Their Flimsy Fiscal Condescension

Posted on March 29, 2024 by davidsberry

“The UK’s public spending works fairly for Scotland and allows the whole country to pool and share its resources.”

—UK Government’s Delivering for Scotland

Really?

According to UK Government figures, Scotland runs a 9% deficit of £19.1 billion. This is based on their figures of £87.5 billion in tax revenue, £106.6bn in outlays.

On the other hand, according to The London Economic, Scotland’s annual tax contributions to the UK Treasury have increased by £14.2 billion over the last decade, with income tax, capital gains tax and taxes on productions driving this increase. Scottish public sector generated an annual revenue of £73.3 billion during the last financial year. This is a 24%increase versus a decade ago, equating to an increased contribution of £14.2 billion to the UK economy. The figure is lower than the UK government figure above because it does not include revenue from North Sea oil and gas.

Also, the UK government figure for outlays includes several items of questionable value to the people of Scotland. These include Scotland’s 8.5% share of the £21bn development of Trident and almost all its £3bn annual running costs—a total of £4.8bn, which docks a quarter off Scotland’s supposed “deficit” for starters. Kick in the £4.5bn squandered on cost-of-living handouts and the Scottish deficit drops to 4.8%, rather less then the 5.2% deficit the UK is currently running.

“Every time we present a progressive budget, Douglas Ross (Scottish Tory leader) stands up and predicts some kind of mass exodus from Scotland.”

—Humza Yousaf, FM, Budget Debate, 21st December 2023

The bottom line is Scotland now accounts for 8%of total UK contributions, far more per head than the 3.5% from Wales and the 2.1% from Northern Ireland. 

Both income tax (+71%) and capital gains tax (+70%) have seen the largest increase of all taxes on income and wealth over the last decade, with corporation tax (excluding North Sea Oil) also up 17%. This also does not include Scotland’s 90% share of the £2.6bn in windfall tax that the UK government received in fiscal 2022/23. Only public corporation contributions have seen any decline (-30%). 

Taxes on productions have also climbed by 35%, with taxes on environmental levies driving this increase, up 368% in the last decade. This last is particularly odious because the levies favour generation close to the many English conurbations and penalise those generated in the many sparsely populated stretches of Scotland.

Taxes on land and building transactions have increased by 197%, with taxes from EU Emissions Trading Scheme auction receipts seeing the third largest increase at 190%.

“Scotland’s economic contribution to the UK stretches far beyond North Sea Oil and, in fact, there has been significant increases across many areas of the Scottish economy in the last decade.”

—Bradley Post, MD of RIFT

No wonder any mention of Scottish independence triggers desperate chills among unionists: the above gives over fourteen billion reasons why they’re so keen to cling to Scotland as part of the UK.

#1105—501 words

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Orban’s Heritage?

Posted on March 23, 2024 by davidsberry

On March 8th, Hungarian prime minister Viktor Orbán visited Donald Trump at his palatial Mar-a-Lago retreat, where media reported much bonhomie and mutual respect. Almost unreported was Orbán’s visit to Washington, where he met Kevin Roberts, president of the Heritage Foundation at its headquarters and spoke privately to an audience of right-wing politicians, analysts and public personalities. To more liberal observers, it was nothing short of shocking that Orbán declined to meet with officials in Biden’s administration yet met with such a right-wing think tank instead.

Since Roberts’s appointment as head of Heritage in 2021, this formerly mainstream conservative organisation has swung to the position that its role is “institutionalising Trumpism. Roberts has been vocal about his admiration for Orbán, tweeting that it was an honour to meet him. The admiration appears to be mutual.

“Hungary is the place where we didn’t just talk about defeating the progressives and liberals and causing a conservative Christian political turn, but we actually did it.”

—Viktor Orbán, addressing the CPAC in 2023

Roberts is quoted as saying that Orbán’s statement was true and should be celebrated. He has called modern Hungary “not just a model for conservative statecraft but the model.

Last year, under Roberts’ direction, Heritage joined the Hungarian Danube Institute in a formal partnership. The Hungarian think tank is overseen by a foundation that is directly funded by the Hungarian government. It is effectively a state-funded front for pushing pro-Orbán rhetoric. The Danube Institute has given grants to far-right figures in the US. 

The American public have no idea how much funding may be flowing  The tight cooperation between Heritage and Orbán is behind something called Project 2025, the plan Heritage has led, along with dozens of other right-wing organisations, to map out a future right-wing presidency. directly from Orbán’s regime to the Heritage Foundation.

In Hungary, Orbán has changed the political landscape by:

  • undermining democracy
  • filling the Civil Service with loyalists
  • attacking immigrants, women, and minorities
  • taking over businesses for friends and family
  • moving his country away from rules-based international order 

In an interview this January, Roberts said Project 2025 was designed to jump-start a right-wing takeover of the US government. 

“The Trump administration, with the best of intentions, simply got a slow start. Heritage and our allies in Project 2025 believe that must never be repeated.”

