Sunday 23 December 2012

Christmas is a bit like marriage

In the final weeks of the old year, one of the issues which hit the Welsh headlines was the question of gay marriage.  The Government got itself into a right old mess by proposing a blanket exclusion of churches from conducting gay weddings.  That upset some, then they suggested a right to opt in which upset others, and finally (or probably not) they settled on a proposal which treats the Church in Wales as though it were some sort of appendage of the established Church of England.  It had commenters scrambling to find words to describe the proposal – ‘bizarre’ simply didn’t do it justice.

Underlying the debate, of course, (leaving aside the extent to which some of the opinions are simply based on seeking a religious justification for discrimination on grounds of sexual orientation) is the question of whether what is or is not a ‘marriage’ is something to be defined by civil society or by organised religion.  Whilst Christianity can certainly lay claim to ownership of ‘holy matrimony’ (the clue is in the adjective), the concept of ‘marriage’, in some form or other, certainly pre-dates all of the religions which are today fighting for ownership of the word.
It is, in essence, a civil construct, and it is for civil society to determine what it means, and to change the definition if and when we so wish.  Whether religious bodies subsequently choose to sanctify it in the name of their own particular god is, quite rightly, entirely a matter for them to decide in line with their own rules about qualification.  And civil society has the right, if it wishes, to allow those religious ceremonies to have the same status as civil ceremonies.  The underlying principle is about ‘rendering unto Caesar’, to use a biblical phrase.
This is the time of year when we are regularly implored to remember the ‘true meaning’ of Christmas as first and foremost a Christian festival.  Well, there’s certainly a clue in the name, although that can be lost somewhat when shortened to Xmas.  But for the peoples of northern Europe at least, the idea of a festival – often involving some of the activities which are most at odds with what we are told is the ‘true meaning’ – at, or around, the time of the winter solstice pre-dates Christ by thousands of years.
It is easy to understand how, for early man, much more dependent on the vagaries of the weather and the seasons than are we today, the point at which the days stopped growing shorter and started lengthening would have had a profound significance, and be just cause for celebration.  With no knowledge or understanding of the mechanism underlying that change, it must have looked like an act of the gods.
In trying to gain acceptance for their new religion the early wise men of the Christian church knew what they were doing when Pope Julius I decided, without a shred of solid evidence, that Christ’s birthday would be celebrated on December 25th each year.  It had nothing to do with historical accuracy, and everything to do with an attempt to Christianise an existing pagan festival.  It worked too – Saturnalia, Yule, and all the other names by which the winter solstice celebration had previously been known were rebranded, and the new brand name stuck.
But old habits die hard; and underlying that acceptance of the new name and the new meaning, many of the old traditions survived, and were simply incorporated into the new.  This year’s census showed the extent to which Wales, like the rest of the UK, is becoming increasingly secular in belief.  Coupled with increasing globalisation, a purely religious festival would surely end up being slowly relegated to the background as just another holiday.  It retains its appeal, I suspect, largely because it isn’t just a religious occasion; it’s a holiday which can be, and is, celebrated by people of all religions and none.  The power of the sun’s cycle is still there as a primal force in all of us.  Its meaning is whatever we want it to be.
So, whatever meaning you ascribe to it and however you wish to celebrate it, enjoy the next week or so.  Borthlas will return, refreshed, in the New Year.

Thursday 20 December 2012

To frack or not to frack

For those who remain unconvinced, despite the scientific consensus to the contrary, that the man-made contribution to climate change is significant enough to warrant action, the deposits of shale gas which apparently underlie these islands can only be a bonanza.  For those who are convinced about the climate change argument, but think that the solution is to use lower carbon fuels rather than renewables, having large reserves of gas on (or rather under) home territory makes it easier to argue the case for gas.  

I disagree with them, but those are honest arguments; it’s just the premise on which they are based which is in question.  Equally honest are the arguments of those who think that what is required is a wholesale shift from carbon fuels to renewables, and that extending the large scale use of gas is deferring, rather than solving the problem.  From that viewpoint, opposition to fracking is a natural consequence.
Rather less honest, though, are those who seem to be arguing that we should continue to use gas ‘but not that gas’.  Any politicians who have supported – or merely failed to oppose – the construction of new gas-fired power stations are being more than a little disingenuous in trying to ride a wave of public opinion concerned about fracking.  Effectively they’re saying that using gas is fine as long as it comes from somewhere else.
Now it might be argued that fracking has an environmental cost associated with it; but then so does all extraction of fossil fuel from the earth.  It’s just that, when we see the gas being delivered to the Haven in large tankers, we’re not seeing that environmental cost.  It doesn’t mean that nobody else is.  A determination to protect the environment at home whilst depending on products produced by environmental damage done elsewhere isn’t being green; it’s just nimbyism writ large.
We can make choices about policy on energy as on anything else; but when we’ve made a choice, we have to be willing to accept the consequences, not just load them on someone else.  For me, the choice is a simple one; either plan to phase out the use of gas, or else accept that, sooner or later, it has to come from fracking.  It’s not honest to support the continued use of gas whilst opposing the exploitation of reserves. 

