition.

TTIP has been compared to the 1846 Corn Law abolition, which either swept away protectionist tariffs that impoverished millions of workers, or protected a vital source of food and led Karl Marx to ask: “What is free trade under the present condition of society?” His answer was: “It is the freedom which capital has to crush the worker.” Is that the case with TTIP? Here are five key factors to consider.

Health and public services

From the moment TTIP became part of President Barack Obama’s growth strategy, critics have feared that he little realised the expansionary intentions of US healthcare companies or was too distracted to care. The concern relates to the prospect of EU countries, under pressure from rising healthcare costs, handing over major parts of healthcare provision to the private sector. Once services are in private hands, say critics, TTIP rules will prevent them being taken back into state control.

Since these fears were voiced, trade negotiators have excluded provisions that would have allowed firms to sue governments for the loss of health and public services contracts once they expired. This allows the UK’s rail franchise system and the contracting-out of health services to continue under time-limited contracts.

But the US private health industry, which is the largest in the world, views a Europe struggling with the needs of an ageing baby-boomer generation as ripe for the picking. For this reason alone, contracting out the distribution of drugs, the supply of medical devices and the provision of vital services could prove irresistible.

Dispute resolution

A little known facet of every trade deal is a separate form of arbitration for the businesses covered by the agreement, allowing them to avoid the civil courts. As such, the investor-state dispute resolution (ISDS) gives foreign investors the power to sue a government for introducing legislation that harms their investment.

Famously, it was used by big tobacco to sue the Australian government when it introduced plain cigarette packaging. Before and after the scandal, other governments have come under legal challenge from corporations concerned that public policymaking is denying them revenues.

In spring 2014, UN official and human rights lawyer Alfred de Zayas called for a moratorium on TTIP negotiations until ISDS was excluded. He warned that the secret court tribunals held to settle trade disputes were undemocratic. Their reliance on a small group of specialist lawyers also meant that arbitrators sitting in judgment were the ones who at other times represented corporate clients.

De Zayas feared that smaller states would find themselves in the same position as many governments in trade disputes, suffering huge legal bills and long delays to public policy reforms.
He was joined in his mission by NGOs and, most importantly, by MEPs in Strasbourg.

As a first concession, the US side agreed to prohibit “brass-plate” firms – those that exist only by name in a county, without any employees or activity – from suing a government. This aimed to prevent a repeat of the Australia incident when the Ukrainian arm of tobacco firm Philip Morris, effectively a brass-plate entity, spearheaded the attack on plain packaging.


  European commissioner Cecilia Malmström has proposed an international court of arbitration to settle investor disputes. Photograph: Emmanuel Dunand/Getty

Many EU politicians said this concession was too easy to circumvent, leaving corporations in a powerful position. So Europe’s chief negotiator, Swedish commissioner Cecilia Malmström, hatched a scheme for an international court of arbitration – an open public forum instead of the private court system. Even her critics said it was a bold move, and unlikely to be accepted by the Americans.

Washington has countered with proposals for a more transparent ISDS court, with live-streamed meetings and the publication of all documents. Not enough, says de Zayas, who wrote recently: “Alas, countless ISDS awards have shown a business bias that shocks the conscience. To the extent that the procedures are not transparent, the arbitrators are not always independent and the annulment procedure is nearly useless, ISDS should be abolished as incompatible with article 14(1) of the ICCPR [International Covenant on Civil and Political Rights] which requires that all suits at law be decided by independent and competent tribunals under the rule of law.”

The two sides have yet to formally discuss either proposal: under deals between the US and Japan and the EU and Canada the issue was barely mentioned, but it is now expected to be among the most contentious.

Regulations

Michael Froman, the US chief negotiator, described the task of harmonising regulations as follows: “For years the US and EU have accepted each other’s inspection of aeroplanes because it was obvious they would not be able to check all the planes landing in their jurisdiction. We seek to expand this practice to other areas.”

So how would Froman apply this to the fact that American cars will still be left-hand drive, restricting their use on British roads? He argues that the cost of imported cars, research and development and testing can still benefit from the harmonisation of regulations on either side of the Atlantic.