—Kevin Roberts, president, Heritage Foundation

Project 2025 stands on four principles that it says the country must embrace. In their vision, the US must:

  1. restore the family as the centrepiece of American life
  2. dismantle the administrative state
  3. return self-governance to the American people”
  4. defend our nation’s sovereignty, borders, & bounty against global threats s
  5. secure our God-given individual rights to live freely

In almost 1,000 pages, the document explains what these policies mean for ordinary Americans. But more objective explanations might observe:

  1. “Restoring the family” means eliminating any words associated with sexual orientation, abortion, reproductive health, or reproductive rights; it means celebrating overturning the 1973 Roe v. Wade decision
  2. “Dismantling the administrative state” means civil employees who thwarted Trump’s agenda 2016-2020 should be fired and replaced with loyalists who will carry out a right-wing president’s demands.
  3. “Defending our nation’s sovereignty” means ending the rules-based international order hammered out in the years after WWII. This means deserting the UN, NATO or the Universal Declaration of Human Rights
  4. “Securing our God-given individual rights to live freely” reeks of religious rule but ultimately focuses on standing against “government control of the economy”—the idea that regulation of business and taxes hampered economic liberty. This ideology mat have moved as much as $50 trillion from the bottom 90% to the top 1% in the US since 1981.

Purging the civil service is a hallmark of dictators, whose loyalists then take over media, education, courts, and the military. 

“With the government firmly in the hands of a dictator’s loyalists, things like water or schools or Social Security cheques depend on your declaration of loyalty, and there is no recourse. You cannot escape to the bar or the bowling alley, since everything you say is monitored. Even courageous people restrain themselves to protect their children.”

—Timothy Snyder, scholar of authoritarianism.

That Trump, Heritage and Orbán have all stood firmly against aid to Ukraine in its struggle to fight off Putin shows a penchant for dictatorship. Plan 2025 is the blueprint for a small, self-selecting elite to take over America, using money as a weapon. 

As the thin end of the wedge in all this, Republican-dominated state legislatures have already attacked voting rights, banned abortion without exceptions and defined a fertilised human egg as a person; They have banned books, attacked public education and gutted business regulation.

America’s Founding Fathers were clear about the relationship between rights and government, in a vision quite different to Project 2025. “\ 

“Governments are instituted among Men. Such governments are not legitimate unless they derive power from the consent of the governed.”

—Declaration of Independence, 1776

#1104—814 words

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Insatiable Social Care

Posted on March 17, 2024 by davidsberry

A year ago, the IK government published their flagship policy “Next Steps to Put People at the Heart of Care”. It is full of noble intent that: “everyone who needs care in England will have outstanding, quality care that empowers them to lead fulfilling lives and have the greatest possible independence”, or “care workers will develop their skills and their careers, and will be recognised for those skills.” All excellent stuff. But om the midst of all this is an asmission from the Minister that:

“For decades adult social care has not had the attention, resource or support from government that it deserves.”

—Helen Whately MP, Minister for Health & Social Care

At present, social care is funded by government for people assessed as having significant care needs and limited financial means (assets below £14,250). People with assets of more than £23,250 pay for all their social care – and there is no limit to what they might pay. Every part of England is now covered by an integrated care board (ICB), as it has been in Scotland for a decade, were each of the 32 councils operates a joint board. 

Allocation of £2.1 billion in funding for England was specifically earmarked for supporting and improving adult social care and discharge, but has yet to achieve much.

According to The Health Foundation. one in seven people aged 65 and over face care costs over £100,000. Government only covers the costs of care for people with the highest needs and lowest means. Everyone else must pay for care themselves, get help from friends or family, or go without. 

  1. Providing basic protection for all against some care costs, with a Scottish-style model of ‘free personal care’ in England, could cost an extra £7bn by 2035/36 
  2. Protecting people with the greatest lifetime care needs against catastrophic costs, by introducing a Dilnot-style ‘cap’ set at £86,000, could cost an extra £3.5bn by 2035/36 
  3. Introducing an NHS-style model of universal and comprehensive care could cost an extra £17bn by 2035/36. 

Successive governments have ditched or delayed plans to reform funding for social care, leaving people suffering unnecessarily. Tony Blair promised reform in 1997. A decade ago, the coalition government legislated for a Dilnot-style cap on care costs but its introduction was later delayed. In 2021, Boris Johnson announced that the cap would finally be implemented. But, in a case of history repeating itself, the government has since delayed the cap until 2025 – after the next election. Ultimately, progress will not happen without political will and leadership. 

According to The Health Foundation wid package of investment and reform in social care is desperately needed. 

“Despite the pressing need for change, successive governments have failed to reform the funding of social care, leaving a catalogue of broken promises, delays and abandoned manifesto commitments whilst people continue to suffer under a care cost lottery.”

— Charles Tallack, Director of Data Analytics, The Health Foundation

It may be because of eye-watering budget numbers involved that successive UK governments have balked at facing the issue. The common view among those working in social care is that they are underpaid for the work they do. The average social care salary in the UK starts around  £19,000, rising to £31,000, according to the government. That averages £12,38 an hour—not much more than minimum wage.

Currently, integration of Social Care with Health is proving to be something of a window-dressing sham on either side of the Border.

Each NHS trust has paid lip service to it, especially in efforts to reduce bed-blocking, But as as cash-strapped councils have sold off care homes to raise funds, the private care providers that dominate the segment have been motivated more by profit.

This alone provides a clue why true integration will be not just thorny, but also expensive. An indication where all this might lead can be found in the US, where the profit motive has long been king in both the health and social care sectors.

