The Sunday Quote

''Where there is great power there is great responsibility .... where there is no power there can, I think, be no responsibility.''

The Rt. Hon Winston Leonard Spencer Churchill KG OM TD CH FRS - 28 Feb 1906

From The Square

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.... Or perhaps more accurately from The Editor's Telegraph.

The Booker column today has a heart-warming tale; It describes how a couple, Graham and Sara Blackmore who ran a small skip hire company in Cardiff, had been turned over by officials from the Environment Agency and finally, having had their "day in court", had come away found innocent of all charges.

The story speaks for itself and is well worth reading on the link provided. But, what does not come over from this tale on its own – but will be apparent to regular Booker column readers – is one essential feature that makes it news. That "news" is the very fact that, despite being "framed" by the Environment Agency with a series of malicious, trumped-up charges, the couple were actually found "not guilty" in a court of law. This is not always the case and in a distressing number of instances, innocents are found guilty of "administrative" offences by courts which too often support "their officers" – the officials – right or wrong. I recall many such situations in my 10 years as an activist with the Federation of Small Businesses (FSB).

A particular case is that of Janet Devers, featured heavily in The Sunday Telegraph today the week before the last the hapless lady was found guilty by Hackney magistrates for offences under the Trades Description Act.Apart from the issues involved – the sale of goods measured using the Imperial system – a review of the evidence demonstrates that the trading standards officer did not prove his case. There were major technical flaws in his evidence, in key areas he was shown to be lying and evidence was given from a number of witnesses that events the TSO claimed to have happened – which were essential to secure a conviction – simply did not take place.

On those grounds alone - without considering the general merits of the issue - the case should have been dismissed. But the Magistrates chose to believe the version of events offered by the officer – even though, under cross-examination, he had admitted they were not true – and convicted Janet. She is now to appeal; as one who has won more than one appeal against the injustice of lower courts as well in other cases of over over inflated small minded egos have needed to be brought bang to right, I wish Janet every success.

Yesterday we must note with concern that The Daily Telegraph was headlining – front page in the print copy – the "victory" by the metric martyrs. It is not a victory; far from it (Anyway the Metric Martyrs title is a misnomer, they should be the Imperial Martyrs but that is an other issue).

The EU regulations have not been changed and until they are nothing has changed. All that is being proposed – and then only in the next few months – is that UK local authority "guidelines" on prosecution are to be changed.What can so easily be changed administratively can, in a few years time – when everybody has forgotten the "victory" and moved on – can be changed back again; even then, this is just a "guideline" which, can be ignored anyway. It has no legal effect what so ever.

The key to all this though is the Rt Hon John Denham, the Innovation Secretary, he apparently issued guidelines that prevent local authorities in the UK taking traders to court. He is cited as saying: "It is hard to see how it is in the public interest, or in the interests of consumers, to prosecute small traders who have committed what are essentially minor offences."But who is Mr Denham's boss? None other than the Prince of Darkness himself, Peter Mandelson now Lord Foy - the master of spin.

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I have had more than one conversation over recent years with his (now) Lordship. There is no doubt whatsoever about his intentions on full European integration which includes metrication (presumably he has now or for the time being at least , dropped the 'Stalinist' regionalization plans so favored by his fellow New Labour lovies!)

Small businesses in our once great nation have much to concern themselves about at this time, not least the ripple effects of incompetent senior bankers across the globe (with the notable exception the ''the worlds local bank'' the HSBC) officials and bueaucrats driven into action by EU regulations that quite simply do not have public support (or indeed logic). The FSB as the UK's biggest business organisation, is also, according to its web site '' the leading voice of small businesses at the heart of the European Union'' (EU).

Through their dedicated (small) office in Brussels, and their EU team, they no doubt try to ensure the voice of very British entrepreneurs is heard but it is clearly impossible (when one understands what is actually happening with the implementation of so much EU regulation) to make any difference what so ever.

