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David Cameron as an individual, writes Charlie Moore, throws up no insuperable barriers for the majority of voters by his class background. He is patently an able, presentable, decent representative of the well-off, well-educated, mainly southern, upper middle classes who have helped preserve our national stability for two centuries or more. You may not particularly like the type, but you would have to be quite bigoted to say that he was not fit to be prime minister.

Bigoted? Is that the best he can do?

COMMENT THREAD


A full seven days after we report on the EU link, The Sun finally gets it. "A European Court of Justice ruling meant he [Osborne] was under pressure to either slap VAT on all hot takeaway food or axe the duty completely", says the paper. And that is exactly what we said here, last Wednesday, after the muppets on the Treasury Committee had failed to spot the link.

So, at last, days after a provincial newspaper picked it up from us, with the duty child on the Failygraph denying an EU link, the mighty Sun finally discovers the Bog case and tells us that the VAT hike related to the case where, "a German won a bid to carry on selling grilled sausages without charging VAT".

Of course, what the paper hasn't come to terms with the fact that our masters in Brussels have spoken, leaving Osborne absolutely no option but to comply. For all its bravado, the Sun campaign for a "VAT U-turn" is going nowhere. Perhaps they should have checked first about the EU link, before they sounded off. Watch now as they quietly forget all about it.

COMMENT: "SOMETHING FISHY" THREAD


Peter Kellner, of YouGov – husband of eurocrat Baroness Ashton - says one of his polls some months ago had 38 percent of voters believing that if ministers were replaced by "non-political experts who know how to run large organisations", it would be a jolly good thing".

This is according to "reformed" Europhile Max Hastings, but I somehow doubt that there are many people left in this country who speak of anything being "a jolly good thing". This might say more about the egregious Max than it does the British people, especially as he freely admits to having "greeted David Cameron's ascent to power with enthusiasm".

As to the Kellner poll, but one presumes Max is talking about this survey which Kellner used for his Reuters Institute/BBC David Butler lecture.

Much as I would distrust Kellner's personal "take" on anything, we can take some very small comfort in the fact that he and Mad Max do seem to have noticed – at last – that there is something very wrong with our nation. Thus we have the Max writing that: "that there is a much more deeply-rooted malaise, afflicting every party and indeed almost every institution in Britain". He adds:
There is a collapse of trust in those in charge, and especially in our politicians, which should thoroughly alarm all who care about democracy.

Voters look at Westminster, and see government in the hands of people who seem to care nothing about their opinions, their troubles, their hopes and fears. They are wholly uninterested in representing their constituents' wishes and hopes — only in their own advancement.
It really is quite interesting how the great and the good are finally catching up, writing in terms that have been the currency of this blog for some time. Look here , for instance, when we write almost exactly a year ago, of the current administration:

Already, they are in a situation where accumulated broken promises and the resulting breakdown of trust, the sense that they are out of touch, their internal party management problems, and the classic tendency to blame the media for their woes, all combine to give the impression of a political group in terminal decay.

Of course, it is a feature of the great and the good mindset, that nothing exists, nothing happens, until they have thought about it, and the Great Max has duly pontificated about it in the Wail at great personal profit to himself.

But if they are late coming to this party, they are nowhere when it comes to offering solutions to the problem. These we are going to have to devise for ourselves. We plan to make a start in July, preparing our Old Swan Manifesto.

There are still a few places left for the inaugural meeting and, if you want to reserve your place at the table and haven't already been in touch with us by e-mail, then you need to drop us a line. If the popular response to the crisis is electing Galloway, we have our work cut out. The sooner we start the better,

COMMENT THREAD


I am beginning to suspect that the "elephant in the room" syndrome which is so apparent in our media arises as much from ignorance and incompetence as it does any conspiracy to conceal the impact of the EU on our lives.

The EU elephant having been ignored on postal charges and the famous pasties, we now have "Exhibit 1" - this piece in the Daily Wail (illustrated above), which retails alarming tales about blunders and near-catastrophes occurring in British hospitals through poor language skills amongst the staff.

Despite its own piece in January (below) telling us that the EU is not directly responsible for such situations whereby nurses end up on the wards with a dangerously limited grasp of English, the paper continues to focus almost exclusively on the EU involvement.


In fact, what the EU did was prevent the European-qualified medical staff being entered on the UK register, merely because they could not speak English. This did not in any way prevent hospitals insisting that staff displayed a specific level of skill – it simply transferred the responsibility from the national registration authorities to the individual employers.

Blaming the EU in this context is perfectly valid, in disrupting established systems and sowing confusion as to where the responsibilities lie, but that is not by any means the full extent of it.

At the end of the line is that group of increasingly highly-paid NHS executives, who are rewarded to such obscene levels supposedly that they should be aware of such matters, and ensure that they are taken into account. Thus, we not only have the EU dimension but multiple failures of management.

Therein, though. lies is another issue. As the military will tell you, if you are incautious enough to ask, to be effective, an organisation should have a clear chain of command.

But, as is the case now, where we have confusion in our legislature, where some laws are made in Whitehall and others in Brussels, it is not surprising that even highly-paid officials – much less the gifted hacks - get it wrong. There is no longer a clarity of purpose and a clear chain of command.

That was the point we were trying to make a couple of weeks ago. When "everybody" is in charge, no one is in charge. Responsibility shared is responsibility diluted, and while the finger of blame is pointed in one direction, others equally culpable get away with it.

Most often though, unlike this case where the EU is taking the rap, the "colleagues" are able to screw up the system, and walk away without blame – no least thanks to the media which no longer understands how we are governed.

COMMENT THREAD


There was a time when we were following every twist and turn in the ongoing Airbus saga and the dispute with Boeing, but it is simply one of those issues that do not excite that much interest, so it is very hard to keep up the narrative.

However, as the story runs into its eighth year, things are beginning to come to a head. The scale of the subsidies involved, in the order of $18 billion, is so huge that the story will not die, and even the Daily Mail is taking an interest.

Alongside Bloomberg and others, it is reporting that the Obama administration has requested that the World Trade Organisation set up a compliance panel to deal with what it is calling the "inconsistent" subsidies from the EU member states, paid over to Airbus.

What is being alleged by the US is that the subsidies have cost American aerospace companies tens of billions of dollars in lost revenue, which in turn "has cost American workers their jobs and hurt their families and communities".

Since the WTO has already ruled that the subsidies have cost Boeing the sales of more than 300 aircraft and market share, and government aid for Airbus continues, the US has asked the WTO to discuss the issue on 13 April.

This, though, is far from clear-cut, which is probably why the MSM have steered clear of the story. For, while Boeing is an injured party, so is Airbus, with the WTO in March 2011 having ruled that ruled that Boeing subsidies from the US government and individual states have damaged Airbus by more than $5.3 billion.

