Economics co-existing with madness

[Geoffrey Collier]

Let us reflect on three matters, and understand why economic chaos abounds. Few comments will be necessary, because the message is self-evident.

(1) General Motors has a car factory in Ellesmere Port. That factory is in danger of closure for reasons unrelated to what we would consider economic necessity. The G.M. board has reported losses for 2010/11 of $562m. (£533m) on their European subsidaries Vauxhall and Opel. Closures are to be made and it appears that they will be to Britain's detriment. The Ellesmere Port plant employs 2100 but makes 187,000 vehicles per year. G.M's German plant at Bochum employes 3100, workers, and has a capacity for 160,000. Bochum has a union agreement which expires in 2014. The Daily telegraph reports that should GM close plants based on efficiency, and where the company sells the vehicles, Ellesmere Port should survive. 'But with powerful German trade unions, it may not turn out that way'. It appears that Bochum will survive and Ellesmere Port will close. I wonder what incentives are being offered to GM by the German government?

(2) The Welfare debate continues; and the wiseacre on this forum blame scroungers, immigrants, and the freckless for the necessity to 'cut cost' and bringing some economic reality into the lives of the multitude. I have argued for some years, and also on this forum that the (1) minimum wage, (2) welfare payments and (3) the basic State retirement pensions should be linked and aligned one with another. However, the government sees things differently. They say that 'certain welfare payments' must remain high, because of the cost of accommodation in big cities, particularly in London. Claiments are paid £500 to £1000, plus, per week in housing benefits, and property companies would be in serious difficulties if those rent levels were significantly reduced. So, it appears the the distortion between welfare payments and earned wages, has to continue in deference to the interests of landlords. Those considerations shouldn't form part of the debate. What should the unemployed receive, relative to those on a minimum wage, or in receipt of a retirement pensions, having paid national insurance contributions continuously for forty-four years. What special consideration do we make for property companies? None.

The reality of what the government is doing, in relation to Welfare Reform, is having a serious effect elswhere. There can be little doubt that NHS reforms are being made more severe than justified in order to go 'quietly' on welfare reforms. It is important to separate the two problems in our mind to discern factors which impinge one on another. The NHS 'cuts' are being made at a scale which allow any economies made to subsidise those welfare reforms which the government are loath to make.

(3) The government is boasting that the size of the Civil Service is smaller now than at any time since World War 2. If you see dancing in your street, it will be that which your neighbours are celebrating. Before you get too excited, understand the slight flaw in the claim. Because the publicly funded Civil Service has contracted, that has only been made possible by expanding a publicly funded private sector, and that is presenting very special problems. What a shame the reduction in the Civil Service should be overshadowed by police raids on offices of a 'private' employment service which has received countless millions of taxpayers money, and provided the owner with a personal fortune estimated a £70 million according to the Sunday press. I suspect that should the cost of private advisers, analysts, and a host of other services be removed from public cost, savings of a substantial amount could be made.

[Baron von Lotsov]

If you want a simple conclusion that sums up the problems in its entirety, then I have to blame the feckless politicians, who are in charge of more money than their ability enables them to do responsibly. Business is a dog-eat-dog game. Those higher up the food chain, as in the ones with a lot of wealth, are the sharpest most poker-faced of the lot. There is only the government minister who is in charge of more than the wealthiest of these, and as you might guess, they are seen as easy pickings.

The solution is to break the cash up. The smaller the pieces of cash the less attractive it is to thieves. When governments go about awarding multi billion pound contracts then they are inviting fraud. Lets say councils need someone to cut their hedges. They could all hand the work over to one private firm in a massive contract, or each individual council could contract it out to small business. Small business does not have the power to force the government’s hand, so the whole thing is easy to control. The more you try and manage things on a massive scale the more risk you are playing with. So I agree with privatisation as long as it can be so arranged that a proper market exists. The public sector is hideously inefficient. Some things are so inefficient that if you had to pay for them in a shop it would be like paying five times the price. Someone I knew who worked for a computer firm used to sell £1.50 printer cables to these idiots in government for £50! They have no comercial awareness at all.

[Francis Overdere]

Let us reflect on three matters, and understand why economic chaos abounds. Few comments will be necessary, because the message is self-evident.

(2) The Welfare debate continues; and the wiseacre on this forum blame scroungers, immigrants, and the freckless for the necessity to 'cut cost' and bringing some economic reality into the lives of the multitude. I have argued for some years, and also on this forum that the (1) minimum wage, (2) welfare payments and (3) the basic State retirement pensions should be linked and aligned one with another. However, the government sees things differently. They say that 'certain welfare payments' must remain high, because of the cost of accommodation in big cities, particularly in London. Claiments are paid £500 to £1000, plus, per week in housing benefits, and property companies would be in serious difficulties if those rent levels were significantly reduced. So, it appears the the distortion between welfare payments and earned wages, has to continue in deference to the interests of landlords. Those considerations shouldn't form part of the debate. What should the unemployed receive, relative to those on a minimum wage, or in receipt of a retirement pensions, having paid national insurance contributions continuously for forty-four years. What special consideration do we make for property companies? None.

You are wrong in saying that Housing Benefit claimants are paid £500 to £1,000. They aren't. Most simply have their benefit topped up by a small amount. Housing Benefit is means tested and people in work can claim it if they are on a very low income.

It is however the benefit which generates most fraud and needs drastically tightening up with proper checks made on all claimants.

[Geoffrey Collier]

You are wrong in saying that Housing Benefit claimants are paid £500 to £1,000. They aren't. Most simply have their benefit topped up by a small amount. Housing Benefit is means tested and people in work can claim it if they are on a very low income.

It is however the benefit which generates most fraud and needs drastically tightening up with proper checks made on all claimants.