Thus this is how we are now governed in the UK and many of us are getting fed up with it. One wonders what the Federation of Small Businesses can actually do other than support members to the hilt when ''the Inspectors call''. No wonder as I am fond of repeating FSB representative members have twice voted (1995 and 2001) to demand a withdrawal from the EU.

So there we have it, I feel a letter to Colin Stratton (FSB NE Regional Chairman) coming on or perhaps (or indeed both) a visit to the North East Regional AGM on the evening of the 6 November to (the now very referbished ) Grand Hotel in Hartlepool, I know they will be pleased to see me I am after all a member; I was once very active in the FSB, the largest business organisation in the Realm.

Peter Troy
8&9 The Square
Sedgefield.

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The Sunday Quote

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''We must be clear about this it does mean, if this is the idea, the end of Britain as an independent European state … it means the end of a thousand years of history. You may say, "let it end". But my goodness, it is a decision that needs a little care and thought.''


Rt Hon Hugh Gatiskell (1906-1963) leader of the Labour Party from 1955 until his death in office in 1963.

In October 1962 Hugh Gaitskell electrified the Labour Party conference with his 105 minute speech, wholly dedicated to the Common Market, he delivered the singular and now oft-quoted passage that has proved to be horribly prescient.

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Time for Tea

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(Flash back, Tea time with Troy on board HMS Trincomalee, 20th September 2005.Graphics courtesy of Radio Hartlepool).

What is happening in this country and indeed the world with regard to the banking crises is so enormous that it is almost too scary to think about. That is, of course, why so many people do not think about it.

That phenomenon is a variation of this, a very natural human reaction to something which is just beyond the capability of most people to deal with.In fact, it is more akin to the reaction of the archetypal housewife on being told that World War II had broken out, busying herself making a pot of tea. At times like this, we all retreat into our comfort zones, close our minds to the impending disaster and hope for the best. But disaster there will be – we are already in the opening phases, and "making a pot of tea" is not going to solve it. But this is not a "sky falling in" type of disaster. That is the wrong analogy.

This is more like the "Temple of Doom" movie. We are trapped in a room, with the ceiling – complete with wicked spikes - getting lower and lower, threatening to crush us all. But every now and again, the ceiling judders to a halt in its downwards path. We breathe a sigh of relief, and hope it is all over. Then it lurches into action and the nightmare continues. One of those "lurches" happened this week, with the stock exchanges plummeting worldwide and the FTSE falling three percent on Thursday, driven by "fears of a recession".

Not only are we reaching into the depths of banking theory which, frankly, very few people (particularly senior bankers) understand we have the overlay of highly complex regulatory systems, framed at national, regional and global levels, together with national and international politics and, of course, the drama of the events themselves.

One yearns for some wise soul to reach out and explain it all, in very simple terms, telling us what to look for, what matters, what is fluff, and to where all this is leading. That, of course, is the stuff of dreams – of child-like fantasies. In truth, there is not one problem but many, all interwoven, and the complexities of modern politics, played out on an international tableau, are such that they defeat even the most experienced commentator.

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How about tea with Troy ? It won't solve anything, but at least it'll make us all feel better.

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Peter Troy. Editor of this blog

Photographed during a recent visit to Jersey CI.

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Reaction

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The implications for the future of the banking industry of the domino effect of the great banking crises hardly bare thinking about.

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There is a mass of comment available across the UK media today and blogosphere; it is impossible not to feel a frisson of panic at the idea that not only bank machines might run out of money but also that the engine room of the British economy - that's the small business community - will soon run short of vital support from banks who could shortly be powerless to support vital lending facilities.

It has to be said that in the face of the global banking crisis the reaction of our government and that of the US could not have been more different in terms of openness.

In the US a plan was formulated in broad daylight, subjected to intensive public scrutiny and debate, put before both the US Congress and the US Senate for approval and again subject to massive debate before being approved by the democratically elected representatives of the country and put into action.

