Season's Greetings

A Living Wage

The Living Wage has been in the news frequently after the figures for 2012 were published in November – and rightly so. It’s not a new idea though, the concept going back at least as far as 1894. 108 years on, The Living Wage Foundation is promoting its implementation and has done so for over 10 years. The new figure of £7.45 per hour is scarcely a king’s ransom but at least it is higher than the current minimum wage for adults of £6.19. That difference is important.
The Centre for Research in Social Policy calculates the Living Wage periodically by looking at the costs of a basket of goods and services that a family needs to reach a minimum acceptable standard of living. It covers more than just the items that are needed for rudimentary survival, such as food, clothing and rent. The calculation includes what is needed to reach a standard of living that is the minimum that is acceptable to a panel of members of the public. It is not at all surprising that this acceptable standard has gone down somewhat since impact of the financial calamity that began in 2008 continues to ripple through.
Almost all people wish to provide for themselves by working for a living (where work still exists and where jobs have not been exported by private sector companies or are being destroyed - as at Remploy – by government). In return, employees should clearly be paid a living wage for their work. People should be able to earn enough on which to live through their work alone. If companies want someone to do a job for them, then they should pay that person enough to reach the minimum standard.
The introduction of the Minimum Wage was a good first step towards paying a living wage, but the level is set too low for a family to live on. People on very low pay therefore often have to rely on support from the state to make ends meet. These benefits are effectively a subsidy to those employers who pay their employees less than enough to live on - with the balance taken from the pockets of the taxpayer. A Living Wage allows people to earn enough on which to live without the state having to intervene in yet another failure of the current rapacious and unprincipled version of capitalism.
All this of course stands in stark contrast to what typically happens at board level. There is an urgent need for sweeping, lasting and inescapable changes to the way in which top-level executives have their pay, bonuses and exit payments decided and the way that they are assessed for tax - and the many ways that legitimate tax is avoided both by individuals and companies some of whom pay less than the Living Wage.
It is entirely wrong that directors’ pay continues to rise at ten per cent a year while many employees are having their wages cut or frozen and their working conditions worsened. The values of fairness and responsibility should apply throughout companies, and in the setting of top-level pay there should be no further rewards for failure and no more huge and unwarranted executive pay increases – frequently made at the expense of low-paid workers.
The Fair Pensions' Just Pay! campaign aims permanently to embed Living Wage standards in the country’s private sector, beginning with the biggest companies listed on the London Stock Exchange, namely the FTSE 100. Companies today cannot be counted upon to do the decent thing of their own accord so it will have to be made a requirement to end the present injustice and exploitation.

How to Make Companies Act with Integrity

When considering private sector regulation it is sometimes asserted by vested interests and their allies in parliament that competition from a state owned enterprise, or one that was operated by what remains of Local Government, would be unfair to the rest. But as the continued ruthless exploitation of consumers demonstrates, an effect on the rest is precisely what is needed.

The financial barrow boys who misled the country and dragged down the economy - and who have since had further shameful practices exposed -are not alone. This ‘industry’ is just one example of the unprincipled way in which private sector outfits now operate. Effective action – not simply cosmetic – needs to be taken if the interests of ordinary people are to be brought back to the fore. Government promises and procrastination until anger over the latest outrage subsides will not do.

‘Competition’ has come to mean little more than competition for maximum profit by whatever means. These include misusing the loyalty of longstanding – usually elderly – customers and by the use of complex charging schemes designed to confuse. In banking there is the common practice of slipping people into accounts with even more derisory rates of interest when bonds mature and salami slicing interest in ISAs so there’s hardly any difference to taxed accounts.

Creeping cartelisation is a feature of a number of other so-called competitive industries too – witness the power companies managing their latest round of price hikes. The regulators range from inadequate to useless. Orthodox consumer groups complaining into the ether and taking little action have also proved to be ineffective so it is good to see some direct action taking place.

Governments, not infrequently ideologically driven, not wanting to upset important political donors, do as little as they think they can get away with (and then complain about ‘apathy’ and low turnouts in elections). Unmitigated ‘competition’, meaning little more these days than an economic free-for-all, is well past its sell-by date.

But there is a way of making finance, fuel, power and other industries heed the public interest and behave with a measure of integrity. If each of these sectors had a publicly owned firm within it acting as an exemplar, treating people in a respectful, honest and straightforward fashion rather than merely as profit fodder this would introduce a form of competition that is worthwhile to society as a whole. It would offer security and fairness to ordinary people, presently suffering relentless abuse by commercial predators.

As I’ve often suggested, there would be no better place to start than with the recreation of Municipal Banks – in so far as the Government would still allow fully-fledged Municipal Banks to operate in a meaningful way. Once the success of this was demonstrated we could then move on to other areas, starting with the railways and the franchised companies’ love of cancellations, outrageous fare hikes, complex pricing schemes and overcrowded carriages.

The Lunar Society

We are fortunate in Birmingham to have such a splendid organisation as the Lunar Society. Since its welcome re-incarnation in the 1980s, the Lunar Society has played a key role as an independent and productive forum for debate on scientific, engineering, medical, economic and related issues.

The Society brings together people from a wide range of professional, academic and industrial backgrounds to address important concerns of today and possibilities for tomorrow. The resultant understanding achieved is highly relevant to the present and future of our City, our Region and the wider world.

The global aspect is there because, true to its origins, the Lunar Society has made a major input and helped to raise the profile of matters of international importance. One example is the memorable focus on climate change and sustainable living which attracted an audience of several hundred to its main debate.

The 'Lunar mindset' matters every bit as much today as it did over two centuries ago when the Society was originally formed. Indeed in these austere and straightened times the work of the Society is more important than ever, seeking as it does to promote and connect innovative thinking in science, economics and culture and to catalyze action for the enhancement of the common good.

That we have such a visionary organisation with its foundations here in Birmingham is a great credit to the country's premier city outside of the capital.  The Lunar Society website is well worth a visit covering upcoming events, speakers and discussions and membership arrangements.

The Wonderful World of ‘Competition’

The recent outrageous further round of price hikes from power supply companies will have a severe impact on a wide range of people particularly, but by no means only, the millions already in desperate fuel poverty.

Average bills, already well into four-figure territory, will be pushed much higher still. The fuel companies benefit from a so-called ‘market’ where the main inter-company rivalry is about getting away with additional charges and inflated prices, making more profits, taking bigger bonuses and treating people as monetary cannon fodder. Another example, as if we needed it, of the wonderful world of competition.

Like banks and other notorious and parasitic sections of business today, they operate in effect, quite legally, as an informal cartel. They set their prices and margins in the same way and take it in turns to hike prices according to what they think they can get away with. Whether it’s gas, electricity or petrol, one thing is certain, unless there is official action these outfits will be getting a way with a lot more of your money and mine and their profits will not suffer one bit as a result.

Still, at least we needn’t lose sleep at night worrying about their oh-so-vital-to-the-economy executives’ remuneration or their shareholders profits - they at least will be comfortable in success or failure and can look forward to a tax cut next year. Even if pensioners can’t afford to keep a room warm, the board members will still have plenty of money to burn!

I would love to see a publicly owned exemplar company set up making fair, consistent and simple charges – some hopes! Failing this, in my opinion there should be frequent windfall taxes on fuel, power (and other) profiteering – the only questions should be about the extent and the use of the proceeds. It is clearly wrong that companies should make fat and inflated profits while people struggle to make ends meet, faced with rapidly rising costs for heating and other essentials such as food or even hanging on to their own homes.

Fuel and power supply are dominated by a small number of firms that are allowed in turn dominate you and me. These industries are classic ‘oligopoly’ structures, the shortcomings of which were once well understood. Industry ‘regulation’ in all quarters has been weak under successive governments and will remain so.

The exhortation to ordinary people to ‘shop around’ is worth little over time. It has been found out that a third of switchers make themselves worse off. And do they think that elderly and now vulnerable people who have built the country up should be spending their retirement time ‘switching’ between fuel companies (and banks) to reduce the extent to which they are exposed to highway robbery?

It is no defence for these organisations to retort that they are operating globally. Who has paid to make their fat global profits possible in the first place? We have! We’ve already paid ‘global’ companies with the British jobs they have exported and the higher prices they extract from us for the same products sold in other countries. This has fattened their profits and we’re entitled to a return on that too!

Since privatisation, foreign owned firms with even less concern for people in this country, sell North Sea gas to themselves during the summer for storing in Europe and reselling here at higher prices in the winter. Those companies who use (by whose consent?) the label ‘British’ should be made to act as if they were. Big business in general should not be a morality-free zone. They should think of those who have to eke out a small pension. They talk about their tough choices. How would they like to try the really tough choice between food and warmth?