That, say the Mail could end up with Britain being hit by more than £6 billion-worth of trade sanctions, as WTO-authorised retaliation, a measure which the papers says could cripple Britain's export trade with America – the figure being the difference between the US and the European subsidy levels.

Reuters, though, is more sanguine, suggesting that it could be more than a year before the WTO reaches a decision and, in any event, Boeing is also still in receipt of subsidies, so the actual award may be less.

Nevertheless, one is tempted to wish a plague on both houses. Cumulatively – on both sides of the Atlantic, we are looking at $25 billion of taxpayers' money handed over to aircraft makers, to keep them competing with each other. Whatever happened to the free market, where the best product was supposed to prevail?

COMMENT THREAD

UPDATE: Our little George is getting a bit carried away with his success. He promises "a tidal wave" which will "sweep away" the "discredited" political class. Speaking to supporters outside his campaign headquarters, he said austerity and opposition to the war in Afghanistan had delivered him a win that his Respect party could repeat across northern towns and cities.

It ain't going to happen ... not the way he thinks.

The Westminster-centric Iain Martin, however, sees it through the national filter. It gets The Boy off the hook, he thinks, providing more of an embarrassment for Miliband than it does the Tories. Life does look so very different inside that Westminster bubble.

Channel 4 uses YouGov's Associate Director Anthony Wells for their damage limitation. Beating Labour was a great personal victory for Mr Galloway, but it "probably" does not tell us anything about Labour's standing nationally. By-elections are too idiosyncratic to shed light on the national picture, says Wells, adding: "It means nothing for the country (as a whole)".

Lone protester Thomas Johnson, 26, of Bradford, was less than impressed, yelling that Galloway was a "parasite" as he pelted him with eggs as he left his headquarters. Galloway said it was too early for protests as Johnson shouted: "He's a sycophant, he's a greedy leech, he's a parasite on this city". And that makes him different how?


There is a real sense here of having "stuffed" the local parties, a rebellion against the duopoly of Labour and Tory, where the two major parties between them believe they own Bradford. Speaking to a local activist this morning, one who ended up working for Galloway, what came over as much as anything is a resentment at the two-party stitch-up on the local council. And they know Galloway can't break into that local mafia but, at least, as I was told, "he can speak for us" – tell it like it is.

For far too long, people have fallen into line and, with increasing reluctance, given their votes to these clowns in the polls but, completely under the radar came a man who could unite the Asian vote (which is as fragmented as the whites), and pull in support from the white communities.

With the best part of a 10,000 lead, the sheer scale of the rejection of the approved Labour candidate tells its own story. Completely under the radar, ignored by the media – local and national, none of which saw it coming – Galloway stormed the ramparts and took Labour's prize from them.

The difference here, from many other contests, is that by some mysterious and unknown chemistry, Galloway came over as a winner. People actually believed he could win and, in believing he could, made it so. And that is how perilously thin stand the political classes in this country. They win elections – on tiny fractions of the popular vote, out of habit – because that is the way of things.

But then along comes a maverick, a man who says it ain't so, and they believe him. And that much tells us all about the state of this country and the media. While the prattlers focus on their London-centric soap opera, the bubbling, seething resentment out in the real world catches them by surprise. Would that it was not Galloway – would that it was someone else. But against Galloway's 18,000-odd, UKIP struggled to pull in 1,000 votes, still trailing behind the Lib-Dims who also lost their deposit.

Already though, the establishment, with its media claque are moving in, setting up full damage limitation mode. They seek to present this as a one-off, an aberration. They need an orderly return to the status quo. And maybe it was a one-off, but it was also a very clear message to the political classes. The Westminster claque won't hear the message, of course. Not only don't they want to, they couldn't deal with it even if they feigned understanding.

But the message we, the people, can take away (without 20 percent VAT) is that the political classes are on borrowed time – if we believe we have the power to make it so. Yesterday, eighteen thousand people said so, and there are many millions more who can say the same.

UPDATE: When I wrote the above, I hadn't read this. The headline is misleading. Brendan O'Neill writes: "the vote tends to be less a positive endorsement of any clear-eyed political agenda than simply a 'screw you' to the three big parties which once claimed to represent the political spectrum".

Galloway, he says, is merely a beneficiary of the decay of politics as we knew it, which means that, far from representing a surge in radical Left-wing sentiment, his victory isn't that different to when a member of the BNP wins a seat on a local council or some UKIP suit gets sent to Brussels.

COMMENT: "BY-BYE ELECTION" THREAD

UPDATE: And he won! George Galloway has scored a dramatic victory in the Bradford West by-election, securing a 10000-plus majority in what he called a "massive rejection" of mainstream parties. The word "sensational" is being used, as Galloway ends the two-party carve-up in the city.


The results of the West Bradford by-election were not yet out (at the time of writing), with counting still going on by the time I went to bed. Thus nothing of the contest made the daily newspapers. Instead, the media are focusing on the great fuel debacle, and the inadequacy of the government's communication skills.

Interestingly, I have it on record on 27 January 2010 saying that the fascinating thing about Cameron, whose only claim to fame is that he is a politician, was that he isn't even very good at politics. I'd already said as much earlier, and was to say it again on 28 October 2010 when, after another fine mess, I was remarking that he "Isn't even a good politician".

That is indeed the remarkable thing about a man who isn't good at anything else, so he should at least be able to handle the PR for his own government – and he can't achieve that.

Depending on the result at Bradford, Cameron might be in for another hit, although the low key nature of the contest is possibly because it is a safe Labour seat since 1974, and the party is expected to walk away with it again.

What makes the contest different is the intervention of George Galloway. His Respect party in 2010, when it stood in Bradford West, came fifth behind the British National party. But Galloway looks set to do better this time around, to the extent that Ladbrokes has suspended betting on the result.

Currently, the result is impossible to guess, and no one is making any predictions, but it is not exciting enough to wait up for the result. I'll pick it up in the morning.

COMMENT THREAD

Wylfa Power Station, Anglesea: replacement plans abandoned

German utility giants E.ON and RWE have scrapped their plans to build new nuclear plants in the UK, raising questions over the security of the country's future energy supply, says the Telegraph.

The companies had been working on proposals for new nuclear power stations at Wylfa on the Isle of Anglesey and at Oldbury-on-Severn in Gloucestershire, through their joint venture, Horizon Nuclear Power, established in 2009.

This morning they announced that, following strategic reviews separately carried out by both parent companies, they would not proceed with the developments and would seek a new owner for Horizon.
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The Mail says the government has been dealt a "devastating blow". It is not wrong, although the bigger blow is going to be suffered by the people, when the fatuous windmills stop turning and the lights go out.

