Why tuition fees have to go

I’ve long argued that exorbitant tuition fees English students are required to pay are a generally bad idea. I’ve described before the impact they’ve had on the running of universities and how they’ve turned universities into money hungry corporations. How it has resulted in students increasingly seeing their degree as a commodity to be bought, not something life changing they are earning through hard work. I certainly see the benefit of students making some contribution towards their studies, after all not everyone gets to go to uni and fees do make universities less dependant on the whims of government. However, the more and more I look on it, the more I feel that given the choice between the no-fees system of Scotland or the supermarket uni’s of England, fees are just not a good idea and should be scraped.

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The arguments put forward for fees are that they would give student better value for money in their education, more choice, it would increase funding to critical courses, such as medicine and engineering and it would cut student numbers. As these statistics show, in all three cases they have failed and the opposite has happened. Students, saddled with increasingly high levels of debt have becoming increasingly dissatisfied with their courses. Given that engineering and medical courses are more expensive to operate, the mercenary nature of some universities has seen them cut back on these course, as well as shutting down various specialised courses and restricting student’s choices (I don’t think I’ve worked in a uni where one course or another wasn’t in the process of being wound down).

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As for cutting student numbers, they’ve been going up until recently. This is just as well, for as I discussed in a prior article, we are entering into an increasingly technology driven age where its going to be harder and harder for anyone without some sort of qualification (a degree, college cert, trade, etc.) to stay employed.

However thanks to the brexit effect and Tory cuts to student grants they are now getting their wish and student numbers are down slightly this year, by about an average of 4%. Now within the meta data there are some alarming numbers, with a 23% drop in nursing, this on the back of a 96% drop in EU nurses coming to the UK to work. So this raises the risk of some serious staffing shortages in the NHS in a few years time.

Another impact of brexit, is that not only have lecturers and researchers begun to leave the UK, but UK universities too are looking to establish campuses in Europe. I recall suggesting that this might happen in the event of brexit a few years ago, and well, now its happening.

Meanwhile students in the UK are now looking at leaving uni with an average of £57,000 in debt. That is a lot of money to end up owing, made worse by the fact that the interest rates are now set to go up to 6.1%. Indeed this is sufficiently high that it for most graduates earning an average entry level salary they will will struggle to pay off just the interest on that loan, and will likely see the principal written off, which basically means the taxpayer pays it.

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So in effect the entire student fees system is little more than a tax on millennials to exploit the fact that they don’t vote, while pensioners (who either went to uni for free or paid a fraction of the amount) get an above inflation pension rise every year. Of course, increasingly, it seems the millennials aren’t willing to pay this “tax” and will vote for a party that promises to scrap it and the brexit voting pensioners can go spin on it (again I recall pointing out something like this might happen after a leave vote).

Also we need to consider a more fundamental issue, effectively by raising tuition fees Osborne and Cameron pulled an old fashioned accounting trick. The accumulated student debt in the UK now exceeds £100 billion, which we’ve established will mostly be written off, but the government won’t have to pay that off for a good few years. So in effect they set up a sort of buy now, pay later scheme and create the illusion that they were cutting the deficit.

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Now “only” £100 billion doesn’t sound so bad against the back drop of a UK debt level of £1,737 billion, 86% of GDP, noting that it was only 65% of GDP when the Tories took over (and the Tories were elected because they claimed that labour had let the debt get out of control). However given that student debt is rising at about 16% a year, so it will be closer to a figure of £300 billion in 2025 (not accounting for inflation). Add in the expected cost of brexit and its economic impact (another £100-200 billion depending on the breaks) and its not too difficult to see how the UK’s debt levels could exceed the critical threshold of 100% of GDP within a decade, worse than every European country, other than Italy and Greece I might add.

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If want to scare away your creditors, you can do it very easily if they discover that you’ve been playing silly buggers with them and there’s a whole block of off the book debts that you’re on the hook for. This is what happened to China recently. The rating agencies cut China’s credit rating due to concerns about debts run up by state owned companies. I was in China at the time and suffice to say, they were less than pleased about this, pointing out that its highly unlikely that all of these debts would go bad all at once and that China’s economy is in a vastly more healthy state than any western state.

Well the danger is that at some point the penny will drop, the rating agencies will apply a similar logic to the UK and we could see a ratings agency downgrade of the UK debts (again!), both public and private. A rating agency cut remember will make everything more expensive, mortgages will go up, personal loans, car loans and yes student loans. So its altogether bad news. Oh and since we are talking about it, as things stand the rating agencies are jittery, telling the EU to go whistle over the brexit bill, you might find its the Chancellor who is whistling if that provokes another credit rating cut.

Now the Tories will probably argue that this is the whole reason why they are trying to sell off student loan debts to the banks. However this risks making the situation worse. Firstly the whole reason for increasing the interest rate was to facilitate this sale. But increasing the interest rate on any loan will increase the default rate yet further. You are also selling off an asset which you know is going to be defaulted on. Its like sub-prime mortgages all over again. And you are creating a mechanism by which a contagion of debt can spread from one institution to another (or to the government). Again, the whole logic behind the Chinese debt downgrade isn’t that the rating agencies doubt China’s ability to pay, its their worry that a default on a loan in rural Gansu province, could lead to the collapse of one local bank and then ricochet through the system until it threatened the finances of the whole country.

Furthermore, saddling young people with an economic millstone means them living on baked beans for many years and putting off important spending decisions, such as buying a house. This is not good for the economy and could well lead to economic stagnation (which would prompt another rating agency downgrade!). And why should banks get to profit from that?

So all in all, something has to give. In the first instance, if we don’t actually expect students to pay off this debt mountain, then why make them. Set up a debt forgiveness scheme and cut down student debts to more manageable levels.