Those who take big from society should also give back in comparable measure. Long gone are the days when those in near monopoly positions could be relied on to do this to some extent on their own account – or to be socially responsible and patriotic in the first place. So they need now to be taught how to be generous – or even pay their taxes. That would certainly be one way to create a warm glow all round!

Saving the Economy

While it is ever more apparent that effective measures need to be taken to stimulate the flagging economy – and others throughout Europe - careful consideration must be given to the form that such measures take and the effects that the actions have on different groups of people. In my opinion we need to do more on behalf of the saving community.
There has been far too much reliance on keeping both short and long-term interest rates low. There should be a much greater emphasis on public works such as transport infrastructure, power generation and increasing the nation’s limited fuel storage capacity.
In the present circumstances interest rate cuts have only a very limited positive impact on the economy, mediated as they are through the banks, as we continue bumping along the bottom in the worst recession since the 1930s.
Moreover, reductions in interest rates adversely impact on savers immediately and are only partly passed on (in some cases loan charges were actually put up by banks) to borrowers. And the exorbitant rates that continue to be charged on credit cards, not to mention usurious payday loans, are a disgrace.
Savings are the bedrock on which long term investment should be built. Not only this, but savers, particularly older people in or near retirement, are having their incomes severely reduced by interest rates held for years at derisory levels on savings accounts even at banks that it might be thought had retained some shred of respectability.
Ways must be found to moderate this highly adverse impact on highly responsible people who have paid their taxes and who are trying to live within their means and provide for themselves. Whenever it is pointed out that state pensions are protected (so far) it is rarely mentioned that pensioners who have savings have lost hundreds or thousands of pounds of income by the slashing of interest rates.
Furthermore, the economic effect of interest rate cuts can even be the opposite of that intended. The substantial income reductions for savers mean that they have less money available to spend. Twenty years ago in Japan the experience was that as interest rates were progressively pared back people reduced consumption and saved harder to make up the lost income. Annuities for those coming up to retirement have also fallen and financial institutions already cream off huge chunks of people’s private pension savings.
As we see all to frequently, it is no use relying on the banks to be reasonable about interest rates to savers. There needs to be action by the Government. This it could take through National Savings and Investments (which used to be called the National Savings Bank). We certainly need a bank that is operated in the people’s interest and which provides secure and reasonable returns to savers. If the Government won’t provide such a bank then local authorities should be re-empowered to step in to act in the public interest.
These practical measures I admit are vain hopes in the atmosphere of austerity that the Government and its friends in the right wing press has persuaded people is unavoidable. This is not so and if a principled stand was taken against this negativity there would be more cause for optimism than there is now.

Star Wars

I’ve now started a long overdue personal boycott of Starbucks. As if this outfit’s long history of UK tax dodging wasn't bad enough, their wretched managers are now trying to claw back any future tax bill from their low paid staff by, amongst other things, stopping paying them in their (half hour) lunch break. This was the last straw for me and no amount of sugar in the coffee could sweeten this!
It’s yet another example of less well off people being made to pay the price for greed, bungling and rank disloyalty by overpaid executives. And of course it is the approach taken by this equally wretched government with the scrapping of Remploy at the same time as promising a nice tax reduction for the rich one of the most appalling examples of its true values.
Tax dodging companies - of whom there are many - and individuals should have been made to cough up long ago. They are freeloaders on society and if they want to go elsewhere we should see if we could struggle along without them.
Payment of taxes should not be voluntary and it remains to be seen how much Starbucks and others (such as Amazon and Google) actually pay in the future. The years of austerity brought on by avaricious banks and incompetent and misguided government would be easier to endure if we really were ‘all in it together’. Perhaps we could then meet up for a coffee fairly traded at home and abroad!

The Tolkien Connection

The upcoming release of the first of Peter Jackson’s films based on The Hobbit gives an opportunity to emphasize, once again, how fortunate Birmingham is to have such a close association with its world-renowned author and how we should make more of this connection.
J.R.R. Tolkien saw himself as a Midlander. This is how he thought of Birmingham: “My father’s and my mother’s family were Birmingham people. I was born far away but came home in 1895, and have remained a Birmingham man ever since. The West Midlands are the best part of England”. Tolkien lived as a child in what was then the hamlet of Sarehole (now part of Birmingham) between 1896 and 1900 and elsewhere in Birmingham until 1911.
Looking back in old age, he described the four years at Sarehole as ‘the longest seeming and most formative part of my life”. The house in which he lived with his mother and younger brother is still there (now number 264 Wake Green Road) just across the road from Sarehole Mill. The Mill was the inspiration for the mill in Hobbiton and is now a most interesting museum in The Shire Country Park.
In one of his letters Tolkien writes: “As for knowing Sarehole Mill, it dominated my childhood.” In another he writes, “…I.. lived for my early years in ‘The Shire’ in a pre-mechanical age.” His own description of his surroundings in Sarehole is that it was “…a kind of lost paradise…there was an old mill that really did grind corn with two millers, a great big pond with swans on it, a sandpit, a wonderful dell with flowers, a few old-fashioned village houses and, further away, a stream with another mill…I took the idea of the hobbits from the village people and children”.
The Shire is based on the area around Sarehole Mill, The Dell, The Dingles and Moseley Bog where Tolkien and his brother Hilary often played as children. It is fortunate that a good deal of the original landscape which Tolkien saw still exists - which is why The Shire Country Park was established to conserve and interpret this unique historic area. In addition to the park’s links with Tolkien, there are Bronze Age burnt mounds in Moseley Bog and Sarehole Mill was also once owned by the famous industrialist Matthew Boulton.
In 1900 the Tolkien family moved to Moseley and then to Kings Heath to be closer to the tram route for him to attend King Edward’s School, at that time located in the City Centre in New Street. In 1902 they moved again to be near to the Oratory Church in Edgbaston, an area which includes the ‘Two Towers’ of Perrott’s Folly and the Italianate Waterworks chimney. The towers are strikingly aligned to the eye when leaving the old St Philip’s School (which Tolkien also attended) into Plough and Harrow Road and many people are convinced that they contributed in Tolkien’s imagination to the Towers of Middle-earth.
Hall Green’s annual atmospheric Middle-earth Weekend takes place in May and attracts over 10,000 visitors each year – proof, if it was needed, of the vitality of Tolkien’s legacy and how it is embedded in the community. Shire Productions gives unique dramatised extracts from The Hobbit and The Lord of The Rings with the next event on 8th and 9th December as detailed in the previous posting.

There and Back Again

My wife Vivienne recently made the following post on her popular blog, Stuck in the Mud  www.stickinginthemud.blogspot.co.uk
about an interesting forthcoming Tolkien related event in Birmingham associated with the release of the first Hobbit film. She posted:
“I write, not just as a volunteer gardener at Sarehole Mill, but donning my other hat, as a founder member of Shire Productions, a theatre group who have long been associated with the Middle-earth Weekend held annually at Sarehole Mill  www.middleearthweekend.org.uk  
We are very pleased the group are associated with this pre-Christmas and pre-'Hobbit' film event at Sarehole Mill.  Come with us on an unusual journey.
‘There and back again’.
Readings, poetry and songs by J.R.R. Tolkien in Moseley Bog starting from Sarehole Mill, Cole Bank Road, Hall Green, Birmingham B13.
2.00 - 4.00 p.m.  Saturday 8th and Sunday 9th December 2012 
Join a winter afternoon walk to Moseley Bog and feel the magic of 'the Old Forest' that inspired J.R.R. Tolkien. Members of theatre group Shire Productions will join you on the walk from the Mill to the bog and lighten your travels with songs and anecdotes.
Once there, surrounded by ancient trees, you might meet Thorin, Bilbo, Lord Elrond and other characters from The Hobbit.
Tolkien’s stories and songs will come alive through his readings, poetry and songs and on the way back again, magic lanterns will light the path for you.
On your return at the Mill it will be time for a well-earned 5th breakfast of hot drinks and sweet cakes.
Start at 2pm from bridge at the mill car park. Please dress appropriately for a winter afternoon in December. The cost is £6 (including 5th breakfast), children under 16 free.
Booking is essential, as numbers are limited.   Tickets are available from the on-line box office  www.bmag.org.uk  or phone 0121-303 1966.
Come in costume if you wish.”
Since the posting, tickets have been going fast and there are only a few remaining for the Saturday event. Once again Birmingham leads the way in community led Tolkien related activities.