Thursday 13 December 2012

Who's writing the script?

I'm sure that there was an episode of Yes Minister in which Sir Humphrey explained to the hapless Minister how he could gain a lot of public credit for stopping a certain policy from being implemented.  The Minister's response was to say that the Government wasn't intending to do that anyway, so how could he stop it?  Ah, said Sir Humphrey, but if you leak the fact that the Government might be thinking about it, you can then launch a campign to stop it, and it's a campaign which you're certain to win.

If that wasn't an episode, then it certainly deserved to be.

There's more than a passing resemblance between that scenario and the Lib Dems' 'campaign' against regional pay.  Perhaps they're using the same script writer?

Wednesday 12 December 2012

It doesn't have to be this way

The decision by Starbucks to pay some Corporation Tax over the next two years highlights a feature of the tax system which is widely used but not so widely known.  For large multi-national companies, Corporation Tax is essentially a voluntary tax.  They can decide how much to pay and where.

It isn’t new.  It’s something which large oil companies in particular have long been able to do.  If you own the whole supply chain from exploration through to retail, vesting different parts of it in different companies based in different countries but within the same group allows you to set transfer prices in a way which generates the ‘profits’ in the most favourable jurisdiction. 
What Starbucks and the others have been doing is simply a variation on that.  And the main thing that they’ve done differently is to be greedy – wiser companies have taken advantage of the rule in a more moderate fashion which leaves them paying something to everyone.
The recent stories have also highlighted another factor – the use of nameplate companies.  These are companies, set up in low tax jurisdictions, which don’t do anything very much other than act as a repository for profit, and a means of avoiding tax.  Ireland has been doing a bit of that of late; setting a low rate of company taxation has encouraged companies to set up nameplate companies in Ireland.  Ireland has gained, the companies have gained – it’s just the rest of us who’ve lost.
It underlines the danger of seeing company taxation as a competitive tool, and potentially gives ammunition to those keen to avoid devolution of Corporation Tax in the UK.  A race to the bottom might generate local benefits, but those benefits are not always based on real economic activity.  A race to the bottom helps no-one in the end.
What’s noticeably absent from the Starbucks statement is any commitment to change their accounting practices in the long term.  The PR that they’re getting from this gesture is good; but there’s no sign that they are really going to change.  They also haven’t given, a far as I’m aware, any commitment that they won’t simply use the tax paid ‘voluntarily’ over the next two years to offset any taxes which might become due in future years; something which they’re perfectly entitled to do.
Since none of the companies concerned have actually done anything illegal – indeed, they are under a legal obligation to maximise shareholder value – it’s unrealistic to expect any great change in behaviour unless the legal framework in which they operate is changed.  The government is showing little sign of any willingness to tackle that issue.  Again, that’s not really surprising – looked at as purely a tax collection issue, it’s hard to see what they could do effectively.
But what if we looked at the issue more widely?  Why does the law say that companies are obliged to maximise shareholder value (within the law, naturally) regardless of the interests of other stakeholders?  Setting the interests of capital above other interests might be a reflection of where we are; but there’s nothing inevitable about that.  We can order things differently if we wish.  It’s not a proposal I’d expect from the current government – but I’m not hearing it from any of the opposition parties either.  Why are they all so wedded to the rule of capital?

Tuesday 11 December 2012

"Spain won't allow it"

I doubt that there’s much to argue with in Barroso’s claim that an independent Scotland (or Wales, or Catalonia...) would need to apply for membership of the EU.  It’s probably a fair reflection of the legal position. 