In contrast here in the UK what do we see ?

As the Banking crisis developed , our government dithered – it reacted to events rather than taking the initiative with a pro-active strategy. The main action was a series of meetings with the institutions of the European Union behind closed doors and completely misunderstood by business lobby groups and the national media.

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It is only after a closed meeting of EU finance Ministers (Ecofin) last week, we see action taken. Parliament is not consulted, there is no public debate. Both Parliament and the people are simply told what is going to happen, there is no vote, no approval just a done deal.

Therein lies the difference – on the one hand in the United States we see, with all its imperfections, a functioning democracy in action. Here in the UK by contrast, in Britain the mother country of modern democracy, we see a cabal of rulers working behind closed doors, coming out into the daylight only to inform us what they have done and how much it is going to cost us.

Thus is how we are now governed in Britain secretly, badly and from Europe.
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The Sunday Quote

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''Banking establishments are more dangerous than standing armies''

Thomas Jefferson (1743 - 1826) 3rd President of the US.
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Faulty Regulation

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Dr Richard North has discovered cast iron evidence that the EU commission has known for at least a year that there have been disastrous "shortcomings" in its system of financial regulation. This system include the measures for the application of the "mark to market" rules which lie at the heart of the current banking crisis. His post on EU Referendum is recomended.

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Banking Crises Update

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Gordon Brown has promised that the Government will "do what it takes" to help families deal with the effects of the global economic crisis such as rising food and energy costs.e effects of the global economic crisis such as rising food and energy. Sounds fine but the UK government is not in charge! costs.

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The Daily Telegraph running out of hyperbole proclaims that the sky is falling in the banking industry and the situation is getting even worse. Christopher Booker in The Daily Mail reckons that this crisis could not only sink the euro, but the whole of the EU as well.
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The British media haven't begun to understand what is going on Ruth Lea for example who is writing about the British government having been "dithering" - ignoring the fact that it is ''Europe '' (EU) that is in charge. With increasing clarity, it is emerging that Messers Brown and Darling were waiting for the go-ahead before acting. That is why they took no action on Monday – they could not until they had had their marching orders from their political masters in the EU. Thus, overnight on Tuesday and into the early hours of this morning was the first time they could have acted, having been given the green light at Luxembourg to break the EU rules.
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Thus is how we are now governed.

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Dithering Darling

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Today, after days of "dithering" Chancellor Alistair Darling suddenly launches "a drastic rescue of Britain's high street banks in move designed to head off a cataclysmic failure of confidence."This just happens to be a day after an emergency meeting of the finance ministers of the 27 EU member states. Is this a coincidence?

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At the (EU) Ecofin meeting yesterday, two things happened. Firstly, the ministers effectively gave the green light to member states to break the EU's own state aid rules.Secondly, they turned their faces away from initiating structural reforms to the regulatory system, which might have freed the logjam in inter-bank lending – preferring instead to make one minor and largely cosmetic change.

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Now, today, we see Mr Darling introduce a scheme designed specifically to free up inter-bank lending, including the provision of at least £200 billion to banks under the Special Liquidity Scheme and the injection of £50 billion capital into a select group of British banks - to the general approval of the Europhile Tory hierarchy. Thus we see an alternative and far more expensive plan aimed at achieving that which the EU members states collectively failed to address.

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Furthermore, it is one which, in its totality, almost certainly breaches EU state aid rules, as well as being "discriminatory" – two of the EU's mortal sins.

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Whilst this is clearly not the end of the current banking crises; it could just possibly be the begining of the end of the EU as we know it!

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The Sunday Quote

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'' Human behaviour flows from three main sources, desire, emotion and knowledge''

Plato

Peter Troy

Blogger,Publicist

but not a Golfer

The Peter Troy -The Publicist Ltd Golf team (Captain Chris Williamson second from the left) at the Hartlepool and District Hospice Tornament recently. http://www.the-publicist.co.uk/

Photo. Mike Gibb

Oh Dear Me!