As for fees, I still do think that students should pay something for their education, if they can afford to do so. A graduate tax is one idea, or some smaller, more limited level of fees. Alternatively, as pensioners will directly benefit from graduates (i.e. doctors & NHS nurses), maybe going after wealthy pensioners and taxing them (or breaking the triple lock on pensions) might be another solution.

But certainly the current system is just a recipe for disaster. It will lead to skill shortages in key areas, its creating a third level system that is increasingly unfit for purpose and could actually threaten the financial health of the country.

E is for Euratom, C is for post brexit chaos

daryanenergyblog

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When article 50 was declared, both the bill and letter sent to the EU clearly stated the UK was leaving Euratom (the EU’s nuclear agency) as well as the EU. I was slightly confused by this as it seems to contradict something I’ve long noted about the Tories, their illogical devotion towards nuclear energy. I did wonder whether this represented a moment of clarity (that nuclear power is a waste of time and money), or was it just another sign that they haven’t got a clue with what they are doing. I think we’ll have to conclude it was the latter.

Euratom is a European agency that has various responsibilities. They act as a single market for nuclear energy components, nuclear fuels (i.e uranium supplies), medical isotopes, regulation of the nuclear industry (notably its safe handling procedures) as well as research into long term nuclear projects such as the…

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Trading delusions

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They had something on the BBC the other night about the possible impact of brexit on trade, in particular on food prices and the UK food industry. Here’s a summary article from the BBC news website.

As I’ve mentioned before, one of the problems with the BBC, is that in the interest of “balance” and “fairness” they’ll have some expert on telling us what’s likely to happen, then they’ll turn to some swivel eyed right wing loon, to give the opposing view.

Two terms that keep cropping up with the brexiters are “new and exciting trade deals” and “push into new emerging markets”. Well first of all, why do you need a new trade deal with the other countries? Via the EU the UK already HAS a perfectly good set of trade deals. Brexit means the UK will have to spend several decades renegotiating those deals. The idea that a country of 60 million is going to get a better deal than a trading block of 400 million is clearly absurd.

Granted the TTIP trade deal between the EU and US looks like its dead, but to be honest that was kind of tainted to begin with. Its demise is probably a good thing. The danger now is that the UK will find itself forced to sign up to some version of that which blatantly favours the US, which could see the sell off of the NHS.

As for “new and emerging markets”, where exactly are these places? Have we found a new continent recently? I know we’ve been finding exoplanets recently, but its a bit early to be thinking of trade deals. Granted, as most brexiters seem to live in the 19th century to them “the orient” or “the south seas” might be a new and mysterious place, but we’ve been trading with these countries for years.

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Is this this what the brexiters mean by a new emerging market?

Given that the bulk of this TV programme seemed to be about food and beef, I can tell you, having been to Argentina and China in the last 12 months, they have a perfectly adequate supply of food and its very cheap. Indeed, that’s the problem, they don’t know the meaning of the word “small portions” in either country. There is no way the UK could undercut local prices. And given how much of the UK is owned by foreign multinationals, its not as if it will ever be a straight “us” versus “them”. It will be one UK based but Chinese owned firm, against an American owned firm in China.

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The new iconic London taxi….owned by a Chinese firm…who bought it off a Malaysian company

Indeed the danger is the other way around, that these countries with there lower production costs will flood the UK market with cheap produce and bankrupt UK industry. One of the things about trade deals is that if everyone wanted a perfectly free trade deal, then all you’d have to do is get both sides to sign a single piece of paper with “no tariffs” written on it. But nobody wants that because it would decimate their industry as the other side dumps goods at ultra-low costs (in some cases made at below the cost of production thanks to state subsidies). This is why the devil in any trade deal is in the detail. And inevitably the UK is going to struggle to get anything more favourable than the EU has managed to get.

Even competing against the US presents problems. Their farmers use all sorts of practices banned in the UK, growth hormones in cattle, feedlots, chlorinated chicken. Its enough to make you want to go veggie….until you realise how much of America’s cereal crop is of full of GMO’s. And US farmers receive very high levels of farm subsidies. Indeed, even US industry is heavily subsidised in some sectors (usually in the form of massive sweat heart deals to supply equipment to the military, FEMA or USACE), such as construction equipment, aircraft and vehicles, the very industries the UK is anxious to defend.

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Far from being the land of small government and free enterprise, the US is one of the most interventionist and protectionist regimes in the world

The idea of UK firms like JCB competing against titans like Caterpillar (America) or LiuGong (China), both with the backing of world superpower behind them is just laughable. And UK beef farmers with a few hundred acres competing against an Argentinian farm half the size of Wales, don’t think that’s going to work…particularly after anyone abroad google’s “British beef” and the first thing that comes up is “mad cow disease”.

The only way that UK firms could compete is by copying the same tactics. E.g. After these pro-brexit farmers go to the wall, the local laird (who helped bankroll the leave campaign) buys up their farms, rips up the hedges and country side and turns the entire county into one massive feedlot. Now if we are lucky he might hire a couple of destitute farmers on as farm hands. But then again, he might just sneak in some migrant workers instead. It depends who is suitably desperate for work.

Volvo, electric cars and the value of red tape

daryanenergyblog

drivee_hero Figure 1: There has been massive growth in EV’s in Scandinavia recently

Last week Volvo announced that they were planning to only build hybrid or battery electric cars after 2019. And France went so far as to suggest they will ban all petrol powered cars from 2040 onwards. Well in many respects this isn’t really a surprise.

