Be Your Own Dick Tracy

                 

Just walk into the nearest spyware shop, and grab the gizmo of your choice.

Arpita Basu 

In a basement office-cum-showroom off Green Park in south Delhi, a demo is in progress. “Recording time is 12 hours, the images and sounds will be so clear you can see and hear everything,” offers the sales assistant. The customer, a man in his 40s with dark-circled eyes, is convinced; the deal is sealed. In an hour or so, the digital table clock he just bought should be sitting on his bedside table; hopefully, worth every penny of the 12,000-odd rupees he spent on it.

The innocuous clock is in fact a spycam, bought to combat “domestic abuse” in his bedroom, he confesses, even as he advises us on the best cam for our job. There are, after all, plenty of options: caps, wristwatches, sunglasses, buttons, pens, belts, pendants, photo-frames, iPhone lookalikes, cola cans, even chewing gum packs, each fitted with pinhole cameras and tiny recording devices to be your eyes and ears when you need it to be.

For anything from Rs 1,500-Rs 30,000 or more, you can play detective with a lifetime’s supply of spy devices available off the internet, in discreet shops, or through smses peddling the snare ware. A request to an online directory for details of shops selling spyware like pen cameras throws up nine addresses in south Delhi alone. No wonder Bhavna Paliwal, director of Tejas Detective Agency, has had to reluctantly ditch the pen camera as a work tool because it is “so common now”. Clearly, spyware has stealthily attached itself to the underbelly of urban relationships, with spouses, partners, friends and colleagues relying increasingly on guileful gizmos to catch their kith and kin in the act.
Mueen Pasha, founder of the Bangalore-based Spy Zone, has been selling spy gadgets for eight years, but it’s only now that his business is truly thriving—he sells at least a hundred gadgets a month, in the price range of Rs 4,000-Rs 15,000. “Sales have gone up, and in the last two years, family problems have come to the fore. These days working hours are so long that one doesn’t know what is going on at home and some people will go to any lengths to find out.”

In Mumbai, Mahmood, a salesperson in a spyware shop he didn’t want named, says, “Most often people buy these gadgets when they suspect their partners of infidelity. Many discuss their problems in detail, so that we can suggest the best gadget. Others claim they want to fix cameras in their shops or homes after a theft, or to keep an eye on their domestic helps, but we can tell they are lying.”
He has seen enough customers to know that the real reasons may be very different. Sanjay Singh, director of Indian Detective Agency, doesn’t hesitate to call the use of spycams a ‘trend’. “People going for business meetings try to sneak in devices to record conversations. Many who come to us have already tried these DIY spykits,” he says. One woman, he recalls, approached him to help her bring her husband to book. The gentleman in question, she alleged, was enjoying the company of other women behind her back. “I was surprised by the knowledge she had about spy devices!” Singh says.
Paliwal too has had clients trying to cut costs by doing the digging themselves instead of hiring a private eye. “Very often they fail,” she laughs, recounting how a newly-married man tried hiding a tiny camera in the air cooler. Only, he hadn’t factored in his wife’s keen eyesight. “As it turned out, he had no reason to suspect her,” she says. Another client, a professional working in a multinational company, made a mess of “investigations” trying to record his wife entering her office. “Their divorce case was under way, and if he could prove she had got herself a job, he wouldn’t have to shell out maintenance money,” she explains.

So common are these devices, and so diverse their customers, that Devendra, from Anand India’s sales team, finds it difficult to sketch up a client profile. “Aajkal to bahut chal raha hai,” he concedes, counting journalists, lawyers, doctors, wives and husbands among his customers. One popular product, he says, is the spy bug—a matchbox-sized device fitted with a SIM, which can be yours for Rs 3,000. “Once you put the sim into the device, and call that number, you can hear whatever is going on around that device.” If that sounds difficult to pull off, it isn’t. Arun (name changed) vouches for it. His “friend”, he claims, had once hidden this spybug in his girlfriend’s handbag when she went to meet a former classmate. “He suspected the two of them were more than friends and figured that listening in on their conversation would clear things up.” Obviously, the girl’s word that there was no funny business going on wasn’t enough.

Paliwal feels shows like Emotional Atyachaar, where cheating partners are spied upon and confronted, sparked the dubious inclination to peep into our own bedrooms. This inclination has been fuelled by easy access and low prices. Singh says, “Five or six years ago, we would buy pen cameras for Rs 15,000-Rs 20,000. Now Chinese versions of it can be bought for Rs 1,500 or less.”
That cannot be good news for unsuspecting subjects at the receiving end. As Singh cautions, misuse is an obvious danger. “I know of teenagers using these gadgets, they are so tech-savvy anyway. People know all about these gizmos; even leading dailies run advertisements for them. Girls often bear the brunt, being filmed without their knowledge and viewed by hundreds once the video is posted online.”
Even if the footage is for the eyes of the “spy” alone, the act itself is an invasion of privacy, a breach of trust. As Paliwal asks, “Will a wife who knows that her husband tried to record her activities on the sly ever trust him again?” Whatever the answer to that, it is a risk not a few are clearly willing to take.