The US bank bailout has been rejected. Wall Street has nose dived.

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'No' vote crushes DowDow falls as much as 730 points as the House rejects the $700 billion bank bailout plan. more . Now what?

Bailout plan rejected - supporters scramble House leaders trade partisan words after historic financial rescue goes down in defeat.

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In the meantime according to Deutsche Welle, the German government has been injecting "billions of euros" into troubled commercial property lender Hypo Real Estate (HRE). This, we are told, is the first German blue-chip company to seek a bailout in the global financial crisis.

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The German Finance Ministry in Berlin is reported to have said it had provided HRE guarantees for an emergency credit line totalling €35 billion (about £25 billion), although there are no plans to nationalise the bank. A spokesman for the finance ministry said the commitment was needed so that [other] banks could bail out HRE.In different times, this might have made front-page news but such is the torrent of financial news that it is hardly surprising that it has been given less than star treatment by the bulk of the UK media.

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To be fair, The Times has picked it up, together with the news of Glitnir, "the struggling Icelandic bank". This was partially nationalised today as the Icelandic Government bought a 75 percent stake in it for €600 million (£478 million) "to ensure broader market stability".The Icelandic bank move was not unexpected but problems with HRE were not widely signalled.

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The Times has Bundesbank, and financial regulator, BaFin, confirming that they were involved in the efforts to bail out HRE, and has their spokesman saying: "The Bundesbank and BaFin now assume that Hypo Real Estate Group is secure."On the other hand, Kiri Vijayarajah, an analyst at Citigroup, counters: "Hypo Real Estate also has other problems. It has exceptionally high leverage, which may no longer be viable. Also, we believe it is likely to experience losses on real estate loans, causing more damage to earnings and capital."When blue-chip German banks start feeling the strain, it is time to wonder where it is all going to end.

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The BBC website today helpfully publishes the full text of the government statement on the nationalisation of the Bradford & Bingley bank and the sale of parts of the business to Spanish banking giant Santander.

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The current status of the deal is confirmed by Reuters which reports the EU commission saying it had been in touch with British authorities over a rescue plan, "and expected them to notify the EU executive of state aid in the course of Monday".The agency cites Jonathan Todd, spokesman for EU competition commissioner Neelie Kroes, who states: "We've been in very close touch with the UK authorities throughout the weekend ... Our understanding is that the UK authorities will notify rescue aid to us today."

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A similar process is in hand with the rescue of the Fortis Bank. The Forbes agency, relying on a Reuters feed, is reporting that EU competition commissioner Neelie Kroes have been consulted on the Fortis rescue and had been "close touch with the Belgian government all weekend.

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As Tony Blair once said: ''it can only get better''.

The Sunday Quote

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''We should claim, in the name of tolerance the right not to tolerate the intolerant''

Karl Popper (1902-94) Austrian born British philosopher, The Open Society and its Enemies (1945).
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EU Denial

.....................................................The British political classes including commentators and lobbyists are in denial, determined to ignore a reality and carry on as if it was "business as usual". They all still behave as if London is still the centre of government of the UK ; is not.

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It is point that the edtor of this dear Blog has made many times particularly when he was a very active person (which he may well be again) in that large small business organisation the Federation of Small Businesees.

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The dynamic of this EU denial is actually quite subtle - absolute refusal to come to grips with the reality, acknowledgement of which would then require an acceptance that the UK government had in many policy areas become a marginal backwater of very little importance.

Intrestingly what is happening at what used to be central government level happened many years ago in local government in the UK shortly after the 1973 local government reorganisation. Unappreciated by many, this reorganisation was accompanied by a major "reform" of local government management, heralded by the 1972 Baines Report, a yellowing copy of which still resides on my bookshelf.

