Tuesday, May 24, 2016

Post Referendum

The fact is that the Brexit camp is fighting an dreadful campaign. 

The fish rots from the head, and leadership is the first problem that the Brexiteers face. Farage and Johnson posture, but do not lead. Meanwhile Michael Gove has made his case and quietly returned to government. Only IDS continues his angry way, irritating his Conservative colleagues, but not really landing a blow. 

In the engine room, controversial but not competent figures such as Arron Banks or Dominic Cummings have a set a hostile and provocative tone which has even alienated their own supporters.

The campaign is divided- unable to put forward a clear vision of a post-EU future, because they can not agree on whether that should be completely separate, an association agreement, or full membership of the EEA. Meanwhile, despite the large amounts of cash available, the campaign is disorganised and increasingly dispirited. The polls are running increasingly against the Leave campaign.

A badly led, divided and weak Leave campaign was always going to struggle, but the unappealing personalities at the top seem to be condemning them to defeat, and possibly even a rout.

Of course nothing is certain, but from the point of view of the Conservatives, an unexpectedly wide margin of victory would open up several questions. Firstly the impact of a decisive victory on British politics could be interesting. Cameron has bet the farm on winning- and he has certainly proven extremely effective at destroying his enemies. 

The Lib Dems underestimated him, and not only did he put his tanks on their lawn, he pillaged their camp and scattered salt in their fields. In Scotland he has helped the SNP to rout Labour, and as the SNP tide turns, there is a real prospect that the Scottish Tories under Ruth Davidson (as Cameroon figure as there is in Scotland) could snatch a share of government in 2021, and many MPs in 2020. Labour is in disarray, and the chances of a recovery on either side of the border, for as long as Corbyn is in charge, seem ever more remote. 

So the biggest threat to the Prime Minister is the heidbangers on his own side. The bitterness amongst the Tory Leavers is palpable and in fact they may decline to function to the Tory whip in the coming months: the government only has a majority of 12, and there are many times that number who will be completely hostile to the Cameron-Osborne camp regardless. 

Then there is the cloud no bigger than a mans hand- the expenses scandal. IF that were to break, then the Conservatives would really be in trouble.

So even as Cameron seems set to complete another victory, having exorcised Scottish separatism and UKIP rejectionism, he still faces further battles. Although he is already quite a long serving PM, it may take another election before he can claim to have actually changed his party and his country, and the electoral commission or his own MPs may still deny him that chance- assuming that he even wants it.

Friday, May 13, 2016

Just supposing...

Although the opinion polls are close, the betting markets barely move: the punters are still backing the United States to vote for Hillary Clinton and the United Kingdom to vote to stay part of the European Union. 

Yet, just suppose the punters are wrong?

Just suppose that the polls are right and the UK does vote to Leave. Firstly this would trigger an immediate resignation from David Cameron. His luck would have run out. The Prime Minister himself suggests that his successor is most likely to be a "leaver", "that is where the heart of the Conservative party beats". Despite his unhappy performance so far, that still probably means that Boris Johnson would be the next Prime Minister. The new PM would have a massive pile of problems to deal with on day one. Quite apart from the critical choices that he will have to make on behalf of the UK and it future relations with the EU, he would also have to steady the economic ship, which would be more than a somewhat rattled by Brexit. An old fashioned Sterling crisis and a significant fall off in investment would just be the start of the new world of turbulence in the UK economy.  Then there is the growing prospect of a significant political crisis. The investigation into allegations of Conservative cheating is continuing, and if charges are preferred, then it is quite possible that the government would face a series of bye-elections that could take away their majority. All of this, of course comes on top of the calls for a second Scottish referendum. The UK could be facing economic, constitutional and political crises all at once.

Then there is the prospect of President Trump. Mr. Trump has won his nomination. Come November, there is a significant chance that he gets elected. Just suppose that he does. From the point of view of the West, the reputation of democracy will have taken a severe knock, the relations of the United States with its neighbours will clearly deteriorate, but the impact of Mr. Trump's declared wish to disengage from NATO and cut a deal with Putin would have catastrophic implications, and not just for Europe. The friction between the US and China would become outright animosity. All of the conventional security platforms would be weakened and the position of the UK, which bases a great deal of emphasis on the special relationship with the US, would be weakened drastically.