In 2009 the EU brought out its latest targets for vehicle emissions, which included a target for fleet average carbon emissions of 95 g/COper km by 2021. I recall pointing out to students at the time that if you did the maths this was a very tall order to achieve with any conventional power train, for any car above the size of a small hatchback. So in effect what the EU did with these targets was effectively ban the sale of all non-hybrid, electric or alternative fuelled cars above…

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The Tories next big flip flop – immigration

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Police were called to escort away a deranged woman who was found squatting in a building in central London, screaming stuff about “brexit” and “Dalmatians“. An appeal to re-home her has appeared online

I made a point in one of my previous posts about how conservatives have a tendency to flip flop, happily willing to sacrifice even the most scared of right wing cattle just to get them through some short term crisis. Well its quite likely that the Tories next big flip flop will be on immigration, which is not great news for the brexit bigots, seeing as this is the whole reason why they voted leave in the first place.

Last week, Jeremy Cunt Hunt was caught leaving Downing Street waving a piece of paper (picked up by a high resolution camera) which talked about how the NHS now feared the consequences of people fleeing Britain post-brexit. Of course this “leak” was almost certainly deliberate. This sort of stuff has happened often enough now that it can’t be just an accident. Indeed the very fact that Hunt reckoned he could get away with this should tell you just how weak Theresa May’s position now is.

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That said, what Mr Cunt Hunt was alluding to was not idle paranoia. There has been an alarming drop in migrant numbers notably in nursing (which has seen a 96% drop in applicants from the EU in one year), farming (where a critical shortage of labour now threatens the harvest) and engineering. And its becoming obvious that the numbers will fall further post-brexit with many EU migrants here already talking of leaving and many of those on the continent reluctant to come to a country they now see as xenophobic and racist.

This could potential leading to skill shortages and falling tax revenue. And no we can’t just recruit from within the UK. Where are we going to find several thousand extra nurses a year? Even if we started up a whole bunch of nursing courses tomorrow, it would be four years before the first ones graduate….and they’d probably go work abroad (as some significant portion of UK nurses and doctors chose to do) because they don’t want to have anything to do with the sweatshop conditions of the NHS under the Tories.

Even things like fruit picking are not easily solved. Hire the UK unemployed to do the fruit picking? Ya, ok and you do know the harvest season lasts for like a few weeks, what are they supposed to do the rest of the year? Many of the unemployed you are looking to recruit are “townies” who have little experience of the countryside (I’ve visions of them wandering through the mud in trainers frantically trying to google what is this brown stuff on the ground? And are cows carnivorous?) and have no clue how to harvest crops. By contrast, farm workers from Eastern Europe are happy to come over for a few weeks, live ten to a bedroom, make a bit of cash before heading back to their home country for the harvest there. Ultimately getting British workers to do the farming, even if that was possible, will push up prices by at least 50%.

And suffice to say if replacing farm workers is that hard, what about technical jobs like engineer or academia? There is a quiet orderly withdrawal of academics from the UK going on. Keep in mind that recruiting academics isn’t easy, it can take years to fill a senior academic vacancy.

And anyone who says, but immigration controls won’t interfere with recruitment, no it will, its already doing so. I came across this example on Twitter of a job (looks like a management one) which requires the applicant to be a permanent resident of the UK.

But hasn’t Theresa May made a very “generous” offer of residency to EU citizens here already? Ya she’s promised a settlement which will leave them with less rights than a Jar of Jam. Keep in mind like for like will apply, the EU might well restrict the immigration status of UK citizens in the EU in return. Which will make it all but impossible for certain large UK companies to function (such as Airbus, which has made clear a lack of free movement of workers will have consequences). The flow of migrant workers, filling key skills shortages (and paying taxes), could be replaced by a exodus of retirees streaming in to overcrowd an already overcrowded and stretched NHS.

State interference in a company’s ability to recruit seldom ends well. You are basically putting in place a massive trade barrier. Its ironic how many Tories claim to be neo-liberals, when in fact capital controls or high taxes are less restrictive to a company’s competitiveness than restrictions on immigration. For example, remember how Trump got that factory in Mexico cancelled and created all those American jobs? Well first of all, he had to pay the company off (so it cost the government money). Secondly not a single auto job was transferred to the US, the company exec’s simply took one look at this orange skinned baboon in chief and pulled the brakes on further expansion. So all he did was stop a couple of hundred Mexicans from getting jobs. And what’s the chances that some of them have ended up in the US looking for work?

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Trump’s immigration plan has led to abandoned factories and companies scaling back on recruitment

Oh, and one of the US companies in question, has just announced they are about to start laying off workers in the US. This is of course not really a huge surprise. In a crisis a company has two choices, expand, which isn’t really an option for much of the US auto industry right now, as they lack the cash reserves or growth potential to do that (restricting trade with overseas markets means they have no room to expand, unless he can get everyone in the US to buy a 2nd or 3rd car). So the alternative is the company “rationalises” or “explores efficiency savings”….which is corporate speak for “sack people”. While I’m no fan of the Austrian School, there can be something of a stopped clock element to it sometimes. The trouble is that conservatives tend to ignore them.

Back in the UK, brexit has started to give business leaders the jitters, again due to the potential impact of immigration controls. Hence why the CBI recently called for an indefinite delay in leaving the single market. And again, this is not idle paranoia or remoaning, the first year after the referendum reveals some very worrying trends, as this post discusses. UK GDP growth has nose dived, inflation is soaring at a time that average earnings are flat-lining or falling. While the UK trade balance was initially doing well (thanks to the drop in the value of the UK pound), its now starting to tighten.

In Scotland, the Scottish economy is starting to struggle. Predictably (given their inability to understand cause and effect and the fact conservatives have the memory span of a goldfish), they’ve tried to blame this on the SNP and speculation about a 2nd indy ref.

WTF! So let me get this straight, thinking of having an indyref can cause a recession, even though when Scotland actually HAD one in 2015, it didn’t cause a recession….or is that just because that referendum was Cameron’s idea? (and obviously nothing bad that happens is ever the fault of the Tory party!).