(Whether it’s only Scotland which would need to apply is another interesting legal question, which probably revolves around whether independence is a case of secession from the UK, or dissolution of the UK.  In the second case it seems likely that, in strict legal terms, both successor states would need to apply, since if one of them cannot be assumed to be inheriting the rights and obligations of the predecessor state, then neither can the other.  One for the legal anoraks.)
It doesn’t exactly follow, though, that Scotland’s application, and the negotiations surrounding it, would take place from 'outside the EU', as the unionists have suggested.  They seem to be making the wholly invalid suggestion that the referendum on independence takes place one day, and Scotland becomes independent the minute the result is announced.  That’s just plain silly.
A ‘yes’ vote in a referendum (which I still fear is unlikely in the First Scottish Independence Referendum) would inevitably be followed by a period of negotiation on the detail.  That negotiation would cover the allocation of assets and liabilities between Scotland and RUK, as well as any international obligations and rights – including Scotland’s status in the EU.  Only after conclusion of all those discussions would independence take effect – and it is not beyond the bounds of possibility that there would be another, confirmatory, referendum on the detail.  It is in no-one’s interest for there not to be an orderly and planned transfer of power and responsibility.
The legal question regarding the EU is what made the news; but the more pertinent question is not whether Scotland would need to apply or not, but whether that application would be accepted.  Short of ridiculous demands being placed by Scotland’s new government, it is hard to see how any application would not be successful.  In purely pragmatic terms, why on earth would the other member states not welcome a new state?  Rejecting an application would run counter to the whole European project.
And nothing in what Barroso said touched at all on how the application would be treated – he merely reiterated what has been said before, which is that application would be necessary.  It is others who have jumped on his statement to raise doubts about the success of any application, and they’ve done so not from any legal considerations, but as a form of argument against Scottish independence.
It’s certainly true that the Spanish state is unlikely to express any enthusiasm in advance of the situation arising, and would prefer that the situation never arose at all, because it might encourage the Catalonians and others.  But does that really mean that they would seek to block an application when it came before them?  I doubt it.  When push comes to shove, I really can’t see any EU member states arguing that they should try to block the democratic will of the people of Scotland – I just don’t expect them to admit it in advance.
Then we come to the way that the unionists in the UK are using the statement.  Do they really and truly believe that they can win the referendum by telling people in Scotland that they can’t be independent because Spain won’t allow it?  Not only is that not a particularly honest argument, it has the potential for being a massive own goal, and encouraging people to vote yes.  They’ll have to find better arguments than that one.

Monday 10 December 2012

Quote, unquote

There’s been something of a hoo-ha in Carmarthenshire in recent months about the vexed question as to whether people should, or should not, be allowed to record or film meetings of the county council.  Some councils allow it, others do not; Carmarthenshire is in the latter category.

Whilst the availability of better and cheaper technology has made the question more pertinent, it isn’t a new question.  It was one which was debated in the old Vale of Glamorgan Borough Council back in the 1980s, when I was a member of that council.
The ruling group at the time (Tories, as it happens, but it could equally have been the other lot) wanted to bar the recording of meetings and proposed a resolution to achieve that – banning the use of ‘recording instruments’.  It was aimed at the press, rather than the public – the idea that the public might want to record their goings on would have seemed more than a little strange to them.
When it was debated, I rose to my hind legs, brandished my biro non-aggressively, and announced that I was holding a ‘recording instrument’ in my hand.  Were they, I asked, going to ban the use of biros in the Chamber as well?  The motion was hastily amended to refer to, as I recall, ‘mechanical recording instruments’, and despite my own continued objections was duly passed.
The arguments for banning the practice then were much the same as they are now – and they have grown no more valid with the passing of time.  Despite what some councillors claim, it is no easier to quote someone out of context using a voice recorder than it is using a biro – but at least in the one case there’s a record to demonstrate whether it was, or was not, out of context.
There is an expressed fear about being misquoted, but I rather suspect that the fear is about not being misquoted.
I don’t think that I was the most articulate and coherent speaker in the council chamber (although I’m immodest enough to claim that I wasn’t the most inarticulate either), and anyone who does a lot of public speaking will be only too aware that sometimes things can come out not quite as intended.  I was often misquoted by the local press for things I’d said in the Council Chamber – but here’s the thing: what appeared in print was invariably an improvement on what I’d actually said.  All hesitations and slips ups were miraculously removed by the local journos in the interests of creating a readable story.
Could it just be the case that some councillors in Carmarthenshire (unnamed to protect the potentially guilty) are actually more worried about not being misquoted?

Thursday 6 December 2012

Entrepreneurs, con-men, and thieves

Three different categories of activity, one good and two bad; and most of us think that we know the difference between them.  But the lines can sometimes be a little “fuzzy” to say the least.