Already excessively delayed, the nuclear programme was our last, best hope of keeping the lights on. Now it looks as if we are well truly and domed.

COMMENT THREAD


What the nationals fear to reveal, the Northern Journal makes its front page. Readers will recognise some of the content, but what is also fascinating is the obligatory comment from HMRC. It counters that "the UK has a specific exception from the zero rate for hot takeway food, and that would continue to apply". Thereby, the Treasury insists that "the decision to apply VAT to all hot foods is there to remove anomalies and not to see off an EU challenge".

These bizarre comments are almost mind-blowing. The UK does not have a "specific exemption" on the zero rate for hot takeway food. It has a derogation written into the VAT Sixth Directive which allows it to apply a zero rate to food. But it is free waive that derogation in respect of any categories of food, which is exactly what it has done with hot food.

However, what it is not free to do under the Directive, is apply a discriminatory rate, levying VAT on some hot foods and not others – or different rates on the same types of food. Thus, when the ECJ decided that the sale of hot food over the counter was the supply of goods rather than a service, HMRC was in trouble.

Up until then, it had been relying on the sale of hot foods from outlets such as ethnic takeaways and fish and chip shops being categorised as a service, attracting VAT on that account. When the ECJ decided that this was the supply of food, such outlets should have been able to apply the zero rate, but for the fallback position, where HMRC has waived its derogation for hot food and could apply VAT on this category.

But that in turn exposed a glaring anomaly in the British government's position. It is now charging VAT on hot foods rather than the service of supplying hot foods, but it is applying that tax to some foods and not others. This it is not allowed to do under EU law, so Osborne must regularise the position.

Thus to say that "the decision to apply VAT to all hot foods is there to remove anomalies and not to see off an EU challenge" is utterly bizarre. The point is that, unless the anomaly is removed, there will be an EU challenge. And, since the chancellor does not want to lose the income from takeaway shops, he is imposing the standard rate on all hot foods.

Needless to say, Osborne does not want to be seen as the weak man that he is, bending his knee to Brussels on an unpopular issue, so the Treasury is now laying down a smokscreen, which is getting close to outright lying. But at least one newspaper is seeing the light.

COMMENT: "SOMETHING FISHY" THREAD


What the media critics of bloggers forget is that, by and large, most of us blog for one particular reason – to make up for the defects of the MSM. We write about the things they miss, or add analysis of issues which they seem incapable of understanding.

When a newspaper does a good job, therefore, it is to be applauded, as with The Daily Mail, which is beginning to make serious inroads into the "stolen children" issue. Not yet though has it seized upon the serial inadequacy of the childrens' minister, Tim Loughton, whose incompetence as a high official gives adequate testimony to the decay of our political system.

One might thus return to The Boy's extruded verbal material where he writes so glowingly of "choice". What choice have aggrieved and injured parents, when the judicial system abuses them and the politicians fail to respond? Then, of course, it is for the media to take up cudgels, as the Mail is finally doing, long after Booker has been ploughing a solitary furrow on the issue for some years. Better late than never, one has to say.

But speaking of choice, compare the triviality of The Guardian on what it chooses to call the "pasty tax", with our analysis. Which one would you rather have? Yet, perhaps unsurprisingly, the self-same Guardian, failing across the board on so many issues, would have comments restricted.

If we followed that paper's direction, we would as a result see a progression of failures in the "stolen children" issue – the authorities, the judiciary, the politicians and then the media. And, to complete the suite, the newspaper would silence the bloggers as well. When so much choice is an illusion, it seems that the only option The Guardian would allow us is between being uninformed or ill-informed.

 No wonder this is the Boy's favourite newspaper.

COMMENT THREAD

Having offshored most of Britain's governmental powers, some to Brussels and others to amorphous, anonymous groups such as the Bank of International Settlements, there is so little left of public policy-making in the UK that the elites are driven ever-more to micro-managing an increasingly limited spectrum.

So emerged the "schools 'n' hospitals" meme, as the only two issues of any substance over which British politicians still had any influence – issues which have dominated successive elections. And so it is that today The Boy returns to the Failygraph to write about – you guessed it - schools 'n' hospitals.

It may only be me, of course, but all I see is a leaden text, oozing with smug, patronising clichés, chains of meaningless words which do nothing but parody themselves and their author.

But what is so insidious is the way the debate is being closed down. The Boy speaks glibly of "choice", but only in terms of a limited set of "public services", which he wants to be "truly accountable to local people, not to politicians or bureaucrats in Whitehall".

Yet, when it comes to government itself, the state apparatus of which he is part, we have no choice at all as to who runs it. Our supreme government lies in Brussels, its officials unelected, unaccountable and unresponsive.

Thus, the deal is that we can chose our doctors, and even the hospitals in which we are treated, or the schools in which our offspring are educated, but we are not allowed to chose our own government – or define the policies and issues which it should regard as important.

Cameron may think that that is a good deal, one that can keep the majority of the population quiescent. And he may be right in that estimation. But he is not right in thinking that getting "schools 'n' hospitals" right (if that ever happens) is adequate compensation for the loss of our freedoms and independence.

What then stick in the craw is the deceit. "Nearly two years on from coming into office, brick by brick, edifice by edifice, we are slowly dismantling the big-state structures we inherited from the last government", says The Boy. But he is not. "We are putting people in control, giving them the choices and chances that they get in almost every other area of life", says The Boy. But he is not – not where it matters.

This is the man, Raedwald says, who can't tell the difference between freedom and choosing which prison in which to be confined. And that's what matters.

COMMENT THREAD

Dutifully, Reuters reports on the latest IPCC production – this one on: "Managing the risks of extreme events and disasters to advance climate change adaptation".

It tells us that nations "need to act now" on climate change, because increasingly extreme weather is already a trend. The need for action, it is thus asserted, has become more acute as a growing human population puts more people and more assets in the path of disaster, raising economic risk.

Conveniently, Asia is most vulnerable to potential disasters, with East Asia and the Pacific facing the highest adaptation costs – which sets them up nicely to receive the funds pouring into the pot, which is really all this is about.

But when it comes to public interest, or the scale of the media event, the figure for "sources" tells you what you need to know. With hardly any "big name" newspapers on the list, this tells you that the issue is effectively dead. A high-profile issue, where the media is really excited in the topic, will get anywhere between 2-4,000 sources. This story gets a mere 297.

But the regulatory half-life is what really matters now. As we have observed before, this is what is going to do the damage, as the political classes and the interest groups reap their rewards for a successful scare. The evidence builds, though, that as a scare, "climate" is dying the death.

The public barely cares any more.

COMMENT THREAD

One struggles to believe the level of trivia to which the MSM stoops, except that this is par for the course.