Yet there is nothing US food regulators would like less than to accept processed foods tested by EU officials who failed to spot the horsemeat scandal.

And EU regulators are duty bound to reject GM foods, after sustained protests by Europe’s consumers in direct conflict with US farmers. Washington claims it will accept the science when it applies to regulations, which supports GM foods being accepted by the EU as part of TTIP, just as it is part of the WTO agreement.

Tariffs

Dispensing with tariffs seems like a straightforward process compared with tackling complex regulations. Under TTIP, tariffs on goods and services should disappear, though it is expected that some will only be reduced, and others may take years to go the way of history.

Under the Trans Pacific Partnership (TPP) recently agreed, but not yet implemented, between the US, Japan, Australia, Vietnam and other East Asian countries, all goods, from pork to cars, are covered.

A good example of how long it can take for tariffs to come down is found in the case of the 2.5% rate slapped on Japanese car imports to the US: this will start to be incrementally lowered 15 years after the agreement takes effect, halved in 20 years and eliminated in 25 years. In return, Japan will, among other things, lower its tariff on imported beef from 38.5% to 9% over 16 years. A similar programme could be possible under TTIP, with olive oil tariffs lowered over 25 years.

Labour standards and workers’ rights


Japanese trade unions supported the TPP deal, and unions in Europe are expected to follow suit with TTIP. They accept that labour protection rules lie outside the scope of a deal, and that their governments can therefore continue to implement minimum wage legislation and other supportive measures without being sanctioned.

But unions, where they exist, tend to represent workers in successful industries, which naturally welcome access to wider markets. Workers in weaker areas of the economy could find their jobs coming under pressure from harmonised regulations, lower tariffs, or even just exposure to a US rival with a work ethic that denies most employees more than two weeks’ holiday a year.

TTIP is important to the UK government because the US is our biggest market for goods and services outside the EU. It’s seen as especially important for small and medium-sized businesses, which appreciate the lack of language barrier. Britain also has a trade surplus with the US: we export more than we import, which helps counterbalance the country’s huge trade deficit.

Such is the momentum behind the talks that a deal could be agreed by the end of the year, and go before Congress and EU parliaments in 2017. Both sides claim to be making good progress. But the dispute over ISDS and protests from farmers could yet quash Obama’s hopes for US olive oil sales.

Tuesday 28 July 2015

Greek debt crisis: A tale of ritual humiliation

Mark Steel in The Independent

What a relief that the Greeks have finally seen sense, and agreed to Angela Merkel’s demand that their Prime Minister Alexis Tsipras must scrub Berlin with a dishcloth, and crawl along the banks of the Rhine in a thong barking like a dog.

The week before he’d agreed to dress as a fairy and sing “The Good Ship Lollipop” while German children poked him with stinging nettles, but now that isn’t enough. So he has to accept even more measures essential to stabilising the Greek economy, such as being hosed down with kebab fat while naming the German squad that won the 1954 World Cup.

Otherwise, as EU leaders made clear, there would be no way Greece could stay inside the solar system; they’d have to orbit a different star in a faraway galaxy, which could be extremely damaging to the Greek tourist industry.

Instead of inviting further chaos by leaving Greece in the hands of the Greeks, their finances have been handed over entirely to the only people we can trust to behave responsibly at all times: the banks. Thank the Lord we’ve got at least one institution that has never behaved irresponsibly or recklessly in any way.

Perhaps the Greeks should have gone to Brussels and said they were rebranding Greece, so it’s no longer a country, but a bank. They’d have been bailed out by lunch and given a free set of steak knives as an extra gift. Instead they’ve got to sell off their entire country. By Christmas you’ll be able to buy a family ticket for 300 quid to visit the Domino’s Parthenon, where you can watch a parade of philosophers dressed as your favourite pizzas, with Pythagoras pepperoni proving a particular favourite, then scream your way down the Acropolis on a log flume.