Usury still Rules

In the credit crisis – it is notable that it is called this and not the savings crisis - we hear a lot about rates of interest. You’d think that official interest rates were the be-all and end-all of people’s woes or wealth. But there’s much more to effective economic management than the manipulation – legitimate or otherwise - of certain rates of interest as any unreformed Keynesian such as myself will tell you!
Interest - the price charged for the use of money over time - remains a contentious subject. The Medieval Christian Church saw banking as usurious regardless of the rate of interest applied. The Old Testament (Deuteronomy, 23) allowed interest charges only to foreigners! Islamic opinion is that overt charges for the use of money are sinful.
We hear about sporadic action against loan sharks. This is good of course and Birmingham has led the way in this. But as ever the law is weak and stupendous rates of interest can be charged quite legally. Governments refuse to set a legal limit. This allows vulnerable people to become victims of usury – exploited and trapped in perpetual debt.
A survey carried out in Birmingham twenty years ago (and it is still highly relevant today) showed that equivalent annual rates of over 100% for money lending to be common. At a 100% rate debt will double yearly if capital is not repaid.
In fact this little publicised survey found loans with annual rates of over 1000% - in which case debt can increase tenfold in a year. All this points up the importance to small borrowers of joining a Credit Union and avoiding this appalling usury.
There was even one case of loans charged at an annual equivalent rate of 4,822%! To illustrate the financial enslavement consequent upon this unimaginable usury, at this astronomical rate the liability from borrowing £1 would, in the absence of capital repayment, in eight years exceed the entire UK Gross National Product!
And outrageous annual equivalent rates around these levels are still in operation today, being applied by the mushrooming payday loans ‘industry’ with over 200 outfits in operation. For example the Wonga AER is 4,214%. But appalling as this is, it is exceeded by the AER for unauthorised overdrafts charged by some commercial banks!
It is no use wittering on about regulation or private enterprise. The first doesn’t work and the second generates private cash from vulnerable sections of the public.
‘Self regulation’ is a contradiction in terms and official regulation doesn’t work - as we’ve seen no end of times in the areas of finance, domestic fuel prices, petroleum pricing etc. The problems are too deep seated (tax dodging by corporations and rich individuals is another) and represents a character flaw in both individuals and industries.
This is why there is a need to establish publicly owned exemplar institutions, such as municipal banks, that will operate on fair, reasonable and moral bases and draw off some of the captive business from the grasping and cheating sections of the private sector. Until that is done, usury and exploitation will still rule.

A Bank You Could Trust

No, this is not a contradiction in terms! As regular visitors to this blog will know, I am a strong supporter of the re-establishment of the Birmingham Municipal Bank – and similar publicly owned banks elsewhere - as a safe and trustworthy haven for the savings, small and large, of the people of the city and nearby areas.
The fundamental values of the Municipal Bank would exclude pressurising of customers and needless chopping and changing of frivolous and misleading financial ‘products’, slippery small print, hidden charges and other devices of the trickster.
In such a bank, the simple principle of constancy would prevail. And in my view people throughout the country should be pressing for the re-introduction of Municipal Banks for their areas too. There is opportunity amidst the present crisis - there is a clear gap in the ‘market’ for plain, honest, straightforward savings banks.
Sometimes there’s a value in being unsophisticated - a remark originally attributed to RBS. There most certainly is, and bankers should know this better than anyone. But I suspect that reform for them will be well nigh impossible - their deeply ingrained habits are very hard to drop altogether. Incidentally, an old meaning of the word ‘sophisticated’ is ‘corrupt’ - which I think serves to underline the point.
Constancy and confidence were the values on which most of the true wealth of this country, much of it, alas, now cast to the winds, was built and which other institutions, such as the Municipal Banks and National Savings, sought to complement and support.
Is it too much to suppose that these fundamental principles might be worth rediscovering and implementing again today? They have not been lost by the majority of our population, but are hard if not impossible to find in the financial sector.
When the Birmingham Municipal Bank was first established in the early part of the last century, it faced significant opposition from the commercial banks – no surprise there. We are beset with austerity but the need is as pressing as ever. One tactic today from the various quarters opposed to the idea, is to frighten the horses by waving around large numbers, which are claimed to represent costs.
It is also suggested that commercial banks can provide any required service. The very same banks that, as one developer told me, had pulled out of financing over 90% of their viable projects and put at risk the jobs that would have been created. And these are the very same banks that have taken the Queen’s shilling - or rather billions - are effectively owned by the public, but who are refusing to do their bit for the economy and the country that has sustained them.
They are not to be trusted, and I still hope that a way will be found to once more offer ‘Security with Interest’ (the motto of the former Birmingham Municipal Bank) and attract the trust of the citizens of Birmingham. Such a service is widely desired amongst ordinary, respectable people.
Perhaps if a lead is given by Birmingham, there could be Local Authority led banks throughout the country. Having such ‘exemplars’ might force a change in the behaviour of commercial banks for the many years needed to bring in a new generation of ‘unsophisticated’ bankers who will not need enforcement to conduct their business in the public interest.

The ‘Invisible Hand’

The term ‘invisible hand’ describes the theoretical self-righting mechanism that the original political economists thought to be a characteristic of genuinely competitive markets. But the one thing that can surely now be seen is that this hypothetical hand has been more than usually invisible in recent years or else, of course, we do not have properly competitive markets.
In fact both of these things are true in my view. Hidden hands are not only invisible but also insubstantial and in fact totally incredible. Many so-called ‘markets’ in these benighted days of globalisation are rigged and operate as cartels comprising companies owing no loyalties save to themselves and mammon.
These outfits and their rich owners profit excessively from ordinary people by taking advantage both of them and of their timid and credulous governments and politicians who witter on, textbooks in hand, about the equally non-existent ‘level playing fields’ (about as likely to exist as the Elysian Fields) for international competition.
All this and the obsession with so-called ‘free’ trade and it’s claimed virtues - while some other countries are allowed to get away with cheating 365 / 24 / 7 with, amongst many other things, blatant trade restrictions, industrial espionage and fiddled exchange rates, plundering our once proud industries as they go. What fools we were to allow self-interested corporate management to hand over our assets to them, what fools some of our leaders still continue to be and what fools we are to keep returning them to power.
The only ‘invisible hands’ in evidence have been digging deep into the public purse and less than invisible tills fishing out quantities of the nation’s money that would make a spectre blanche. This along with the disgraceful and shameless industrial-strength tax avoidance widely practised by international companies.
What we need of course are very visible hands, not only bringing the discipline of regulation (and a sizeable stick) and perhaps some genuine competition but the helping hand of direct intervention in the real economy resourced by taxes that are actually paid by corporations and wealthy individuals. We either save what industry we’ve still got left or we shall lose that as well.
I have argued in other postings on this site for the adoption of pro-active Keynesian policies including taking advantage of the balanced budget multiplier effect and focusing on the economic benefits from direct investment in physical assets.
These measures should be taken by the Government as soon as possible but we are unlikely to detect much trace of these in the Chancellor’s upcoming Autumn statement. Alongside these measures should be the establishment of ‘exemplar’ companies - such as municipal banks - in co-operative or public ownership and management. Complaints that such organisations would ‘disrupt the market’ miss the point - that is exactly what they need to do.
There is no ‘invisible hand’ and one thing at least is abundantly clear, either we take our future into our own hands with pro-active public involvement or we will have very little that is visible to hand on to future generations.

Balance and Recovery

While the Bank of England’s recent caution in respect of a further expansion of ‘quantitative easing’ is understandable - indeed welcome - this does not mean that all sensible options are closed.
Much more needs to be done to secure economic recovery in the context of the global financial crisis that is corroding the real economy and which, along with the state of the public finances, remains in very poor shape. This is partly, of course, as a result of dismal, depressing and continuing ill-advised government policies. The Government’s likely juggling with the apparent proceeds from earlier quantitative easing will not disguise the underlying harsh realities.
But even within the timid and self-deluding mindset of the austerity brigade there are things that could be done. If I can return to my Keynesian position I would draw attention once more to the concept of a balanced budget multiplier. This is where in a broadly neutral budget, spending power is moved towards those with a higher propensity to consume. In other words smaller deductions from the pay packets of lower income earners and somewhat higher taxes for the rich - and I mean rich, not the middle classes picking up the bills again.
One way to achieve this would be to smooth out individual National Insurance contributions, making them a flat percentage of earnings with no limit on the range so that the rich contribute more and the less well off have lower reductions. Also, to balance over a longer period, the top rate of tax should go back up to 50% from the entirely unjustified and partisan proposed 45% due next year. Alongside this, the rashly abolished 10p rate should be reinstated.
If the flat rate of National Insurance contributions were set at a level that brought in a greater total sum this would free resources for increased support for manufacturing industry and public works projects. In the latter respect there will not be a Local Authority in the country that does not have ready to go engineering schemes that have been thwarted by budget cuts and the ever-increasing demands on the social care front.
Speed of action is important too; with the glacial progress of assistance to manufacturers and the essential root and branch reform of banking as dismal examples of the dilatory implementation of official policy – such as it is. And action needs to be taken to deal with massive corporate tax avoidance. There’s a double whammy here since many of the rich recipients of the untaxed profits will be tax dodgers too. It’s not just the economy that needs to be re-balanced but the taxation system too.
And there are other fiscally neutral measures that can be taken both at local and national level. Here I refer to procurement of goods and services. The Government must ensure that as much of its purchasing goes to domestic producers - from major defence or construction projects right down to the cars provided for ministers. There are ways of framing conditions for bids that do not contravene Euro legislation that can help domestic producers. You can be sure that certain other European countries already do this - and much besides.
The same goes for contracts from Local Authorities. There is a multiplier of around four so that when a contract for say £500k is awarded to a business there is a total benefit of no less than £2m to the area (as that firm and its employees spend and the beneficiaries of that spend also spend too.)
So there is considerable policy latitude remaining even if the Government is afraid to take radical action. Perhaps it is a forlorn hope, but maybe an element or two of this kind of traditional Keynesian thinking will filter through – in the fullness of time of course.