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Spy Camera

Belt Rs 7,500 Pinhole camera inside clasp with one hour battery back-up		Watch Rs 5,500 Two-hr battery back-up, 4 GB internal memory, 5 MP camera
Silk Necktie Rs 11,000 Pinhole camera in pattern. 4 GB internal memory.		Photo Rs 35,000 Can record for 2 months. Has an HD camera.
Canvas Cap Rs 7,500 4 GB memory, 1 hr back-up, 3 m microphone range		Chewing gum Rs 5,000 Can record 90-min video and take photos with 5 MP camera

Glasses Rs 12,500 Can record audio-video with 2-hr battery back-up.

Ugly is the new Beautiful

 VIEW GALLERY

At the launch tonight of Design Museum co-founder Stephen Bayley's new book, Ugly: the Aesthetics of Everything, guests will be served ugly canapés and ugly cocktails.

In attendance will be Mugly, an eight-year-old hairless Chinese Crested dog from Peterborough, who is the recent winner of the Ugliest Dog in the World contest, held annually in California, as well as models from the Ugly Model agency, including one woman credited with "looking like a fish".

At what is billed as London's first "ugly party", a grand café will be decked out with "ghoulish objects" and "revolting curios", including a stuffed pug giving birth to a flying pig and blown-up images from Bayley's book, including one of Myra Hindley. "My barman is working on a grey- coloured cocktail and Martinis with gherkins in them," says Bayley. "Talking about beauty is boring – when you get talking about ugliness it gets interesting."

His book Ugly explores the complexities of ugliness and makes the point that without ugliness, there would be no beauty. He has cherry-picked items for his book, including kitsch flying ducks, hideous pink-haired troll dolls – even the postmodernist architecture of the Sainsbury Wing of the National Gallery gets singled out. Ugliness is fascinating, he claims – take the repugnant The Ugly Duchess by Quentin Massys – "It's one of the most popular postcards sold in London's National Gallery shop and rivals the sales of Monet's tranquil Water-Lilies," he says.

There are also images of the Eiffel Tower and the Albert Memorial: "In 1887 leading Paris intellectuals ganged up and said the Eiffel Tower, which was being built, was a 'hateful column of bolted tin… useless and monstrous'", he says. "Now the Eiffel Tower is regarded as one of the most touching, romantic French monuments. The Albert Memorial was loathed and detested – now it is charming, delightful and evocative."

There are no chapters in Ugly, which is Bayley's sequel to Taste, published 1991; instead it's full of long paragraphs of ideas exploring ugliness – a subject not many people have written about.

"I'm not being prescriptive about what is ugly – I'm just provoking ideas about our assumptions of ugliness," says Bayley.

"I'm not looking for agreement. When we talk about design, it is this attempt to introduce beauty by the Modern movement. They told us that if things were functional they would be beautiful – but as soon as you investigate what is beauty – I would say the evidence is mixed. A bomb-dropping Boeing B-52 is extraordinarily functional, but is it beautiful even though it is morally repugnant? What about a gun?

"Our view of what is and what isn't beautiful changes over time. Maybe there are no permanent values in the world of art. It is certainly a question that needs to be asked. If the whole world was beautiful it would in fact be extremely boring. We need a measure of ugliness to understand beauty. You can only understand heaven if you have a concept of hell. "

Bayley focuses on Ernö Goldfinger's Trellick Tower in west London: "If there ever was a test for taste, it's this," he says. The tall housing block built in 1972 was listed by English Heritage in 1998. "It was deplored by many as a brutalist horror. Now half the world regards it as an eyesore – the other half regards it as heroic and uplifting. Maybe they are both are right. Any minute now Prince Charles will come to admire it. "

Gebrüder Thonet's mass-produced Model No. 14 chair (1859), the original café chair, was revered by Le Corbusier as "the ultimate in elegant design".

"I like the chair – I like clean, unfussy, undecorated things – but I don't think it's inevitably, timelessly perfect," says Bayley, who also includes an image of an Amorphophallus titanum, known as the corpse flower, which "smells of death" and looks phallic. "Can nature be ugly? Personally, I think it can," he says.

There is no end to the fascination of ugliness for Bayley, whose book opens with a photograph of a pig and then Frankenstein. He adds: "If you are talking to architecture students and you ask them to deliberately design something ugly, it is very difficult. It is very difficult to create ugliness – what we call ugly seems to be accidental."

But whether you would want Matthias Grunewald's oil painting The Isenheim Altarpiece (1516) of a man with skin disease on your wall is quite another matter. Or indeed Hieronymus Bosch's triptych The Garden of Earthly Delights (c.1490-1510) depicting Hell, and full of disfigurements and mutations.

There is an image, too, of John Constable's Windmill among Houses and Rainbow – not because it is ugly. "I want to make the point that while we are all worried about the industrialisation of the countryside, this is what Constable's idyllic scenes of the countryside were often about."

Bayley also includes gargoyles from Notre-Dame de Paris, and anti-Jewish Nazi propaganda posters, in which Jews are depicted as ugly caricatures.

One section of the book, "The problem with hair", has images of the monster in I was a Teenage Werewolf (1957), which shows, he says, "how abnormal hair retains a disturbing power".

"Firstly if you take a long view of the history of art, ideas about beauty are not permanent – and secondly, things that are ugly can be fascinating and perversely attractive" says Bayley. "No matter what your views, you couldn't read this book and not either come out lacerated, stimulated, annoyed or in total agreement with my genius. 

It's not a historical narrative but it's a collection of consistent and interesting and stimulating ideas."

