Not A Green Budget

While there were a couple of measures in the Budget that could be seen as “Green”, these measures are more about raising revenue than attempting to benefit the environment. The greatest obstacle is this obsession with growth.

The growth of an economy by measuring the Gross Domestic Product (GDP) is a seriously blunt instrument. Further, even most economists don't understand how or what elements of the economy go towards making up this measure. Put simply, it measures the total earnings of all individuals, the businesses and the government in the country. Now if we were just talking about people, businesses and government departments just buying goods and services then as a measure it would be useful. However as it also measures many negative aspects of life that money get spent on, it fails to show the real state of any economy.

The problem is that if there is a spate of arson, the cost of rebuilding the properties gets measured as does the increase in insurance premiums. This all makes it look as though the economy is growing, as if you lose everything in a house fire say you then have to spend more on refurnishing your new abode. However the GDP fails to measure the losses of the original property.

Looking at an environmental prospective; even shutting down an industry that was heavily polluting adds a paper benefit to the economy as the costs of clearing up the pollution gets seen as a benefit to the economy.

The economists have the same mindset as the people I challenge for dropping litter. The people who toss rubbish in the street, will often say that they are keeping the road cleaners employed.

Therefore the economists and politicians see growth as useful measure but fail to see that a shrinking economy can be equally as good if not better. If the shrinking was due to high unemployment then that would be bad. But if there was a downturn that was caused by the majority of office workers working from home, utilising the internet and telecommunications to do the same work and no longer having to travel to a place of work, the losses would occur in the daily cost of travel for those individuals. While there would be less money spent on petrol that would impact the oil companies and allied businesses, the benefits will also be less congestion delaying the essential journeys, less pollution to cause breathing problems and expenditure on health care.

All this could happen using existing technology, and that shrinking of the GDP would benefit all but a few vested interests.

This is just one example of where a shrinking could be a real benefit to the overall economy. If everyone who can grew their own vegetables, that would mean that there was less money spent in the supermarkets as well as the reduction in the cost of health care from improved diet and better exercise. The trouble is that activities like this, in the eyes of the economists, are not seen to benefit the economy in ways that can be measured.

Staying with the environment, growth in personal transport is seen as good for the economy. As well as greater volume in car sales benefiting manufacturing and the suppliers of the fuel, the conventional economists prospective fails to take account of the costs that go with this. Like congestion extending the time required to travel anywhere, or the effects of pollution on health. In fact these extra costs are seen as benefiting the GDP as more money is spent on these.

It is this drive for growth that is damaging the environment and stopping any real growth in the quality of life.

This method of only looking at the world purely in terms of its monetary value is at the core of most of the problems we have today. Environmentally where the worlds forests are only valued in terms of the economic earnings from the timber, and not in the way that these forests hold back rainwater, preventing flooding and providing drinking water.

Additionally this fixation on growth of GDP means that important tasks in our societies become undervalued. Here in the UK while the cost of childcare is expensive the wages for the people who work in childcare is very low. This leads to people who would be the best people to care for children, will move on to better paid jobs. Yet caring for the next generation should be one of the most valued tasks in life. Yet people who trade in financial derivatives get paid small fortunes even for doing their job badly.

Equally there needs to be a change to fair trade. While the concept of free trade may sound the right way to carry out commerce, free trade is in fact exploitation. It is based upon paying the least you can for any resource and selling it for the maximum price you can get. While that may earn businesses or individuals good profits, it also creates volatility in the market. That is why crude oil has hit record highs yet again. At the time of writing oil is 110 US dollars per barrel while it only costs 20 US dollars to produce. Yet the free market also means that livestock farmers in the UK and the US are struggling to make any profits as it is cheaper to ship in meat from halfway around the world. Even excluding the environmental cost, this free trading creates the situation where the UK and the US are placing themselves at risk of being held hostage over food supplies. If we loose the ability to feed ourselves we are venerable to any number of situations that could disrupt international transport.

Fair trade has the effect of ensuring a stable price, for the farmer and prevents inflation. While it does prevent spectacular profits, it stops the exploitation. Further, by stabilising supply there is less risk of starvation occurring.

