Tuesday, 21 March 2017

Hammond tied himself in knots but chancellors will have more freedom post Brexit

Philip Hammond's first budget came unravelled but then so did more than one of George Osborne's and several of Gordon Brown's.  And it hasn't yet been described as an "omnishambles", as Osborne's was in 2012: though Osborne's U-turn, on a pasty tax, was more comical.

Setting aside election pledges, which I thought was fairly standard but they seem to get remembered more these days, Hammond's primary point that the self employed are probably not contributing enough in tax at the present time, seems to me to be right. Of course, we should be encouraging people to start and build businesses. There has been a boom in self employment since the credit crunch, derided by Labour as the zero hours economy, when surveys show the majority of the people concerned are happy with their positions. This boom has fuelled the record employment stats. Self employed people do have less security, no sick pay and fewer perks. But their state benefits are now pretty much the same as for employees, unlike in previous times - they certainly weren't for my father, who was self employed for nearly all of his long career. But then he didn't have the benefit of an employer's "stamp" (national insurance contribution, youngsters) so had in effect paid in less.

There is also a large army of voluntarily self-employed people, who work with companies who would gladly employ them, but prefer to be freelance. Sometimes that is because they get more fulfilment from working in different environments, even if they stay with one company for a few years at a time. But often the tax advantages of self employment are material, if not the main reason. And generally these hired guns command a day rate that can be double the equivalent employee's salary. Believe me, I have tried to convince many of these guys to join the company full time, but they just could not afford to take the drop in pay. And that is before the tax advantage of paying themselves through their service company, meaning that they effectively pay tax at around basic rate, even though their equivalent salary would not just be higher  rate, but sometimes pushing into additional rate (yes, I know that starts at £150k). And I realise that there is a bigger army of self employed people whose earnings are modest and not higher than equivalent full time employees, as was the case for my old man.

But the thing that really gets me going is when public funded bodies (like my bĂȘte noire, the BBC) connive with employees to give them more take home pay by encouraging them to go freelance. I realise a lot of their presenters (like Clarkson once upon a time) are genuine freelancers, but they have an army of bureaucrats who are also hired this way. I know this dates back 20 years to (and maybe before) the time of Director General John Birt, who turned out to not be a BBC employee until he switched following much hoo-ha*. And HMRC eventually got its claws into BBC "freelancers" who only ever work at the BBC**. When even some senior civil servants are using self employment as a tax dodge***, I begin to wonder about my belief that the UK is a fundamentally decently administered country, relatively free of corruption. I know this is old news but I doubt it has been rooted out yet. Which is perhaps one of the reasons that Hammond thought it was time to act. And his proposals were "progressive" in terms of hitting higher earnings harder.

The government has called a pause on this issue and punted it into the long grass that lies somewhere over the rainbow, i.e. after an election. Which of course may be sooner than 2020. By then the Chancellor, whoever that may be, will have more freedom to act, because we won't be bound by EU rules. In particular, it should be possible to design taxes which strike a fairer balance between traditional and on line retailers. The Amazons of the world are getting a soft ride - made softer compared with high street businesses by the business rates revaluation. An internet sales charge on goods sold on line would be relatively difficult to dodge and easy for HMRC to collect. And the only reason it hasn't already been done? The EU regulations on VAT preclude member nations from applying different rates to goods sold online and in stores.

I suspect there are many opportunities such as these once we are free from the Brussels yoke (nearly typed yolk....). And once we start to make those changes the EU will surely follow. It may yet be that we will have more influence on EU policies from the outside, by taking action, than being one voice in 28.

Yes, that's me, ever looking for silver linings.

*John Birt's history is on Wikipedia: https://en.wikipedia.org/wiki/John_Birt,_Baron_Birt#BBC_career
**More than 100 BBC stars face tax investigations by HMRC, Independent, October 2016:
***HMRC crackdown on freelance tax dodge used by BBC and civil servants, Telegraph, Oct 2012:

Wednesday, 15 March 2017

The Best Manager of the 1960s

Which football manager accrued the most top-division points during the 1960s? Perhaps Manchester United's Matt Busby, whose team won the league twice in the decade and also became England's first European Cup winner? Maybe Bill Shankly, whose Liverpool team also won the league twice and paved the way for a dynasty which turned into the greatest trophy winning team England has ever seen? Or Bill Nicholson, whose Spurs side won the double in 1961 and were in contention through the decade? Joe Mercer, whose Manchester City team won the league in 1968? Or Don Revie, who created a mean machine at Leeds United en-route to becoming the first England manager (in my time) mired in scandal*?