The truth is that it has long been pointed out by economists that the Scottish economy is particular sensitive to the impact of any brexit, I recall pointing this out several years ago (back in 2011 in fact), so that the Scottish economy is now in a slump over brexit is not really a huge surprise, this is in line with long term predictions. And once the penny drops in Scotland that is is the fault of brexit, don’t be surprised if support for independence starts to rise.

So all in all, the Tories are going to come under massive pressure not to restrict immigration. Now they’ll talk the talk, make people fill out a lot of BS forms and pretend to do something, but essentially they’ll probably end up doing nothing meaningful. So if you voted for brexit to stop migration, well I’ve got bad news for you. On the bright side, migrants are paying for you’re retirement.

And if that sounds far fetched, well in some respects they’ve already flip flopped on immigration. I recall just a few months ago Amber Rudd on QT defending the ridiculously Byzantine immigration procedures (including an 85 page form) and how yes all EU migrants would have to fill this out and what’s wrong with that?….because the civil service will then have to read all 3 million of them (plus 6 million more for the Irish) and that will take a decade or more (they handle only about 150,000 a year at the moment).

And low and behold a few months later now they’ve said bollix to that, we’ll get all the EU migrants to fill in a form on a website and the Irish will be exempt. Good, I can apply for settled status for my friend in Portugal Ivan Proteus Freely as well as my German cousin Anita Bathhaus 😉 I mean its not as if they can check all 3 million online applications.

Jokes aside, the point is that the current Tory plans on immigration are simply unworkable. They won’t actually cut immigration by much (something that was predicted some time ago).You’ll simply replace short to medium term workers coming over to fill labour shortages (who pay taxes, but leave before they get old enough to become a burden on the state), with older British retirees (who will overload the NHS) and long term migrants from Asia (who tend to plan on staying for longer, as well as bring over their entire family).

I’ll finish by noting how quite a lot of those involved in the brexit negotiations (Dave2, the EU’s Bernier, Theresa May) are all keen mountaineers. Well in mountaineering we have an expression, often called the golden rule of mountaineering:

Going to the summit is optional, coming back down is compulsory

I’d make a sign with that written on it and hang it on the wall in the room where the brexit negotiations are going on.

Conservative flip flop syndrome

daryanenergyblog

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Back in the middle ages they believed that madness was a disease and that you could catch it if you hung around people who were crazy. You do have to wonder these days whether they had a point. One has to question if conservatism is a mental health condition caused by exposure to right wing media lies, combined with the memory span of a goldfish and an inability to understand the concepts of irony or hypocrisy.

wild-animals-t-roosevelt-a-thanksgiving-trucesa How did the Republicans go from this….

For example, I was updating some notes this week on the history of environmental protection. One thing that stands out is how many Republican presidents keep cropping up, not as opponents of environmentalism, but as supporters of it. Teddy Roosevelt (Republican) is known as the father of American environmental conservation, founding 6 national parks in his presidency. Nixon founded the EPA, tightened the clean air…

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Possible Tory leadership candidates

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The word around the camp fire is that we are probably just weeks, or maybe months, away from a Tory leadership contest (they even have a wikipedia page up about it already!). Theresa May is widely seen as a lame duck, whose job at the moment is to basically turn on and off the light of her office and that’s about it. Her advisers are gone, leaving her alone and vulnerable. Her recent announcement regarding the future rights of EU citizens was rejected by the EU. In part because it doesn’t go far enough. But also because the EU realises that it doesn’t matter what she says as she won’t be in the job for much longer.

So given such circumstances I thought it might be a good idea to review some of the runners and riders in the upcoming leadership contest. For those who aren’t vampires familiar with how the Tory leadership process works, there’s a first round of voting by MP’s which eliminates the candidates one by one until only two remain holding the still beating hearts of their opponents. Then there’s a 2nd round where senile bigoted pensioners the party faithful decide between the two.

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Boris

So after a posh Etonian Bullingdon boy got the country into an awful mess, what could possibly go wrong if the Tory’s pick another Etonian Bullingdon boy as PM. Certainly Boris is very popular with the base and he’s a good deal more charismatic than Theresa May….then again a corpse has more charisma than her! Certainly he could take on Corbyn and have a good chance of winning an election. However, he’d be a risky bet I’d argue.

Firstly brexit. During the campaign Boris promised the sun the moon and the stars to the country. He made many contradictory promises ranging from the hardest of hard brexits to the softest of them. Initially he even suggested a leave vote won’t mean the country leaving as he could use that to negotiate a better deal (the EU intervened at this point and said what you see is what you get a leave vote means you are leaving). Now he could do this because as we now know, he didn’t actually want brexit. He saw it as merely a means to an end to wound his old rival Cameron, while earning himself some browning points for an eventual leadership challenge after he’d gracefully lost.

The problem for Johnson now is that in any election campaign his lies will come back to haunt him. He made promises he can’t possibly keep. If Corbyn had any sense (perhaps there’s labour’s problem, he doesn’t!) his first question in any debate with Boris will be “so when are we getting our £350 million a week?” and basically take it from there, roll out all of Johnson’s lies during the referendum campaign one after the other.

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Also there’s a substantial anybody but Boris” movement within the Tory party. Many just don’t like him. They consider him too ambitious by far, too unprincipled and too incompetent. And there’s the usual toff infighting. At Eton he was Hufflepuff, they were all slytherin. But either way, there’s a significant number of the old guard in the smoke filled rooms who do not want him, which includes the Barclay Brothers (who are already canvassing for David Davis) as well as Rupert Murdoch. So while he’d likely win if he can get through to the second round of voting, the chances are he won’t make it through. He’ll be quietly knifed in the same way Gove knifed him last time. And we still don’t know what exactly went on between Gove and Boris. If there’s some sort of dirt he was threatened with, then its reasonable assume that threat will be made again.