Fair trade not only applies to food, when applied to all areas of commerce the consumer gets a better standard of product that's safer and lasts longer. The manufactures also get a better price, leading to better wages and less environmental impacts. Less resources wasted, Less energy used, fewer good transported around the world.

We need to start looking for alternative economic solutions. For example if everyone who is unemployed were provided with an allotment to grow some of their own food, we would reduce the cost of unemployment. However, I am a realist and know that most of the unemployed would not make the effort.

Just as I know that no government will really start to tackle climate change until we have the levels of the seas rising.

Don’t blame the Clerk

Yesterday I wrote about the fact that the Inland Revenue has lost in the post the data on all the 25 million people that receive child benefit. The part of the story that I was most alarmed about as it was reported yesterday was that a junior clerk had sent this information. What is alarming is that, if true as reported and I heard what Alistair Darling said, verbatim, that anyone in a junior position would be able to access all the records and to be able to copy them.

I refrained from calling this clerk all the stupid names he deserved to be called if it had been his fault, simply because knowing how people always try and avoid the blame when something goes wrong, was it really just a clerk that had done this.

Well today new information emerges. While the facts as reported were true, it was the facts that emerged late tonight that shows he was only carrying out instructions from above. It turns out that the National Audit Office requested that the data was stripped of anything that sensitive, this was refused by the revenue, on the grounds of cost. Also these emails asking for the information were copied to a person at director level, that fourth down the chain of command from the top, so the poor clerk who was being blamed for this was and is innocent.

It is interesting to note that the clerk, a young man of twenty-three, has been whisked away to a hotel to keep him away from the media. Oh how damaging his account will be.

In the UK we have to provide to various government bodies and departments all sorts of private and confidential information, we don’t have a choice. Therefore the government has to ensure that this data is secure. While I don’t agree with the paranoid people that say that no governments can be trusted, I don’t feel happy supplying any further information to any government department with this extremely poor level of data protection in place at the moment.

Between Northern Rock and a Hard Place

In the News over the past two days are two stories that are linked, both are shocking revelations, but the link for me is more personal than they will be for most. Yesterday the Chancellor of the Exchequer, the UK finance minister revealed that the UK treasury has loaned Northern Rock forty billion pounds of taxpayer’s money. In the past when my Blog was on yahoo I have spoken of the over inflated housing market, and as my personal experience will show Northern Rock are all part of this hyped up and grossly inflated market.

However before going there, today I heard that the Chancellor of the Exchequer was going to be making a statement to the commons. I thought that it would be related to Northern Rock, thus I was interested but I would wait until the news latter to find out what had gone wrong now. However the announcement that the government had lost in the post important confidential personal and security details of twenty-five million of its citizens completely floored me. As my ex-wife was and for all I know is, a senior tax inspector, I knew immediately that rules had been broken for this to happen. Also, knowing something about the data protection act, I knew that the law had been broken too.

As I don’t have any children myself, this news doesn’t affect me directly, but as I do have experience of having suffered “Identity Theft”, I realised just how serious this was. Also indirectly, I wondered just how safe are my details, details the government holds about me and everyone else in this country.

When my identity was stolen the term Identity Theft had not even been coined and I was shocked at how easy it had been. In no small part my then bank, Northern Rock, were guilty of gross negligence in allowing it to happen.

I was working away from home, I had a mortgage to pay and I had taken in a lodger. I had gone back to Newcastle for the weekend partly because the lodger had not paid the rent and because something odd was happening with my bank account. I asked the lodger for the rent but he said he couldn’t pay and he wanted to leave. So I went to the bank to try and find out what was happening there. The Northern Rock treated me coldly and quite rudely. It was only latter that I discovered that I was dealing with the same person who had enabled my lodger to have a new cheque book, cheque guarantee card and while I had proof of my identity had done this without carrying out the proper checks on him. Further, had the bank actually told me what they knew immediately, I could have gone to the police and they could have made an immediate arrest, as the lodger was still there in my home.