Busby, Shankly, Nicholson, Mercer, Revie - all famous names. Well it wasn't any of them. Harry Catterick, manager of Sheffield Wednesday and Everton is the answer.

In an excellent column a couple of years ago, The Guardian's Daniel Taylor asked how is it that the man who won two league titles and an FA Cup for Everton and went by the nickname Mr Success, with a nod to the Frank Sinatra song, has become almost a footnote when the list of authentic greats is trotted out? To the extent that, a few years earlier, Taylor's colleague Scott Murray listed Catterick as one of 6 title winning managers who rarely get the credit they deserve. (The only post war ones were Burnley's Harry Potts, Catterick and Dave Mackay who won the league with derby County but forever remains in Brian Clough's shadow. To be fair, there is now a statue of Mackay at Derby's stadium, there long having been one of Clough and Peter Taylor, but only since 2015).

Catterick's lack of name recognition these days certainly seems odd when a veteran of the Merseyside press, Colin Wood, who reported on all those sides in the 60s and 70s, rates the Everton side of 1969-70 as one of the best British teams there has ever been.

Catterick was a modern manager in some ways. He insisted on total control before it was common. He trusted youth - all his teams featured local players who he gave opportunities to, usually as teenagers. And he believed in playing the game properly, in an era when players had nicknames like "Chopper", "Bites Yer Legs" and the "Anfield Iron". But, unlike natural publicist Shankly and paternalistic Busby, he kept the media firmly at arm's length. “The fellow who looks for popularity has something wrong [with him],” he once said. And he was obsessive: I don't remember this but he insisted Everton’s team lineups were printed in alphabetical order (presumably when they were released to the other team and the press I think 30 minutes before kick off) so the opposition would not have any clues about their formation.

Catterick was a hard task manager, with a fearsome, boot-camp mentality and a place at the back of the Goodison Road stand the Everton players dubbed the Bollocking Room. “What was he like to play for?” “Hellish” said Alex Young, the recently deceased fan hero known as "The Golden Vision" and a prolific scorer in the 1962-63 championship season.  That would be the same Alex Young who, on leaving Everton several years later, negotiated a gentleman’s agreement for a £1,000 settlement but never saw a penny - Catterick laughed at him when he came asking for it, saying “let that be a lesson to you, son: Get everything in writing”.

But for all his faults, Catterick created three different trophy winning teams at Everton in the 60s (ok, the last league win was 69-70 to be precise) in an era of intense competition. And the 69-70 team was as good as any in that era and one of the best teams I have seen anywhere, anytime. Many games still live in my memory, but perhaps most notably the demolition of Manchester United, European Cup winners just a few moths earlier and with Best, Law and Charlton in their team, in August 1968. Catterick's still developing team with Ball, Kendall and Harvey and a very young Joe Royle won 3-1 but on the day United were "well beaten" to use a phrase used later by Sir Alex Ferguson about another Everton win over the Red Devils.

Image result for sawyer Catterick football greatAs Taylor said, all that really matters should be the man’s achievements. They are considerable and, in a book published in 2014 which is an excellent read, Rob Sawyer concluded after meticulous research that Catterick “unfairly stands in the shadows of contemporaries such as Shankly, Revie and Clough”.
Catterick did not seduce his audiences, but his teams did play with great personality and charisma and it is time, surely, to give him his due. Howard Kendall was Everton's most successful manager and is naturally seen as Everton's best ever. But for me, the Cat was just as good.

*Looking for a way out of managing England in 1977, Revie quit in unedifying circumstances. He had missed a friendly with Brazil in Rio de Janeiro for what he claimed was a scouting assignment on the Italians, when in fact he had travelled to Dubai for contract negotiations with the United Arab Emirates. Revie asked for his contract with England to be cancelled, which the FA refused to do and the FA offered Revie their full support despite having already approached Bobby Robson to replace him. As bad as each other.

Rob Sawyer "Harry Catterick - Mr Success"

Tuesday, 7 March 2017

I'm getting blown away, Young man

I've never liked Neil Young. I didn't get Crosby, Stills and Nash, with or without Young, though of course Nash played a big role in those wonderful 60s chart hits by The Hollies. They were all too folky and country for me. (I know my all time hero is a man with an acoustic guitar, Roy Harper, but he isn't folk*). But maybe I was wrong about Young....