The outcomes of just two simple votes could undermine decades of progress, cooperation and peace.  

When people say that Mr. Cameron is exaggerating the scale of the crisis, then just maybe they are wrong: we may not be scared enough.  

Tuesday, May 10, 2016

Leaving Europe is so stupid it amounts to fatal self harm

Listening to the BBC one might think that, intellectually, the debate about British membership of the European Union was a finely balanced argument.

It isn't.

As Kate Hoey admitted to Andrew Neill, there is not one single independent study that suggests that leaving the EU would benefit the UK economy. The Leave campaign could have put up a "sock puppet" study up to suggest they were right, but they could not even do that- so damning is the factual evidence.

The press is suggesting that they are reporting the debate evenly- but the reality is that there is no factually based support for any of the statements put out by the Leave campaign- it is not supported by any sustainable facts at all.

I have made comments about the rise of stupidity in politics before, but quite frankly the utter failure of the media to recognize that one side is intellectually bankrupt implies either stupidity or bias. In the case of the Daily Mail, it probably implies both.

OK, it is fair to say that Boris Johnson, George Galloway or Nigel Farage are more interested in questions of political power than questions of political accuracy, but surely their cynicism is precisely the thing that the media should challenge.

But no: who David Furnish may or may not be sleeping with, in the context of his open relationship with Elton John, or whether or not Hugh Bonneville might have slept with a woman not his wife- that is what the press will go to the stake for. It is not a question of principle, it is a question of profit. 

It is a total disgrace.

The fact is that leaving the European Union would be so damaging, that is not even sure that the UK would survive. Building a new border across Ireland, infuriating the fractious Scottish body politic and creating enormous economic harm- apparently all of this is less important that the sex lives of celebrities.   

If British citizens do not care about their own future, the media will certainly not do it for them.

When every single friend of the UK- allies, trade partners and our own daughter states- says that leaving would weaken the UK, and every enemy of our country, Marine Le Pen, Donald Trump and Vladimir Putin wants us to leave, then the balance of probabilities is really crystal clear.

The media should report not merely opinions, but the biases that inform those opinions. That they fail to do so is one reason why the mainstream media in the UK is increasingly ignored.

It is essential that each citizen brings critical faculties to our consideration of the argument. It is not acceptable to leave your critical brain at home when you consider the future or our country.

It is not an accident that two thirds of those who hold degrees support Remain. It is not a co-incidence that all our foreign or off-shore owned media supports Leave.

Draw your own conclusions.  

Friday, April 08, 2016

Selling our enemies the rope to hang us

Panama is not the world's largest off shore financial centre.

Mossack Fonseca is not the worlds largest offshore lawyer.

The scale of the leak of confidential information is huge, but in fact it represents the tip of the iceberg for the flow of offshore money it represents. The British Overseas territories, especially Bermuda (for insurance), the Cayman Islands and the British Virgin Islands (for trading funds) and the Channel Isles (for private equity and other fund structures) handle a much larger flow of funds. Panama is not the world's most trusted jurisdiction and as a result the level of criminal transactions could be a higher percentage there than in the UK controlled jurisdictions or Luxembourg or Malta. Nevertheless the fact is that the funds flows detailed in the stolen data are still a relatively small amount of global offshore transactions.

The press in the democratic world is predictably outraged, and, equally predictably, is focusing on the wrong target. Singling out individual stories is great human interest, and of course it is an easy target to highlight some public figures who have used the off shore centres to game their domestic tax system. However there are two stories which the newspapers are studiously ignoring. 

The first is why such a system of offshore finance is needed in the first place. It is not simply that political leaders and other potential and actual criminals are hiding ill gotten gains. In fact the off shore system is universally used to even out discrepancies and inefficiencies between different jurisdictions and promote cross border funds flows. The reason they are needed is that without them global investment and trade would be a fraction of what it actually is. Yet in a sense the off shore centres are only a necessary evil because the taxation systems of most nation states are irretrievably broken. The centres have delayed the dread day of reckoning when full blown reform of the taxation system is enacted or a collapse in investment brings about a global depression that would dwarf any we have yet seen. The media do not address the fundamental issue of why off shore finance exists on such a scale, preferring only the easy answer of a public witch hunt of prominent individuals involved.