There is an interesting story here, about how the chancellor is having to kow tow to Brussels, to regularise the UK tax position, following an ECJ judgement. But none of them can see it – or want to see it. Even though VAT is an EU tax, the EU is invisible to them.


We are dealing with children. And this is what you get from the juveniles in the Failygraph, punctured by The Boiling Frog. Daniel Knowles has it that VAT is not an EU tax. It was introduced by Thatcher "for ideological reasons".

Against that degree of stupidity, there is no known defence.

COMMENT: "SOMETHING FISHY" THREAD

Panic measures c. 1939: with two million unemployed, Guardsmen were employed filling sandbags to protect government  buildings in Whitehall.

Douglas Reed, in a different book this time but caustic as ever, writes of matters long ago. In reaching from the grave, however, his words resonate on things present, as if he was here now – today. This, though, is 1938, and he is complaining at the misallocation of resources on providing huge numbers of gas masks, when the risk of gas is slight and the risk from high explosives grave.

But in England there, Reed says, "were only gas masks, and not many of those, but no bomb-proof shelters, though in your underground railways you have the finest raw material for bomb-proof shelters, if anybody would take the trouble to have them adapted for that purpose, of any city in the world". He adds:
You could put hundreds of thousands of people in them in perfect safety, you could have food and water and everything you needed down there, if you ever could be moved to do anything about anything, but muddling through is awfully jolly and British, and how too British we British are, aren't we?
Of the preparations in the run-up to Munich, he then wrote:
What an incredible scene of confusion and chaos that was, after six years of constant warnings. On the outskirts of London, Aircraftmen struggling to get a few balloons into the air, many of which broke away, as who should say, "Include me out of this farce, will you?", and drifted off into the blue.
The passive defensive measures comprised gas masks, trenches, bomb-proof shelters, evacuation, he wrote, but the more important measures are the active ones: anti-aircraft guns, fighting aircraft. Do you think, he asked, we were readier in these things?

The answer had come on 4th November (reported on the day from a debate on 3 November), with Hore-Belisha, the Secretary of State for War. He, says Reed, confirmed some of the worst fears that had been expressed about useless anti-aircraft guns, deficient transport, wrong ammunition.

However, Reed wrote ironically, the Government was not at fault. The culprits were "the people who had been crying for years to have these things remedied, for the Government to fulfil its own promises". And the Secretary's anxiety had been "not lest the full equipment should come", but about those who kept stressing the lack of full equipment.

Here, our writer slightly misquotes the Secretary of War (see second para), but not grievously so. It is made clear that the great concern "is to keep alive the vital processes of confidence". The context is that the equipment is missing, but we should not complain about it for fear of affecting "confidence".

Those who bemoan the current inadequacies of government need look no further than here. Read the 1938 debate if you have time, and you will see that we have been taken for fools for a very long time. The Old Swan beckons.

COMMENT THREAD

John Mann, MP for Bassetlaw, in the Treasury Committee yesterday

Georgie Porgie's puddings and pies are certainly making a few ripples. With what the media have variously labelled a "pie tax" (Daily Mail) and a "pastry tax" (Independent and Sun), he doesn't even have to kiss the girls to make them cry. He just charges them 20 percent VAT.

But, as with the postal charges, the MSM simply doesn't get the EU dimension, failing to detect that the anomalies on hot food charging had to be dealt with, because of an ECJ judgement that could cost him billions if not addressed.

At the heart of this tax grab is the VAT Sixth Directive, and - on the face of it - the crucial issue is the requirement that: "The standard rate of [VAT] shall be fixed by each Member State as a percentage of the taxable amount and shall be the same for the supply of goods and for the supply of services …".

The member states, says the Directive, may also apply either one or two reduced rates, at not less than five percent (or zero in the case of the UK), to some specific categories of goods and services, which may include foodstuffs and latterly restaurant services.

Enter Manfred Bog who, back in 1994 was running three mobile snack bars. After a series of disputes with the German tax authorities, Bog in 2006 fixed upon one particular issue, that 70 percent of his sales were being assessed for standard rate of VAT, while the remainder only attracted the lower rate of five percent.

The German authorities here were arguing that the larger proportion of the food sold was consumed "on the premises" (i.e., under a shelter provided by Bog) and, therefore, the trade was a "service" rather than the supply of goods – thus attracting the higher rate of VAT.

We should not detain ourselves with the finding of the German financial court, the Bundesfinanzhof. Down that path lies madness. Suffice to say that the case was joined by others, including a firm called CinemaxX, arguing the toss about popcorn sales. Again, the service/supply of goods argument was in the cooking pot. And then there was Mr Lohmeyer, with his snack stalls and a swinging grill, plus – of course - Fleischerei Nier. Don't even go there.

Cutting to the chase on this bundle of cases, the judgement on 10 March last year ruled that the supply of food or meals freshly prepared for immediate consumption from snack stalls or mobile snack bars or in cinema foyers is a supply of goods rather than service – as long as the supply of services preceding and accompanying the supply of the food were not predominant.

Ostensibly, this did not apply to the UK – or so HMRC said at the time. Yet the Fish Fryers Federation and others disagreed, because the essence of the ECJ judgement was that they were supplying goods (as in foodstuffs), not services. And as the UK zero rates food, they were thus salivating at the prospect of a mega-refund.

"Ahah!", said HMRC batting away such insolence. The fish fryers are caught either way. Their tax category - devised uniquely by the UK - includes "hot take-away food" and well as catering services. It matters not whether it is food or service, VAT still applies, regardless of Bog.

And there gripped the cold, mindless jaws of the VAT Sixth Directive, of which the ECJ had so cruelly reminded us. To their horror, HMRC have confronted their worst nightmare. If the fish fryers are selling hot food rather than services, and have to charge VAT on it, so does everybody else who sells hot food.

That is what the Sixth Directive says: you can't charge different rates of VAT on the same goods. If a member state charges VAT on some hot take-away foods, it must charge the same rate of VAT on all hot take-away foods. They must, therefore, all be charged at zero rate or the standard (higher) rate. And, of course, Georgie opted for the higher rate, taking in the (hot) puddings and pies.

The rest, as they say, is history, except that the media is still blissfully unaware of the background – as indeed are the MPs who were questioning little Georgie Porgie at the Treasury Committee yesterday.

Instead of picking up the EU link - and the fact that Georgie had no option under EU but to go for all or nothing - they sought to ridicule the tax on the basis that enforcement would be impossible. In the form of Labour's John Mann (pictured), they joshed Georgie for not having been to a pie shop recently, (even if he has kissed plenty of girls). Then, smirked Mann, a pie at 20°C, when the ambient is 22°C as it was then, would be VAT-free. But if the ambient dropped to 19°C, the same pie would cost 20 percent more.