Keynesians of the World Unite!

The country needs a revolution, we need change that puts the common good and the national interest in front of corporate profiteering and austerity for all but the rich. Western governments and significant others need to rediscover – and be quick about it - the merits of the positive and proven economics of John Maynard Keynes in which public investments are made and effective stimuli are provided to depressed, damaged or heretofore forsaken economies. As an ‘unreformed’ Keynesian myself I naturally see this idea as preferable to doses of depressing, divisive and failed austerity. Keynesian economic policies would bring an end to the recession and stop the economic ‘bumping-along-the-bottom’ for good.
Major countries - particularly the United States and ourselves – lived for years in a fantasy world of non-existent ‘wealth’ that was ‘created’ by bankers and believed by gullible political accomplices. Creative industry - and by this I mean manufacturing since nothing is more ‘creative’ than making things - has been hollowed out since the disastrous years of the early eighties. I recall Mrs Thatcher’s chief economic adviser asking (privately but not in public) ‘why does the country need manufacturing?’ I was flabbergasted and outraged at that time and have been so ever since as successive governments acted as if they’d been reading the same too-clever-by-half monetarist textbooks. We can co-exist with Monetarists in good times but when the going gets tough it’s time to send for Uncle Maynard.
We need a new industrial revolution, increasing the number of things that we make and mine and have a thriving agriculture. This is not just because self-sufficiency means that the country is less exposed to the consequences of get-rich-quick or manipulative behaviour elsewhere, but because the nation’s self-respect demands it. And ownership does matter - again because of national pride but also because being a ‘branch plant economy’ leaves industry and employment more exposed to closures made by foreign owners. The lack of control over industry represents a failure of the private sector, laissez faire economics and compliant and timid government.
There’s a Dorian Gray feeling about an economy that has relied so much on money lending, taking in washing (sorry, providing services) and wheel clamping (for many years one of the strongest growth sectors). With industries eviscerated and household name British firms falling under foreign control and exporting jobs by the thousand each month, what exactly was it that those in control supposed to have been growing all those years?
Casino capitalism creates nothing, it is a zero sum game - the amount won equals the amount lost. Real capitalists - our Victorian forebears - would be horrified to be bracketed with today’s fly-boys pretending to be beacons of free enterprise. These old-fashioned entrepreneurs had many faults not least their relentless exploitation (now also exported to China) but they had two other qualities - a sense that what they were doing was important for the nation and that the national interest counted as well as their own profits, and the basic money-morality that meant that you didn’t set out to lie and cheat your way to riches.
The other downside of an industry shrivelled in the shadow of globalisation is that some Keynesian remedies do not work quite as easily these days because more of any stimulus leaks out through being spent on imports. In the old days we would have been making the goods on which people spent their extra money, thus creating more wealth which in turn was spent on domestic goods leading to the Keynesian ‘multiplier’ where an original pound of expenditure generates several pounds worth of economic recovery. Investment in infrastructure is preferable to tax cuts and it is important to construct the stimulus to minimise leakage.
So more should be spent on expanding public works (in which more of the good stays at home) and helping to rebuild industry and create jobs directly. What is more, a Keynesian solution does not require huge budget deficits. There is the long-neglected concept of the balanced budget multiplier where higher tax rates are applied to those who spend smaller proportions of their income (the rich) with lower taxes on those who spend greater proportions of income (the rest). But since the adoption of the convenient nonsense of ‘trickle down’ arguments, the idea of taxing people who can afford it has been swept off the table with the crumbs.
I’m tired of hearing that there’s nothing that can be done about globalisation. I for one will never ‘embrace’ it. Eisenhower spoke of the ‘military / industrial complex’. Globalisation has involved a ‘corporate / political complex’ where the actions of rootless corporations are tacitly supported by politicians seeing a short run gain in wealth and needing their campaign coffers filled. But the chickens have come home to roost in droves and the first step would be to break this failed alignment working with like minded nations and getting a grip.
I’m also sick to death of hearing about the ‘vital importance’ of free trade - whatever is meant by that - and hearing chancellors urging the creation of ‘level playing fields’ when what they should have been doing all along is applying the same degree of tilt as the others have been doing for years. I say ‘whatever is meant by that’ because no (legal) trade is completely free in the sense of having a complete absence of regulations and standards. It is a question of how much regulation is needed and how it is enforced when not voluntarily observed.
Just how dreadful do working conditions have to be in China or India before you admit that this isn’t legitimate competition but exploitative cheating? Just how much pollution is it alright to belch out in China? In fact we have been exporting pollution along with our jobs. Production under domestic conditions would have caused less pollution. So globalisation (even without the additional transport emissions) has made global warming worse along, as we now realise, with ecological damage and the spread of disease.
In this context there’s also a lot of dangerous talk about so-called ‘comparative advantage’ where countries to the East make products cheaper for some reason. These ‘reasons’ always including low pay, dire working conditions and serious environmental damage and in certain cases use of child labour, currency manipulation, export subsidies, copyright violations and industrial espionage. After apparent short-term gains in the quantity of electronic gadgets and household bric-a-brac in our homes, this theory leads ultimately to ruin for us too. It is often alleged that we surely have a comparative advantage in being ‘smart’ doing designs and selling services - as if the competitors to whom we have handed our manufacturing and engineering work are stupid and that these ‘smart’ things are not already on their list.
So do I favour so called ‘protectionism’, whatever is meant by that, as opposed to ‘free’ trade? It seems that you can use the word ‘protect’ positively when you insure or take other precautions to secure the future of your home and family but to apply ‘protect’ to the economy on which all this depends has been given utterly negative connotations. The descriptions of ‘fair or ‘loyal’ trade give a flavour but we really need a new word in the mercantile lexicon. But it is not a binary choice. Nothing is ever totally free or totally protected. We need fair and balanced trade and patriotic producers.
I favour a trading environment where our industry, independence, national pride and environment are conserved and where we as a country display the extent of self-interest that other nations do. I favour repatriated production and a context where business leaders rediscover loyalty (bankers need more than this – their very own cultural revolution with a few years spreading muck in the fields to see if they can turn this into brass) and act to enhance the common good. And where consumers preferentially buy English and local and where government, national and local (if any of this is left after the savage cuts) facilitates the rebuilding of productive industry so long dismissed and derided by service economy smart alecs and quick fixers.
Can’t be done? Of course it can – come the revolution! There needs to be the will, robustness in international terms and a genuinely long run vision for the national future. Quite a lot to ask for these days I suspect. In the meantime we should apply the approach advised by John Maynard Keynes to our national infrastructure in all its aspects and not be averse to a fairer system of taxation that would make this an affordable reality. If other countries in Europe adopt a similar approach the effect will be that much greater. Keynesians of the World Unite!

Four More Years!

I was delighted to see the result of the United States presidential election with the return of a Democratic president for four more years. While Democrats retained control of the Senate, today’s Tea party dominated Republicans will keep control of the House of Representatives. It’s probably a vain hope that the obstructionism of the House will moderate given the overall result.
The Founding Fathers when framing the constitution never envisaged the doctrinaire and irrational Tea Party intransigence that has crippled government and which must dismay genuine one-nation Republicans and which makes the US system of government dysfunctional. And if the problem of the ‘fiscal cliff’ approaching in January is not resolved the consequences will be bad for the until now steadily recovering US economy and the rest of us too. It’s said that politics is the art of the possible – and it is the art of skilful compromise too.
Let’s hope that reason rather than doctrine prevails.