CSN&Y were all well known musicians before they got together, an early "supergroup". Crosby was in the Byrds, Nash as already noted was in the Hollies (and the odd one out - a Brit) and Stills and Young were in Buffalo Springfield, whose best known song is probably the Stills song For What It's Worth. If you don't recognise the title, that's understandable, as it doesn't appear in the lyric. I heard it played on Radio 2 recently, so clearly isn't obscure - even if you don't recognise the title, the chorus may well strike a chord:
It's time we stop, hey, what's that sound
Everybody look what's going down

The song got adopted by the anti-war and other protest movements, understandably in view of the opening lines:
There's something happening here
What it is ain't exactly clear
There's a man with a gun over there
Telling me I got to beware

Stills says many people think the song is about the Kent State shootings, in which 4 unarmed college students were shot dead and 9 others injured by National Guardsmen at an anti-war protest in 1970, even though it was written 3 years earlier. The song is indeed a protest song, though not about war. It was inspired by demonstrations against a 10pm curfew placed on Sunset Strip which residents and businesses had pressed Los Angeles to introduce, irritated by traffic and crowds of young people going to clubs and music venues. The young music fans thought the curfew an infringement of their civil rights. Stills has said that the song got its title from what he said when he presented it to the grandly named record company executive Ahmet Ertegun: "I have this song here, for what it's worth, if you want it".**

Crosby basically got sacked from the Byrds and acquired a reputation for being "difficult". Buffalo Springfield disbanded, so Stills and Young were at a lose end, though Young got his own band, Crazy Horse, together. I rather like the story about how CSN got together. They were all at a houseparty in the States and, hanging out in the kitchen, started to sing songs acapella. Hearing the harmonies, they said "we should get a band together". Which they did but, as Nash was still contracted with the Hollies (a bit like footballers back in the day, no freedom of movement!) Ertegun had to do a deal. After their previous experience, paranoia made them call the group "Crosby, Stills and Nash" as, if anyone wanted to leave, the others would have to change the name.

CSN had immediate success - the well known Marrakesh Express. I thought it a bit light, neither mainstream pop nor something more serious. Checking back, it wasn't a very big hit, though bigger here than in the States. Despite this success CSN felt the band needed more. They tried to get Stevie Winwood (I've mentioned him before - must do a proper blog on him sometime) but he was busy with Blind Faith. Ertegun suggested Young and, despite some reservation from Stills, Young joined though, hedging his bets, he wanted to keep his own band going as well.

Neil Young's addition to CS&N made them even more famous though, with or without occasional member Young, CS&N had no enormous mainstream hits, which I hadn't really appreciated given their name recognition, though their albums Deja Vu and CSN were huge. However, the profile helped turbo-charge Young's solo career, his album After the Goldrush album did well, then Harvest with its number 1 hit single (in the US, 10 here) Heart of Gold was a massive seller. I always thought that song, with its weedy and reedy, whinging, whining vocal was the epitome of wimp. If you don't remember just how wimpy, listen here

However, somehow, Neil Young recorded one of my favourite all time songs. I remember listening to John Peel's show, probably in the late 70s or early 80s, listening out for stuff by Joy Division. The great thing about Peel was that he didn't speak over the records, so it was ideal for making your own bootleg cassettes. He announced a Neil Young song and something made me press record.

The song was Like A Hurricane, a live recording from the 1977 album American Stars 'n Bars. The song starts with some ear grabbing guitar which soars and then swoops before the vocal comes in. And of course it's reedy Neil, but rocking a bit. He whines for a couple of verses and then a chorus, with a decent lyric:
You are like a hurricane/ There's calm in your eye/And I'm getting blown away....
Then, after 2 and a half minutes, comes the guitar break, which really gets going with, well, a couple of minutes of fireworks really. Neil whines back in with another brief verse before another 2 and a half minutes of guitar fireworks, before the final thrash takes us to a fairly predictable but satisfying ending. This song is awesome and whenever I listen to it I think it's the shortest 8 minutes of my life.

There are loads of live versions of the song on youtube, though none of the ones I've listened to rival the recording that was officially released.

A friend whose views on music I trust tells me I've missed out on Young, he's great live and there are loads of other good tracks. Mind, when I've checked out sites like Rolling Stone, which has a readers poll of best Neil Young tracks and also "20 insanely great Neil Young tracks only hardcore fans know" I've not found anything else I like much..... yet (though Ohio isn't bad, see **). But there's an amazing number of links to lists like these on Google, so there's a few tracks to check out yet....