Then it was Georgie's turn. Wiping the sneer from his face, he put the MPs in their place. "The way we operate with companies and large retail chains", says Georgie, "is that we don't do a check on every product sold". Instead, he says, "We come to an agreement with a company, a sensible arrangement between the Inland Revenue and the company, about what proportion of their products are sold hot".

If the MPs had any grasp of the real world, they would have known this – but they don't. And nor do they know anything about the dead hand of the EU in all this. So they mock Georgie - but in so doing, they make a mockery of themselves, and the institution of parliament.

This is not Georgie's law. It is alien law, interpreted by alien judges – and our trivial, tittering representatives don't even notice. And we haven't even started on the media – trivia is what they do. As for the people? They launch a Facebook campaign urging the Government to rethink the plans.

Wow! That will really scare the EU commission.

COMMENT: "SOMETHING FISHY" THREAD


There is copious media coverage on the announced rise in postal charges, amid claims that: "We have some of the lowest stamp prices in Europe and amongst the highest service standards".

That claim on prices somehow doubt, if this website (and this one) is right, putting the German cost at 55 eurocents, with France at the same level – currently about 46p. This seems to be the average price for Europe, ranging from 19 eurocents in Malta to €1.12 in Norway.

Aside from that, nowhere at all can I find any reference to the great elephant, which Booker was reminding us about three years ago.

At the time, he was talking about the postal service losses, telling us that Britain's keenness to comply with three EU postal services directives, designed to end national postal monopolies by 2010 and to promote "cross-border" integration of the EU's postal services.

As a result Royal Mail had to surrender the most profitable part of its operations, when bulk business mailing was opened up to rival firms. It still had (then) to deliver business mail, for a knock-down price of 14p an item, while the 19 companies that bid successfully for the business of collecting and sorting them cream off all the profits.

The situation has not changed substantially, which is why we are to pay 60p for a first class stamp, while cut-rate junk mail floods through out letterboxes. But can we get the MSM to tell us this, especially when the other EU countries seem rather keen on protecting their own interests? Silly question really – they are not here to give us information such as that.

COMMENT THREAD

The Old Swan Hotel, Harrogate

Following Wittering from Witney's recent observations on the seminar in London, I now have Dave Barnby's speaking notes for the speech he gave there, explaining why a referendum on leaving the EU is unwinnable. To take part in one would be a betrayal of future generations, he says.

This very much underlines WfW's pessimism, although it is already clear that we cannot rely on the political classes and their strategies if we are going to achieve change.

Last year, however, we were also saying that the political party model, of seeking change through the ballot box, stands little chance of immediate success. To promote our cause, I argued, we first needed a "movement" rather than a political party. This is the entity most likely to succeed in blazing a trail.

The most successful of such in most recent times has been the European Movement. It has pursued the course of European political integration far more effectively than we have been able to block it. It could never be said, though, that this was ever a popular movement – as in "of the people". For that, we have to go way back to the Chartists of 1838, and their People's Charter, setting out their six main aims.

This, it seems to me, is the most appropriate model, emulation of which would allow us to articulate precisely what it is we are demanding of the political classes.

To the effect, I am extending to readers an invitation to a meeting, provisionally booked for Saturday 14 July at the Old Swan Hotel in Harrogate. The idea is for a small group – around thirty people – to follow in the footsteps of our ancestors and draft our own Charter. I would then propose we have a larger meeting in the autumn to agree and ratify a definitive version.

Whimsically, I suppose we could call this the Old Swan Manifesto. If the Bilderbergers can name themselves after a hotel, I don't see why we can't use the same device, even if the Old Swan doesn't have a sinister ring to it.

As to costs, we anticipate having to find about £35 per head for the room, with coffee, a splendid buffet lunch and tea, all in a well-equipped and comfortable conference room. If we are going to have a revolution, I don't see why we should not do it in style.

We're going to operate on a first-come-first-served basis so, to book your place, contact me here or use the "contact" link on the menu under the masthead, and we'll get back to you.

COMMENT THREAD


The BBC pulled off something of a coup yesterday, having Angela Merkel interviewed on Newsnight. Recording the event, the Reuters agency has her saying it would be a huge political mistake if Greece was allowed to leave the euro, saying that Germany would do all it could to keep the eurozone together.

The eurozone would be "incredibly weakened" by a Greek exit, she says. "People all over the world would ask: 'Who will be next?'" She then goes on to say:
It [Greece] has major weaknesses but it is trying to overcome them, be they in the administration or the competitiveness of their business community. It is going to be a long and arduous road.

We have taken the decision to be in a currency union. This is not only a monetary decision, it is a political one. It would be catastrophic if we were to say to one of those who have decided to be with us: 'We no longer want you'.

It would be a huge political mistake to allow Greece to leave. That is why we will be clear with Greece, we will say: 'If you want to be part of a common currency you have to do your homework but at the same time we will always support you.'
This is somewhat different tack from what her colleagues were saying only a few weeks ago, but the nuances are all-important. Reuters headlines: "Merkel - Greek euro exit would be 'catastrophic'", but that is not what the German chancellor is saying.

This is not only a monetary decision, she is saying. It is a political one. It would be a huge political mistake to allow Greece to leave - a political catastrophe. And that is why we are headed for disaster. These are economic issues and the need economic solutions – but the driver is political, specifically the politics of European integration.

This is what we have been saying all along, and this is what makes the crisis so difficult to read for the financial wonks. This is not finance, it is politics. This is why the issue cannot be resolved. The train wreck goes on.

COMMENT THREAD


You really have to admire the perspicacity of The Financial Times with its star columnist Gideon Rachman. The west has lost in Afghanistan, he tells us. This is the same Financial Times, I suppose, that told us how wondrous the euro was, and how the UK should be part of it – except this time the paper's columnist has it right. We lost.

He only thing is that, like the US and most of the media establishment, their focus is far too narrow and the timetable is skewed. We lost years ago, and the big problem is the Indian elephant in the room.

But the man says that "it is only the scale of the defeat that remains to be determined" – and there he's right again. The only thing to be worked out now is how it is going to be spun. Everybody seems to agree that there's going to be a civil war, but who is going to take the blame for it?

And then, who really cares? How much do you hear about Iraq these days?

COMMENT THREAD


We've known this for years. Actually though, on the substantive point, the infestation is being blamed on "neglect at the building".

This is unlikely to be just simple "neglect" - rats need access to flowing water. As a rule of thumb, you can say with almost complete confidence that, if you have a rat problem in a building, there is a drain or sewer defect. This should not be happening. Read what I said about it in 2008 - just as relevant now.