A Keynesian Dynamic Still Essential

There is no doubt that the country was badly placed to withstand the immense damage caused by the financial sector when it first hit the economy and it is not in a lot better shape today. Badly placed indeed, due an unbalanced economy that had become far too reliant on casino capitalism rather than the productive sectors and of course, on an epic scale, due to the abandonment of prudence, wisdom, decency, diligence, respect and even plain common sense in the banking and financial sector and the absence of effective financial regulation.
Added to this has been the destruction of social and industrial foundations caused by globalisation on manufacturing and engineering in particular, with much production closed down by disloyal and herd-driven management and greedy ‘stakeholders’ and many jobs already exported.
The evisceration of our industries of substance has left the country less able to benefit from the lower value of the pound by producing for export - where external demand has not been destroyed by external banks and ill-advised economic policies particularly in Europe. The commercial banks added to the damage caused by their own greed and incompetence by effectively forcing viable producers out of business with severely tightened conditions or recalled loans. I sometimes think that banks, in their behaviour towards industry and individuals alike, are little better than a fifth column. As a result of this and government policies of austerity there is little prospect of anything much better than the economy continuing to bump along the bottom and there is still a real and present danger of approaching a 1930s situation.
How is this dire predicament to be remedied? Certainly not without a cost -  folly always has a steep price. But how do we ensure that such a deep recession, where productive output recedes and where spending and incomes are well below normal, does not worsen further into sustained depression where there are further falls and the loss of GDP approaches double digits? And how do we ensure that a sustainable economic recovery begins as soon as possible?
Those in power, or aspiring to power, must develop effective recovery strategies. It is clear that these do not exist in Government and the opposition continues to be excessively timid and fearful of offering a constructive alternative to the depressing consequences of continuing and deepening austerity. If output, income and employment are to sustain an upward trend, then there must be extra spending, preferably in the form of investment in public utilities and infrastructure. In this connection parts of Michael Heseltine’s recent recommendations are welcome and long overdue although few will find their way into government policy. The rational debate - and there is plenty of scope for discussion of which measures will prove to be most effective - is about how a Keynesian solution is to be implemented, and which quarters can be persuaded and enabled to spend more.
Entirely predictably, precious little benefit has come from exports due to the demand suppressing austerity obsessed policies of European governments promoted and pushed by Germany. If the death grip of the banks can be loosened, and companies can be encouraged to increase their investment spending, then that would be of great benefit. But, to justify such investment, companies need to see demand for their products, which of course is precisely what isn’t there. To add to this situation by further cutting makes no sense at all.
In terms of expanding aggregate demand, you could try to create that extra consumption with tax cuts. But cutting taxes for the rich is precisely not the way to do it – as all concerned know. It is true that continuance with low interest rates cause borrowers to have more at their disposal. But interest rates are a double-edged sword whereby those who rely on savings for income are made worse off and so spend less. We know only too well that, courtesy of the banks, savers are hit early and in full and borrowers benefit later and less. Additionally, experience in Japan in the 1990s found that in the face of interest rate cuts some people may save harder to preserve their future security and incomes.
Important though they are, there has been too much concentration on interest rates and taxation (though not enough about helping those who save) and the related adoption of risky monetary policies such as quantitative easing. Though these policies have a role to some extent, there has been not nearly enough focus on public works projects, support for manufacturing industry and pressing companies to repatriate production in the national interest - and indeed their own.
With infrastructure work - and goodness knows that after decades of under-investment we need it in energy, transport, public and heritage buildings and right across the board - we generate business to firms and encourage them to invest, create or save jobs, keep more of the money at home and provide a better quality infrastructure and the much needed energy security along with stable prices in the future if cartel behaviour can be regulated or re-nationalised away. To my mind that’s a whole lot better and wiser than, in effect, saying: ‘Here’s £100, dash down the shopping centre and spend it on imports’.
What about Government waste? All too much of this is gone for good, but no-one in their senses would object to cutting current waste and improving efficiency - it’s important to do this. But it is also important to divert the bulk of such savings to public works projects - and then to add to this total. It is imperative that the total be increased. Also, if too much of the savings from waste reduction are passed on in the form of tax cuts then, entirely rationally in individual terms, people will use much of it to repair their domestic balance sheets - rather like the banks and with the same lack of benefit to the economy as a whole.
Economic recessions are about a serious and sustained shortage of aggregate demand - and it matters what makes up that demand. The less expenditure that is frittered away on fashionable gadgets and bric-a-brac and which leaks out on imports, and the more of it that is invested in improvements in the nation’s infrastructure and the environment, securing productive jobs and supporting manufacturing, the better. And in the longer term, a restored and re-balanced economy, achieved by these Keynesian means described, will provide the firmest foundation for the restoration of future public finances and the resumption of prudent and sustainable ways of living.

What's still wrong with our economy?

The source of much of the damage to our economy and well-being is of course the banks – still largely unreformed – and also globalisation driven by the avarice of individuals high up the corporate ladders and in hedge funds operating in a patriotism-free zone allied to their political placemen. There is a perverse competitive force at work that belongs more to Catastrophe Theory than the ‘dismal science’ - the sadly apt nickname for economics – and the Lemming-like mentality of "the other lot have made a fast buck out of shutdown-and-offshore so we will too".
Thus it was that real industry, especially manufacturing and engineering, was eviscerated and other productive sectors such as agriculture have had their standing reduced. We sometimes hear talk of a ‘post industrial society’. You can certainly have post-industrial societies in Europe and the US. Indeed we may yet get to find out what one is like. What you cannot have in a country larger than the Cayman Islands is a post-industrial economy.
I have said for many years that when the US Government came to see that the globalisation trumpeted by self interested executives was not working for the country they would stop singing along with the shrill brass. There is evidence that this is now the case in Democratic circles – but not of course in those associated with the likes of Bain Capital.
‘Free trade’ is a hypothetical concept never realised in reality. It might work to the mutual benefit of sections of societies when practised by responsible agents between countries with similar values. Here I’m not talking in terms of ill-defined concepts of ‘capitalism’ or ‘socialism’. I refer to moral stances in relation to fundamental concerns such as the use of child labour, pre-Victorian working conditions and befouled environments. And on the positive side the concept of the Common Good.
‘Free trade’ - is neither inherently good nor inherently bad. Its merit depends on the conditions and principles under which it operates. A bit like America’s constitutional right to bear arms - one thing in the birth of a nation phase, quite another today. What can produce great benefit in one set of conditions can be malignant in another.
And trade is not the only thing that should be ‘free’. The people producing the goods to be traded should be free too. Unless they are, you do not know that the export / import imbalance in their societies is what they would choose. And national currencies should be free to find their own relative levels. These conditions do not exist in many major participants in global trade.
There is another critical factor - the distribution of power and choice in overseas countries and regions used - I choose this term deliberately - by globalised corporations to make their products. Used and then ignored in the ruthless quest for ever greater ‘shareholder value’ and executive bonuses.
The domestic consequence has been the demise of great swathes of the Midlands and North of England and the Midwest of the United States. The production of industrial wastelands and ruined communities at home is as corrosive a by-product of global profiteering as is the effluent discharged in countries to which jobs and production have been taken.
An essential context for free trade to work properly is morality and social conscience. We’ve seen the lack of principle (which resulted in the lack of principal) in the banking sector and the disregard for the fate of communities shown by those entrusted with the power to manufacture.
Executives should not be free to act regardless of scruple (nor should they want to - a change essential for a long run solution) any more than they should be free to ignore chemical pollution. Corporations should be trusts, not in the sense of being monopolies (although they are often effectively these anyway) but in the sense of holding the livelihoods of individuals, the life of communities and the self respect of nations in their hands. We need due diligence here too.
The timescale required for such changes could be a generation. We’ve seen the resistance to social pressure to reform disgusting bonus cultures and the continuation of contempt for people seen as ‘punters’ in banks and other ‘services’. There needs to be a comprehensive re-education of our corporate and political leadership. And to get the policy right, the funding of political parties needs to be freed up from the unseemly and unseen influence of big donors. In fact we need our own cultural revolution.
The original name for economics was ‘political economy’. What is needed now is ‘moral economy’ where concern for the human consequences of decisions is embedded in the mindset of the captains of industry - as should be a sense of responsibility to the society that gave them the opportunities that they so frequently abuse.
Genuine competition might not be a bad idea too, rather than the spurious competition (such as in banking, communications, power and fuel supply and a good chunk of retailing) that is informal cartelisation designed to exploit consumers. Included too should be the politicians who have so often seen their primary role as the reinforcers of, and apologisers for, this dire mis-managerial capitalism.
Internationally, future trade round discussions, if any, should have an infusion of social and moral as well as environmental responsibility.
At home governments constantly tamper with educational syllabi. As part of the much needed moral restructuring of society there should be moral economics as well as ‘bog standard’ economics on the syllabus.
All this is a tall, but the time to start is now. And it is a journey we need to make since the current crisis is ethical as much as economic. Failure to get a grip on the greed and disloyalty of globalisation, the culture of cheating and deceiving, the disregard for sustainable limits to growth and the lack of morality that produced these and other undesirables will result in a post-industrial wilderness in the West.