'Ugly: the Aesthetics of Everything', by Stephen Bayley, is published by Goodman Fiell (£25
)

IMF's epic plan to conjure away debt and dethrone bankers

So there is a magic wand after all. A revolutionary paper by the International Monetary Fund claims that one could eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan.

The IMF reports says the conjuring trick is to replace our system of private bank-created money. Photo: Reuters

By Ambrose Evans-Pritchard

2:31PM BST 21 Oct 2012

210 Comments

One could slash private debt by 100pc of GDP, boost growth, stabilize prices, and dethrone bankers all at the same time. It could be done cleanly and painlessly, by legislative command, far more quickly than anybody imagined.

The conjuring trick is to replace our system of private bank-created money -- roughly 97pc of the money supply -- with state-created money. We return to the historical norm, before Charles II placed control of the money supply in private hands with the English Free Coinage Act of 1666.

Specifically, it means an assault on "fractional reserve banking". If lenders are forced to put up 100pc reserve backing for deposits, they lose the exorbitant privilege of creating money out of thin air.

The nation regains sovereign control over the money supply. There are no more banks runs, and fewer boom-bust credit cycles. Accounting legerdemain will do the rest. That at least is the argument.

Some readers may already have seen the IMF study, by Jaromir Benes and Michael Kumhof, which came out in August and has begun to acquire a cult following around the world. 

Entitled "The Chicago Plan Revisited", it revives the scheme first put forward by professors Henry Simons and Irving Fisher in 1936 during the ferment of creative thinking in the late Depression.

Irving Fisher thought credit cycles led to an unhealthy concentration of wealth. He saw it with his own eyes in the early 1930s as creditors foreclosed on destitute farmers, seizing their land or buying it for a pittance at the bottom of the cycle.

The farmers found a way of defending themselves in the end. They muscled together at "one dollar auctions", buying each other's property back for almost nothing. Any carpet-bagger who tried to bid higher was beaten to a pulp.

Benes and Kumhof argue that credit-cycle trauma - caused by private money creation - dates deep into history and lies at the root of debt jubilees in the ancient religions of Mesopotamian and the Middle East.

Harvest cycles led to systemic defaults thousands of years ago, with forfeiture of collateral, and concentration of wealth in the hands of lenders. These episodes were not just caused by weather, as long thought. They were amplified by the effects of credit.

The Athenian leader Solon implemented the first known Chicago Plan/New Deal in 599 BC to relieve farmers in hock to oligarchs enjoying private coinage. He cancelled debts, restituted lands seized by creditors, set floor-prices for commodities (much like Franklin Roosevelt), and consciously flooded the money supply with state-issued "debt-free" coinage.

The Romans sent a delegation to study Solon's reforms 150 years later and copied the ideas, setting up their own fiat money system under Lex Aternia in 454 BC.

It is a myth - innocently propagated by the great Adam Smith - that money developed as a commodity-based or gold-linked means of exchange. Gold was always highly valued, but that is another story. Metal-lovers often conflate the two issues.

Anthropological studies show that social fiat currencies began with the dawn of time. The Spartans banned gold coins, replacing them with iron disks of little intrinsic value. The early Romans used bronze tablets. Their worth was entirely determined by law - a doctrine made explicit by Aristotle in his Ethics - like the dollar, the euro, or sterling today.

Some argue that Rome began to lose its solidarity spirit when it allowed an oligarchy to develop a private silver-based coinage during the Punic Wars. Money slipped control of the Senate. You could call it Rome's shadow banking system. Evidence suggests that it became a machine for elite wealth accumulation.

Unchallenged sovereign or Papal control over currencies persisted through the Middle Ages until England broke the mould in 1666. Benes and Kumhof say this was the start of the boom-bust era.

One might equally say that this opened the way to England's agricultural revolution in the early 18th Century, the industrial revolution soon after, and the greatest economic and technological leap ever seen. But let us not quibble.

The original authors of the Chicago Plan were responding to the Great Depression. They believed it was possible to prevent the social havoc caused by wild swings from boom to bust, and to do so without crimping economic dynamism.

The benign side-effect of their proposals would be a switch from national debt to national surplus, as if by magic. "Because under the Chicago Plan banks have to borrow reserves from the treasury to fully back liabilities, the government acquires a very large asset vis-à-vis banks. Our analysis finds that the government is left with a much lower, in fact negative, net debt burden."

The IMF paper says total liabilities of the US financial system - including shadow banking - are about 200pc of GDP. The new reserve rule would create a windfall. This would be used for a "potentially a very large, buy-back of private debt", perhaps 100pc of GDP.

While Washington would issue much more fiat money, this would not be redeemable. It would be an equity of the commonwealth, not debt.

The key of the Chicago Plan was to separate the "monetary and credit functions" of the banking system. "The quantity of money and the quantity of credit would become completely independent of each other."

Private lenders would no longer be able to create new deposits "ex nihilo". New bank credit would have to be financed by retained earnings.

"The control of credit growth would become much more straightforward because banks would no longer be able, as they are today, to generate their own funding, deposits, in the act of lending, an extraordinary privilege that is not enjoyed by any other type of business," says the IMF paper.

"Rather, banks would become what many erroneously believe them to be today, pure intermediaries that depend on obtaining outside funding before being able to lend."