It was a point which came to mind when I saw the television footage last week of the raid by the Information Commissioner’s office on a house from which individuals had been sending those annoying text messages telling us that we may be owed a certain amount of money for having been mis-sold PPI.  It was an interesting counterpoint to a story, carried I think by the Sunday Times, a couple of weeks ago about the firms which actually claim the PPI on behalf of people.
That story talked about the 'entrepreneurs' who have established companies to process claims.  They’ve seen a gap in the market, moved in, and made substantial fortunes as a result.
But by doing what, precisely?  Filling in forms which people could just as easily fill in themselves – and taking 10% of the proceeds for so doing?  I’m sure that they’d describe it as providing a service for people who, for whatever reason, are unable or unwilling to do the job themselves. 

There’s nothing wrong with that per se.  Making a profit by providing a service is a perfectly normal business activity.  It might, though, sit more comfortably with a lot of us if they actually told their customers how easy the job really is.  Whatever, it seems that in total these companies have managed to clean up around £1 billion from the victims of the sold PPI insurance. It may sound a little dodgy to take that much money for doing so little, but if it starts and ends there, it is perfectly legal and it’s up to individuals to say no rather than fall for the marketing ploy.  But it’s the marketing of these services which starts to raise some questions about boundaries.
Apparently the companies who send us those annoying text messages are only middlemen.  However, it does appear that the legitimate companies gain access to potential ‘customers’ by purchasing names and addresses from those middlemen, so the ‘entrepreneurs’ are only contacting those who’ve already been hooked.  Whether that still leaves them as entirely legitimate entrepreneurs is a matter of opinion – do they really have no responsibility for any illegality committed before they become involved, such as the way in which their contact lists are obtained?
According to the news reports these text messages say that you ‘may’ be owed a certain amount of money – I’m sure I’m not the only one to have received a message which was far more definitive than that.  Only a week ago I had one telling me that I am owed £3350 from a mis-sold PPI policy.  Since I’ve never been sold, let alone mis-sold, PPI, the precision with which they can tell me how much I’m owed is remarkable.  From press reports I know that the figure quoted is actually based on an average of the sums recovered for a vast number of people – but that isn’t what the message said.  It very explicitly told me that I am owed £3350.  It's a con. 
About a month ago I also had a message telling me that the sender had been trying to contact me about ‘my accident’ to help me claim compensation – and it’s not the first one of those I’ve had either.  (Let me hasten to reassure both my readers that I have had no accident and remain in apparently good health.) A little bit of research on the telephone numbers used for these two messages suggests – although it does not conclusively prove – that it’s the same people behind both.
Then we have those nice Asian people from the “Windows support department” telephoning me to offer me assistance to resolve the ‘problems’ which my computer has, they claim, reported to them (although their lack of ability to explain how my computer has reported these ‘problems’ rapidly becomes apparent when they are challenged).
Perhaps in India these people work in what looks like a respectable and successful call centre, established by local entrepreneurs.  To me they just look like crooks.
I don’t wish to denigrate successful entrepreneurialism; it’s key to our economic success.  We should be careful though about according the accolade to any and every company which makes large profits.  Successful and acceptable entrepreneurialism depends on more than that.  Companies based on activities which are dubious or in some cases downright illegal, even if not performed directly by the companies themselves, have no place in a successful entrepreneurial market.

Wednesday 5 December 2012

Lies and statistics

I heard an opponent of wind farms speaking at a meeting recently.  No surprise that I don’t agree with his conclusion; but his arguments were mostly of the sort that I can understand and sympathise with, to do with landscape issues and the view.  Beauty is in the eye of the beholder of course, but landscape issues are an entirely honest basis for opposition.  It’s just that they need to be balanced against the question of how we source our electricity.

