Ken vs Boris

Ken Livingston pulled slightly ahead in the polls for London Mayor last year. This has primarily been due to his promise to cut tube fares by 7% and bus fares by 11%. I can't think where is going to get the money from, as I said here.

Channel 4 News regularly does fact checks on claims by politicians and they've had a crack at Ken's claims. In summary, they don't think he'll be able to finance his fare cuts without cuts in investment. For details see here.

After this news was reported, Ken's supporters were tweeting loudly, so Channel 4 had another go at a claim:

"Fares might be soaring, but the service is plummeting! Delays and line closures have become a daily part of Londoners’ lives."

The details are here, but suffice to say that Boris comes out much better, see the diagram on the right.

Squiffy.

The lynch mob strikes again

Sometimes you have to marvel at the short-termism and idiocy that infects our politics. Since the announcement of Stephen Hester's bonus there has been an outcry, the media, MPs and opposition whipped up a storm and last night Mr Hester felt he had to refuse the bonus.

The stupidity behind the decision stems from what we are asking Mr Hester to do. He came in to run RBS after Fred Goodwin left in disgrace in 2008. His task is to rid the RBS books of the bad debt, bring back profitability and put the bank into a position to be sold off to re-coup the taxpayers money.

He's doing the first of those two items during a terrible economic climate. The share price is bouncing along, similarly to other banks. How are we going to re-coup the taxpayers money? The share price has to rise, valuing the company higher, and enabling the shares to be sold off for a higher price.

Which brings me back to the bonus. The bonus was often quoted as £963,000, but the bonus wasn't cash but shares to the value of £963,000. The shares were not exercisable until 2014, meaning he can't sell the shares now. We need the share price to rise, Mr Hester's bonus would have increased at the same time. The personal monetary incentive for Mr Hester was therefore tied to the future performance of the bank. We benefit if he benefits.

Now he's been stripped of the bonus, what's his incentive? Only his reputation is now staked, but who would blame him from walking away from the job when his compensation package is the subject of the lynch mob. And if he did, who would want to step in - when you could get a banking job in the private sector without the hassle.

We've just shot ourselves in the foot.

As an aside Chuka Umunna, the Labour shadow Business Secretary, has been saying that RBS employees should be treated as public sector employees. No, completely disagree. If RBS is going to become profitable and get the taxpayer its money back it is going to need to compete against the private banks. Mr Umunna's plan would lead to a demoralised staff, leaving in droves and the ultimate failure of RBS.

Squiffy.

The proposed Scottish referendum

Today Alex Salmond announced what he wants the referendum question to be: "Do you agree that Scotland should be an independent country?".

I say 'what he wants' rather than saying that the question is a fait accompli. I cannot see David Cameron agreeing to such a question as I'm sure he will think it should mention the UK in some way. I expect the final question to be something like: "Do you agree that Scotland should become independent from the United Kingdom?".

Without mentioning the UK the question is slightly biased as it does not even try to infer what the implications would be. The Electoral Commission would, no doubt, not allow the question to stand.

Squiffy.

No growth, and don't hold your breath

The GDP figures showed a disappointing fall by 0.2%. Of course there will be the usual calls for stimulus measures such as tax cuts, more public jobs, temporary job creation schemes.

It will all be for nought. There will be no recovery until the Eurozone crisis is sorted out. Companies have cash to invest, but no confidence. All measures to try to give a boost will be throwing money away until confidence returns. Confidence will not return until the Eurozone crisis is resolved.

Our growth completely and utterly depends upon Angela Merkel and the other Eurozone leaders coming up with a plan that the market believes. When the market believes it, confidence will return and hey presto, our growth will start to spurt.

Squiffy.

1 trillion and counting

Today marks the day when we have £1 trillion debt. It probably won't stop growing until it reaches £1.4 trillion and will probably never fall below £1 trillion again.

The national debt has grown hugely in recent years. To think that it was only £413 billion in 1997 after all those years beforehand and it's more then doubled in 15 years.

The early years of the Labour government made good and reduced the debt to £385 billion before reverting to type, letting rip and allowing it to expand to £618 by the end of 2007 - the growth years. That's an extra £200 billion borrowed while we were making hay!

The structural debt had become built in as many more people became dependent or assisted by the welfare state and the public sector bloated. Add in the bank bailout and recession and bang, £1 trillion debt.

A somber day for the economy, growth figures tomorrow and Greece and the EU on a knife edge. Welcome to 2012!

Squiffy.

Gripe of the day: Toilet guys

By toilet guy, I mean those blokes who lurk in toilets with a saucer, a hand towel, and cheap cologne - not something less wholesome.