One of the main demands in the final deal is that the Greek state must sell off €50bn-worth of its assets, which amounts to everything it has. This is part of the drive to make the economy stable and efficient. This works as long as you assume privatisation unarguably makes an industry more efficient. Obviously there are examples such as the railways in Britain, where privatisation has resulted in cheap reliable trains on which you can always get a seat, it’s easy to buy tickets across different rail networks, and customers are even offered delightful unscheduled 40-minute stops outside London Bridge station to give you the opportunity to paint the view of a gasworks in Bermondsey.

The demands placed on Greece are so extreme that even the International Monetary Fund has declared them “unsustainable”. The IMF is the body that has spent 50 years forcing countries such as Tanzania and Haiti to cut wages and sell off its possessions, in return for loans it needs so it can pay off the interest on the last lot of money it borrowed (from the IMF). So when it says the demands on Greece are too harsh, it’s like making the leader of Isis say, “Steady on, that’s a bit too Islamic”.

Still, someone has to tell the Greeks they can’t expect to carry on getting something for nothing. And the European Central Bank and national central banks – who, according to the Jubilee Debt Campaign, “stand to make between €10bn and €22bn out of Greek repayments” – are exactly the right people to deliver that stern but fair message.

Christine Lagarde, managing director of the IMF, is paid a salary of €550,000 a year, and by special arrangement pays no tax on that whatsoever. So she’s certainly the right person to lecture the Greeks, because she’s never been behind on her tax payments once. Every month she dutifully pays her nothing bang on time; she understands the importance of behaving responsibly with public money.

The most perplexing part of this story is that, a few days ago, it seemed as if Alexis Tsipras and his party, Syriza, were set to resist the orders being thrown at them, especially as they’d gone to the trouble of winning a referendum on whether to accept the EU demands. I suppose Tsipras thought that when the majority of Greeks voted against, it was because they felt those demands weren’t harsh enough, and they deserved to be punished much more severely as they’d all been very naughty.

Because Tsipras went into negotiations making it clear he was desperate to keep Greece in the eurozone, the EU could demand whatever it liked, knowing he’d accept anything rather than abandon the euro.

That sounds like going into a car showroom and saying, “I desperately need a car right now and I’ll have anything rather than leave without one”. A salesman could say, “We’ve only got this one, it’s got no engine and the windscreen’s made of wood and it pongs as a family of weasels live on the back seat and the bonnet’s on fire, it’s £10,000”, and you’d have no choice but to take it.

But maybe he did have a choice, to tell the banks they’ve made plenty out of Greece as it is and so, on balance, the elected government had decided to go along with what the Greeks voted for twice in a few months – wasting their money on schools and old people in villages, rather than do the sensible thing and hand over every coin as interest payments to institutions such as Goldman Sachs.

They’d have been kicked out of the eurozone, and probably out of Uefa and the Eurovision Song Contest, and scratched off the Inter-rail map too. But they’d have been a little beacon for everyone across Europe who feels the banks aren’t acting entirely in our interests, probably enough people to worry Angela Merkel just a bit.

Sunday 19 April 2015

These Tory quacks and charlatans are beyond belief


Armando Ianucci in The Guardian
For some time now, Conservative strategist Lynton Crosby has been reassuring his adopted party they will reach “crossover”. This is the term he’s been using to describe the moment when they take over the lead from Labour in the polls and push ahead.

The date of crossover, rather like the rapture, keeps being pushed back. It was meant to be Christmas last year, but nothing of significance happened then apart from a particularly good Dr Who special. January was also disappointing, February was frigging desolate and March passed without a squeak. Now we’re in the middle of April, what TS Eliot described as “the cruellest month”: for the Tories that’s proved true, with Labour and Conservative still stuck on more or less 33%.