COMMENT THREAD


Witterings from Witney pens his observations from a recent seminar in London. He comes away with the predictable finding that professional politicians favour the system which gives them the best chance of personal power and influence, representative democracy.

"It is all very well campaigning for the laudable aim that those who govern us should be able to be 'hired and fired' by the electorate - but what is the point of exchanging one set of 'central controlists' for another", writes WfW.

"In other words", he asks, "what is the difference between a collection of dictators who cannot be hired and fired and the alternative who can?" We still, he laments, "end up with dictators".

Appropriately, his piece is headed: "When will they ever learn?", and the answer is "never". We are going to have to teach them. It is down to us.

We must not run away, however, with the idea that this is a new problem. From another observer of the political scene, one reads of the "apathy about Parliament which had spread". It was understandable, he said, "because it was the result of many disillusionments and lack of choice". He went on to say:
The electorate had seen that the Parliaments it returned always, invariably, did exactly the opposite of that which had been promised and that which it had been returned to do, and felt, furthermore, that there was no means of remedying this, because no clearcut difference was apparent between the two parties which faced each other in the House; appalling though the Tory Party's record was, the Labour Party offered no clear alternative.
The writer that adds that people knew that voting for a Labour candidate instead of a Conservative, "would not make much difference; they knew that from experience".

Far from being a contemporary piece, though, this is published in 1941, written of events in 1939, its author former Times foreign correspondent Douglas Reed.

Read's pessimism was entirely warranted then and, while there was a brief resurgence of hope in 1945, that was quickly dashed. Ever since, we have been in the same old mould of British politics. Thus, I have to say again, nothing will change unless we make it change.

And that thus brings us to the photograph – and the title of the piece. The photograph is absolutely genuine – not in any way photoshopped - straight out of the Imperial War Museum archives. It shows Churchill visiting Bradford on 4 December 1942, revealing what he really thinks of the people.

Where Churchill leads, others follow. This is precisely what our politicians were doing to us then, and it is precisely what they are doing to us now.

COMMENT THREAD

Raedwald notes that the Lib-dims have already seized upon the Cruddas affair as further justification for tax funding of political parties – or their "private little club". He is calling for a "no" campaign, and has produced his own banner (left).

Coincidentally, Simon Jenkins is calling the affair "a deep offence against democracy", arguing that Cameron and Osborne must have been aware of what was going on – even if they were not privy to Cruddas's earthy style.

I don't think he has the measure of the beast. These vile people employ what is known as "constructive ignorance". They go out of their way not to know what is happening, studiously avoiding anything which might suggest that they have any prior knowledge of events.

This, of course, is the handmaiden to "plausible deniability", a long-known concept, although the phrasing is relatively recent, attributed to Central Intelligence Agency (CIA) director Allen Dulles in 1961 – over keeping back details of a plot to kill Castro.

Our response needs to be along the line of Jenkins, but not so much arguing that they must have known, so much as they should have known. Senior management should always make it their business to find out what their subordinates are doing.

But Jenkins also sees another agenda – as picked up by Raedwald. The casualness of the political parties, all of which have had mishaps with dodgy donors, he says, suggests a continued desire to play fast and loose with ethics in the hope of forcing public opinion to replace private donors with state aid.

We rather hope, though, that public opinion is more robust. These people are already thieves, ones who have cloaked their actions in the spurious legitimacy of the law. To allow them more larceny, this time more directly to line their own pockets, is intolerable.

My guess though, is that the contempt for the electorate is now so embedded in the system that, one way and another, these thieves are going to push this through regardless. And that will be an even greater offence against democracy.

COMMENT: "TORIES FOR SALE" THREAD


There is not a great deal more one can or wants to add to the tawdry little episode uncovered by The Sunday Times. The inferences are obvious - Peter Cruddas is Cameron's "people", underlining once again that the man masquerading as our prime minister is no judge of character.

But even when they are banged to rights, his sort still don't get it. Announcing his resignation, Cruddas says: "I deeply regret any impression of impropriety arising from my bluster in that conversation".

Textual analysis is hardly needed. He regrets not the act but "the impression … arising" from his act. These people don't even know how to show contrition. Probably, the reason is that they don't have any. They just regret they were caught.

The Failygraph's Iain Martin thinks the "cash for Cameron" is toxic for the Tories. That's one way of putting it. It is the commenters, however, who demonstrate that damage has been done.

Says one: "Like most people I feel awfully let down but the Conservatives and I say that as someone who has voted Tory all his life but won't be in future, either locally or nationally". And that is one of the blander offerings.

Regular readers here know that we (as we were in those days) took agin Cameron the moment he became Tory leader. Nothing that has happened since has given us a scintilla of doubt that our original judgement was correct.

Perhaps someone should tell him that he doesn't have to keep proving that he is no good. This we know already.

COMMENT THREAD


The availability of additional material on-line from the National Archives has had me busily downloading thousands of pages of files. Of special interest are the Chiefs of Staff bundles. They not only add points of detail which support the thesis developed in The Many Not The Few, they offer something that very few books are able to convey.

What comes over is quite how little attention was being devoted at the very highest level to the prospect of imminent invasion of the UK. Even when the threat is supposed to be at its most extreme, the Chiefs are considering the fate of areas as diverse as Malta, Greece, East Africa, Malaya and Hong Kong.

Remarkably, on 15 September - later marked out as Battle of Britain Day - the very date that invasion is expected when one might have thought that minds would be totally focused on impending doom, under consideration is the transfer of an Australian division to India.

Churchill might have wanted to convey the impression of England standing alone and embattled, but so many other geographical areas and campaigns are being considered that one really does get the impression that this is an Empire at war.

Even on the domestic campaign, though, in what is often called the Battle for Britain, the air battle is by no means the only preoccupation. And this is because there are three pillars to this war.

The best known is the fight to clear the skies preparatory to an invasion, but simultaneously there are two others. One is the attack on morale – exemplified by the London Blitz. The other is the blockade, the attempt by the Nazis to choke off Britain's food and war supplies.

Once again Churchill likes to position this. He locates the most deadly phase as 1942-3, calling it the Atlantic War. The battle, though, starts earlier, and comes to a danger level far sooner than is commonly believed.

Hitler's blockade is actually launched on 29 November 1939, arguably the opening of the Battle for Britain – something which sends the purists into paroxysms of rage. Closer to their ideal is the date of the revision, 24 May 1940, but in each case the objective stayed the same: to "cripple the English economy by attacking it at decisive points". And it morphed into unrestricted submarine warfare on 17 August 1940.

A V Alexander, First Lord of the Admiralty
By 29 August, the First Lord of the Admiralty, Labour Co-operative MP Albert Victor Alexander, is worried. He tells his Cabinet: "A most serious situation has arisen". The enemy is concentrating a heavy attack on trade with submarines and aircraft, he says.