According to the Genworth Cost of Care Survey 2023 of care in the US, the most substantial cost increases occurred in home health aide and homemaker services costs. Inflation and the shortage of skilled care workers are the core drivers of increases in the costs of care services.

“Understanding long-term care options and the costs associated with care are critical first steps toward being prepared for whatever you want your aging journey to look like,” 

—Jamala Arland, President and CEO, Genworth

Their 2023 survey found that the costs of long-term care services have increased since 2022 as follows:

  • Assisted living facility rates increased by 1.4% to an annual median cost of $64,200 (£50,156).
  • The cost of a home health aide, which includes “hands-on” personal assistance with activities such as bathing, dressing, and eating, increased 10.0% to an annual median cost of $75,500 (£58,984).
  • Homemaker services, which include assistance with “hands-off” tasks such as cooking, cleaning, and running errands increased 7.1% to an annual median cost of $68,600 (£53,593).
  • The annual median cost of a private room in a nursing home increased 4.9% to $116,800 (£91,328).

Staff trainings and cost are the top barriers that impact a provider’s ability to recriot and train staff.

In the UK, the annual average cost of residential care is £39,480, and receiving nursing care in a care home costs on average £49,920. The US figures for these are already 27% and 84% more, respectively. These differentials do not arise, as might ne expected, from higher wages paid in the US, which are comparable to those in the UK.

The conclusion appears to be that, if the grafting of the public NHS onto a probate system is even feasible, the progit priority of care companies will drive the cost of social care toward that of the US. That will pose the dilemma of whether we are prepared to shoulder the costs. These will be high, whether paid in taxes or directly from your own wallet.

#1103—990 words

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Affordable Husting

Posted on March 6, 2024 by davidsberry

“A social contract where the tax contribution is based on the ability to pay, and strong public services are understood as enabling a strong society and a growing economy.”

—Shona Robison MSP, Foreword to the Scottish Budget 2024-25

This worthy statement, and many others like it, suffuse the 1,512-word Foreword to the Scottish Budget 2024-2025. Though there was much anguish over how to stretch limited funds over many conflicting priorities, the fact of the matter is that Ms Robson had a total of £59.7 billion in public funds to distribute. That amounts to £11,371 for every man, woman and child in Scotland.

As you might expect, the usual suspects among political opponents were quick to rubbish choices made.

“A chaotic and incompetent Budget, based on the fiscally illiterate assumption that income tax can be used to plug the holes.”

—Michael Marra, Labour finance spokesman

“This Budget does nothing” to boost jobs, investment or economic growth.”

—Liz Smith,  Conservative finance spokesperson

While these might be dismissed as the usual parliamentary knockabout, a number of other voices have been raised in criticism, especially those attending the Housing Festival, held at the SECC in Glasgow this week.

“This deeply disappointing and disjointed Budget risks bringing to a screeching halt – and if anything, throwing into reverse – action to tackle poverty.”

—Jamie Livingstone, Chair of Oxfam Scotland

“The Budget will only serve to deepen the housing inequality being felt across the country and risks losing the significant socio-economic benefits that come through increased home building.”

—Fiona Kell, Director of Policy at Homes for Scotland

For it seems the most intense debate around the budget is to do with affordable housing and a 26% cut in funding to support it. On March 3rd, Shona Robison asserted the Scottish Government had built 117,000 new homes since 2007. The Scottish Government’s commitment is, working with partners, to deliver 110,000 affordable homes by 2032. Of this total, the target is that 70% (77,000) will be available for social rent and 10% will be in remote, rural and island communities.

Last year, according to the Scottish Government’s Affordable Housing Supply Programme (AHSP), a total of £752 million was available for deployment in 2023 to 2024 to address Scotland’s shortage of affordable housing.

“The Scottish Government’s ambition is that everyone in Scotland should have access to a warm, safe, affordable and energy efficient home that meets their needs, in a community they feel part of and proud of.”

—Housing to 2040(March 2021)

Lofty words. But, compared to that 2023-24 programme, the revised budget of £556 million, approved at the end of February, represents a serious decrease of 26%. These new “savings” of £196m are split between a £74.7m reduction on capital and a £121.4m reduction in financial transactions. These cuts to ‘financial transactions’ (65%) are greater than the cuts to capital (14%), which means the non-social housing part of the new supply programme takes the brunt. The budget also scrapped the fuel insecurity fund, used to support social tenants unable to meet their energy costs.

Ominously, Cabinet Secretary Shirley-Anne Somerville confirmed the target to build 110,000 homes by 2032, but said this was ‘at risk’. By way of explanation, the Scottish government said the cuts were necessary because the UK government did not “inflation-proof” its capital budget, resulting in a real-terms cut of 10% in capital funding to Scotland.

But why a 10% cut in real terms of funding coming from Westminster should translate into a 26% cut in the AHSP budget is not clear. In fact, examination of other parts of the budget raise questions as to the real policy priorities being pursued. For example over the last two budgets:

  • Tacking Child Poverty within Social Justice has risen from £45.7 million to £111.4 million—a rise of 144%.
  • Social Justice itself has grown to £7.6 billion from £5.6 billion, a 35%.  Increase
  • Most of this went raising Social Security Assistance by a whopping 56%, from £3.9 to £6.2 billion.
  • NHS Recovery, Health and Social Care. Was already at £17.4 billion and was raised this year to £19.6 billion, an increase of 13%.