Lighten Up!

Here I’m not referring to the advice I often receive but to the question of Summer (Daylight Saving) Time. The clocks go back this evening and each year at the end of October marking the start of the ‘dark nights’. This is always a bit depressing and in my opinion we should have the clocks set two hours rather than one hour ahead of Greenwich Mean Time in the summer and one hour ahead of GMT in the winter months.
It is an established fact that this would save lives in traffic accidents. This arrangement would also be better for evening sport and outdoor activity in general. It would also reduce the impact of Seasonal Affective Disorder (SAD) as people, on the whole, would experience significantly more daylight. And, as is also well known, it would save energy too.
So why isn’t this apparently good idea brought in? It is reported that some people in very high places don’t like getting up in the dark, but I find it hard to take this seriously. Our farmers may grumble - and indeed they’ve much to complain about as undervalued contributors to the productive part of our economy - but I imagine that livestock go by other perceptions of time rather than how we choose to set the nominal dials on our timepieces.
I believe that most people in England (three out of four according to a recent survey) support such a measure - and have done so for a long time. But I understand that Scotland wants to keep the present system so that’s apparently that. In my view they should be told to keep their own time and go their own way in this as in other matters.
All in all we do need more illumination at home - not to mention in our national affairs and I suspect few people would disagree with that! The Government recently let a private members bill fizzle out and there’s little chance that the Government will see the light anytime soon. So no change there then!

Help St Basil’s win £250,000!

St Basil’s is an outstanding Birmingham charity that provides expert advice and support to young homeless people in our city – and indeed helps them to avoid homelessness in the first place. The organisation provides housing advice, family mediation, emergency housing and supported accommodation.
St Basil’s will have completed 40 years of service in October this year and they have the opportunity to win £250,000 to extend the ever more needed services that they provide. And what’s more, you can help them to win it!
The money would come from Persimmon Homes, one of the country’s largest house builders, who are giving away a 3 bedroom home worth up to £250,000 and consolation prizes of £6,000 - also, as it happens, to celebrate their 40th birthday. But there are twenty-three other organisations hoping to win the home and crucially, who gets it will be decided by a public vote.
You can support St Basil’s by voting at persimmonhomes.com More than this, it's possible to vote once a day until the vote ends on the 27th of this month. Please do your bit to help this wonderful Birmingham charity!

Middle-earth Weekend 2012

From an item in ‘Amon Hen’, the bulletin of the national Tolkien Society:
The Middle-earth Weekend 2012 was held at Sarehole Mill in The Shire Country Park, Hall Green, Birmingham over two days in May. It was a great opportunity to meet old friends and make new ones. Vivienne Wilkes and the Middle-earth Weekend Planning Group brought together this mix of contemporary and historical elements and created an atmosphere redolent of the world of Middle-earth at the Mill and on the event field.
This year’s theme was ‘Celebrating 75 years of The Hobbit’ and visitors were treated to entertainments, activities, craft demonstrations, re-enactments, food, drink in the all-round hobbity surroundings that this part of the country possess.
The Tolkien Society was there as well in the Tolkien tent organised by Dave Corby of the Isengard Smial. The weather may not have brought the May sunshine; but the warmth of the hosts, and the enthusiasm of the visitors, served to brighten the whole experience.
The weekend is the culmination of months of work by the Shire Country Park Friends, the Birmingham Tolkien Group, Shire Productions and staff at Sarehole Mill. They rely on a dedicated group of volunteers both in the run-up to and over the weekend.  The regular features of recent events have been the marquees, on the recreation ground behind the mill.  These provide the covered venues for the following attractions:
Crafts, various artisans exhibiting and purveying their wares
Activities, usually themed, this year the theme was ‘Mirkwood Forest’
Performances, a variety of theatrical entertainments organised by Shire Productions
‘The Tolkien Tent’, an educational resource with representations from local historical groups, readings, quizzes and stalls.
More volunteers are needed for the Middle-earth weekend in 2013. To make next year’s weekend happen, the organisers need additional willing, enthusiastic and above all, committed volunteers. Preparations for the weekend start in the New Year and if you would like to make a contribution to the running of this unique event, please contact Viv Wilkes or Stevie Prior via middleearthweekend@gmail.com.

Lording it Over Us?

The last week has seen the effective demise of proposals to reform the House of Lords. After a century of promises, papers, reports and commissions this was very disappointing. The 21st Century is surely time for a more democratic second chamber - but please don't call it a 'senate'!

There can be no justification for half of our parliament being appointed through the patronage of party leaders to lifetime terms of office – an arrangement that we have the doubtful pleasure of sharing with Belize, Burkina Faso, and Jordan. There's also no excuse for supporting a system that allows some lawmakers to inherit their office – an arrangement that we currently share only with Lesotho.

Nearly 800 years after Magna Carta, as George Monbiot recently put it, unrepresentative power of the kind familiar to King John and the Barons still holds sway. There is no excuse for more than half of the country's lawmakers to sit in Parliament without an electoral mandate from the people.

I know that there are arguments to the contrary, but whatever happens, some things do need to change. Some of the more reasonable arguments relate to the value of experience, so that, for example, someone who has sat in the Commons would at least know the Westminster ropes and hopefully have acquired a degree of judgment.

While there may be some truth in this, it did not stop an earlier government from abolishing the role of Aldermen (retired, former long-serving councillors) from their role in council decision making. So if this is right for local government I'm sure that it should also be applied to national government. Forgive me for seeking consistency here.

There is also the question of business experience - all well and good so far as it goes (bankers, financial services, insurance, much of the legal profession and certain security firms excepted) but how many of the Lords would have experience of living on the minimum wage or surviving on benefits and about which they approve life-affecting legislation? A lopsided set of experiences may not lead to overall good decision making - as I'm afraid we know to our cost.

In addition to all of this there are some disconcerting features about the larger half of Parliament. For example, in the present House of Lords:

40% of members were educated in just 12 private schools

Seven out of ten members are party political appointments

Half of the members come from London and the South East

More than a quarter are former MPs

Only one in five are women

As is clear from these facts, while its debates often have a reasonable tone and behaviour is undoubtedly better than in the Commons - it could hardly be worse  - the House of Lords as presently constituted does not, in its composition, reflect the country that it helps to govern.

It is surely preferable for lawmakers to hold their place in Parliament through the directly expressed will of the people. This would give them greater legitimacy in standing up to a Cabinet and a Commons that can become obsessed with failing agendas and detached from reality and the best interests of the country.

Sign up for Alan Turing

Alan Turing, the centenary of whose birth was celebrated on the 23rd of June was an inspired mathematician fully deserving of the description 'genius'.

Turing was, through his undaunted code-breaking at Bletchley Park, one of the hidden heroes of the Second World War who by his brilliance and dedication saved countless allied lives. The official bigotry he received in return and the conviction and chemical mutilation that led to his premature death was utterly tragic.

There have been quite a few tributes to Turing and piecemeal recognitions here and abroad and also pieces concerning his pardoning or 'rehabilitation' - but of course it is the government at the time that needs the pardoning and the attitudes of those days towards sexual orientation that need the rehabilitation if that were possible.

Despite an official Government apology in 2009 by way of a statement in the House of Commons there remains a strong case for a full hearted and unequivocal recognition of Turing's contribution not only to cryptanalysis but to computing science, mathematics and wider inspiration that is evident to the population as a whole.

So I was delighted to discover that there is an e-petition to feature Turing on the £10 note. You can sign it at epetitions.direct.gov.uk The petition is open until the 21st of March 2013 and there are some 20,000 signatures so far - so there is a good chance of reaching the crucial figure of 100,000 by that time.

While it is the Bank of England that decides who is featured on banknotes, they could hardly ignore a positive vote in Parliament in a debate triggered by the requisite 100,000 signatures from members of the public. Let's hope that we can get there - Alan Turing's memory deserves no less.

Towards the Common Good

The present position of society both in its economic and social aspects is increasingly dysfunctional and ill-served by many institutions as they now stand. This is the damaged state that we are now in. We are faced with choices that we do not want but if, in the longer term, we want to see an end to austerity, anxiety, inequity and lost esteem then I believe that measures need to be taken (set out in earlier postings) entirely different from those propounded by what is turning out to be one of the worst governments in living memory. These measures - Keynesian, interventionist and equitable will take time - a long time - to have full effect but they are urgent and the consequences of not taking action are severe. These steps are needed to form a bedrock upon which a Virtuous Economy can be founded and enable the rebuilding of national morale, and the personal and mutual self respect and security that contribute to the Common Good.

