Monday, 31 May 2010

Herald Column 1 June 2010

This morning's Herald column (not on website).

You may have missed a good story about David Laws which emerged on Friday afternoon. No, not the one which came out later that evening. Paul Goodman, the former Tory MP for Wycombe, reported on the website Conservative Home that Laws had been asked whether he wanted a pot plant for his office. He declined, but took the trouble, while he was doing so, to ask what the Treasury’s budget for pot plants was. Apparently, he got a fairly quick answer. And straight after that, the Treasury no longer had a budget for pot plants.
It was that sort of approach which led so many people to be optimistic about Laws as Chief Secretary to the Treasury. It’s difficult to overstate the damage that a ministerial resignation of any sort does to the coalition government not much more than a fortnight into its term, and it’s worse still that it should be over expenses, the very issue which prompted their promise of a “new politics”. But of all the members in the new administration, Laws was perhaps the single most damaging scalp which could have been claimed.
He’d already won widespread admiration for the speed with which he had identified cuts, and for his assurance at the Dispatch Box. The fact that it was a Liberal Democrat who had frontline responsibility for taking the axe to public spending was also a useful piece of political cover for the Conservatives: the necessary pruning could not simply be characterised as typically vindictive Tory cuts. It was a useful glue, too, for keeping the two parties committed to the same programme (which is almost certainly the thinking behind Danny Alexander’s appointment to the post).
But Mr Laws’ experience in the financial sector and his efficiency in getting on with reducing the deficit made him the emerging star of the front bench. If anything, he was even more of a pin-up boy for the Conservatives than for Liberal Democrat backbenchers: he was the principal architect of the Orange Book policies which moved the Lib Dems to a genuinely liberal economic position, and made the current alliance not only thinkable, but positively attractive.
So his departure is a great shame. But it was inevitable. I don’t share the sentiments of those who argue that David Laws should have been more candid about his personal life. Though I know and like both Ben Summerskill of Stonewall and Peter Tatchell of OutRage, I can see no reason why MPs need to declare what they get up to in the bedroom. Indeed, staying in the closet, like Mr Laws, is, some might argue, more dignified than parading about the internet in your underwear, like Chris Bryant, the Labour MP for the Rhondda.
But Mr Laws didn’t need the payment of taxpayers’ money to his partner to protect his privacy. Even he, one suspects, put little stock in his slightly weaselly defence, which relied on claiming that the rules are unclear on exactly what constitutes a partner. They are a bit, but hair-splitting on the issue sounds particularly unconvincing from a man who put out a positively sanctimonious statement about his own exemplary record on expenses.
I imagine quite a lot of the public will have some sympathy with his fears that stopping claiming rent would have given the game away about his relationship with his landlord, but I suspect very few of them think it was worth £40,000 of their money to keep up appearances.
The expenses scandals have been deeply damaging not merely in exposing the bad behaviour of a fairly large number of MPs. They have created a corrosive atmosphere in which any expense is assumed to be unjustified, and every politician on the take. That is a problem, because there clearly are justifiable expenses involved in the work of a member of parliament. David Laws happens to be a very rich former stockbroker, but it would be very damaging to insist that all prospective MPs should have such resources. The expenses row has also created a rod for the back of the parties (that would be all of them) who claim the impossible: that they are going to keep things Persil-white from now on.
But if there will always be some trouble from this quarter, it can at least be dealt with robustly by the measures that David Cameron was the first to suggest, chief amongst which is the decision to make all such claims available to public scrutiny. It is of a piece with that thinking that one of Mr Laws’ first decisions was that any public sector salary higher than the Prime Minister’s would have to be personally approved by the Chief Secretary. And the government has also announced that same should apply to public spending decisions. Hence the online publication of all public sector spending over £25,000 (a measure Derek Brownlee introduced into the Public Services Reform Bill in Holyrood in February).
There must be no room for complacency in this scrutiny. Treasury estimates have apparently suggested that tax revenues are rather better than expected, and that Mr Laws might be able to ease off slightly on the cuts, and still bring the deficit below £100 billion by 2013. Quite correctly, he responded that there should be no let-up in finding and enforcing savings.
Correctly, because politicians’ expenses may be the visible scandal, but the figures become trifling when they are placed next to the unnecessary expenses in the public sector. If Danny Alexander can bear that in mind, his lack of economic expertise may not be a problem. Between 2005 and 2009, government departments ran up a bill of £780,000 on pot plants and cut flowers. Mr Alexander must simply ask whether spending of that sort, and on everything else, from PR consultants and first class travel to newspapers and biscuits, can be justified. We already know that it cannot be afforded. That is the lesson of Mr Laws’ hostility to the pot plant. If his legacy is that kind of approach, his 17 days in office will not have been wasted.