Also while I could see him winning an election because lots of people think it would be a laugh to see what Boris gets up too. But on the other hand, if the country is reeling from brexit or some other crisis and the view is that we need a grown up in charge, then a Tory party led by Boris Johnson could well lose. So while he’s in with a shout, it would be a risky bet for the Tories to choose him.

Michael Gove

So Gove’s main selling point is….I don’t know either! But certainly his main claim to fame is that he’s the guy who knifed Boris last time. But that means that the pro-Boris brigade will support anybody but him. So its possible that he and Boris might essentially take one another out. In fact that’s probably why he’s back in the cabinet, so May has him plotting away against Johnson rather than plotting against her. Its like in King’s landing, you have little finger and…the fat one!…who are constantly plotting against one another and essentially countering each other in the process. Meanwhile Cersei Lannister Theresa May get’s on with her job.

And a reference to GoT is appropriate because the fact is he’s a sneaky lying two faced wee git. If he became PM they’ll be issuing stab proof vest to anyone going into Downing street. It would quickly become a place of intrigue with back stab and front stab happy courtiers plotting against one another, while the country burns around them.

And like Boris, he faces a problem in any election over all the lies he told during the EU referendum. Now while Boris might be able to dig himself out of that with the odd joke or Latin quote (a tactic that will wear thin over a month long campaign), Gove isn’t sufficiently charismatic (and way too stupid!) to do that.

So I would take a successful campaign by him as a sign the Tories have decided they want to take a sabbatical for awhile and are happy to let labour take over and sort out this brexit mess for them.

David Davis

The Brexit secretary David Davis, whom I will hence forth refer to as Dave2, is another possible choice, seen as the right wing establishment’s preferred pick. And he’s even picked up an endorsement from Nigel Farage. While he did back brexit during the referendum, he largely kept his head down as he tried to avoid making enemies.

However as brexit secretary Dave2 is in a bit of a tight spot. Inevitably as part of the brexit process the government is going to have to make a lot of unpopular decisions and agree to things that will anger the Tory party base, as well as the rest of the country. And while the other candidates can dodge the issue to some extend, as brexit secretary Dave2 can’t. His signature will literally be on the offending documents. Indeed I assumed when he was appointed that he was given this job because he had no political ambitions beyond it, much as how Alastair Darling was given the task of fronting the no vote in the Scottish indyref. This is the sort of job you take on if you don’t mind ending your political career.

So I can’t really see him winning, either the leadership contest nor an election. But then again, with the right media support anything’s possible I suppose. With the Tories its not what you know but who you know that counts.

Phil Hammond

Chancellor of the Exchequer Phil Hammond has very much been the grown up in the room of May’s cabinet. He campaigned for remain and has spent the last year lobbying for as soft a brexit as possible. He’s also rowed back on some of his predecessor’s harsh austerity measures. If the Tories are going into an election facing a backlash against both brexit and austerity, they could do well by put him on the podium to say, look I didn’t start the fire, but I’ve been doing my best to put it out.

Of course Hammond’s greatest strength is his greatest weakness. He’s way too sensible to win a Tory leadership contest. The Tory party base, i.e. Daily Mail readers, don’t want some smart arse mansplaining to them why all their right wing fantasies are bollix. So I reckon he hasn’t got a huge chance of winning. This would create problems for the Tories however.

There’s a lot of Tories who think the lunatics are being allowed to take over the asylum. And a lot of them have coalesced around Hammond. It was widely expected that if May did win the election and get a large majority she’d have to pick between the Hammond brigade or the Boris brigade. And the expectation was she’d sack Hammond. So if he were to be treated badly this could be the sort of thing that would upset apple carts and lead to massive infighting, perhaps even a party split.

One possibility is him and perhaps Dave2 taking over as a sort of Triumvirate (with perhaps one of the other candidates, other than Boris, as the third) for the duration of brexit talks giving time for Boris to be disposed of a younger candidate to emerge, upon which time they resign and hand over power just before an election.

Michael Fallon

Another remain supporter in the running is Michael Fallon, the defence secretary. He’s largely stayed out of the brexit fray, much like Theresa May did prior to the referendum. So he can portray himself as the sensible compromise candidate that everyone can unite around. He’s reasonably experienced, having been appointed a junior minster by the wicked witch of Finchley Thatcher and then serving as a minster under John Major.

However he has a few skeletons in his closet. Firstly, as mentioned, he served in the Thatcher and Major governments. That’s like applying for a job in the South African government and putting on your CV how you used to do the same job during the apartheid regime. Recall how badly Michael Howard (another ex-Major cabinet member) performed in an election, largely thanks to comedy sketches like this. These are memories the Tory party have spent the last two decades trying to get the electorate to forget.

Secondly, there’s the expenses scandal. Now okay, lots of politicians got their hand caught in the cookie jar during that. Even Corbyn got caught out for a cheeky claim for a pair of wall hangers for his Azaleas (ok I’m making that one up, but its the sort of thing you could see him getting caught for). But Farron claimed for the mortgage on his house! Oh, and this is despite the fact that he lives just down the road from London in Seven oaks (about 30 minutes away by train). And he was chairing the Treasury select committee at the time of the scandal! This is fox in charge of the hen house sort of stuff. So he comes with a lot of excess baggage that could play very badly in any election.

Of course this is the problem with the Tories. There’s going to be Tories reading this and thinking, well what’s wrong with that? Everybody fiddles their expenses or taxes, don’t they? Ah….no! The majority of the electorate can’t afford a second home, or even a mortgage on the home they live in. This sort of stuff plays very badly in an election and could easily swing it the way of Corbyn in a tight race.

Dark horses

In addition there are several dark horses to consider. Scottish Tory leader Ruth Davidson is a good example. She’s actually managed to convince some Scots to vote Tory, which is a bit like talking an Inuit into buying a fridge freezer or a chicken to go into a KFC. Currently the rules say she’s not eligible as she’s a lying thieving jock not a member of the Tory party (the Scottish conservatives are a separate party from the Tories). She’s also not an MP and thus couldn’t be PM. However that could all change.