In the eight weeks up to 25 August, 143 ships had been lost, amounting to 564,000 tons. A number of ships had been damaged. The losses sustained during the most recent six days had been extremely serious – 15 ships totalling 92,000 tons sunk and 12 ships totalling 42,000 tons damaged.

Alarmingly, the situation had continued to deteriorate. Furthermore, it was felt that Churchill had contributed to the problem. On 1 July, as a precaution against invasion, he had instructed the Admiralty to "endeavour" to raise the flotilla in the "narrow seas" (the English Channel) to a strength of forty destroyers, with additional cruiser support.

These warships could only come from the convoy escorts, as Churchill was very obviously aware. "The losses in the Western Approach must be accepted meanwhile", he had written in his minute. By the end of September, those losses were reaching dangerous proportions.

The C-in-C Home Fleet, Admiral Sir Charles Forbes, had never been at ease with this situation. There would be sufficient warning, he argued, to permit destroyers to be employed on convoy escort and other duties. Should an invasion seem imminent, they could be rapidly called back.

This had become a running sore in the relations between Forbes and the Admiralty acting under the direct instructions of Churchill. This culminated in Forbes writing a letter, suggesting that "the Army, assisted by the Air Force, should carry out its immemorial role of holding up the first flight of an invading force".

The Navy, he asserted, "should be freed to carry out its proper function – offensively against the enemy and in defence of our trade – and not be tied down to provide passive defence of our country, which has now become a fortress".


To Forbes in late August, Alexander had added his voice in support. Now, on 30 September, shipping minister Ronald Cross raised the alarm. "In a matter of this vital importance", he wrote in an urgent report to the War Cabinet, "remedial, measures should not be delayed". He urged an immediate increase in the number of escorts for the convoys.

Two days later, the First Sea Lord was writing a report in support of Forbes, for the Chiefs of Staff. He acknowledged that special following the fall of France had been necessary but to keep ship on standby. But the time had come, to "review the necessity for keeping our naval forces in any instant state of readiness to repel invasion round our costs".

This was Admiral Dudley Pound, who was not suggesting, he said, that all naval forces should be removed from the east and south coasts. However, they should be reduced to the minimum necessary. The Army could hold out against any sudden invasion, until relief naval forces could arrive.


With a merchant ship of 4,600 tons having been lost on the previous day, and belated reports having been received of three other merchant ships sunk far out in the Atlantic, the very next day, 3 October, Pound's report went before the Chiefs of Staff Committee.

Joining him, the First Lord of the Admiralty, the C-in-C Home Fleet and the Shipping Minister in expressing their concerns about the shipping losses now came Minister of Food, Lord Woolton. He submitted a memorandum to the War Cabinet. During the last few weeks, he said: "I have been seriously disturbed by the extent of our food losses at sea".

If the current rate of loss was sustained, imports would have to be increased, taking up a much larger proportion of shipping, with serious effect on other supplies.

Alongside Woolton's paper was yet another memorandum from Alexander. He repeated the point so heavily emphasised by Forbes that the only short-term way of improving the situation was "the return to trade protection of the forces which were withdrawn for anti-invasion duties".


What had been remarkable, and obviously quite unexpected, was how quickly and severely the shipping losses started to bite. The arithmetic offered by Ronald Cross attested to this. Imports in the first year of the war had been 43½ million tons, but September imports had been "disappointingly low", at three million tons.

Given the shipping losses already experienced, expected imports for the second year of the war had fallen to 42 million tons, and 34 million for the third year. But, at the then current rate of shipping loss, they were expected to drop to 32 million tons, as against the 34 million imported in the last full year of the First World War, when the population to be supplied had been 6.5 percent less.

These figures made no allowance for increased demands for shipping for military purposes in the Middle East and elsewhere, made worse by the closure of the Mediterranean. Thus, what Cross was saying was that shipping capacity was set to fall below survival level. By the third year of the war, Britain would no longer be able to feed its population and support then current military campaigns.

Now, on Friday 4 October, Churchill appeared to be responding to the chorus of concerns about the shipping situation when he addressed the War Cabinet. He had, he told his ministers, discussed the matter with the Defence Committee.

Their view was that suitable weather for an invasion "was not likely to prevail on many occasions during the winter months", so it would be right to divert a number of destroyers and anti-submarine trawlers from anti-invasion duties, to reinforce shipping escorts.

Despite this though, on 8 October, the prime minister was in parliament ramping up the invasion threat. "Do not be lured into supposing the danger has is past", he said. On the contrary, "unwearying vigilance" had "at all costs" to be maintained.

Then, a week later, in Cabinet, under the agenda item "likelihood of invasion" Churchill told his colleagues that it would be premature to suppose that the danger of invasion had passed.

Intelligence reports, he said, had indicated that enemy plans were still moving forward and, in these circumstances, "it would not be possible for the Navy to withdraw any more of their forces from the invasion front in order to strengthen shipping escorts in the north-west approaches".

And so, out in the Atlantic, the carnage continued. It was not until 31 October at a meeting of the Defence Committee, which Churchill chaired, that the prime minister finally agreed that the danger of an invasion was "relatively remote".


The dispositions and state of readiness of British forces would be adjusted to match what was judged to be a diminished threat throughout the winter. At last, Admiral Forbes was to get some of his escorts back. But he was not to keep his job. On 2 December, he was relieved of his command.

Nearly a decade later, Churchill was to assert in his history of the Second World War that he was more concerned about the shipping crisis than he ever was about the invasion threat. But his text was strangely silent about his reasons for refusing to give convoy protection more priority.

Why after agreeing to release escorts on 4 October did he go back on his word on 15 October and why then was it the 31 October before he finally agreed to a redisposition of forces?

That is the subject of the next part of this post when, with additional material, I will offer some answers that question.

COMMENT THREAD


Contrary to the exclusive predictions of some "well-informed" sources, Greece has not dropped out of the euro this weekend.

In dealing with this issue, however, one must always understand that so much of the financial system depends on confidence, so that – as we have seen before – lying and dissimulation is part of the game. When billions can turn on the word of one high official, it is inevitable that straight-talking becomes a rarity.

Where one then adds the foetid atmosphere of a major international crisis, with real danger and genuine fears, it is so very easy to stand on a soap box pontificating. And, in the manner of Charles II, there will always be enough people who find the nonsense appealing, and respond to it.

Nevertheless, despite all those dire predictions, we find that Alistair Osborne in The Sunday Telegraph is writing of a "dramatic lull" in proceedings.

One is tempted to ask, how can you have a dramatic lull, but we know exactly what he means. And no one with even a modicum of intelligence will begin to argue that the Greek crisis is over. This is just a lull. The storm will break again in good time.