Francis Overdere: I fear that you are in error. The City of London, for example, make Housing Payments which are separate from housing benefits: what they are allowed to pay is constrained, not by an individual's payment receipt, but by the the total discrete budget of the authority making the payments. To follow social policy in England we all need to have an acute grasp of an obscure case of grammar called the 'discretionary conditional'; that means that all the usual considerations and constraints can magically disappear, conditional to the specific situation.

[Francis Overdere]

Francis Overdere: I fear that you are in error. The City of London, for example, make Housing Payments which are separate from housing benefits: what they are allowed to pay is constrained, not by an individual's payment receipt, but by the the total discrete budget of the authority making the payments. To follow social policy in England we all need to have an acute grasp of an obscure case of grammar called the 'discretionary conditional'; that means that all the usual considerations and constraints can magically disappear, conditional to the specific situation.

I don't know what you mean by the city of London. Housing Benefit is administered by local councils which get the money from central government. It is as I said means tested and those rules apply to every case. It has nothing to do with the local authority budget.

Housing benefit - FAQ

[Geoffrey Collier]

I don't know what you mean by the city of London. Housing Benefit is administered by local councils which get the money from central government. It is as I said means tested and those rules apply to every case. It has nothing to do with the local authority budget.

Housing benefit - FAQ

Francis Overdere: There are Discretionary Housing Payments (DHP), and depending on the nature of the local authority (or corporation in respect of London)the rules are quite capacious in their scope. They can also be drawn from a budget which is measured and assessed in its totality rather than person-specific. Within the Square Mile, there is an exemption and discretionary clause for virtually every eventuality. There have been enough publicised stories about such things: 'Two thousand pound a-week rent for mansion for illegal immigrant's family paid by rate-payers'. That kind of thing really excites the commonalty, poor things.

[Francis Overdere]

Francis Overdere: There are Discretionary Housing Payments (DHP), and depending on the nature of the local authority (or corporation in respect of London)the rules are quite capacious in their scope. They can also be drawn from a budget which is measured and assessed in its totality rather than person-specific. Within the Square Mile, there is an exemption and discretionary clause for virtually every eventuality. There have been enough publicised stories about such things: 'Two thousand pound a-week rent for mansion for illegal immigrant's family paid by rate-payers'. That kind of thing really excites the commonalty, poor things.

Discretionary Housing Payments are an extra amount local authorities can distribute in cases of dire need at their discretion.It is paid for by central government. Need has to be proved and once the allocated amount has been paid out it cannot be topped up. Hence local authorities are supposed to ensure it goes only to the most needy.It can be stopped at any time.

Although I do see your point.

[Geoffrey Collier]

Francis Overdere: May I suggest that you read an article on the front page of to days Daily Telegraph by Tom Whitehead? Under the Freedom of Information Act. At least 100 families are known to be in receipt of housing benefits sufficient to service £1. mil mortgage. Some 30 families are in receipt of £1,500. each week to pay their rent. While another 60 are receiving £5,000. per month. The list is endless. As recently as September 10,480 were being paid in excess of £400, each week for rent. Presumably these are the cases of families in dire need whom you mention? Innocuous sounding phrases, 'like discretionary powers to allocate resources in special circumstances', is often the lexicography behind which national scandals hide.

[Baron von Lotsov]

Some 30 families are in receipt of £1,500. each week to pay their rent.

I think there are a few cases of asylum seekers who have come from countries where Britain has some sort of interest, e.g. places like Iraq and Afghanistan, where certain people are 'helping' British Intelligence and in return they have been paid off via our state welfare system. I spotted one of these in the Daily Mail a while ago. Obviously I don't have proof, because such things are classified, but one such person was an extremely wealthy 'farmer' in Afghanistan who you would have expected to wield considerable political power. I mean even though his house in the West End at £2.5m was considered large by normal standards, it was nothing compared to what he was accustomed to. It was almost certain he was worth more than £4000, the limit at which they stop paying housing benefit, but it seemed highly likely he was over here for a reason. I expect he was involved in some sort of deal where he agreed to hand over sensitive information on the enemy that would have put him in great danger if it were not for the offer of asylum and certain rewards. These kinds of deals are not the sort that can go though public accounts, so in practice they siphon off funds from wherever they can.

[Geoffrey Collier]

Baron von Lotsov: I am sure that you are broadly correct. However, living in Britain is like co-existing in a parallel universe; very little in reality is what it appears. This can have strenghts on some occasions, but it can be the basis for corruption and political manipulation. Until the office was re-activated in the 1970s', for example, few had heard of the Official Solicitor; he hadn't done anything for about fifty years. And then promethean heat was again injected into him. Australian Governor-Generals were found to be more than ceremonial figures when one 'sacked' the government of Gough Whitlam. This is the pragmatic part of the Constitution; whatever our feeling about particular situations may be. But the pragmatic can often come close to the corrupt on occasions. One of the Lord Chancellor's 'archaic offices' is, 'Keeper of the Queen's conscience'. I'm sure that duty would have befallen the L.C. if King Edward V111, hadn't gone quietly. The importance pf precedent in our Constitution is very selectively used. In the early 20th.C. Lloyd-George in 1910, 'went to the country' seeking a mandate for his People' Budget. They were also seeking the reform of the H of L. Then the King died, a new king and major Constitutional reform demands a new election 'they' cried; and they got one. An election was not imposed on Ted Heath, however, when he took us into the Common Market with a majority which the following year he deemed was to small to confront the miners. In recent years we have also seen decisions imposed upon us via social policy decisions, rather than legal changes. That can also be an avenue for surreptitious funding changes. However, despite all those dangers, I still believe that Written Constitutions are not the answer: I dislike them.