The US Federal Reserve would take real control over the money supply for the first time, making it easier to manage inflation. It was precisely for this reason that Milton Friedman called for 100pc reserve backing in 1967. Even the great free marketeer implicitly favoured a clamp-down on private money.

The switch would engender a 10pc boost to long-arm economic output. "None of these benefits come at the expense of diminishing the core useful functions of a private financial system."

Simons and Fisher were flying blind in the 1930s. They lacked the modern instruments needed to crunch the numbers, so the IMF team has now done it for them -- using the `DSGE' stochastic model now de rigueur in high economics, loved and hated in equal measure.

The finding is startling. Simons and Fisher understated their claims. It is perhaps possible to confront the banking plutocracy head without endangering the economy.

Benes and Kumhof make large claims. They leave me baffled, to be honest. Readers who want the technical details can make their own judgement by studying the text here.

The IMF duo have supporters. Professor Richard Werner from Southampton University - who coined the term quantitative easing (QE) in the 1990s -- testified to Britain's Vickers Commission that a switch to state-money would have major welfare gains. He was backed by the campaign group Positive Money and the New Economics Foundation.

The theory also has strong critics. Tim Congdon from International Monetary Research says banks are in a sense already being forced to increase reserves by EU rules, Basel III rules, and gold-plated variants in the UK. The effect has been to choke lending to the private sector.

He argues that is the chief reason why the world economy remains stuck in near-slump, and why central banks are having to cushion the shock with QE.

"If you enacted this plan, it would devastate bank profits and cause a massive deflationary disaster. There would have to do `QE squared' to offset it," he said.

The result would be a huge shift in bank balance sheets from private lending to government securities. This happened during World War Two, but that was the anomalous cost of defeating Fascism.

To do this on a permanent basis in peace-time would be to change in the nature of western capitalism. "People wouldn't be able to get money from banks. There would be huge damage to the efficiency of the economy," he said.

Arguably, it would smother freedom and enthrone a Leviathan state. It might be even more irksome in the long run than rule by bankers.

Personally, I am a long way from reaching an conclusion in this extraordinary debate. Let it run, and let us all fight until we flush out the arguments.

One thing is sure. The City of London will have great trouble earning its keep if any variant of the Chicago Plan ever gains wide support.

What happens to a Lottery winner?

Lottery millionaires each fund six jobs a year, study shows

3,000 £1m-plus winners have created another 3,780 millionaires among family and friends and contributed £750m to GDP

• Caroline Davies
• guardian.co.uk, Monday 22 October 2012 00.05 BST

Some of the National Lottery's 3,000 millionaire winners. Photograph: David Parry/PA

The balls have dropped and all six numbers match, so it's time to buy that Audi, book the holiday in the US and phone the estate agent. At least, that's what most lottery millionaires do, according to an analysis of spending and investment by jackpot winners.

Since its launch in 1994, the lottery has created 3,000 millionaires who have won more than £8.5bn in total, at an average of £2.8m each. The trickle-down effect means that between them they have created a further 3,780 millionaires among their children, family and friends, according to the forecasting consultancy Oxford Economics.

Most winners (59%) give up work straight away, but 19% carry on doing the day job and 31% do unpaid voluntary work. The good news for the economy is that 98% of winners' spending remained in the UK. Through their spending on property, vehicles and holidays, it is estimated that each winner keeps six people in a full-time job for a year.

Winners have contributed almost £750m to GDP, and generated more than £500m in tax receipts for the Exchequer. The bulk of the money went on property, with £2.72bn spent on winners' main properties, and £170m in paying off existing debt and mortgages.

Maintaining income was a priority, with £2.125bn spent on investments. Gifts to family and friends accounted for £1.17bn, and £680m was spent on cars and holidays.

The study, commissioned by Camelot to mark the 3,000 winners milestone, was based on research from 100 £1m-plus winners. It found that in total the 3,000 winners have purchased 7,958 houses or flats in the UK, or 2.7 each, spending £3.3bn. Most winners (82%) changed their main residence, spending an average £900,000.

The new home is likely to come with a hot tub, with almost a third (29%) putting that on their shopping list. A walk-in wardrobe was a must for 28%, almost a quarter (24%) opted for a property behind electric gates, and 22% had a games room, with 7% installing a snooker table.

Larger properties need maintaining, and 30% of winners employed a cleaner and 24% a gardener. A small proportion (5%) employed a beautician.

Audis were the favourite cars of 16% of winners, with Range Rovers and BMWs also popular purchases (11% each), as well as Mercedes (10%) and Land Rovers (5%). Winners spent £463m on 17,190 cars, with the average price of their favourite being £46,116.

Holidays were also a priority. The majority (68%) choose five-star hotels overseas. The US was the favoured destination for 27%, followed by the Caribbean (9%). Closer to home, however, UK caravan sales have benefited. Over the past 18 years, 10% of millionaires have bought a caravan, generating sales worth about £7.4m.

Some winners (15%) have started their own businesses, 9% have helped others to do so, and 6% have invested in or bought other people's businesses. Businesses started or supported by lottery winners employ 3,195 people, according to the study.

Andy Logan, co-analyst and author of the report, said: "The effect of a win spreads much further and wider than we anticipated. Not only does it transform the lives of friends and family, but each win has a measurable effect on the UK economy, especially with so much of it being spent in the UK. The use of each win creates a ripple effect across this generation and very often the next."