The second uncomfortable truth is why the destination of a great deal of hot money has ended up being the London property market. It is clear that in parts of Prime London a major percentage of the housing stock has been taken out of the market as Asian, Arab and Russian investors buy a portfolio of property on a "buy to leave" basis. The huge surge in London property prices which has driven a wave of house price inflation across the UK is rooted in hot money, at least some of which is indeed criminal. Despite half-hearted attempts, offshore companies pay essentially no tax on UK property and the result has been a boom that has increasingly driven Brits out from their own capital. Successive governments have failed to recognized the massive damage this is continuing to do to our global level of competitiveness.

So as allies of Assad or Putin or other murderous regimes squat tax free in Mayfair, those who might have been living in Central London are pushed miles form their places of work and recreation.

The core of the Offshore scandal is taxation. The inefficient and distorted way that governments have chosen to fund themselves is the direct cause of this. Doing away with offshore centres, without first creating an open, transparent and stable taxation regime would have a catastrophic effect on the global economy. So the Mossack Fonseca data theft is pretty much the last warning.

Tax reform is an issue which can wait no longer. If democratic government is going to maintain its legitimacy in the future, then political and financial figures must accept now where the blame truly lies and completely transform what, how and where it seeks to gain its finance.

Thursday, March 24, 2016

The Rise of Stupid Politics

When people take a position in any argument, in principle they should base their views upon a platform of facts. Sometimes those facts might be interpreted in different ways, but as the old Guardian motto had it, "Comment is Free, but facts are sacred". This "Dialectic" has been the basis for rational argument for centuries.

Not any more.

We are seeing the rise of political comment and political practice that is not based on any kinds of facts at all. "Evidence based policy" is so rare that these days it has to be specially commented on. The fact is that, from Donald Trump to Katie Hopkins, emotion and not truth is now becoming the primary source of policy.

OK Katie Hopkins makes her money from being a pantomime villain, but in fact very few people get the joke. Her opinions, like those of Donald Trump, or most of the Brexiters in the UK are not based on facts- they are almost entirely made up, and border on the irrational. In a single speech that Donald Trump made recently, he made the largest number of factual errors that Factcheck had ever seen.

In fact these are not mistakes: they are outrageous, brazen lies, which he does not retract.

The same applies to most of the comment from the Leave camp. The twisted logic that says that the Brussels bomb attacks prove that the EU is a threat to the Queen's peace in Britain is utterly outrageous.

This info graphic provides the facts as to why. The level of terrorism in Europe is actually at a fairly low point compared to most of the last forty years. In that time of course, well over half of terrorist murders were in the UK as a result of Irish terrorism. Given that the withdrawal of the UK from the EU would probably restore a working border between Northern Ireland and the Republic, it is far more likely that leaving the EU would increase direct terrorism against the UK itself. The risk is obvious, but as they say, never let the facts get in the way of a good story. 

Only a spectacularly stupid commentator like, say, Katie Hopkins would deny the truth of that risk.

Meanwhile in Scotland, stupidity runs riot. Today, March 24th 2016, was the proposed independence day for Scotland. During the referendum campaign the SNP made a case for economic independence that was totally dishonest. Yet the implosion of practically every single economic statement ever made by the SNP is met with a barrage of denial from separatist fanatics. It seems the majority of Scots are still prepared to vote for a party that not only got it wrong, it actively mislead the Scottish people. If there is any case for Scottish independence, it must be built on reality, in other words one built on real sacrifice and hardship, not on the easy lies of the SNP. Worse, those who raise rational arguments with the SNP are subjected to a brutal hate campaign led by thugs. It is irrational at best, at worst, it is a threat to the very basis of freedom.  

If today had been independence day, Scotland would be in a very serious crisis, and not only an economic one, but a political one too. Even the most lurid issues raised by "project fear" would have been nothing compared to the grim reality.