Nobody claims that such increases are unjustified, nor that the beneficiaries are undeserving. But one of the tough jobs of government is setting priorities. Some funding has come from cutting  the Wellbeing, Economy, Fair Work and Energy budget by 7% from £1.4 to £1.2 billion, with the biggest loser being Enterprise, Trade and Investment, dropping a quarter from £467 to £349 million. And, over these three years, another £137 million is being poured into the fiscal swamp that is Ferguson Marine.

Given just the above figures for Social Justice, plus NHS Recovery & Social Care have received a £4.2 billion uplift over two years between them, it seems hard to justify the removal of £196 million—just 4% of that total—from as crucial a policy area as affordable housing.

The resulting problem is both acute and urgent. It is not helped by the government definition that includes housing for affordable home ownership and mid-market rental, as well as social rental. The stark reality is that Scotland is failing to provide housing for the less well off and vulnerable, despite the Scottish Government warm words on the matter.

Government statistics released last week revealed 30,724 live applications were recorded in September last year – an increase from the previous high of 30,129 in June last year. The number of unresolved applications had increased by 10%. Over the same period, 9,860 children were recorded in temporary accommodation in Scotland—an 8% increase.

“It is deeply worrying to see a rise in rough sleeping.”

—Matt Downie, Chief Executive of Crisis

The burden of all this falls on councils, who are increasingly hampered in their ability to do much about it. Humza Yousaf’s decision to freeze council tax without consulting councils has exacerbated local government finances and, thereby, both homelessness and social housing services.

During the Housing Festival the Chartered Institute of Housing (CIH) called for action from the Scottish government to address what it sees as a worsening situation across the country. This is reflected in three local authorities: Argyll and Bute, Edinburgh and Glasgow already having declared housing emergencies in their respective areas, with more councils, including Fife, expected to follow.

“The cuts come at a time when multiple local authorities have declared housing emergencies and recent independent research has shown that there are 693,000 Scottish households facing at least one form of housing need.”

Research published by Institute of Public Policy Research (IPPR), Joseph Rowntree Foundation, and Save the Children last year showed that up to 60,000 people in Scotland are kept out of poverty each year because they live in a social home. However, taking East Lothian as an example, its 25% population growth (90,100 to 112,300) since its formation in in 1996 sits badly against the fall of 56% in its housing stock—from a peak of almost 20,000 to 8,906. Their waiting list is pushing 5,000. Other councils tell similar stories.

“This is a hammer blow for tackling homelessness and poverty across Scotland and will have long-lasting consequences for the nearly 250,000 people throughout Scotland stuck on a waiting list for a social home.”

—Sally Thomas, SFHA Chief Executive

A cynical observer might say that the Scottish Government is hanging councils out to dry while they hold hustings camouflaged as voter bribes to ensure they hold on to power. But even a sympathetic observer must wonder why the affordable housing budget could not have been secured as a relatively small part of the budget with a big and long-lasting impact.

Housing Minister Paul McLennan was scheduled to hold a Q&A session with delegates to the Housing Festival, but it appears this was altered at short notice to giving a speech. Given the above, this may have been an example of discretion being the better part of valour.

“80% of adults in Scotland say the country is currently experiencing a housing crisis as the Scottish Government faces increasing calls to reverse its huge cut to the affordable housing budget.”

—Scottish Federation of Housing Assoc. 8th Feb. 2024

#1102—1,314 words

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Channelling Carnegie

Posted on March 2, 2024 by davidsberry

Next week, Chancellor Jeremy Hunt will stand up in parliament and present the last Tory budget before the general election. To satisfy the unruly Tory right and many of their wealthy supporters, it is widely expected to contain tax cuts, even if the actual tax burden remains at record highs.

“There is plenty of scope to cut tax rates in the budget. Debt interest charges are about to tumble as inflation falls. Abolish UK Government Investments and cut nationalised industry losses.”

—John Redwood MP on “X”, Feb. 29th 2024

The trouble with this low-tax shibboleth is that high expectations of public services and other commitments make implementation difficult without driving debt further towards the £3 trillion mark. Debt interest repayments alone now total £83 billion a year—twice the entire UK defence budget.

The “supply side” mantra of lowering taxes to stimulate the economy has a terrible track record. That this does not work in reality has its more egregious example a century ago, during the spectacular, but “Wild West” growth of America’s industrial might.

Ford in autos; Rockefeller in oil; Vanderbilt in railroads; Carnegie in steel—a century ago, they each amassed personal fortunes to become America’s “robber barons”. All of them held it as self-evident that the wealth they gathered from and spent for public purposes benefitted the general masses. It was clearly of more value to the less wealthy than if scattered among them in more trifling amounts.

“Wealth, passing through the hands of the few, can be made a much more potent force for the elevation of our race than if distributed in small sums to the people themselves. Even the poorest can be made to see this.”

—Andrew Carnegie

At least Carnegie practiced what he preached, building the great Carnegie Hall on 7th Avenue  in New York City, and a lass well know one in his home town of Dunfermline.

His philosophy, if not his philanthropy, was trotted out again in the 1980s by Ronald Reagan. The economy did indeed boom, but only for the richer part of the population. “Joe Sixpack”—the auto worker pulling down $20 an hour in Detroit, or the steel worker earning similar in Pittsburgh found themselves living in what became known as “The Rust Belt”.