Three decades after privatisation, monopoly power is still king

IoS investigation: The great British energy rip-off 

The "big six" energy firms were last night accused of maintaining a "stranglehold" over millions of consumers, after new figures showed that they each control more than two-thirds of the market in different regions across the UK.

An average of 70 per cent of households across all regions use the same electricity supplier, with the proportion rising to 85 per cent in some areas, undermining claims by the Government and Ofgem, the regulator, that the energy market is operating competitively.

The figures, uncovered by Labour, are published in the wake of the confusion over the future of energy bills after David Cameron pledged in the Commons to force companies to offer householders the "lowest tariff" – a promise that within hours was exposed as unworkable. The Prime Minister clashed with the Liberal Democrat Energy Secretary, Ed Davey, who backed Ofgem's proposals, published on Friday, for a simplified tariff system that encouraged consumers to switch between firms.

The official figures show that companies supplying electricity to homes where they inherited the network from the former utility boards are operating a near monopoly, making a mockery of the idea that customers routinely switch firms to get better deals.

Separate data from the Department for Energy and Climate Change (DECC) reveals that customers who have stayed with their old electricity supplier are paying more than those who have switched. DECC analysis shows that these "home suppliers" charge an average of £31 a year more than non-home suppliers for electricity – in effect placing a premium on loyalty.

The research emerged on the eve of British Energy Saving Week amid an outcry that energy firms are pushing up fuel bills beyond the rate of inflation, adding between £80 and £112 to the average annual household bill.

Although deregulation of the energy market in the 1980s supposedly led to more competition, the reality is more similar to a monopoly within each region of the UK.

The largest five electricity suppliers dominate the regions they inherited from utility boards more than two decades ago, while British Gas still retains the largest share of the retail gas market nationwide. This is despite consumers being encouraged by price comparison websites to shop around for the cheapest supplier. When the gas and electricity networks were first privatised, price caps were in operation, but a decade ago Ofgem removed controls because competition had, in theory, been established.

Yet figures published in Parliament in a written answer to the shadow Energy Secretary, Caroline Flint, show that there is little real competition. Firms last night claimed the figures show the loyalty of customers they inherited from the boards, but Ms Flint said the companies appear to be exploiting consumers' unwillingness to shop around. With a baffling array of more than 500 tariffs on offer, consumers are often loath to switch.

In Northern Scotland, SSE, the firm that inherited the network from the North of Scotland Hydro Board, has retained an 85 per cent share of the retail electricity market, while in south Wales, SSE has an 82 per cent share and in the Southern region it has an 80 per cent share.

Scottish Power has an 82 per cent share in southern Scotland, and a 73 per cent share in north Wales. EDF has remained dominant in London with a 74 per cent share; in the South-east, it supplies electricity to 73 per cent of homes; and in the South-west, it has 71 per cent.

Npower remains the dominant supplier in the West Midlands, with 65 per cent of the retail market; in Yorkshire, it has a 65 per cent share; and in the North-east, 64 per cent. E.ON has a 69 per cent share in the East Midlands; 68 per cent in the Eastern region; and 67 per cent in the North-west.
The sixth major energy firm, British Gas, has held on to 76 per cent of gas-only accounts across the UK. The figures do not apply to dual fuel accounts, but nearly 10 million households are on electricity only, and 4.6 million have gas only.

Ms Flint said: "It's no wonder the energy giants are shame-faced about hiking up energy bills when they have a stranglehold over the energy market. People talk about the 'big six', but in most parts of the country there's only one big supplier in town. The fact that 70 per cent of people in any region all use the same electricity supplier suggests that the energy market is not functioning properly. It cannot be right that customers who have stuck with their old electricity supplier pay a premium for their loyalty.
"The time has come to create a tough new regulator to police the energy market properly, and force the energy companies to pass on price cuts to the public."

A spokesman for Npower said: "We have a larger than expected share in the West Midlands because our history is in the Midlands. A lot of people were Midlands Electricity Board customers and many of them remained so [under the new name]. The rate of turnover has been quite significant, people have left and people come back. It is about loyalty – many people still refer to us as 'the Midlands Electricity Board' as they refer to British Gas as 'the Gas Board'. They are with us because we are incredibly good value. It is the same in the North-east. We feel very much part of the community in these areas."

A spokesman for E.ON said: "Many of our customers, while staying with us, will have regularly changed products. As such it would be wrong to say they are not engaged in the energy market – they are, and have chosen to stay with us. Some 69 per cent of our customers overall have switched supplier or tariff in the past three years.

"It is important that we treat every customer as an individual and as such being on the right tariff for your own individual circumstances is vital. In recent weeks we have made checking you're on the right tariff easier than ever, and it is this simplicity and comparability that our customers are responding to. By making things simpler and more comparable, as well as continuing to provide help and advice that will make homes more energy efficient, we can really help our customers and ensure they are on the best deal for them."

A Scottish Power spokesman said: "The British energy market is one of the most competitive in Europe, and Scottish Power welcomes anything that encourages or supports this competition."
SSE said in a statement: "We would fully expect our customer retention rates to be higher than those of our competitors because of our exceptional standards of service, for which we are consistently recognised as the best in the business by the likes of Consumer Focus and uSwitch.