However, in the middle of his discourse, he dropped in a statistic.  The areas of mid Wales where wind farms are being built are at such a distance from the National Grid, he claimed, that 30% of the electricity produced is lost before it even gets to the grid.  It reminded me rather of the claim that 78.6% of all statistics used by politicians (including of course that figure of 78.6%) are made up on the spot.
The 30% figure is one often quoted – there are plenty of instances of that or a similar figure to be found on the Internet, but what is the basis for it?  I got involved in a lengthy debate with one of Plaid’s Assembly candidates in another blog post on this very question about two years ago.  He quoted the same figure at me.  His response to my question about the source of the statistic met, initially, with repeated and vehement assertion that the figure was correct and an expectation that I would simply accept it.  Eventually however he admitted that he had no basis whatsoever to justify the use of that figure.
There are losses during transition of course.  The National Grid estimates them at around 2% for high-voltage transmission system and up to another 6% for the lower voltage distribution system, making a total maximum loss of around 8%.  The most usual response of opponents to this is the Mandy Rice Davies rebuttal – “they would say that wouldn’t they?”.  Well, yes, they would; but that isn’t enough to make it untrue.
The higher the voltage, the lower the losses; so at the proposed voltage for the link from the Mid Wales wind farm to the Grid, the loss would probably be in the range of 2 to 6%.  Ironically, the lower voltages preferred by anti-wind campaigners in order to have smaller pylons would actually put that figure closer to the top end of that range that it would otherwise be.  In any event, however, it is still hugely below the 30% suggested.
Apart from my natural aversion to made-up and unjustifiable statistics, does it even matter?  Clearly transporting expensive fossil fuels to the middle of nowhere and then burning them to generate electricity which loses a large proportion of energy before reaching its point of use would be a silly thing to do.  But, even if the loss from wind farms were to be 30%, rather than the more realistic figure of 3-5%, the advantage of wind power is that the fuel is essentially “free” and, for all practical purposes, is unlimited.  So losing part of it en route really isn’t a problem in the way presented.
The 30% figure is not only hopelessly inaccurate; even if it were true it does nothing for the argument in support of which it is being deployed.

Tuesday 4 December 2012

Wishful thinking

The level at which the “discussion” between Cardiff and London over the European Union budget is occurring is disappointing to say the least.  To hear the politicians talk one would think that the only factor of any import is what structure gives Wales the largest sum of money.

It’s certainly true that Wales is a net beneficiary of EU funding.  I’d prefer that it were not so, because the fact that it is true is based on failure not success – the failure of successive UK governments to address what are, at a UK level, “regional” economic disparities.  But whilst the consequential availability of EU funds is better than not having them, no government –either in Cardiff or in London – has exactly covered itself in glory over the application of those funds.  It often looks as though we’re just pouring water into the sands.
More importantly, it isn’t structure that determines how much regional aid we get, its policy.  The claim by opponents of the EU that the UK government could direct more funds to the poorer regions of the UK if it didn’t send the money via Brussels first is an entirely fair one.  The problem, though, lies in the word “could”.  The UK government “could” do lots of things if it wanted; but it has shown little propensity – under Labour or Conservative governments – to turn a “could” into a “would”.  No surprise at the lack of trust therefore.
But the EU’s current stance on regional development isn’t guaranteed forever either.  Like UK government policy, it can always be changed.  I can understand why people think that the EU policy is more likely to stay the same than UK policy is to change; but is that really the basis on which we should make a decision about our role in the European Union?  There’s more to the idea of the European Union than that. 
Both Labour and Plaid Cymru politicians have recently speculated on what would happen in a referendum on the European Union if England wanted out and Wales and Scotland wanted in.  I suspect that there’s a certain amount of wishful fantasising involved there; whilst the views of Welsh politicians and those of English politicians might seem to diverge on the subject, I very much doubt that the views of the electors will show anything like as much divergence.
Notwithstanding the arguments about economic interest – or perhaps because that’s the limit of the support the Welsh politicians can manage to express – I rather suspect that any referendum would, in practice, be about other matters entirely.  And whilst I’d love to be proved wrong, I see no real evidence that Welsh opinion and English opinion on the Daily Mail type of attitude to the European Union are really very different.

Monday 3 December 2012

Men from another planet

On Wednesday, the Chancellor is due to present his autumn statement, and the speculation about its content is already rife.  One widely floated suggestion is that he will limit tax relief on pension contributions for higher earners.

This is a proposal I’d support.  Whilst giving tax relief to encourage people to save for their retirement through recognised pension schemes is a sensible approach, the current system allows disproportionate benefit to higher rate tax payers.  It’s an example of a state ‘benefit’ which aids the most well-off more than the poorest.
Sadly, the rumours suggest that rather than limiting tax relief to basic rate, he will instead propose a cut off point for the maximum level of tax free contributions.  Still, it’s at least a nod in the right direction, even if it limits the impact to those earning £200,000 or more a year.
It was the CBI’s response which struck me.  It warned that setting the maximum pension contribution level any lower than £50,000 a year would “hit vast swathes of middle-income earners”.  In short, they believe that people who are able to save £40,000 a year out of their income towards their retirement are “middle earners”.  It’s hard to believe that they inhabit the same planet as the rest of us.