Less than 40 years later, along came Donald Trump, peddling the same snake oil. In 2017 Trump slashed the top corporate tax rate from 35% to 21% and reined in taxation for foreign profits. So far, it deprived the US Treasury of some $2 trillion in revenues since 2017. A report from the Institute on Taxation and Economic Policy (ITEP) looked at the first five years the law was in effect. It found most profitable corporations paid “considerably less than 21%’ because of loopholes. In fact, between 2018 and 2022:

  • 342 companies studied paid an average effective tax rate of 14%.
  • 87 (24%) of them paid effective tax rates of under 10%.
  • 55 (16%) of them, mostly major corporations, paid less than 5%. These included T-Mobile, DISH Network, Netflix, General Motors, AT&T, Bank of America, Citigroup, FedEx, Molson, Coors and Nike.
  • 23 (7%) of them, all profitable, paid no federal tax at all over the entire five-year period.

Today in the USA, Republicans want to extend the Trump tax cuts after their scheduled end in 2025, a plan that would cost $4 trillion over a decade even without the deeper cuts to the corporate tax rate Trump wants if re-elected. In contrast, his opponent Joe Biden h called for higher taxes on the wealthy and corporations, which would generate more than $2 trillion. 

Curtailing revenue and focusing only on spending cuts reflect a society like the one those late-nineteenth-century industrialists embraced. It is a similar philosophy that tax-cutting Tories are espousing, in which a few wealthy leaders get to decide how to direct the nation’s wealth.

“I agree with the Chancellor who said he wanted the rich to stay here and to spend their money here.”

—John Redwood MP on “X”, Feb. 29th 2024

“Keep the non-dom tax status. Non-doms are good for the British economy.”

—Jacob Rees-Mogg MP on GB News, Feb. 29th 2024

A study by the Policy Institute for King’s College, London found that Britons are particularly concerned about inequalities between more and less deprived areas (56%). Their concern is significantly higher than the European average (39%).

The Equality Trust’s cost of inequality report on 23 OECD countries showed the UK spends more than anywhere else in Europe subsidising the cost of structural inequality in favour of the rich. Inequalities of income, wealth and power, when compared with the top five most equal countries are estimated to cost the UK £128.4bn a year in damage to the economy, communities and individuals

Next week, when the Chancellor breezily announces tax cuts for the rich, claiming it will boost the economy and do wonders for levelling up, put on your most sceptical face and keep a tight grip on your wallet because “trickle-down economics” is a ruse invented by the rich to keep them that way.

“I mean the truth is, I’ve never had it so good in terms of taxes. I am paying the lowest tax rate that I’ve ever paid in my life.”

—Warren Buffet (a.k.a. “The Sage of Omaha”, net worth now $117 billion)

#1101—885 words

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Mine Eyes Have Seen No Glory

Posted on February 24, 2024 by davidsberry

“If you don’t think this country is sliding towards theocracy, then you haven’t been paying attention.”

—Charles M. Blow New York Times, Feb. 21st 2024

Democracy in America, that self-styled “leader of the free world” is in trouble. People may think the threat comes from this year’s Presidential Election will be between soo-to-be-octogenarians, who should have retired years ago. Though this is a worry, more of a worry is the delusional bombast and miasmic morals of the most egotistical president America never should have had.

But the most worrying of all is that Trump’s bombast commands the support from one half of the institutionalised parties in the USA: the Republicans. Once staid and genteel, the GOP has gone off the political reservation. In all 250 years of its existence, only they or the Democrats have controlled the United States. Trump’s 2016-2020 tenure in the White House erased what little bi-partisan mechanism remained between them. The behind-the-scenes co-operation that served America so well up to the 1990s is now just a memory.

A major factor leading to this is religious extremism. 250 years ago, the “Founding Fathers” quite deliberately excluded religion from the U.S. Constitution. James Madison had seen his home state of Virginia arrest itinerant preachers for undermining the established church. He demurred, believing men had a right to the free exercise of religion. 

In his “Memorial and Remonstrance against Religious Assessments,” he explained not just religion, but representative government were both at stake. The establishment of one religion over others attacked the unalienable right of conscience. If lawmakers could destroy freedom of conscience, they could destroy all other unalienable rights, throwing democracy out the window and becoming tyrants.

But in the 1860’s, The Confederacy rejected the idea of popular government, maintaining instead that a few Americans should make the rules for the majority. They not only invoked “the favour and guidance of Almighty God” in their Constitution, they established as their motto “Deo vindice,” or “God will vindicate.” This thinking has a long history across the “Bible Belt” states of the South.

The depth of feeling in this area was highlighted this week when the Alabama Supreme Court declared that cells kept frozen for artificial insemination were children. Judge Tom Parke took the “theologically based view of the sanctity of life”. In this, he has substantial support for this view among MAGA Republicans’.

 “Embryos, to me, are babies.”

—Republican presidential candidate Nikki Haley

A number of hospitals in the South have ended their popular IVF programs out of fear of prosecution, And, if you think Speaker Lindsey Hoyle was being partisan when he made a mess of parliamentary procedure on February 21st, try this for size:

“The United States is a Christian nation, and I call for biblically sanctioned government. Sometimes what your constituents want does not line up with the principles God gave us for government. You must have conviction enough to stand up to your own people.”