The key element of this was the creation of super-departments with chief executives who acquired a huge tranche of delegated powers, making a vast number of decisions that were hitherto reserved for councillors, to be discussed and debated in committees and full council. At a stroke, the bulk of local government shifted from political control to managerial governance. Councillors became, on many issues, largely redundant and council meetings were stripped of their true meaning.
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The response of the councillors was interesting. Instead of dealing with the deadly dull but vitally important issues of council management, they devoted more and more time to party political bickering, with heated debates about political issues which often had no relevance at all to council business. Council meetings became theatre – hugely entertaining at first, if for no other reason than for their novelty value. Soon enough though, the novelty palled as we realised that so much of this was empty posturing.

The politicians were left to bicker amongst themselves, largely ignored by the electorate who knew instinctively that their mouthings were devoid of meaning.

The equivalent of their Baines Report for national government was the Treaty of Rome and the subsequent treaties, which gradually stripped them of many of their powers and turned political government of the UK into managerial governance, centred on Brussels.The transition is not yet complete, as there are some policy areas which do remain as "competences" – in the modern jargon – of the London government, but most of the power has gone elsewhere.

A graphic illustration of this comes with yesterday's Environment Council in Brussels, which has produced a 26-page communiqué, stuffed with detail, agreeing initiatives of enormous importance to our daily lives, many with multi-billion price tags and timetables for implementation stretching into decades. It is well worth having a look at the document, just to appreciate the vast range of issues it covers.

Some of this was elaborated upon by environment commissioner, Stravros Dimas, in a speech yesterday to a conference in Brussels. Yet, despite the importance of the issues covered, such was the dullness and the lack of any personality recognisable to the British public, that the only media coverage I can find was in the official Chinese press agency Xinhuanet, and that was only a partial account.

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On the eve of the Conservative Party conference, the British political Journalists are far too busy to care. They are preparing themselves for the theatre, analysing and dissecting the personalities and readying themselves to write yards of extruded verbal material on their speeches.

If one were to ask any one of them to identify the person in the photograph above, many of them would not have a clue. Yet, Stavros Dimas, as environment commissioner, is probably one of the most powerful politicians in Europe (and thus Britain) using powers delegated to him by the Single European Act in 1984 when, with the approval of Margaret Thatcher, "evironment" became an exclusive European Community competence. Few though, have ever heard of him. Fewer still would recognise him.

That fact though is so hideously uncomfortable and unpalatable that there will be no mention of it at all at the Conservative Party conference next week; such is the nature of British Political Subjects these days.

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The Last Straw

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The Daily Mail today chooses to devote its front page to a warning by the National Grid that electricity supplies will be tight this winter, with the real possibility of power cuts.The story, in typical Mail style, is luridly written, but there is a germ of truth in what it says.
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What is especially remarkable of the Mail story (online edition), is the number of comments – 243 at the time of writing. That is unusually large and can be taken as indicative of widespread public interest.After the economy, there can be no doubt that this is the most important issue in the book and, if the current economic crisis is resolved – at least temporarily – there is every reason to suppose that energy will leap to number one, especially if we do start seeing power cuts. In any event, even if the economy does go belly up, the lights going out could be the last straw.

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Raised Voices Needed!

This week those of us that follow politics will watch as Government ministers and their followers at the Labour Party Conference try as hard as they can to convince us that ''it can (yet again) only get better''.

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The British Labour party like the world banking system has gone belly up and can survive only if it is rescued by outsiders with new methods and ideas. While key Labour party figures are publicly declaring loyalty to Gordon Brown they are behind his back still managing to undermine him.

Against this background Labour party politicians and delegates will be implored to 'Keep Trade Local' by the Federation of Small Businesses, (FSB) the UK's largest member based business organisation. Whilst the FSB's campaign against the growing threat of corporatism is aired to the good bad and ugly of British politics the far bigger threat to small businesses is the recent ripple effect of the so called credit crunch on the economic engine room of the British economy, small and medium sized businesses.