"There's no doubt that greater levels of consumer engagement in the market would be a positive thing. However, switching rates in the UK compare very favourably with those in other European energy markets, and with other retail service markets such as fixed and mobile telecommunication, insurance, mortgages and personal current accounts."

How easy is it to reduce your energy bill?

If a seasoned investigator has trouble, what hope for the average consumer? Here’s what I discovered after many frustrating minutes on hold:

Npower

My current provider, Npower, predicts my spend for the next 12 months will be £208.37 for 1,620 kWh of electricity and £531.78 for 11,260 kWh of gas – all helpfully displayed in my latest bill, but irrelevant because it was generated two days before they announced an 8.8 per cent price hike. Sneaky.

British Gas

After an automated apology for any delay due to “a high volume of customer calls” came some advice: “If you’re calling for our fix and fall tarif,f go online to sign up and register your details. If you have received a coupon about this offer, please complete it and return the pre-paid envelope. If you are calling about a fixed contract that ends in either 2013, 2014 or 2015, your prices are not affected by our recent price increase.”

I simply want to find out if you can beat my existing deal.

“Press 1 to change your account name or address or if you are moving house. Press 2 to give us your meter reading or find out your balance, pay your bill or to let us know you are going to pay your bill or you have paid your bill. Press 3 if you have any questions about your central heating or home care or press 4 to talk to one of our team.”

Hooray. Well, nearly. I sit through more suggestions to “go online for further information”. A pause, then a human voice. “You probably were sent that estimate prior to their price rise announcement.” True. “Our best deal is the online variable until November 2013, which includes the price increases taken into effect. We can do a 6 per cent discount from your total bill for direct debit.”

“That will cost you around £229 for electricity and £532 for gas. A little bit more than your estimate, but your prices will go up remember”.

So your prices are fixed, then?

“No, we have another “fix and fall” tariff which is not discounted but is fixed until March 2014. That might make more sense to you.

“If our prices go up, yours won’t do, but if prices go down, yours go down – and you get a fixed premium of 3 per cent.”

“That comes to £253.34 for electricity and £583 for gas.”

£100 more! “Ah, but your charges…”

Yes, yes, they will be going up.

To be fair, she did recommend I call npower to check how much my bill would apparently be going up by. That was easier but it still took 17 minutes.

E.ON (no freephone)

It took less than a minute to speak with someone and we were straight down to business: full address and phone number (“in case you get cut off”) before we were on to the tariffs. Four on offer: standard, E.ON energy discount (“3 per cent cheaper than standard for 12 months but you’re not protected against price rises”), fixed one year or fixed two years. It was like remortgaging a house.,

Standard came to £787.93 and the energy discount was £752.69. Fixed one came to £776.48 – “no premium, mind” – and fixed two £816.39 – “a bit of a gamble as it is 5 per cent above standard unit rate but you’re protected against price rises.”

The good news: E.ON was not among the four of the “big six” energy companies which had recently announced price rises for 2012. The bad: “but it’s more than likely we will put them up for 2013”. Hmmm.

That took four minutes.

EDF

Oh dear. I gave up trying after being on hold for 15 minutes listening to what sounded like Morcheeba. Rubbish.

SSE

After seven minutes on hold, I was mercifully told there were only two tariffs the company provides – standard and capped. My quote was £28 more expensive than npower, but SSE credits your account with £100 when you switch and their rate is capped for two years meaning, like British Gas, it won’t go up, but could come down. And SSE “was the only energy company that reduced their prices last year”. In addition, my gas and electricity standard charge of 16.44 pence per day would come down to 14.8p with paperless billing. “I’m here until 2pm if you want to switch,” a very helpful Eddie told me.

Scottish Power

I had tapped in my numbers to their online quote generator which gave me an estimated bill of £816.57. But on the phone, a quote using the same figures was better: £755. This for a deal fixed until March 2014 without a cancellation fee. Did I want to know the unit price? I certainly did. “Scottish Power’s first quarter electricity unit price is 21.74p for the first 225 units going down to 10.99, compared with Npower’s current unit price of 16.93 reducing to 13.39. Our primary gas units are 8.10 going down to 3.01 with Npower’s at 7.89 reducing to 3.51.” I regretted the request for more detail.

So much to choose from. Do I ditch and switch, fix or stick? I have no idea. I tried calling Npower to see what their updated estimate would be for next year, but their systems were down. I’ll have to call back on Monday.

Paul Gallagher

Stiglitz on FDI in India's retail

Nobel laureate Joseph E. Stiglitz is one of the world’s leading economists. A former chief economist at the World Bank and currently University Professor at the Columbia Business School, he was recently in India to attend an international conference on development and to promote his new book, The Price of Inequality. He spoke to Pranay Sharma about growing inequality in the world and the challenges facing India. Excerpts:

Your coinage, “one per cent versus 99 per cent”, has caught the imagination of different people in the world. What does that reflect?

It reflects a different view of society. The nomenclature, ‘one per cent and ninety nine per cent’, is a way of saying that almost everybody today is in one boat and a few people are in another boat. There is now that huge divide from the very top that is no longer class-based but money-based. So it’s really the redefining of the divisions within our societies.

And this is not specific to the US but something seen all over the world?

That’s correct, it’s all over the world. India has become famous for being the land with the highest per capita of billionaires. This is striking for a country which is average and has a large number of poor people.