—House of Representatives Speaker Mike Johnson

But this noisy minority does not speak either for the bulk of America, nor for the princples upon which the country was founded and has since prospered.

#1099—531 words

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Visa Vision as Cash Cow

Posted on February 21, 2024 by davidsberry

The continuing legacy of hard-core brexiteering under BoJo has yet to show much by way of advantage to the general public. But what it has done is weaken links forged with the Continent over half a century of EU membership, especially when it comes to travel of more than a week or two. Two weeks in Torremolinos or Tenerife may go as before. But those with property, relatives or friends across Europe now run into residence difficulties.

Having left the EU, UK residents are treated as any other foreigner. This means, they must comply with Schengen rules. They state that you may visit the EU only 90 days within any 180-day period and may not return at all during the following 90 days. Those who were already resident in the EU had their residency “grandfathered in”. For anyone else wishing to spend time there, a visa has become necessary.

One company was quick to spot the business opportunity in this. Originally based in India, VFS Global, headquartered in Dubai, UAE, developed a Swiss parentage by becoming a portfolio company of EQT, a private equity firm. EQT funds have invested in portfolio companies globally. Their portfolio companies grew to generate total sales of €19 billion and employing 110,000 people. The Swiss-based Kuoni and Hugentobler Foundation had minor a stakes in VFS Global.

“While working in India for the Switzerland-based Kuoni Group we had first-hand knowledge of the challenges travellers faced while applying for visas.”

—Zubin Karkaria, Founder and CEO, VFS Global

The niche that enabled VFS Global to become the world’s largest visa outsourcing specialist for governments and diplomatic missions worldwide was  managing the administrative, non-judgmental tasks related to visa, passport and consular services. This allows client governments to focus on the task of assessment itself. Established in 2001, it now operates 3,516 application centres across 149 countries on behalf of 67 client governments.

A quarter century ago, Karkaria clearly identified a huge business opportunity. The 1990s saw a huge surge in global travel which continues to this day. Most countries require a visa for entry. As few provide such visas on arrival, embassies in the originating country must first deal with applications prior to travel. Most require a complex set of validated documents before issuing a visa. Encountering this complex process for the first time, applicants typically make mistakes. By outsourcing to VFS Global, embassies save on staff, who typically enjoy job security, as well as vacation, sick leave and pension benefits.

It is unlikely that employees enjoy such benefits, the job security or the working conditions of the embassy staff who formerly did the job. Indeed, Karkaria and his board apply the “boiler room” techniques typical of Indian call centres and garment sweat shops. Judging from their offices in Edinburgh and London (both run by their GVC subsidiary), almost all staff are foreign nationals, probably on work visas themselves. Many appear to have scant training and an idiosyncratic grasp of English. They work long hours in a half-dozen cramped cubicles with room only for a desk and a chair for the applicant and a curtain for “privacy”.

They claim to run an appointment system, which must be made online and to offer a “Premium” service for £60 (on top of their £210 visa fee) for assistance in compiling the complex package of documents to be submitted to the relevant embassy of the applicant’s behalf.

At the Edinburgh office, not only is the Premium service unavailable, but the appointment time is a fallacy. On finding the building in the office block wasteland that is Leith Docklands, you are given a number at the reception desk and pile into a waiting room of 60 people sharing 45 seats to spend several hours until the sequential number is called. There are no refreshments; the water cooler does not work and a single toilet is some distance away.

Once squeezed inside a booth and the document package examined, any deficiencies are pointed out, invariably leading to another appointment needing to be made and the same day-long procedure repeated. What is not said is any indication of which other documents may lapse in validity before the next appointment, so running the risk of further visits being necessary.

Although suffering poor working conditions, staff are generally affable, but a lack of competent organisation and management makes the application process an ordeal for all concerned.

Despite this third-world level of operation, in December 20923, VFS Global was appointed to deliver UK Government Visa and Passport services across 149 countries where it operates. No doubt there are financial advantages in outsourcing. But the level of service offered is notably poor and might even be a deliberate disincentive to visit.

In October 2021, Blackstone acquired a 75% stake in VFS Global for $1.3 bn. Blackstone bills itself as “the world’s largest alternative asset manager”. It is also an astute collector of “cash cows” that pay big profits but little tax. By registering as a company in the tax haven of Mauritius, there is minimum transparency, especially regarding its finances. Senior management hide profits behind a smokescreen of vacuous management-speak.

“To lead and set the standard in the visa and consular services industry, through innovation, technology and customer service excellence.”

—VFS Global Vision

“We make people’s cross border mobility simple and convenient through highly secure, reliable, efficient, and innovative technology solutions.”

—VFS Global Mission Statement

#1098—898 words

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Robber Baroness III—Dido Harding

Posted on February 14, 2024 by davidsberry

But the most ambitiously Teflon of this sordid little group must be Baroness Diane Mary “Dido” Harding of Winscombe. She has shrewdly exploited being the most “connected” among them. Her father was John Harding, 2nd Baron Harding of Petherton and she has made the most of being friends with David Cameron while both were at Oxford.