Good governance is desperately needed. Active and positive engagement is a necessary virtue, aiding and abetting the achievement of common goals with Government setting aside timidity and doctrine, releasing itself from nefarious influences providing its political funding and involving itself proactively in the process of building a wider and lasting prosperity. Prosperity itself is by no means an ignoble goal, but it is important to bear in mind that affluence is a condition and not a value. The true worth of an economy is found not in measures of monetary worth or league tables, but in the achievement of a broader well-being and the underpinning social and moral values.

At the individual level, in contrast to this exploited, deceived and litigious age when good people are rendered fearful for their future and that of their families, a Virtuous Economy, a citizenry of good intent with commonly held moral values, and the concept of stewardship more than the overhyped 'leadership' will make possible the creation of a Good Society cleansed of these negative qualities. A desire to do good - in other words to behave virtuously - should become second nature. This is the basis of the Virtuous Economy and the enhancement of the Common Good.

All of this could be done if the commitment was there. Outside of the governing class, the viperous press and the commercial elite, I believe that it is. An economy is not an abstract entity to be revered - rather it is what we choose to make it. The Common Good can be enhanced with or without economic growth - if we decide to do so. Perspectives can be changed, commerce can be reformed, Government can be engaged, exemplar institutions with a public service ethos can be created and moral re-education undertaken. Time, commitment and patience are required but the journey this time will be towards the Common Good rather than our decades long journey away from it and the likelihood of 'bumping along the bottom' for two more decades.

Restoring the Economy

The Governor of the Bank of England recently stated that 5 years in from the start of the crisis in 2007 (although its roots go much earlier) we may still not be half way to a full recovery. Prof King is quite right although his horizon is optimistic. I believe that a timescale of a generation may be required. Just as it took generations to throw away the trust and values along with the industry we'd built up over a century and a half, it may take a comparable time to restore them.

What we are now left with is an economic system with a degraded version of capitalism and a state wedded to a philosophy that sees no room for direct intervention. Linked to this is the steep decline in business ethics and morality. So what should be done in response to the mess that has been allowed to develop?

First the government must operate a comprehensive economic and industrial policy that aids manufacturing, engineering and the industrial sector generally, agriculture, mining, fishing and all related productive areas. Linked to this there should be sustained research investment in science, engineering and medical technology. This policy should be a resourcing priority.

We have seen in the past five years the unreformed nature of the banks, the damage they continue to do and the bills that continue to come in. The spots run deep and they cannot be relied upon to provide the kind of service that helps to restore and develop the productive economy and provide a trustworthy, simple and honest service to ordinary people - especially savers.

Nor in my opinion can companies in other fields such as retailing be relied on to provide a plain and unpressured service. Unprincipled behaviour also runs deep there too and the temptation to exploit the 'punters' in the push for yet more profit would not be resisted for long. The answer is that government, preferably local, should establish 'exemplar institutions' wherever needed - the first being the re-establishment of municipal banks.

Economic policy should be actively Keynesian, meaning that major projects are established - and where necessary delivered - by government in contrast to the back seat, timid, private-sector-only stance taken over the Severn Barrage. Contracts should be framed so that British companies get the business. Opportunity should be taken to employ and train as many young people as possible on such projects. There are many other possible schemes in transport infrastructure. HS2 is one example, though not a particularly good one with its wildly exaggerated employment benefits.

In deficit reduction, timescales should be revised (this is happening anyway as current policies fail) and more emphasis should be placed on taxation and less on cutting benefits leaving room for investment. There are several reasons for this.

First is the fact that cutting public expenditure on projects and services also cuts employment and tax receipts and increases expenditure on other accounts such as unemployment benefit. In Keynesian terms there is also a reverse multiplier effect - the negative knock-on consequences of people having less to spend.

The greater part of the burden of present policies is born by the less well off. This is wrong both morally and in economic terms. Those who can afford to pay more in tax should do so - indeed a few notable figures have declared their willingness to contribute more. Loopholes allowing the unprincipled rich to avoid supporting the society from which the extracted their wealth should finally be plugged tight. If some say they will jump ship we should test this cry of 'wolf!' and see if we can scrape along with a few less executives on bloated salaries, bonuses and padded out remuneration packages.

There is little or no correlation between entrepreneurial activity and taxation of income at higher levels. There was much joy at the introduction of a 60% top income tax rate when this was reduced from 83% under Mrs Thatcher. In any case most of those paying the higher rate are internal promotions in large firms and not entrepreneurs.

At the same time let us encourage public spirited attitudes, a sense of fairness and a return to loyalty to country and community. The way that pay is determined for all employees should be the same throughout a company although levels would be different. If the boss gets a bonus, so should everyone else - they made it possible.

The government should push for a revised international approach to the basis of trade. Globalisation is not free trade - far from it. There should be inter-governmental efforts to rein in global corporations and their grasping owners that have decimated many western economies and there should be less knee bending to these outfits or appeasement of countries with unfair and inhuman economic and social practices. Trade in manufactures is far from free - with China cheating in at least six ways - and an utterly stupid money driven short term attitude to security of supply of key materials such as rare earths.

Fiscal and monetary policy should aim for sustainably expanding and balanced demand and related wider policies should involve major capital projects where the demand is met from domestic sources and where employment and training are maximised. The Keynesian 'balanced budget multiplier' should also not be overlooked. If the taxation of affluent people is increased and there is a corresponding reduction in taxes and deductions from the pay of less well off people, then demand rises since from an extra pound more is spent at lower income levels. This gives an initial tax neutral stimulus - and a net benefit in revenue as the positive knock-on consequences work through.

Quantitative Easing is of limited value in getting funds to productive sectors of the economy. It is not so effective as infrastructure projects in which governments are frightened directly to engage. The direct effects on manufacturing investment of low interest rates have in the past been damped and lagged at best. Eventually however lower rates should result in lower required yields and increased long-term investment if the conditions of lending are appropriate. But as smaller firms know to their cost this is not always so, the banks being what they are.

To this can be added appropriate levels and forms of taxation and public spending - I say appropriate rather than low. In the case of deductions from income, the irrational structure of national insurance contributions should be replaced with a flat rate covering all income levels. This would mean a top rate of deductions next year of 51 - 52% - well below the welcomed 60% and also resulting in a mild balanced budget multiplier effect. Government should help to make industrial winners where we still have a current edge. I don't say 'comparative advantage', a dubious concept that has rationalized retreat from manufacturing. The view that the winners we're left with should determine our future is inherently passive and dangerously vulnerable as the aspirations of China and the East confirm.

A strategy of trying to shift the economy ever more towards 'higher value added' activities, as if these were somehow protected areas and inaccessible to the countries that have acquired so much of the rest of our industry, is also destined to fail. Unless action is taken these areas will go the same way as their 'lower value added' predecessors. To imagine otherwise is at best wishful thinking or at worst smacks of a type of ignorant superiority.

The proponents of this approach of keeping ahead by moving up a line assume that there is an ever rising and straight line. But what is involved here is a rising curve of declining slope and of limited length. If this is the case, the consequences of this attempt to 'move up the curve' - in all essentials a retreat - are all too clear.

Action is needed nationally and internationally to retrieve the industry already lost. The country's manufacturing and engineering sectors must be rebuilt - they, along with agriculture and mining represent the economy's productive base. In the discussion about the future of the Euro, it is notable that the countries which are struggling most are those where industry has declined the most.

In economic policy the simple truths must be realised that in the absence of demand, there will not be production and that in the absence of production there will not be job creation. It should also be understood that the true meaning of the word 'economise' is not to make minimum use of a scarce resource but to make the best use of it.

The measures proposed here will take time to have full effect but they are urgent and the consequences of not taking action are no less severe. We are faced with choices we do not want but if, in the longer term, we want out of austerity, anxiety and lost esteem then this is the path we must take.

A cut above the rest?

The International Monetary Fund have come up with another stunning insight. No doubt after months of deep analysis and contemplation, the IMF are warning that as our own economy shrinks and the Government keeps on cutting and as most of our European trading partners shrink and cut there might be a threat to economic growth. Who would have believed it?

Surely we are a cut above the luckless lands in the Euro zone and anyway have we not all been led up the path of a deep cuts policy with tailor made cuts for different people? It's so clever. For example, there would be one kind of cut for the poor - punitive cuts for disabled people, young people and the many who are forced to rely on benefits - and, quite naturally, a tax cut for the better off now and another just before the next election.

The plutocrats are so vital to us - we couldn't possibly do without them. Those scraps off the heaving tables of the wealthy will assuredly trickle down you see. And none of our still-so-rich bankers are crying 'Wolf' about taking their bat, ball and bad habits out of the country - oh dear me no, perish the thought!

The one thing that all this will not cut of course is the financial deficit - with lower tax revenues from businesses and individuals and increased public expenditure anyway for the legions of unemployed, underemployed and simply forgotten. Unless of course we let them eat cake! Could this be the Government's Plan B?