Tuesday, 25 May 2010

Herald column 24 May 2010

I'm getting some complaints that the column isn't always online at the Herald site. Here's the raw copy:

If you wanted to make an investment of £100 million or so, would you hand it over to a bunch of people who want to build a 2,500-seat velodrome in the East End of Glasgow, where it will provide a lasting legacy for the many thousands of budding Chris Hoys for which that part of the world is renowned? Or might you wonder whether your cash would be safer in a chain of kebab shops, off-licences and tattoo parlours?
To put your mind at rest, the outfit handling this investment guarantees “100% dedication. 100% satisfaction.” The very first line of its mission statement promises: “to organise and deliver the Glasgow 2014 Commonwealth Games in a way that fully realises the aspirations of the Glasgow Bid and the contractual obligations of the Host City Contract – on time and on budget.”
Which sounds lovely. There’s a snag, though. With four years still to go, Glasgow 2014 Ltd is already £70 million over budget. I wouldn’t describe my satisfaction at that as “100%” – au contraire, in fact, as the man on the Channel ferry said when asked if he’d dined. The only thing it might be the correct percentage mark for is the level to which the organising committee for the 20th Commonwealth Games has met my expectation that it would demonstrate appalling fiscal incompetence.
Naturally, having shown early on the ability to throw money away that characterises grand projects of this sort, they’d now like some of the cash that they think they would have had if it weren’t being spent on the Olympics in London, so that they can throw that down the stank as well.
Possibly, like me, you don’t have £100 million to invest just at the moment. But then nor does the Westminster government. What it currently has to invest is minus £1.8 trillion, or 126% of GDP, or £76,000 per household. That’s if you don’t count the banks bailout, of course, which would make it minus £2.3 trillion, or 161% of GDP, or £96,000 per household.
In the face of these frankly terrifying figures, it seems fairly pointless to argue about whether the government should not spend this money that it doesn’t have in the East End of Glasgow, or not spend it in the East End of London. One simply concludes that they should not spend it.
But huge projects such as the Olympics or the Commonwealth Games are the most obvious example of taxpayers’ money being squandered on exercises in vanity masquerading as “investment” or “regeneration”. Private building contractors do not feel that throwing a gigantic beanfeast and shoving a couple of thousand testosterone-laden lunks into their newly built block of flats is a necessary preliminary to flogging them off. If the Government wants more social housing, or a swimming pool, or a gymnasium, why not just build the thing without the additional expense?
Because the truth is that for all the talk of how much such projects do to revitalise run-down sections of cities, there is precious little evidence that they do. The vast majority of these schemes do not deliver any appreciable benefit. The “multiplier” argument that the wider economy benefits is pretty bogus when it comes to sports facilities, which don’t produce much in the way of a financial boost for the areas in which they are constructed. Dressage arenas, volleyball courts and archery ranges have a fairly limited usefulness beyond their immediate function. And, of course, every pound spent in constructing a velodrome is a pound not being spent on, say, an accident and emergency unit.
Nor is there even necessarily a short-term financial boost from the event itself. Tour operators in South Africa report that holiday bookings have actually fallen in the run-up to the World Cup, as, understandably enough, more visitors are put off by the presence of football fans than there are football fans.
Two of the Olympics often held up as great successes – Atlanta and Sydney – suggest that the colossal expenditure required to stage them did not deliver much in the way of benefit. True, Atlanta (which was an exercise in naked corporatism which relied on huge levels of private sponsorship) did in fact turn a profit, just, but it brought in $10 million for an outlay of $1.8 billion. Sydney cost the Australian taxpayer around AUS$2 billion. And for all the bruited claims that it would showcase the city’s charms to a wider international audience, subsequent foreign tourism to New South Wales actually fell behind tourism in the rest of Australia.
I admit that I don’t have much interest in sport. But I wouldn’t go as far as Noam Chomsky, who thinks that its whole purpose is to foment jingoism and distract the lumpenproletariat from things which really matter, like seeing through the gigantic capitalist conspiracy organised by the military-industrial complex, of which the snooker at the Sheffield Crucible and the darts at Frimley Green are merely components.
In fact, sport can clearly be extremely good at generating money, which may be why billionaires are so keen on owning football clubs. Manchester United’s magazine, for example, sells 30,000 copies -– in Thailand. You don't need to be Warren Buffett to see the opportunity for making a bob or two in a market like that.
Successful sports teams, as a result, manage to attract customers, sell television rights, market replica strips and even pay the ridiculous salaries of their players without reaching into my pocket to do it. If they pay a design company £95,000 for a G in a set of circles which looks remarkably like one they produced earlier for an arts group, it’s nobody’s business but theirs. If they put up a stadium, they pay for it by selling tickets.
Given the apparently insatiable public appetite for huge sporting events, the real puzzle is how you can contrive not to make a fortune out of them. But the answer to that is simple enough. You just get government involved in the process, and wave goodbye to the money. Your money.