Working out what is going on though, is a different matter. The truth most certainly lies in the fact that, while crises such as we have seen are unravelling, no one at all actually knows what is going on. No person has perfect knowledge and those at the centre of the storm often see least. They are reacting to events, not masters of them.

But, for the time being, we should take advantage of the "dramatic lull". When the next storm does hit, we will be gasping for oxygen, so we should stock up while we have a chance.

COMMENT THREAD


For two consecutive weeks, the Booker column (above – click to enlarge) has raised issues about so-called "experts" in the employ of social services, used in the "stolen children" racket.

As with last week, Booker has also been able to refer to work by The Daily Mail, adding strength, if not depth to his long-running campaign to redress the failings of the family courts system.

The Mail, in typical fashion, churns out high volume stream of consciousness material, with very little focus, not really focusing on the causes of the evil it records, leaving Booker to widen out the story and bring more to the table. He thus is able to reinforce the point that expert witnessing has become a highly lucrative cottage industry, making the "experts" a powerful constituency in support of the status quo.

What has yet to come over, although it will be addressed by Booker in future columns is that, whatever the venality of the "experts" that give evidence, their failings are entirely the responsibility of the court.

It is a little known fact about experts that, formally, they are officers of the court, and serve the court as a whole, not any particular party. This requirement is honoured more in the breach than the practice, but it still is the case that witnesses can only enjoy the privileges of experts with the assent of the courts.

As such, a judge can chose, on the basis of a challenge or on his own volition, to reject the credentials of putative experts, and refuse to allow them to testify.

Thus, where we see – as we did last week – many of the so-called experts being either unqualified, or not practising, it is up to the individual judges to take action. And for that they allow, they should take responsibility – not that any ever do.

Presiding over the dung heap, though, is the justice ministry, which has the power to propose legislation to regulate the expert witness industry, if the judges fail – which they are doing rather consistently.

And here, it would appear that there is such a need, when we learn that Jonathan Djanogly, a junior Justice minister, stated in answer to John Hemming MP that some 90 percent of these family care proceedings rely on the evidence of expert witnesses, the average case being based on four such reports.

At 900 cases a month, that is over 3,000 reports a month, at up to £100,000 a hit. Funded entirely by public money, this is hundreds of millions a year, the tip of the ice-berg of the billion-pound child-snatching industry.

Even without the case for better justice for parents and children, therefore, there is a powerful need to see better value for money, and far more accountability over its spending.

This is where The Guardian goes off the rails. Having pitched in last Wednesday to defend its client readership, the social workers, it completely misses the point, complaining about the amount of hostile publicity the social workers are attracting.

But, in this devastating saga of incompetence, all that is left now is the searchlight of publicity and a robust media. Yet The Guardian, in complaining about this, does not in any way address the issues which give rise to so many hostile comments, many arising from individuals who have been bruised by the system.

This paper needs to realise that the criticism is not an attack on the social workers, per se, as much as on a dysfunctional system. Without checks and effective external oversight and regulation, any bureaucratic system will degrade over time. And where officials are awarded great power, it is inevitable that some well misuse it.

What is wrong here, then, is the regulatory system – in the first instance the courts and then, as the long-stop, ministers and parliament. All have their roles in ensuring that the system works efficiently and fairly in the best interests of all concerned – and that the broader societal interest in maintained. All are failing.

Those failures are the real scandal - the inadequacies of the courts and the politicians. That is where the searchlights should be shining brightest. And that is what Booker is trying to do.

COMMENT THREAD


Either it isn't or it is against EU law. Take your pick. On the face of it, any attempt to impose minimum pricing, unless authorised by EU law, is a restriction on the free movement of goods and could be regarded breaching EU law – especially if it had a discriminatory effect on other EU member states.

However, while those issues have to be tested on the facts of the case, there is a "get out of jail free card", in that the UK can invoke "public health" as justification. It might have to prove the case, but it is for the commission in the first instance to decide. And this is far from a done deal.

The Daily Mail headline illustrated by The Boiling Frog, therefore, may be a little optimistic – or misleading, even. But it all helps to sow dissent, and that much is welcome. Let's see the paper do a job on VAT as well, and we might get somewhere.

COMMENT THREAD


In the Failygraph today, we see a piece that might by some be considered "sour grapes" over the Indian fighter contract.

A claim has been made by Mysura Reddy, a "leading Indian MP", that government officials manipulated the award of the $20 billion contract, in order to help the Rafale win in the competition against the Eurofighter. Reddy is also concerned by reports Rafales were outperformed by Eurofighters in operations over Libya.

As a result, we are told, in a story that is safely buried in the financial pages so that the paper can get on with real news, Indian defence minister A K Anthony has ordered a review of the evaluation process.

In this short report, however, there does indeed seem an element of sour grapes. Whatever else might be said about the two aircraft, the fact is that the Rafale has a genuine multi-role capability, while the Eurofighter's ground support capability largely exists on paper only.

More interesting than the actual report, though – as so often the case - is one of the reader comments. Its writer asserts that India does not need the aircraft and cannot afford them. Notionally, the aircraft are being bought to counter the threats from Pakistan and China. But, says the writer, day by day Pakistan is becoming less of a threat and "any notion of China being a real risk is just being whipped up to scare people so that more money can be spent".

That has some resonance with our own defence situation, where the military are notorious for talking up threats in order to acquire the latest fashion in toys. It would not be at all surprising if this dynamic was driving the Indian procurement process.

But then, in the "killer" lines, the commenter goes on to posit: "when you are in the Indian Def Ministry, how else do you get the large bribes other than to actually award contracts?" Skimming off the pay and rations of soldiers etc., he writes, "is chicken feed compared to the 5-10% that gets handed out for such deals". In like vein, he continues:
You only need to get one contract done and you're set for life. However much you need to give to the ruling party, you'll always get to keep a chunk for yourself. The French do well because they have less inhibitions about paying than the Brits. Significantly less.

So, follow the money trail. See which banks are involved and if you were ever to find someone close to the deal, then you'd be able to work out whether the money arrives via new accounts set-up in offshore havens or through a complicated structure where someone in India gets involved for no real reason.
The situation is such that we are told it is "almost a guarantee that people will be paid off in such deals". And, while we have absolutely no evidence that corruption was involved in the Rafale deal, experience tells us to expect it in a society where corruption is the norm.

And still the British aid to India continues, with another £600 million committed until 2015, including the balance of £10 million to Pachauri's pet institute, TERI, a man who now tells us he is unused to luxury. And if that naked hypocrisy is representative of the standard of public discourse amongst the Indian ruling class, then we should expect a level of corruption in the Rafale contract, and much more.

COMMENT THREAD