Amber Rudd is an obvious successor to May. But I’d argue she’s out of the running given how she only avoided a visit to the job centre a couple of weeks back by a margin of a few hundred votes. Any sort of a swing towards labour, and post Grenfell that’s almost certainly happened already, and she could lose her seat. In any election she’ll be spending most of her time knocking on every door in her constituency trying to hang onto her job. She’ll have no time to do anything else. And she still might fail, particularly if the lib dems and labour were to do a deal giving labour a clear run against her. So by electing her, the Tories could be facing another Michael Portillo moment come the next election.

Another dark horse is Stephen Crabb, who stood last time. His main selling point is….rugby? I don’t know he could maybe try a different approach to brexit talks, a bit like this bit from Flash Gordon.

There’s a couple of others in the running Liz Truss (the Tory cabinet’s official bimbo, given how the tabloids are constantly printing pictures of her arse!), Jo Johnson, Nicki Morgan or Priti Patel. All those in this list haven’t really screwed up too badly and won’t upset any of the major factions within the party if they won. Of course that in of itself is what probably rules them all out, the Tory party base don’t want a little miss sensible bossing them about.

Then there’s Nadine Dorries a member of the so-called “red Tory” faction. She has in the past written off Osborne and Cameron as a pair of “posh boys who don’t live in the real world. She’s sat on a number of important committees which have investigating the expenses scandal and tax evasion. So she knows where the body’s are buried. If the Tories are looking for an insurgent populist Sarah Palin of their own, she’s your candidate….if you can look past the fact she’s a flaming fruitcake who believes in abstinence only education and has filed multiple private members bills against abortion. So, like Boris Johnson, I doubt she’d make it through to the second round, the party establishment will see to that.

Put up or shut up?

So my assessment is that its difficult to see who will win. Boris Johnson is certainly the leading contender, but he’ll likely falter early. If he gets taken out, then it becomes a bit more of an open contest. Who wins will largely depend on how soon the Tories expect to be fighting an election and whether or not they want to win it. They might pick a sensible candidate, in which case the centre ground voters will swing behind the Tories and labour will get wiped out in a snap election.

But the danger for the Tories is that the swivel eyed loon brigade will back some nutter (like Andrea Loathsome Leadsom or Nadine Dorries) or a hard brexiter (at a time when the aftershocks of brexit are starting to impact on voters) and all but guarantee that they lose the next election.

Indeed, its worth finishing with a poll, which suggested that a change of leadership might actually hurt the Tories chances rather than improve them. Which does raise the possibility that May might pull the old Johnny Haymaker, resign and then apply for the leadership again and tell the party “put up or shut up”. So in the end they might find they are stuck with her, which needless to say slashes the odds for labour to win the next election.

Grenfell tower update

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Cladding samples are being taken away for testing across the UK

Given recent events I think an update was needed on the Grenfell fire situation as events have moved rather quickly. As I wrote my last piece there were reports in the media which suggested that the contractors at Grenfell may have used cladding products that weren’t suitably fireproof (and illegal on a building this tall). I was inclined to ignore these rumours until such time as they was confirmed by official sources, ideally the ongoing investigation into the fire. The UK media is well known for jumping to the wrong conclusions and I didn’t think it as credible that such a huge error could have been made given how well regulated the building trade is in the UK.

Well it would appear I was wrong. Tests on panels from the buildings and on other structures across the UK have failed fire tests. At the time of writing samples from 34 blocks have failed fire tests. This has led to a number of hasty decisions been taken by councils across the UK. Several blocks in Camden have now been evacuated as the buildings have been deemed unsafe. Not only is the cladding of concern, but many other factors too, such as integrity of fire doors, fire breaks, risers and evacuation routes. This has left hundreds out of their homes in London, a city with enough of an housing problem as it is. And in Birmingham over 200 tower blocks are now slated to get sprinklers fitted at a cost of tens of millions per block.

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Keep in mind all of this is happening before the official investigation into the Grenfell fire has even concluded. The normal process for dealing with an event like this is, take on board some interim measures to keep everyone safe e.g. a complete smoking ban (which is one of the leading causes of fires), ban certain dangerous appliances from being operated (such as the fridge model that started this fire), perhaps bring in fire wardens to patrol the buildings and institute a complete evacuation policy in the event of any fire, regardless of how small. Let the investigation continue and then once all the facts are in place, make an informed decision about what to do next.

Keep in mind, this is not the first time we’ve had safety concerns about flats. In 1968, a small gas explosion in the Ronan point tower block led to the collapse of a whole corner section of the building due to a mechanism known as excessive progressive collapse. And, much as I outlined above, temporary measures were put in place to prevent a repeat performance, followed by a schedule of repairs to fix the issue, once the investigations had concluded.

So I do worry if a weak lame duck government, which knows this crisis is of its own making due to its corner cutting austerity and its failure to adequately regulate the industry, is now running scared and basically setting policy by reacting hastily to scary tabloid headlines rather than informed opinion. This risks making a bad situation worse rather than better.

For starters, are we sure the fire spread up the building via the cladding? Yes the evidence says it might have done so, but I don’t think its proven yet. And sprinklers won’t do much to stop a fire on the cladding. They would help keep evacuation routes clear of fire, but if you’ve got issues with poor fire doors and barriers to stop smoke and flames from spreading, then eventually the evacuation routes will just fill up with smoke and the sprinklers will cease to be effective. I’m not saying sprinklers are a bad idea, I’m just pointing out the risks of making a hasty ill-informed decision.