From the start, Harding has used this start to cultivate the kind of useful links that help further careers, including:

  • Trustee of DotEveryone. (A charity focussed on ensuring the digital revolution works for all of society)
  • Advisory Board of The Fore Trust. (A charitable trust providing funding to early-stage charities and social enterprises)
  • UK Holocaust Memorial Foundation. 
  • Cross-party Advisory Board, with specific brief to assist with digital activities.
  • Court of the Bank of England, incl. Chair of Remuneration Committe
  • Director, British Land PLC 
  • Member of Telecoms Industry Security Advisory Council
  • Member of the Prime Minister’s Business Advisory Group
  • Director of Cheltenham Racecourse
  • Director of the Jockey Club 

Unquestionably bright, as well as ambitious, she holds a 1st Class BA Honours Degree in Politics, Philosophy and Economics from Magdalen College, Oxford, followed by a Masters in Business Administration (MBA) from Harvard Business School. She parlayed these heavy-duty qualifications into work as a Consultant and Engagement Manager, at the prestigious McKinsey and Company, followed by a post as Retail Marketing Director, Thomas Cook Group.

Harding then moved swiftly through a retail career with Woolworth, Kingfisher and Tesco, before she became CEO of TalkTalk Telecom Group PLC, a £1.8bn company, in 2010. It was there that she developed many of the links listed above and developed a political network that has served her well.

While running TalkTalk, she faced calls for her to resign. In October 2015, TalkTalk experienced a cyber-attack, during which personal and banking details of up to four million customers, not all of which were encrypted, were thought to have been accessed. The company was subsequently fined £400,000 by the Information Commissioner’s Office for its negligence.

When asked during an interview on City FM if the affected customer data was encrypted or not, she replied: “The awful truth is that I don’t know“. Her inflexible line on termination fees was also criticised. In all, the company admitted the incident had cost it £60 million and lost it 95,000 customers.

“The TalkTalk boss Dido Harding’s utter ignorance is a lesson to us all.”—Marketing, 29 October2015

“It has been a tough week for TalkTalk boss Dido Harding, facing complaints from customers and calls for her head“

—Evening Standard, 28 October 2015

In February 2017, Harding stepped down as CEO, explaining it was “to focus more on my public service activities”. (see bulleted list above)

As a longstanding member of the Conservative Party and friend of David Cameron, Harding was appointed to the House of Lords in 2014. During time there, she never voted against the party.  In 1996, she married John Penrose, now Conservative MP who is a neighbour of Jacob Rees-Mogg, both representing Weston-Super-Mare. Penrose had to resign as Anti-Corruption Champion due to his involvement in the Boris Johnson partygate scandal

But her own retreat to “Weston-les-deux-Églises” did not last long. In October 2017—the same year she quit TalkTalk—Harding was appointed chair of NHS Improvement, responsible for overseeing all NHS hospitals, comprising foundation trusts and NHS trusts in England.

From there, it was a short step when the Covid pandemic hit for Health Secretary Matt Hancock to announce in May 2020, that Harding was to be put in charge of the “track, test and trace” programme. Renamed “NHS Test and Trace”, this would prove to be as big a white elephant and black hole for public money as the PPE procurement fiasco. Both cost the public purse at least £40 million, for which no-one—including Harding—has ever been called to account.

“What we’ve done in really rigorously testing both our own COVID-19 app and the Google-Apple version is demonstrate that none of them are working sufficiently well to be actually reliable to determine whether any of us should self-isolate.”

—Dido Harding

In November 2020, a case was lodged to challenge the legality of her appointment.  In February 2022, two High Court judges ruled that Hancock had failed to comply with the Equality Act 2010 when appointing Harding, and also when appointing Mike Coupe as director of testing in September 2020. The court was told that Harding intervened to add Coupe, a former colleague of hers at Sainsbury’s, to the shortlist of candidates.

“Test and Trace has cost the taxpayer £22bn. It has repeatedly failed to achieve targets it has been set. It was once heralded as The Thing That Would Defeat Covid, but nobody talks about it much any more.”

—The Times, December 13, 2020

Despite all this, Harding went on to several other government appointments, including an (unsuccessful) bid to be CEO of Public Health England. Since then, she has kept a low profile, with her loyalties now focussed on money-spinning private American healthcare companies. Harding has taken on a consultancy job at Carna Health, an ambitious Massachusetts-based company that claims to be ushering in “a new era of healthcare”.Harding is also offering her “expertise” more widely through her personal consultancy, Avalon Enterprises, and through speaking gigs for Chartwell Speakers. Away from healthcare, she has also accepted a consultancy role at Vitrifi, a new telecoms business that regularly donates to the Tory Party. 

#1097—904 words

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Hope I Retire Before I Get Old

Posted on February 9, 2024 by davidsberry

With apologies to The Who and their classic sixties song, the need to think deeply about—and perhaps even achieve—retirement early in life has a new urgency. As if the Cost-of-Living crisis were not enough, along comes a report from yet another specialist lobby group you may never have heard of: the Pensions and Lifetime Savings Association (PLSA). Their report puts the yearly price of a retirement income deemed “moderate” for a single person at £31,300 for this year. The sum is £8,000 greater than the £23,300 estimate made last year. 

A “moderate” level of retirement is when retirees can afford running a car, dining out foreign holidays and ability to help family members with a budget of £1,000.

These growing retiree expectations of their quality of life in retirement is only partly responsible for the 34% jump in finance required. Having such disposable income above and beyond bare essentials such as food and shelter is now common currency.