At this time I was still thinking it was just a stolen or missing chequebook that was the problem, and the lodger was just a non-paying lodger. If it hadn’t been for the fact that I had an empty bank account and I needed to get that sorted before I travelled back to London to work, I don’t know how long it would have taken to discover what was really happening. So on the Monday I called work and explained I had a serious problem that I needed to sort out, and would be back at work the next day. Fortunately, just before I went to the bank again, the post arrived and in it was a Driving licence in my name. This was before pictures were a requirement. Keeping this with me I went to the Northern Rock and got to see the branch manager. It was then that I discovered what the bank had done, and had they told me on the Saturday that there was a suspicion of what’s now called Identity Theft the whole matter could have been resolved strait away. The bank, Northern Rock, even inadvertently admitted that they had not followed their own security procedures and accepted weak and incomplete means of identification by the man that had been my lodger. Therefore I thought the matter would be resolved quickly.

I then took the evidence to the police. A CID officer took my statement and whilst shocked at what I discovered from the police about this type of crime, I was lucky as I had good documented evidence that a crime had occurred. Even the detective acknowledged that had it not been for that evidence, particularly the Driving Licence, there would have been little or nothing they could do.

My problem with Northern Rock continued as they kept on honouring the cheques from the stolen cheque book, and eventually I had to open a new account with another bank, to avoid loosing my pay to an overdraft that was increasing weekly.

Eventually, the police caught the culprit, I even discovered his real name and that the name he had given me was another stolen identity.

Even with the real culprit, Richard Michael Cope, pleading guilty and serving prison time, the Northern Rock Bank tried to pursue me for the several thousand pounds that this guy had stolen. Additionally, I ended up with a poor credit rating because of it. It took several years to recover from that, and I lost my home as a result of gross negligence by Northern Rock and the criminal who stole my identity.

Therefore, I can really feel for all the people who are facing a worrying time because of the gross incompetence of our government.

However the issue that is really worrying, and should worry us all, is the way that the government has supported a Northern Rock, a failing bank.

As Northern Rock is a regional bank its headquarters are here in Newcastle, locally many people don’t want to see the bank fail. Apart from the jobs that would be lost, I don’t see why it should survive. That is not based upon my experience with them, but the hard economic fact that the Northern Rock has been carrying out irresponsible lending. Twice since loosing my home, I have looked at getting back on the housing ladder, and twice I have been told how to get a mortgage via the Northern Rock by committing a fraud. Two different brokers told me how to do it, and Northern Rock would give a mortgage to anyone.

While it may have been tempting to try and cash in on the over inflated housing market, I also have my principals and I will not compromise my ethics for greed.

Also as the housing market is inflated, here in the Northeast the property prices are fifty to sixty percent higher than actual values, this irresponsible lending was bound to cause misery in the end.

When the problems with the sub-prime mortgage market broke here, it was clear that banks like Northern Rock would suffer. However, the government had a really difficult call to make. They couldn’t let this irresponsible bank fail as it would bring about the collapse of the housing market and in consequence the whole economy could fall into recession. Also as all politicians are also property owners, they don’t want to see prices fall for personal reasons too. That makes for poor judgement by governments.

Further, the finance market is not that simple, as the mortgage loans are sold as a commodity amongst banks on the money markets. Therefore, other banks who have been much more responsible and prudent were also at risk. While this method of selling bundles of debt to other financial institutions helped raise more capital for the banks, it also meant that lenders like Northern Rock could and were lending money without even caring if the money would be repaid. They could sell the loans on and it was whoever bought that package of loans to worry about getting their money back. Additionally, when prices are rising even the buyers of these derivatives know that the banks like Northern Rock are making really bad lending decisions, but as long as house prices are increasing, the banks will still make money even if they have to reposes. That is why when house prices stagnated, the other banks refused to lend to Northern Rock.

Step in the Bank of England, but had they known that Northern Rock were lending irresponsibly, as regulator for the banks they would have stopped them making bad loans anyway. So we have the government supporting a failing bank to the tune of thirteen hundred pounds per person in the UK, in a desperate attempt to stop an inevitable collapse in the credit and housing markets. Sooner or later it will have to happen and while I do feel for all the people that will suffer because of it, for the last ten years this country has gorged and consumed on a credit frenzy of one trillion pounds sterling.

Well the party is over and the mess needs to be cleared away.