And there is a more fundamental point here. Many of the UK’s tower blocks are 40 to 50 years old. They were cheap and nasty when they were built and one has to question whether the time has come to start pulling them down. Up here in Scotland a number of the housing associations are essentially doing just that, refurbishing some blocks to get a bit more life out of them, demolishing others as soon as possible. There’s little point in wasting billions on expensive repairs to blocks which you are going to pull down in a decade or two anyway. Indeed, this is what the whole Grenfell saga highlights, the chronic underfunding of social housing that has been going on for decades. Now the chickens are coming home too roost.

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Social Housing has been chronically under funded since the Thatcher era, indeed the country essentially stopped building council houses in the 1980’s

And there’s also the matter of regulation. I mean WTF! What are these guys playing at! Did they really think that it was acceptable to put non-fire proof cladding on a building like this. If the media is to be believed apparently the non-fire proof version was just £2 cheaper per panel. So for the sake of enough cash to buy a few bottles of cheap bubbly for the share holders meeting, they were willing to put at risk hundreds of lives. And why weren’t the regulators on the case and kicking their ass? And if there are other issues here beyond the cladding, e.g. poor quality of fire doors (or perhaps even no fire doors) and inadequate risers, then why in blue blazes wasn’t something done about this along time ago! This could not and should not have just come out of the blue.

Perhaps this is the problem, I’ve been assuming that the construction industry over here is as well regulated as it is back in Ireland (if not better), while its becoming obvious that it is actually very poorly regulated. Indeed, now that you mention it, it was pointed out to me recently that in the estate where I live there’s still one or two outstanding issues which the building contractors never sorted out (and the building is at least ten year old!). Nothing serious, but we’ve had engineers around from time to time to inspect and advise. And one has to assume the Tory policy of austerity, which has squeezed council budgets as well as government departments, has played a role in all of this lack of regulation.

Of course in Ireland regulations have tightened up thanks to the EU. This, brexiters, is why we have an EU. Because we don’t want people living in unsafe buildings. And because when one of them burns down due to unsafe practices, guess what, suddenly nobody else what’s to live in a similar building anymore, nor can they sell their flats. And suddenly the government’s got a massive mess that needs sorting out.

So I suspect the fall out from Grenfell is merely a example of what we can expect post-brexit. The Tories will use it to gut regulations their fat cat allies have long disliked. Then when people start dying or scare stories about food safety or dangerously unsafe toys start to circulate, there will be this massive backlash and public anger which the government are forced to fire fight at great expense.

News roundup

I was away in Ireland over the last week, so thought it would be good to do a round up of the news while I’ve been away….

The Prisoner

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Theresa “the Maybot” May, has been described as the prisoner of number 10. She is basically a lame duck PM and its not even her first day of her new term yet. She’s had to sack advisers and bring in some of the more odorous elements of the Tory party in order to cling to power for a bit longer.

And already some minsters, such as Hammond (who it was expected would be given the boot after the election) are staking out their stall for party leadership and openly attacking her. And her actions and U-turns with regard to Grenfell fire, shows just how little power she now has.

The return of Gove did surprise many, but it makes sense. Basically she’s stuffing two big egos in the room, Boris and Gove and hoping they take each other out. Keep in mind that Boris dropped out last time because of some “dirt that Gove apparently has on him. There’s also a significant anyone but Boris wing within the Tories. Keep in mind the whole point of making Boris foreign secretary was so that he’d screw it up and blow any chance of becoming PM. It also looks like David Davis is emerging as the preferred candidate by the Murdoch’s or anyone who dislikes Boris.

Election 2018?

One possible strategy for the Tories is they ditch Theresa, elect someone who can perhaps smile and even interact with “people”, or who knows maybe even hold a baby. Then they have another election. However if that’s the plan, its a bad idea.

Firstly the country has voter fatigue. They’ll have to put Brenda from Bristol on the terrorist watch list if they called another one. I could see a lot of people just going into the polling booth and voting monster raving loony (or UKIP, similar policies basically) just out of frustration.

The Tories are about to be hit with a lot of bad news in the coming weeks. Firstly the whole brexit business is going to mean them making a lot of unpopular policy decisions as part of these negotiations. For example, indications are they’ve already quietly accepted the concept of paying an exit bill of some kind. There will be some leeway to negotiate how much, but its going to be in the tens of billions, perhaps as much as 60 billion….paid in euro’s of course! And then there’s the deficit they’ll run up paying for all of those other promises they’ve made, yet still seeing job losses as companies start moving workers overseas. Estimates from the treasury suggest this could cost up to £66 billion per year.

That’s not the sort of backdrop to an election you want to fight. The one trump card they have is that Corbyn has been going along with their brexit policy and thus will catch some flak himself. However, its a risky strategy. As I believe I speculated years ago, one could envisage a scenario where the Tories held a EU referendum, to their own horror actually won it. Then due to all the negative economic impacts lost a subsequent election to a hard left labour leader, who proceeds to run them and the non-dom’s out of town. That is not that an unlikely scenario now.

With friends like these……

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Then there’s the thorny issue of the Tories new allies in hate, the DUP. Or basically the old testament with fortnightly bin collections. These are people who believe in young earth creationism, that we can pray the gay away and they have links to known terrorist organisations. This lot actually transcend the tea party in terms of craziness, I mean they actually think line dancing is a sin. They are basically living proof of Poe’s Law.

It is no wonder they have John Major worried. And when John Major starts criticising you, aka the guy who lose the 1997 election by the largest margin in recent UK history, you know you’ve strayed seriously off course. I mean if you think about it, John Major would now make a better and more competent PM than any of the likely present Tory candidates. When you’re in a hole, stop digging, especially when you hit the water table.

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And speaking of terrorist supporting sectarians, there’s the issue of Sinn Fein. They have seven MP’s, just three less than the DUP, meaning that if they showed up in Parliament they could all but cancel out the DUP and get up to all sorts of mischief. However, Theresa May can sleep easy because that’s not going to happen. Why? Because they’d have to swear allegiance to the crown and Sinn Fein are refusing to do that.