Likewise, if the UK votes to leave the EU, the most lurid problems raised by the so-called EU "project fear" may also be as nothing compared to the reality- and the Brexit supporters do not have any idea how to address the problems that their disastrous miscalculation could create. Most of the "facts" raised by the Leave faction are in fact provably not true.

Some of the more patronising political figures complain that the issues are blurred by "politics" and so, for example, Tom Hunter is printing at his own expense a guide to the issues. OK fair enough, but frankly it is up to the voters to do more to educate themselves- indeed they have a civic responsibility to do so.

In the end, the voters get the stupidity they deserve. It is nearly three thousand years since the Greeks established the rules for searching for the truth, the dialectic, which was popularized by Plato's Socratic Dialogues. Voters who do not use the dialectic end up like the wife of the Monty Python Professor of Logic: totally screwed.

The poisonous irrationality of the politics of the stupid needs to be addressed and defeated. Otherwise irrational Fascism and irrational Communism may prove to be the forerunner of a far darker hell, and one from which our species might not recover from. 

Friday, March 18, 2016

Justification by Faith


Next Sunday- Palm Sunday- Holy Week begins. It is a time when the long fast of Lent reaches its conclusion and the critical events of the Passion of Christ are remembered. 

Personally I find it a sombre and powerful time.

Yet for many in the West the idea of commemorating the crucifixion is absurd and possibly dangerous. For many, to ascribe power to the legendary judicial death of an obscure Jewish carpenter is to ignore the truths that we see all around us. Christ does not mention the things we know today, because he did not know them, therefore he must be merely a product of his time, and therefore not transcendent or divine. Some go further and suggest that Christians or indeed any other religious follower are self deluding or arrogant because they refuse to accept the truths of science.

Personally I do accept the truths of science. I accept the sceptical method. I am in awe of the majesty of the the vastness and stunning beauty we see in the heavens- and the science that helps us start to understand it.

I also know that we know so little. In a Universe where even the Milky Way itself is a mote of dust in the near infinity of space, our perception of reality is limited and partial. Beholding the Universe is something that is essentially impossible, and even the attempt puts us in a position of utter humility. The scale and power of what is out there is quite literally beyond our comprehension.

As a small boy I watched the launch of the Apollo Moon missions, and for me the names of Neil Armstrong, Buzz Aldrin, Mike Collins, Pete Conrad, Alan Bean, Dick Gordon, Jim Lovell, Fred Haise, Jack Sigert, Al Shepherd, Ed Mitchell, Stu Roosa,  Dave Scott, James Irwin, Al Worden, John Young, Charlie Duke, Ken Mattingly, Gene Cernan, Jack Schmitt and Ron Evans carried an almost mystical magic. These men, together with Frank Borman, Bill Anders and Tom Stafford are the only humans have have ever seen the whole of the Earth with their own eyes. Their reflections on the meaning of their mission, notably in the film "The Shadow of the Moon", express profound truths about our place in the Universe. All of them express a sense of spirituality in the way they describe our home Planet in the vacuum of space. Many of them indeed followed spiritual or religious paths on their return home.

Learning more compels us to understand that most truth contains quibbles and qualifications. We need to learn humility. For some the idea of religious faith is the opposite of humility, it is irrational certainty. Perhaps for some it is. I certainly don't feel that way. I accept that faith seems to demand a belief in the impossible. Almost by definition I question this faith at every turn. Yet recently, since the beginning of the liturgical year in Advent, I have attended the Lutheran service in Tallinn. The pattern of Confession, Kyrie, Gloria, Lessons, Sermon, Creed, Sanctus, Lord's Prayer, Pax, Agnus Dei, Nunc Dimittis, Benediction and Postlude is an ancient one. In the mediaeval church of the Holy Spirit, though the congregation is very small in this most secular of societies, the Lutheran music tradition is strong and beautiful. Taking Communion should objectively not mean too much, but in fact I feel considerable emotion. I am moved by the idea that the Universe might have a presiding spirit within it and that our existence may not be merely from some random course of events. The service makes me mindful of my fellow congregants, of wider humanity, the world and the worlds beyond the worlds. I take in the message of peace, forgiveness and trust that is distilled from the approved version of the Christian story. Whatever the details of the origins of Christianity, whatever the complete truth of the New Testament, the faith that is preached today is a subtle and sophisticated analysis of human frailty and human strength. 