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John Wright the former Trade Unionist (NALGO) and now National Chairman of the FSB would be best advised to use his Labour Party membership to great effect in the next few days - when he enjoys the new Labour's beer and sandwiches - since his members are about to never have it so bad.

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If being more taxed an any time in modern history or more regulated than ever before has not been bad enough then the consequences of grossly incompetent bankers which will mean a serious lack of cheep business credit (or any credit at all in many cases) is about to provided the biggest threat to non-corporate business Britain (and the 'western' world) in living memory.

The message from the representitives of small businesses should not be so much ''keep trade local'' as for the government to truly understand the basic needs of trade which is less official interference, less support agencies and less taxation. But of course our true government is the European Union not the Labour Party. Perhaps small businesses need to raise their voice (not least so it can be heared in Brussels) since they will mostly soon be fighting for their very survival.

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Ryder Cup - Hijacked

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The Ryder The Ryder Cup tournament, the 37th event in Louisville, Kentucky, is supposed to be the ultimate expression of the "European" ideal, having been hijacked (like so nany other events and indeed organistaions) by the European Union which is taking every opportunity to display its hated emblem the ring of barbed wire, whoops sorry stars!

.As Dr North explained the background to this last year, the EU – and the huge publicity budget devoted to promoting their "European identity" – the idea hasn't really taken off. Certainly, the very British fans pictured above do not seem to have got the message, thank goodness.

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The Cost of The Credit (and Green-con) Crunch

Taxpayers in Britain face up to 5p in the pound in extra taxes because of the credit crunch created by the banks, leading economists have warned," says The Sunday Times, bemoaning in its leader that, "It's the ordinary folk who carry the can."

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Indeed they do - particularly small businesses - and it was ever thus but, while the paper is rightly getting excited about this latest raid on our wallets, another one is around the corner which will cost us, potentially, even more.

That being the EU's emission trading scheme (ETS) which, with other levies and taxes, is set to add anything up to £15 billion a year to all our bills (no one knows precisely how much – so this is a conservative estimate) – also, by some strange coincidence, equivalent to 5p in the pound in extra taxes, and that is likely to be only a start.

.Worst still, this "tax" is regressive, which means those on lower incomes are hit proportionately harder than the wealthy.Amazingly, the political classes in Britain seem to be totally unaware of what awaits us. This is perhaps indicated by a post in Conservative Home today which "reveals" the exclusive news that a senior frontbencher has told the site that, "as part of an ongoing review of economic policy, higher green taxation is very unlikely to feature in the next Conservative manifesto."

.So "can politicians be that ignorant?" Can they be so ignorant that they are apparently so heedless of what it to come that they can make statements as utterly facile and meaningless as appears on the Conservative Home site.

Well yes es they can! – which makes Booker's column today a timely corrective.In his piece, he picks up the connection between Lehman Brothers and the climate change industry, and between the company and those two great climate change evangelists, al Gore and James Hanson. What drives this development is the growing realisation by European governments – and the EU commission – that the emissions reductions targets they have set themselves for 2020 and beyond are unachievable without massive damage to the economies of developed nations and, in particular, the need to force electricity generators to shut down their plants, leaving their customers cold and in the dark.

That Bankers Lehman Brothers – and before them Enron – were so keen on this scheme tells you all you need to know. It comes from the same stable as the securitisation packages of sub-prime mortgages, a financial empire built on foundations of sand.Many people warned of the dangers of the "credit crunch", but some of those who are popping up now are exposed to accusations of being wise after the event.

Yet, in the "green-con boom", the wiz-kids are preparing the ground for another financial bubble – a "climate change crunch" if you like - the consequences of which will be just as damaging as the present crisis. As The Sunday Times so rightly observes, "It's the ordinary folk who carry the can." Christopher Booker, (Booker's column today) as he is so often, is being wise before the event.

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The Sunday Quote

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''Bank failures are caused by depositors who don't deposit enough money to cover losses due to mismanagement ''

Dan Quale 44th US Vice President (1989-93).
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