It would be easy then for David Cameron to give up on Mr Crosby and his promise of good polls ahead; except, he can’t. Lynton Crosby is his Designated Bastard, the man his party has paid fistfuls of money to order all of them about and get them to do whatever it takes to win. It’s the stuff of tradition for Tory governments to get in an expensive Designated Bastard at election time; it’s the line of life, a cycle of comfort. The Designated Bastard arrives, tells them not to be pussies, puts up posters about Labour’s tax bombshells, flashes up cartoons of the Labour leader in the pocket of someone, or being the poodle of someone, sitting on someone’s lap, wearing someone’s hair, or being stuck up someone’s arse.
Usually, the party pays devoted attention to the Designated Bastard. First, because he’s so expensive but really because he’s such a Bastard. He gets them to do things they’ve spent the past five years being ordered not to under any circumstances. For five years, they’ve been clenching their teeth and talking about partnership and coalition. They’ve been pushing Big Societies and feeling everyone’s pain by sobbing that we’re all in it together.
Then the Designated Bastard comes along and tells them it’s OK now to junk all that, to accept that most of us voters are mean and self-interested, and that any appeal to our immediate material needs and to our deepest fears will work. The Designated Bastard will explain to them that to win, they’ll need to ignore those who won’t vote for them, and, if need be, to legislate against them. If it involves pushing welfare cuts for the young unemployed in order to pledge cuts to inheritance tax for the wealthier, then that’s what needs to be done. If it involves tempting council home occupants with the right to buy, at the expense of an already depleted social housing market, then it’s just tough teats to everyone. He’s a Bastard and he’s just telling you what you already know but never thought yourself capable of: you need to go in and display your inner Bastard to your constituents. It’s always worked and like the sun coming up it will happen again.
Except, this time, it seems not to be. Lynton Crossover hasn’t worked. And that’s a problem, since there is no plan B. The Tories believe in tradition and the tradition has always been that being a Bastard works. So panic sets in. Once panic starts, rational political behaviour falls apart. Hence the true “crossover” we got last week – the much commented on swapping of clothes brazenly taking part in the Labour and Conservative manifestos. Labour painted themselves as the party of fiscal rectitude, while the Tories went crazy on uncosted spending commitments. In this crazy looking-glass politics, Labour turn out to be the party with the most conservative financial commitment to the NHS, while the Conservatives are the most profligate.
This muddle has been a long time coming. For decades now, each main party has been defining itself on how similar it is to the other and how different it is from its own past. New Labour stole Thatcherite prudence and Cameroonian Conservativism detoxified its nasty image by going green and socially aware. Like two galaxies drawing closer to each other, it’s no wonder they ended up in a massive swirl of confusion. The spinning can’t be stopped: if anything, it gets faster and faster until you can’t tell which one is which.
Labour’s paranoia about looking like Old Labour I can understand: battered for so long by a mostly rightwing press, it still clings to a suspicion that even in this digital age the old tabloid headlines still affect people’s opinion. The Tory volte-face I find truly extraordinary, though. Normally, this type of trickery is done with just words. Last election, it was the verbal gymnastics contained in such slogans as “Vote Blue, Go Green” or that most perfect of semantic paradoxes, “Vote for Change: Vote Conservative”. It’s a basic trick with words, in which you take a word and insist it means its opposite. The more you insist, the greater chance people will believe you.
This time round, though, there is something desperate about the trick. They will “spend” on the NHS more than Labour, but that spending will be funded by carrying on with their “track record” on the economy. They’ll block Scottish MP’s voting on certain tax laws but that will somehow keep the UK united. They will rail against recklessness, but concede a European referendum to stave off a threat to their support and pledge billions in public spending based on no more than an inkling the economy’s going to keep growing.
All this time, they’ll muffle this panic with words such as “steady” and “on course”, words used to conceal an unsteady veer away from stability. They’re like bad magicians who, at the moment of subterfuge, simply shout: “What’s that?” and point to the other side of the room in the hope we’ll turn away.
This isn’t wordplay – this is charlatanism pure and simple. David Cameron is indulging in basic quackery, trying to sell you stuff he knows doesn’t work. He’s doing it with our money and he’s conjuring with people’s lives. We know there’s no magic; the money will come from the cuts and deficit reductions and benefit targets and financial squeezes on those Cameron knows won’t be voting for him anyway. It’s the bastardly misuse of the public purse and the final proof, if any were needed, that he is unfit to lead his country and his party unfit to govern.

Sunday 12 April 2015

Every man, woman and child in Britain is more than £3,400 in debt – without knowing it and without borrowing a single penny


Every man, woman and child in Britain is more than £3,400 in debt – without knowing it and without borrowing a single penny – thanks to the proliferation of controversial deals used to pay for infrastructure such as schools and hospitals.