But hey, maybe I just found one while writing this - "The Restless Consumer", an angry rant against George W Bush from 2006. You can hear this one (with official video) here. Clearly, though, my Neil Young highlights playlist is going to remain fairly short. But thanks for Like A Hurricane, man.

*The best description I've seen of Roy Harper is that he "belongs in the category of epic progressive acoustic - which would be a category of one". So not really folk at all. "The Restless Consumer", though very electric, has a very similar feel to some of Roy's angrier stuff.

**For what it's worth, it's actually the Neil Young song Ohio that is about the Kent State shootings. Young called the incident the "biggest lesson ever learned at an American institute of higher education". Young, who has made many political songs and even more comments, including getting into an online spat with Donald Trump in 2015, is Canadian.

Rolling Stone magazine links:
http://www.rollingstone.com/music/pictures/readers-poll-the-best-neil-young-songs-20110608   (Like Hurricane polled 4th)
http://www.rollingstone.com/music/lists/readers-poll-the-10-best-neil-young-deep-cuts-20150603 (this is a fan poll which excludes "hits")

Sunday, 5 March 2017

Are standards of public discourse at an all time low?

I read a fascinating profile of a young Irish American Silicon Valley entrepreneur called Patrick Collison recently.* The business he founded with his brother, Stripe, is worth $9bn. The business is an online payments venture. The brothers, who were studying at MIT and Harvard at the time, spotted that the biggest barrier to getting a new business off the ground was the lack of an easy to use tool to process payments. Stripe provides a platform for app developers and other companies to accept money from online customers, in return for a small fee for each transaction.  I know that sounds like Paypal, but what Stripe does is provide the "tools and apparatus" for initially small companies to use, so presumably they get precisely what they need out of it rather than a vanilla service. The potential is huge: ecommerce currently accounts for just 3% of global retail spending.

But what caught my eye about Collison, who looks a geekish and youthful 28 - neither brother has a girlfriend - was what he said about politics and Donald Trump: "Much of what Trump said is something all of us should not only reject but have some sort of degree of responsibility to reject, be it the misogyny or racism or the rejection of fact as the foundation of political discourse."

There have always been lies, damn lies and election pledges. But have we moved on to a genuinely new, post-truth era of political discourse where facts are ignored or deliberately distorted? Of course, one persons "fact" is another's assertion and there really are lies, damn lies and statistics, or at least selective quotations.

The more traditional kind of political "lie" comes in the form of election pledges which, at the whitest end of lieing, are well intentioned promises which time proves to be unrealistic, unachievable or, in the case of Nick Clegg and tuition fees, dispensable. Or at least tradable in a negotiation. And some (but not that many I feel) are made knowing that they will have to be modified or compromised, which one might charitably call dissembling rather than lying. But there are downright porkies.

And now we seem to have the scenario of politicians effectively saying black is white, one might say in true Joe Stalin, rewriting of history mode.  Are politicians getting less honest? With Trump making remarkable and so far unsupported claims on Twitter about Obama having his phone tapped, has the quality, if that's the word, of debate descended into the gutter?

Respected American corresponent Irwin Stelzer noted that the recent  US presidential election had the worst level of debate ever seen, apart from by anyone familiar with any of the US presidential elections in recent decades.

And while the debate still rumbles about "lies" told by both sides in the Brexit referendum, even Boris Johnson's £350M a week and Project Fear's immediate emergency budget probably weren't as much of a false promise as Ted Heath's "cut prices at a stroke" in 1970.

Apparently this concern that lack of truthfulness will undermine democracy goes back to, well, the beginning of democracy in ancient Greece and a chap called Thucydides, who lamented the fall in standards of political discourse. (If anyone knows the precise quote please do tell me - I've seen it but I can't remember where. Old Thucydides was prolific and there's a ton of his stuff thrown up by Google).

Meanwhile, I wonder if Stripe will be undercut by companies that offer the tool set for a one off fee or an annual software licence, rather than a fee for every transaction. Transaction fees are the holy grail of this kind of business as they produce those lovely repeat revenues that roll in for no further work, but they are vulnerable to competition. If so, I wouldn't fear for the Collison brothers, who  already had form before going to America. Aged 16 and still at school in Ireland, Patrick won a BT Young Scientist and Technology Exhibition competition. He then started a software venture called Auctomatic with his brother, which helped eBay sellers track their inventories. It got investment from an American accelerator programme after failing to get support from the Irish Enterprise fund and was sold for $5million to a Canadian company while Patrick's younger brother John was still at school. "It was very useful experience for us" said Patrick.