Back in Ireland his Gerryness spent the last week trying to avoid this elephant in the room. They are willing to trade the post brexit status of NI, the possibility of a border poll, risk a hard border, sit on their hands while the DUP are allowed to screw them over, all to protect their precious ego. Keep in mind that back in the 1920’s a similar pledge of allegiance was applied during early days of Irish independence. When the Irish government announced a change in the law that would require MP’s (TD’s in Ireland) to take their seats or lose them, SF swallowed their pride, declared it “an empty formula” and simply crossed their fingers while making the pledge.

What Sinn Fein have shown by this, or their refusal to enter into government in Ireland, is that they are the eternal protest vote. If you’re angry you can urinate into the ballot box, or vote Sinn Fein. Its basically the same thing and will have about the same effect…although one of those might get you arrested!

Nursing applications down 96%

And speaking of brexit, we are already seeing the first impacts of brexit and the harsh immigration measures the Tories are aiming for. In academia, we are finding it ever harder to recruit good staff. Student numbers are already down. But spare a thought for nursing. Applications for nursing jobs in the UK from the EU have fallen by 96%.

That’s a shortage of about 1,300 nurses per year the UK will have to somehow fill. Keep in mind the typical nursing course will graduate about 100-250 nurses per year, after 3-4 years of training. So its not a problem that can be fixed quickly. And these graduate nurses might not have specialised in the areas where we have shortages (that’s sort of the whole point of recruiting from the EU). So this is inevitably going to mean an NHS that is already stretched will now be stretched yet further. I hope nobody’s planning on getting ill in the next few years.

Now I know what the brexiters will say, oh but we’ll give work visas to nurses with a generous quota. But this misses the point, right now they don’t have to apply for any visa and they still aren’t coming. What are you going to do, send “recruiters out to hang around university bars across Europe, get graduates doctors and nurses drunk, whack em over the head and they wake up in hospital in Greenwich, looking for a doctor, only to realise that they are the doctor.

Trump trip on hold

At least one bit of bad news the Tories will not have to deal with thought is Trump’s state visit. Aware that he might not be terribly popular in London (nah, ya think!) he’s reluctant to come. If he wants to have insults hurled at him all he needs to do is go back to NY for that. He has a fairly fragile ego after all.

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For example, this week we had the story of how he fired the NY public persecutor because he didn’t answer a call from Trump. Apparently Trump had made requests and repeated calls that the prosecutor knew were illegal (it regarded a case against his son in law) and he decided he had better things to do that explain US law to a professional buffoon for the third time in one day. Needless to say this is a level of corruption we’d expect from an African dictator. On its own this one act is grounds for impeachment all by itself.

Also as a birthday boy treat he held his first full cabinet meeting (yes he’s only just held his first one!). Which involved them going around the room and letting everyone pledge loyalty and line up to kiss his ass. Of course the politically astute will realise that these same guys, like Caesar’s chums in the Senate, will still probably knife him when the time comes. In politics, its the guys who come to you with smiles and kisses you need to watch out for. Just ask Boris!

Merkel Trolls Trump

And speaking of Trump. Angela Merkel, the leader of the free world by default, spent the last week trolling Trump. On the anniversary of Reagan’s visit to Berlin and his famous, tear down this wall speech, she visited Mexico and gave a speech against Trump’s plan for a wall. It is just as well Trump and his supporters are unaware of the concept of irony, because if they were they’d have died at this point.

Furthermore, the trouble with Trump’s wall plan, aside from the enormous cost (of up to $70 billion), the time it would take to build, the ongoing costs of maintaining it….forever….is that a technology has already been invented that renders it obsolete – planes! There’s nothing to stop some Mexican migrant getting on a plane to LAX (which is going to be a lot cheaper than hiring some Coyote to guide him across) and then simply overstaying his visa.

As for harassing American companies about their factories in Mexico, much was made by Trump supporters of how Ford mothballed a car plant under construction in Mexico a couple of months back. However, they’ve failed to notice how this hasn’t amounted to any announcement to build the factory in the US instead. Ford simply abandoned the plan altogether and decided to downsize their planned capacity. All Trump’s done is force Ford’s shareholder to take a hit, deprive a few Mexicans of jobs (and what’s the bet some of them end up in the US) and not created a single US job.

Also we’re assuming that his wall will be guarded by jedi knights. I’ve no doubt the Mexican smuggling cartels will do a deal with a few corrupt border guards and we’ll find the flow of drugs and migrants continues. Border controls generally needs the support of both parties on both sides and Trump has more or less guaranteed he’s not going to get that.

Trump on Cuba

And in other Trump related news, Trump has announced a reversal of Obama’s reforms with regard to Cuba. Yes and who will benefit most from that, why Cuba’s long standing ally – Russia! Well there’s a coincidence!

Quite apart from the fact that these restrictions go against every economy principle the US stands for. Quite apart from hardship this brings down on ordinary Cubans. The fact is that if you want to ensure that communism survives in Cuba indefinitely, then embargoes like this are exactly the way to guarantee this.

Grenfell tower fire

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A fire in the Grenfell tower complex in London, which has left an estimated 58 dead has shocked the UK, leading to protests, as well as exposing the deep divisions that exist between the have nots and have loads in the London property market. It has also left a lot of questions to be answered as regards how the fire spread and the degree to which recent refurbishments to the tower complex may have played a role in the tragedy.

4168824800000578-0-image-a-8_1497646862991 Figure 1: the Grenfell tower fire

The fire appears to have spread up the building via a facade, recently installed in the building to improve both the building’s look as well as its environmental performance. Now there’s a lot of he say’s she say’s in the media on this topic, which I’ll try to make some sense out of. But suffice to say we’ll need to wait for the…

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