The report judged that, even for a “minimum” retirement standard, a single person would need to put away £14,400 annually. This is £1,600 more than the £12,800 advice in the previous year. Even this 11% increase is double current wage inflation.

The bulk of the increase in requirement comes not from rise in expectation but from rising food inflation and energy bills that remain high.

“The increase in the annual rate was largely the result of the increase in food prices and tobacco duty“

—Office of National Statistics (ONS)

“800,000 people went more than 24 hours without gas or electricity in 2023 because they could not afford top-ups.”

—Citizens Advice Bureau

Costs also rose for those wishing a “comfortable” level of retirement, but less steeply. Research had shown that a couple would need only one small second-hand car, rather than two cars, as had been assumed in previous years.

The retirement living standards are calculated by the Centre for Research in Social Policy (CRSP) at Loughborough University, on behalf of the PLSA. The Covid pandemic is the largest factor in greatly increased socialising expenditure in pension age.

“Following the COVID pandemic, this latest research highlights a pronounced need and enthusiasm among the public for shared experiences beyond the confines of their homes, including activities like eating out and holidays,”

—Professor Matt Padley, Co-director, CRSP

The UK pension “triple lock” guarantees annual rises in state pension based on the larger of wage increase, inflation, or 2.5%. Last year, the increase was 10.1% and from April 2024, it will rise by a further 8.5%.

Though this cumulative increase of almost 20% may make a good basis on which to build a retirement, it still does not keep pace with the 34% “moderate” increment described above. Many baby boomers have done well into retirement, having benefitted from generous, plentiful jobs and steady rises in property values during their careers. But this does not apply to millennials and later generations.

Those looking to retire with a “comfortable” living standard, beyond 2050 will need to put aside £59,000 each year for a couple to achieve that. This is an increase of 9.2% from the £54,500 advised last year, and still greater than the “generous” triple-lock increment. Many feel such demands are unrealistic

“The triple lock added an extra £11bn a year to public spending.”

—Institute for Fiscal Studies

“Reforming the costly triple lock uprating of state pensions would help, by indexing pensions to an average of CPI and wage inflation, and by providing direct transfers to poor pensioners to mitigate poverty risks.”

—OECD

Is ANY of this sustainable? The recent publication of the state pension age and demographic change report saying the UK state pension age will have to rise to 71 for middle aged workers. 

#1096—622 words

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Robber Baroness II—Sarah Bentley

Posted on February 6, 2024 by davidsberry

The story of Paula Vennells and the destruction brought to the lives of hundreds of sub postmasters outlined earlier in Robber Baroness I, is bad enough. But an even more egregious example of promotion beyond competence which has wider fiscal impact and longer-lasting damage on both the environment and the public purse is the case of Sarah Bentley. 

Hers is a chapter in the tortuous saga of water privatisation in England. Many readers will be familiar with the difficulties of water companies in general, and of Thames Water in particular.  Background detail can be found on this site at “Can Water Stay Liquid”).

Sarah Bentley started well, graduating from the University of Kent with a first-class honours degree in Management Science and Computing. She then worked internationally in a number of roles, including strategy, marketing and propositions for BT’s Global Services division. After this, she became CEO of Datapoint, an Alchemy-backed company delivering customer relationship management (CRM) services throughout Europe,

Sarah then moved to become the managing partner for Accenture’s digital business unit in the UK and Ireland servicing a range of large UK consumer-facing businesses. She moved to join the Executive Committee at Severn Trent water company, where she was appointed as Chief Customer Officer in 2014, leading their Consumer Retail, Wholesale Network Operations Group.

This appears an excellent set of experiences as preparation to lead a customer-facing utility, with experience in a water company to boot. As a result, in 2020, Sarah was able to negotiate with Thames Water to be appointed as Chief Executive Officer. She secured this on her promise to forge an 8-year plan to rectify Thames’ fiscal, managerial and environmental failing after years of paying shareholders large dividends and sinking the company in debt for inadequate replacements for Victorian infrastructure.

What lured her from Severn Water was a very generous sign-on package. Just a year ago, she was handed a total of £727,000 in two one-off payments, part of a £3.1million ‘golden hello’ for signing on. This sum came on top of her eye-watering annual pay and bonuses the year before. It was announced within days of Thames being blasted by the Environment Agency for the firm’s pollution record. 

Then figures came to light that Thames had suffered its worst leaks since 2018—some 630 million litres—and hundreds of untreated sewage discharges. Given the resulting outrage, Bentley announced that she and Alastair Cochran, Chief Financial Officer would forgo any performance bonus that year. However, Ms Bentley’s actual compensation rose to £1.6m—larger than her £1.5m in the previous year.

“Ms Bentley’s plan to give up the bonus was “nothing more than a flimsy PR stun.”

—Gary Carter, GMB union

Despite such largesse, last summer, Ms Bentley resigned from Thames Water, giving no explanation. Not one-quarter-way into her 8-year plan, she left Thames Water mired in a £10.8 billion debt and suffering mounting prosecutions for increasing environmental damage from its crumbling infrastructure.

The pension fund owners, who made such a killing in Thames early years of privatusation, have stumped up £1.5 billion to try to make good the damage.

“The days of profit before the environment must end.”

—Chris Weston, CEO Thames Water, 27 June 2023

#1095—510 words

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