Why has this happened to our loos? Who thought it would be a good idea to have a guy hanging around the loos expecting to get a pound for turning a tap on for you and handing you some paper towel? It really isn't a chore for me to do it myself! I've lived for nearly 40 years on this planet knowing how to wash and dry my hands and I don't need help when in some dingy pub toilet.

In fact I really hate it. Sometimes you feel under pressure to tip them, and are tempted to forego the handwashing so as not to have to face the man with his hand out. My friends and I actively avoid going to pubs who host toilet guys, so let that be a tip to any publicans tempted to employ such a man.

Squiffy.

The Iron Lady

Have just watched the Iron Lady. To say that Meryl Streep made a great performance would be to understate the brilliance of it.

As a diary of a frail woman dealing with dementia it was also a great film, but as the biopic of one of the most important women of the 20th Century it is lacking.

As an unbelievably supportive husband, it is hard to imagine Dennis asking Mrs T to put family before running for Tory leadership.

There are also several inaccuracies, such as rubbish piling up whilst the Tory party was in Government during 70-74, it was the winter of 78-79. Apart from a small summary of her time as PM, apart from the Falklands, it whizzes through the years.

I'm not sure the incident which caused Geoffrey Howe to resign is accurately reflected, there is no mention of the previous EU summit which so annoyed her.

It's a good film with a great performance about an old woman with dementia dealing with the loss of her beloved husband. As a story about Mrs T and her years in power, it could be much better.

Squiffy.

The London Mayoral Campaign has truly started

This morning on the way to the tube, a couple of people were trying to thrust some leaflets at me. The leaflets were from the Ken Livingstone Mayoral campaign.

It was a good choice by Ken's team to run the leaflets today, on a day when tube fares are going up by 6%, as the leaflets re-iterated Ken's promise to reduce fares by 7%.

The question is where is Ken going to get the money from? It's an old political question, but all the more potent now that we have less money to play with. I don't believe the Livingstone campaign has really answered this yet, the money they have mentioned has already been spent by Transport for London, according to Mayor Boris.

The current Mayor has restricted some programmes so that the council tax precept for the Greater London Authority has remained flat for the last three years - a great help at the present time. I think that if Ken is elected, fares will go down for one year only, then shoot-up to pay for a deficit in the GLA's finances, along with a hike in the council tax precept.

I don't believe politicians promising something for nothing, so Ken has much more to do.

Squiffy.

2012 Predictions

Last year was poor, let's see how well I can do this year. So here's the 2012 predictions...

1. At least one country, probably Greece, will exit the Euro. The Euro will survive though.
2. Ed Miliband will have another bad year, though the talk will be of being replaced by Yvette Cooper.
3. Britain will win around 24 golds at the Olympics.
4. The Diamond Jubilee will be a great success and provide a bounce to the coalition of around 5% in the opinion polls.
5. Sebastien Vettel will win his third World Championship, closely from Lewis Hamilton.
6. Chris Huhne will resign from the Government when facing charges of speeding & perjury.
7. A reshuffle will see David Laws make a return to Government.
8. In the Euro 2012 championship, England will get knocked out in the quarter finals.
9. Mitt Romney will face Barrack Obama in the presidential election, and Obama will win.
10. The polls will remain similar to now, Tories 39%, Labour 42%, LibDem 12%.
11. Boris will win the London Mayoral election, defeating Ken by 6%.

Everyone have a great year.

Squiffy.

2011 Predictions revisited

2011 is over, let's see how badly I did...

David Laws will make an early return to Government, in a reshuffle sometime in January or February. 0 points.

The AV referendum will be narrowly lost, but on a low turnout. 1/2 point - it wasn't so narrow

Vince Cable will walk out of the Government. 0 points

Ed Miliband will have a poor year despite the polls and there will be a whispering campaign around to bring his brother back. 1 point

Diane Abbott will walk out of her shadow portfolio. 0 points

The coordinated strikes threatened for Easter will be a damp squib compared to the jollity of the Royal Wedding. 1/2 point.

Sebastien Vettel will be F1 World Champion again, just beating Lewis Hamilton. 1/2 point - Vettel won, but by a healthy margin over Button

Michael Schumacher will walk away from F1 mid-way through the year. 0 points

CPI Inflation will hit 4.0%, but we will have annual growth of 1.8%. 1/2 point, CPI did hit 4%, growth was worse than 1.8%

The parties will end the year on: 39% Tories, 42% Labour, 12% LibDem. 1 point.

Overall 4 points, which is pretty bad. Let's see what next year brings...

Squiffy.