“India’s famous for being the land with the highest per capita of billionaires. Striking for an average country with so many poor people.”

Some of your detractors describe you as “the prophet of gloom and doom”. Is that a correct assessment?

I had accurately perceived the crisis of 2008 and there were those who drew a rosy scenario and did not see it happening. The same people started seeing the ‘green shoots’ in 2009 which again did not happen and we did not get the recovery. Those who are described as ‘gloom and doom’ people are the ones who have predicted, as people jokingly say, five out of the last 10 recessions.

Everybody now talks about the global economic crisis and how it has affected countries across the world, including the US. But are you overstating the case about the US?

The statistics are what they are. The fact that the median income of a full-time worker is lower than what it was in 1968 is part of it. I have gathered some of the statistics that may not have been given sufficient attention by others, but those are facts. The question is, what do you make of those facts? Where the US economy is going is obviously a matter of interpretation. But some of the facts that I think are disturbing may be different from the facts that others are looking at.

What you describe in your book is not only an economic or political failure, but a systemic failure in the US. Is democracy in the US in crisis?

Yes, it is. We have changed the rules of the game to give more weight to money and moneyed interests just at the time when inequality is growing. So we now have an out-of-balance political system.

“There is that huge divide now from the very top that is no longer class-based but money-based...a redefining of divisions within societies.”

You say in your book that if the economic benefits were shared better, Americans would have forgiven many of the ‘sins’ of the US corporates. If that were to happen, then who would have paid the price, people in other countries?

What I was trying to suggest was two-fold. That people in America would not have been so concerned if the top had walked away with just a larger share and did not damage the environment too much. The typical American would have felt that he himself was getting better without asking a lot from the corporation. But part of what is going on in terms of global warming is that the price is being borne by people outside the US. People of America had not paid any attention to that at all.

In India, we have the experience of the Bhopal gas tragedy. An American national responsible for it paid very little compensation and refused to share the burden of guilt. Now we have a debate on ‘nuclear liability’ where the US government and American companies planning to set up N-plants in India are opposed to accepting a larger share of the burden if an accident occurs in any of their plants. How do you react to this?

This is a perfect example of why I say that we have a distorted market economy through politics. Markets don’t exist in a vacuum, we create frameworks. They give money to special interest groups—the one per cent. The nuclear industry is a good example. If the government had not been subsidising them, then in a calamity there would be no one to pick up the tab. They say they have insurance but that is a price no company is willing to pay. We pick up the cost of nuclear exposure, nuclear waste...nobody is willing to pay for that. So there is this massive subsidy given by the government to the nuclear industry.

“We have changed the rules of the game to give more weight to moneyed interests, just at the time when inequality is growing.”

So you think US companies planning to set up N-plants here should share a larger burden of that liability?

They should bear it all. In the global context, they don’t bear that in the US either. The nuclear industry exists only because of government subsidies. But subsidy in the form of liability; the oil industry is also protected in the same way. They have a law that limits the liability in the event of a spillover. If you look at the way the legal system is designed, many of those who are injured by the spill will never be compensated.

You have praised governments in China and India for intervening in the market to make globalisation work better for their respective people. How do you now see the performance of the two countries?

China represents what is the success of globalisation, where over 400 million people moved out of poverty. The gap between their income and that of people in the US has reduced enormously. Same is perhaps also true for India. But when you have rising aspirations in a country like China—which has been slow in implementing good working conditions—it can lead to agitations by workers.

What about India?

India has not grown as fast as China but it is growing significantly. There have been very significant successes, though there hasn’t been much reduction in poverty in a big way.

“US firms planning to set up N-plants should bear all the liability. But they don’t do that even in the US, state ‘subsidies’ protect them.”

PM Manmohan Singh announced a clutch of economic reforms recently, particularly in regard to allowing FDI in multi-brand retail. Do you think India needs to open up its market?

India is an unusual country and different from many other developing and emerging markets. It has a large entrepreneurial class and has lots of savings, wealth. And this entrepreneurial class is very talented. So that raises the question as to why India needs foreign entrepreneurs in any sector, particularly the retail or the financial sectors.

And what’s your answer to that?

I have not seen a good explanation yet. To me, as most economists say, a little competition is good. On the other hand, the worry is that a company like Walmart may owe some of their success to its power and ability to drive down prices. Because they can buy things out and if that’s the case then they will use that power to have Chinese goods displace Indian goods. The real harm will not be to the retail sector. That is not the real problem. The harm will be to the Indian supply chain going into the retail sector. The other concern is that Walmart has succeeded in expanding its business by adopting abusive labour relations.

“India has a large, talented entrepreneurial class, and lots of savings and wealth. Why should it need foreign entrepreneurs in any sector?”

Is that the experience of other countries where it has a presence?

That is the experience of other countries. It is a business practice that you don’t want to import to your country. Bribery in Mexico, free-riding on healthcare, a policy against unionisation, discrimination against women—a whole range of accusations, some of which have been proved and others that remain accusations but are hard to win in courts. Why would you want to import such business practices into India? Many economists see the breakdown in social contract as one of the reasons for inequality. There is also a worry that Walmart will break down the social contract in India that is already frail.

So how does one go about it?

The other reply to these concerns is for India to have legislations to ensure these problems don’t happen. You should have good protection from large multinationals.