In the symbols of the liturgy I am actually surprised to find not an empty, dust-filled irrelevance, but a profound sense of purpose. I do not claim that Christianity is the only religious way to encounter the purpose of existence, in fact I do not claim that religious faith of any kind is necessary. I only claim that for some, such faith is and has been a positive force.

Therefore I will ask of others only what I would offer myself: a sense of respect. I would ask that you do not denigrate faith as a "conversation with an invisible sky fairy". I would ask that you accept that others have different points of view and that these points of view may have a value that you may not understand or believe. I would ask for tolerance and an open mind. Even, at a stretch, I would ask for kindness.

We live in a staggering Universe. We should all show humility to the living things that share our stunningly beautiful Planet- a living jewel of Earth hung in the blackness of space.

As Eastertide begins, I remember a Good Friday radio broadcast on the BBC from years ago. It was a retelling of the Passion and used Vaughan Williams Fantasia on a theme by Thomas Tallis as incidental music. When I hear it, I think of my homeland and my family, many of them now living under the eaves of the green hills of Gloucestershire where Vaughan Williams was born. I also think of the passage of time that makes music possible and the Spacetime that we all exist within.

Truth is founded on doubt and uncertainty, it is a way to attempt to understand, even when there are inevitable limits to our understanding- such limits exist even deep at the heart of quantum mechanics. I think the same fundamental conditions apply to faith too.

Maybe understanding doubt is the most profound lesson we can learn from the time we are given here.

So as Holy Week begins, I wish you patience, understanding and joy.

Thursday, March 17, 2016

Taking the long road

George Osborne's budget was an incoherent collection of gimmicks. It was not designed with any other purpose but the promotion of its author and a certain faux stability ahead of the EU referendum in three months time. 

So, easy to criticize, but the fact is that at the moment, no political party in the UK is prepared to suggest the kind of reforms that are needed. The political cycle is too short for any government to reap the reward of the kind of radical changes that are required, but not long enough for the same government to avoid the negative consequences that such radical reform will inevitably bring with it. So, successive governments merely tinker with the system, knowing that to do more carries greater risks and limited rewards in the short term.

The cost of tax administration in the UK continues to increase, and the ever more complicated system imposes greater fiscal drag and ever more distortion of the economy. Incomes remain heavily taxed, while land is barely taxed at all- a distortion that has helped to create an increasingly dysfunctional housing market. Addressing the tax of land and property would help to release the significant percentage of the housing stock that is empty because there is no incentive to let it or sell it. "Buy-to-leave" has become a major problem across the country, but especially in London. It is a national scandal and one which Mr. Osborne's supporters have a vested interest in perpetuating. It is well beyond bizarre that HMRC's own office buildings are held in tax avoiding off-shore trusts, and high time that assets such as land and property were taxed in the same way, or at least to the same degree as income.

As for income tax itself, the highly regressive nature of the UK tax burden remains disguised by the nominally progressive setting of different tax rates, but it is still the case that the tax burden falls excessively on the lower and middle income groups. A wholesale reform and simplification of tax is long overdue. The current administrative cost of the collection of tax at over £20 billion is nearly five times greater than the fiscal gap that Mr. Osborne sought to plug with his regressive cuts to disability allowance and other benefits. The burden on the private sector is greater still. A flat tax with a tax threshold that is set at median income, so that only the top earners pay income tax is both far cheaper to administer and far fairer than the current system.

The Liberal Democrats have an opportunity to build a programme of effective, efficient and fair taxation. Now is the time for the policy teams to embrace a genuinely radical platform that unites taxation and benefits, as we have long advocated, but also to build in local and national accountability into the tax system. The original idea of pension and welfare insurance must surely be restored, and the promotion of savings and investment made fashionable once again. We have the opportunity- and as Mr. Osborne now, and Mr. Brown in the past show- no one else is prepared to offer leadership. Yet without reform, future chancellors too will be reduced to the ineffectual tinkering that George Osborne has presented to the House of Commons this week.

As the clouds of the next financial crisis gather, the time for action is already getting late in the day. We must set out on the long road to reform as soon as we can.