But let's cut to the chase. It's been so nice to know that we're all in this together and that our wise and considerate Government, the highly paid intelligentsia at the IMF and in our beloved banks will pull us all through - with the IMF suggesting tax cuts (how imaginative!) and the bankers with their bowls ready for a further big cut of the national cake in the next financial bailout.

But enough already. Maybe I should just cut this short - it's beginning to make Reaganomics look almost sensible!

Middle-earth in 2012

The Middle-earth weekend in and around Sarehole Mill and the childhood haunts of JRR Tolkien was a great success and was also an enormous credit to the volunteers involved, particularly the two principals, whose tireless efforts and hard labour enabled this unique event to take place.

'Tireless' is a heavily overused word in certain contexts today but it really does apply in this case - 24/7 availability (admittedly another cliche, but also true here). 'Hard labour' means bent backs and rolled up sleeves when needed rather than when convenient.

There was also a cheerful willingness to pick up tasks that others had not done and resolving, through patient and time consuming management, the extensive list of issues that arise in the long run-up to an original event of this scale in society today. All this and all the while showing inspirational leadership and commitment and much else besides - all on a voluntary basis.

There is a true family atmosphere at MEWE - amongst the volunteers, the performers and exhibitors and the thousands of families who come along and who were exemplary. The Middle-earth weekend is a very special event packed with interest, nearly all of it free so that the modern idol of money does not prevent anyone from coming - and of course with good old fashioned values aplenty.

As with many cultural organisations, the volunteers get older and fewer each year and to have delivered MEWE and its predecessors on no fewer than thirteen occasions is a superb achievement in which great pride can be taken.

Middle-earth Weekend 2012

There are many old favourites and several new features to enjoy at this years Middle-earth Weekend at Sarehole Mill and Recreation Ground, Hall Green Birmingham this Saturday and Sunday 19th and 20th May. Our picture below shows the programme cover for Saturday.

This year the Tolkien Tent has zones within it describing the various stages of Tolkien’s life and we hope you will also take time to visit the Mill and their new Tolkien-related displays and stroll in the grounds to see how The Gaffer’s Vegetable Garden and Sam’s Flower Garden are progressing, together with the new fernery and woodland walk. Here also you can experience how feels walking barefoot in The Shire.
Admission is free and all the usual events can be found such as guided walks and tours, medieval re-enactments, archery, Morris dancing, drama performances and much more. Hope to see you there!

The Birmingham Tolkien Strategy (4) The Strategy for 2012 Onwards

The following objectives are retained, developed from the original strategy or are newly adopted in the light of the current position. By these means, the Birmingham Tolkien Strategy will be taken forward in the coming years.

Objective 1: Raise the recognition of Tolkien’s connections with Birmingham and the influence on his work of the city, its people and environs. Make this tangible within the City and more widely known nationally and internationally. The means of achievement are: (i) Develop a promotional programme using printed and on-line publications, media output and broadcasts to inform and attract visitors. (ii) Develop an integrated and easily accessible website covering all Birmingham related Tolkien information and provide extensive links. (iii) Provide improved visitor facilities and Tolkien related displays at Sarehole Mill. At an appropriate time develop a business case for a Tolkien Visitor Centre at Sarehole.

Objective 2: Preserve the landscapes, locations and buildings in Birmingham with links to Tolkien and his writings and secure them for the future. The means of achievement are: (i) Ensure that the condition of key buildings, sites and landscapes related to Tolkien is monitored and maintained and that they receive adequate investment. (ii) Ensure that Tolkien related buildings in Birmingham are easily identified.

Objective 3: Develop educational programmes including literacy, creative writing and drama based on Tolkien's work and the natural environment, people and buildings that influenced him. The means of achievement are: (i) Deliver educational programmes at Sarehole Mill, Moseley Bog and at other locations in The Shire Country Park and Tolkien related areas.

Objective 4: Engage community groups, individuals and organisations interested in Birmingham's Tolkien heritage and help them to work together. The means of achievement are: (i) Arrange meetings to develop new ideas and respond to issues and opportunities. (ii) Organise 'large group' strategy meetings covering relevant organisations and individuals. (iii) Promote the work of groups including the Birmingham Tolkien Group, the Tolkien Strategy Group, the Tolkien Society, The Shire Country Park Friends and Shire Productions. (iv) Support staff in the Library and the Museums Trust in producing Tolkien related materials and activities.

Objective 5: As part of an overall high quality programme, develop, support and connect with Tolkien related events and activities in Birmingham and more widely. The means of achievement are: (i) Ensure security of provision for the annual Middle-earth Weekend or successor events. (ii) Continue to conduct and develop the existing tours, walks and visits. (iii) Encourage special events related to Tolkien as opportunities arise. (iv) Produce a high quality visitors’ guide to Tolkien’s Birmingham. (v) Develop links with other towns and cities with Tolkien connections and promote these to visitors, in a reciprocal fashion, along with other museums and centres.

Objective 6: Enhance and conserve The Shire Country Park and Sarehole Mill and work with other bodies to conserve Tolkien related sites in the City and encourage public artwork. The means of achievement are: (i) Support capital bid/s for Sarehole Mill, the Mill Pool and its surrounds and assist volunteer-led projects that enhance the environment of the Mill and pool. (ii) Improve the signage, fencing, interpretation, accessibility and contiguous walkways in The Shire Country Park. (iii) Extend The Shire Country Park by including The Ackers and ‘green oases’ throughout its length as satellite units. (iv) Support the use of Perrott’s Folly as a base for community purposes ideally with a small Tolkien Visitor Centre complementary to Sarehole. (v) Continue approaching Severn Trent to conserve the Waterworks Tower and explore options for opening the site to visitors. (vi) Give in-principle support for the Ent Statue and other Tolkien related exterior artworks. (vii) Extend the area covered by the Moseley Bog improvements to include the Dell and adjacent land and provide connections between them.

Objective 7: Maximise funding opportunities for sustainable Tolkien related developments, contribute to the recognition of his legacy and enhance the positive image of Birmingham. The means of achievement are: (i) Develop and refine a funding strategy for this programme. (ii) Develop enhanced, longer term, Tolkien awareness in key organisations, individuals and the wider population, and produce an appropriate marketing plan. (iii) Ensure that the Tolkien Strategy for Birmingham, its activities and future continuations integrate with the Heritage and other Council strategies (iv) Through the above and by other means work for the benefit of Birmingham and its people.

The achievement of these objectives will be monitored and aided by the Tolkien Strategy Group and the Birmingham Tolkien Group in conjunction with Birmingham City Council and the Museums Trust.

The Birmingham Tolkien Strategy (3) Challenges and Opportunities

Ambitious as it was, not all elements of the original action plan have yet been achieved. There remain many challenges mainly relating to the large scale parts of the strategy and the necessary resources; capital, revenue and human. Not least is the putting together of a financial strategy and an appropriate marketing plan.

The Tolkien Centre business plan was delayed by several factors including issues in the River Cole flood plain. A survey revealed that the original site was impractical due to severe flooding - the scale of which was confirmed by the 2007 floods. The rear of the Mill was less affected and this is a possible location for a Tolkien Centre. However, the land is held in trust and special arrangements would be needed. The design would also need to be reconfigured to suit this location close to the Mill.

In Edgbaston there have been delays due to changing corporate arrangements regarding Perrott’s Folly and the Waterworks Tower. The original Perrott’s Folly issues were resolved, although others remain, and the present position is unclear. The Birmingham Tolkien Group are hopeful that the plans of Severn Trent Water will crystallise in the near future.

In Moseley, while planning permission was granted and fundraising for the Ent statue designed by Tim Tolkien made some initial progress, this project has now encountered difficulties and its future is uncertain.

The lottery bid of the Wildlife Trust for Birmingham and the Black Country was successful and reconfigured visitor arrangements for Moseley Bog have opened. It is hoped that it will be possible to include The Dell (which has strong Tolkien connections) and a path connecting The Dell to the bog itself.

It remains an objective to enhance links with Oxford and Stratford in terms of literary tourism. From the Birmingham perspective this would relate to those visitors who have a specific interest in Tolkien.

In terms of future events, there will be substantial opportunities, particularly in terms of visitors in the next few years including the following:

• The next two Tolkien films based on The Hobbit are due for release in December 2012 and December 2013.

• The Tolkien Society's international conference in Loughborough in August 2012 will provide opportunities for presentations and receiving visitor groups.

• The 2012 Olympic Games and the associated cultural Olympics.

• Birmingham Rep have a playwright working with library users and local people to create 'audio walks' culminating in a performance in the natural amphitheatre in Moseley Bog.

Following discussions with interested parties, the Birmingham Tolkien Group will bring forward proposals regarding these opportunities as resources allow.