Does President Obama have a shot at being re-elected?

I think he has a good chance. I think he has been more successful than what his critics say but far less successful than the expectations when he was elected in 2008. The reality is, if the Republicans do well in Congress then it will be a more defensive (move) to prevent things from getting worse. But also not allowing changes that’ll make the economy work.

“Corruption scandals have a resonance as people know the power of money. Money begets money and it begets via the political process.”

When you look at India what are the areas of concerns?

One of the things would be the huge inequality which is still there. It is very serious and it cannot be ignored. The existence of extreme wealth and extreme poverty, they are worse than many other countries.

Do you see the government intervening to tame the market?

I don’t see it that much...when you have so much of economic inequality, there is always the fear that political power will corrupt the government. A lot of the corruption scandals have a resonance because people understand the power of money. They know money begets money and it begets through the political process. It may be difficult to ascertain what happened in the coal block allocations. But these are people’s assets which have surely not been sold in efficient, transparent auctions that could raise the most money for the well-being of everyone in society. And that has a real resonance in a society that already has such inequality.

Corporate Social Responsibility (CSR) - a Cloak for Crooks

By S A Aiyar

The government's new Companies Bill will reportedly ask large companies to spend 2% of their net profit on CSR (corporate social responsibility). The theory is that corporates must aim for social goals, not just profits.

It's unclear whether the 2% allocation will be compulsory or indicative. In either case, this misses altogether what corporate social responsibility actually is. It is an ethical attitude, a determination to observe the highest standards in dealing with all stakeholders - customers, suppliers, shareholders. CSR means observing the highest standards in dealing with health and environmental hazards, and in presenting corporate accounts accurately. If a company cheats its stakeholders, fiddles its accounts and ignores hazards, then it is grossly irresponsible whether or not it spends 2% of profits on some list of government-approved social activities.

Last week the Enforcement Directorate attached Rs 822 crore of fixed deposits of the erstwhile Satyam Computer Services. The Satyam scam was the biggest in corporate history. Promoter Ramalinga Raju made Satyam India's third-biggest IT company. But in 2009 Raju confessed he had fiddled the books for years, and forged certificates of bank deposits. This helped inflate the share price and enable Raju and family to borrow huge sums for real estate speculation.

Raju was India's biggest self-confessed crook. Yet he was much celebrated for CSR and won several awards. These included a UK government award for CSR in 2008.

His Byrraju Foundation took information technology directly to rural India. It set up a rural call centre, enabling villagers without college degrees to join the globalisation bandwagon. He took telemedicine to rural areas, enabling villagers to interact with specialist urban doctors. His foundation sought to build self-reliant rural communities, providing services like healthcare, education, water, sanitation and green awareness.

He ran an emergency ambulance service that reached sick and injured people within 30 minutes, ready with paramedics and equipment, and rushed them to hospital. This scheme attracted so much praise that many other states replicated it.

Lesson: a company that cheats shareholders, creditors and other stakeholders can parade as a paragon of corporate ethics, and win multiple awards. Allocating some profits for rural development and health is no indicator whatsoever of ethics. Rather, the CSR allocation can camouflage lack of ethics.

Many consumers have been duped by CSR awards. They are willing to pay more for products from such award winners. After the Satyam debacle, they should know better.

Worse than Satyam has been the oil multinational, BP. It caused the biggest environmental disaster in history when its Maconodo well exploded in the Caribbean Ocean after it failed to observe many safety procedures. This exposed as fraudulent its campaign to paint itself as a green saviour. Once called British Petroleum, it change its name to BP and launched a hugely successful image-building makeover calling itself "Beyond Petroleum". It got a new logo of a green and yellow sun (representing solar energy) to emphasise its green credentials. It boasted it was among the world's biggest producer of solar panels and windpower, although these accounted for barely 3% of its business, and actually represented public relations spending. "Beyond Petroleum" won two "Campaign of the Year" awards from PR Week, and an award from the American Marketing Association.

BP won the 2007 Prime Minister's CSR award in Malaysia for aiding a turtle sanctuary. Fortune magazine has an annual corporate accountability rating for CSR. BP topped the Fortune list in 2004, 2005 and 2007, and came second in 2006. The Chinese were taken in too: in 2007 they gave BP the "The Most Responsible Enterprise" award organized by China News Weekly and the Chinese Red Cross Foundation. BP won the Corporate Citizenship Award for Chinese enterprises several times.

Yet behind this image-manship, BP had a horrendous record of cutting corners and neglecting safety. Its poorly maintained refinery in Texas exploded in 2005, killing 15 and injuring 180. In 2007, a BP pipeline got corroded through neglect and leaked 200,000 gallons of crude into the pristine Alaskan wilderness. BP was fined $303 million to settle an accusation of conspiracy to manipulate the price of propane gas. Between 2007 and 2010, BP refineries in Ohio and Texas ran up 760 "egregious, willful" safety violations, while rivals Sunoco and ConocoPhillips each had eight, Citgo had two and Exxon had one comparable citation. So, BP accounted for 97% of all corporate refinery violations. 

Lesson: don't get fooled by corporate spending on CSR. Far from being evidence of ethics, it's often a cloak for gross misgovernance. If the Companies' Bill mandates 2% spending on supposed CSR, corporate ethics will not improve. Rather, more Satyams will emerge.