The UK owes more than £222bn to banks and businesses as a result of Private Finance Initiatives (PFIs) – “buy now, pay later” agreements between the government and private companies on major projects. The startling figure – described by experts as a “financial disaster” – has been calculated as part of an Independent on Sunday analysis of Treasury data on more than 720 PFIs. The analysis has been verified by the National Audit Office (NAO).

The headline debt is based on “unitary charges” which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies.

The situation is expected to worsen as PFI projects spread across the worldThe situation is expected to worsen as PFI projects spread across the world (Getty)


















Basically, a PFI is like a mortgage that the government takes out on behalf of the public. The average annual cost of meeting the terms of the UK’s PFI contracts will be more than £10bn over the next decade.

And the cost of servicing PFIs is growing. Last year, it rose by £5bn. It could rise further, with inflation. The upward creep is the price taxpayers’ pay for a financing system which allows private firms to profit from investing in infrastructure.

An NAO briefing, released last month, says: “In the short term using private finance will reduce reported public spending and government debt figures.” But, longer term, “additional public spending will be required to repay the debt and interest of the original investment”.

A case in point is Britain’s biggest health trust, Barts Health NHS Trust in London, which was placed in special measures last month. It is £93m in debt – struggling under the weight of a 43-year PFI contract under which it will pay back more than £7bn on contracts valued at a fraction of that sum (£1.1bn).

PFI’s were the brainchild of the Conservative Party in the 1990s, but were swiftly embraced by New Labour. Successive governments signed hundreds of the deals. PFI-funded schools, streetlights, prisons, services, police stations and care homes can be found across Britain.

The system has yielded assets valued at £56.5bn. But Britain will pay more than five times that amount under the terms of the PFIs used to create them, and in some cases be left with nothing to show for it, because the PFI agreed to is effectively a leasing agreement. Some £88bn has already been spent, and even if the projected cost between now and 2049/50 does not change, the total PFI bill will be in excess of £310bn. This is more than four times the budget deficit used to justify austerity cuts to government budgets and local services.

Gateway Surgical Centre, London, is run by Barts Health NHS Trust, which is struggling under a £7bn PFIGateway Surgical Centre, London, is run by Barts Health NHS Trust, which is struggling under a £7bn PFI (Alamy)


















Responding to the findings, TUC General Secretary Frances O’Grady said: “Crippling PFI debts are exacerbating the funding crisis across our public services, most obviously in our National Health Service.”

According to Jean Shaoul, professor emerita at Manchester Business School, PFIs have been “an enormous financial disaster in terms of cost”. She added: “Frankly, it’s very corrupt... no rational government, looking at the interests of the citizenry as a whole, would do this.”

Unlike government funding, PFI’s cannot be adjusted to match the economy’s fortunes. They are governed by contracts that often run to thousands of pages. In contrast to the radical cuts to public spending, less than 1 per cent has been trimmed from the total cost of PFI deals since 2012.

Danny Alexander, Chief Secretary to the Treasury, admitted last month: “Too many of the old PFI deals were poorly negotiated... with high costs draining local and national coffers.”

PFI contracts could escalate like America’s subprime mortgage fiascoPFI contracts could escalate like America’s subprime mortgage fiasco (Getty)

















Last year The Independent revealed how firms given 25-year contracts to build and maintain schools doubled their money by selling their shares in the schemes less than five years into the deals. Four – Balfour Beatty, Carillion, Interserve, and Kier – made combined profits of over £300m.

Repeated concerns over projects suffering years of delays and soaring costs have been raised in Parliament in recent years, chiefly via the Public Accounts Select Committee. Its chair, Margaret Hodge, has spoken of Labour’s promotion of the deals during its time in power: “I’m afraid we got it wrong... we got seduced by PFI.”

Allyson Pollock, professor of public health research and policy, Queen Mary University of London, said the diversion of funds from other budgets to PFI payments make the schemes “an engine for closure of public services and further privatisation”.