Part of that experience was to concentrate on getting the culture in his team at Stripe right (the company now employs over 600 people). "Lots of companies have "no assholes" rules, but that's way too low a bar".

The thing is, politics is open to all and you can't control the culture like you can attempt to do in a company. It's up to the electorate to have what Joe Strummer called a "bullshit detector" to see through the fog of claim and counter claim, truth and half truth, out of context quotations and soundbites aimed to lead you to a particular conclusion.

As ever, caveat emptor: be wary of what you buy into.

*Sunday Times Business section, 26 Feb 2017

Thursday, 2 March 2017

Why we can't end austerity

The BBC assistant political editor Norman Smith commented that it was remarkable for the Tories to win the Copeland by-election last week after "seven years of austerity". Well, that would be because there hasn't been seven years of austerity, it would actually be because Labour is in disarray. The rotten sneaky Tories (and their LibDem fellow travellers in the last Parliament) have actually increased public spending by 9%.

To be fair, that is in cash terms. The Institute for Fiscal Studies says Total Managed Expenditure (the official term for public spending) has been "relatively flat in real terms" (i.e. adjusted for inflation) since 2010. You can see the graph for yourself by following the link below, but the actual numbers are (in 2015-16 money) that spending peaked at £765.4bn in 2010-11 and fell back to £740.4bn in 2013-14 before turning back up slightly. I make that a real terms reduction of 3%, a hardly swingeing 1% a year. And it came after Blair and Brown increased real terms spending from £502bn in 1999-2000 to £763.2bn in 2009-10, an astounding (and horrifying) 52% in 10 years, averaging 5% a year. This is the real source of our public funding crisis, not the pantomime villain banks. Because the money was not just spent but spent badly, pumping up salaries without efficiency improvements, for example the notorious GP contracts, a classic case of less (service) is more (cost).

Now I know that there are areas of the public sector which have experienced severe funding cuts because of this stagnation of spending growth, but I feel the dialogue surrounding "cuts" is fundamentally dishonest.

The BBC, of course, is the arch-champion of the savage/unscrupulous/heartless cuts brigade. They never put the context of the conflicting pressures or the still parlous state of our public finances. And they never, ever, make it clear that the ever increasing debt burden (for it is the deficit that has come down, not the debt total, which continues to grow alarmingly year on year) basically means we are living off our children and their children, who will have to settle the bill.

We heard a lot from the Remain camp about the supposed evil of older voters tilting the scales to Brexit, condemning the younger generations to penury. Well Brexit might turn out that way but probably won't - the chances are it will be a 2nd order effect on the economy in the long term. But unsustainable spending now, leaving a mountain of debt definitely makes future generations poorer. For some reason, this argument is rarely heard. Much easier to kick the can down the road and leave some other poor bugger to pick it up. But just as unpraiseworthy as leaving future generations with a despoiled environment.

As I said, I'm not arguing that there haven't been cuts, some of them painful. And demand has gone up: there are more old people (indeed more people) so there are pressures on social care and the NHS. Local councils have faced years of budget reductions, to the point where basic amenities (e.g. public toilets, parks and gardens) have become unaffordable with the inescapable legal responsibilities councils have to provide many services. But given spend hasn't gone down materially this is fundamentally an issue of allocation and priorities.

So, how should it all be paid for? On planet BBC/hand-wringing Guardianista left wing, no cuts to services are ever acceptable, so total spend would always increase. (I know they point to a few things which they would stop but their appetite for spending is always bigger than the savings).

They say that continuing to increase debt to fund services and investment is sustainable and affordable as long as the markets will lend. And interest rates are low. (For now). But debt interest is the 5th biggest call on public funds in 2017, after pensions, health, welfare and education. At 6% of total spend it is equal to our spend on defence and a third of the health budget.

And every extra pound of future interest payments committed by current borrowing is a pound that won't be available to spend on future services.

By the way, if you want to know what austerity really looks like, in Greece public spending has been cut by 30% since 2010.

So can we please stop pretending that something similar has happened to us? Oh for a grown up and realistic debate about requirements, our ability to pay for them and priorities. In the meantime, I'll consider everything else to be special pleading.

Anyway, since total public spending year on  year has barely gone down - the IFS graphs show very clearly we've had a small squeeze in overall spending terms - we can't end austerity because officially it never happened.