Issue 33: 2015 12 17:contents

17 December 2015 : Issue 33

Week in Brief     

       UK

International

Financial

P1000023

Demolition in Clerkenwell – 148th anniversary

Comment

An Agreement From Paris by John Watson

Will the process succeed?

The Ticking of the Clock by J.R.Thomas

A secret agenda at Rolls Royce?

The Monopoly On Violence by Neil Tidmarsh

Brussels proposes to arm itself for our protection.

“Je partage votre colère!” by Richard Pooley

A local view of the French regional elections.

 

petrol

see Chin Chin          cartoon  A Kenning

Features

Feuding Twins by Lynda Goetz

Lady Thatcher’s legacy.

The Top Dogs’ Dogs by Neil Tidmarsh

A dog’s life at the top.

Investment Outlook – Sell Everything? by Frank O’Nomics

A gloomy view of the markets.

The True Price of Diesel by Chin Chin

The price is only the half of it!

Review

“Alive, Alive Oh!”

J.R.Thomas reviews Diana Athill’s book.

Letter

Listed BuildingsPeter Wilson

Crossword

Plain Vanilla 3

Solution to last week’s crossword “Hunting, Shooting, Fishing”

Earlier Editions

Issue 28: 12 November 2015

Issue 29: 19 November 2015

Issue 30: 26 November2015

Issue 31: 03 December 2015

Issue 32: 10 December 2015

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Issue 34: 2015 12 24: Christmas Present

24 December 2015

Christmas Present

Wrapping it all up

By Chin Chin

sello_nose copyIt was Christ himself who said that it is more blessed to give than to receive, so I think it must follow that membership of the Trinity is a help when wrapping Christmas presents.  For me as for most men, however, wrapping is something of a trial and the frustration of wrestling with paper, sellotape and scissors absorbs much of the goodwill which should accompany the gift.

Women can do it, of course.  It is as natural to them as breathing, and in a few minutes they can produce a symphony of perfectly tied ribbon and neatly folded corners without so much as breaking into a sweat.  “There you are, you see, it’s easy,” they say, smiling sweetly and a little condescendingly, offering to take over the wrapping of the parcel with which you are struggling.  It is tempting to give in to them as one usually does but, in these days when sexual stereotyping is frowned on, dignity has to be maintained.

“No, No,” you say, “it is simple enough.  I’ll have it done in a jiffy.”  I’m not quite sure how long a jiffy is, but this boast is mere braggadocio, a demonstration of machismo designed to boost your own self confidence, the drawing-room equivalent of the bare-chested wrestling with wild animals which has become de rigueur for Russian leaders.  Still, it certainly stiffens the sinews and you seize the sellotape with renewed zest.  It is then that the unpalatable truth dawns.  The box you are about to wrap is octagonal.

The difficulty with this lies in the number of fingers.  Those of us who live within the circuit of the M25 generally have four fingers and one thumb on each hand.  Technically that is not quite the same as having five fingers on each, although the distinction has often been blurred in literary works, for example Tolkienian references to“Nine-Fingered Frodo and the Ring of Doom”.  Anyway, a total of ten fingers and thumbs is usual.  That means you have ten basic mooring positions for pieces of sellotape, exactly the number of pieces which you need to wrap an octagonal box – one at each corner and two criss-crossing over in the middle.

So far, so good, you might think; that sounds like a match.  Unfortunately, however, it leaves no fingers (or thumbs) free to manage the paper itself and you end up trying to fold it with fingers and thumbs which already have sellotape stuck to them.  The result is inevitable.  The sellotape sticks to the paper in all the wrong places.

Now there is a difficult choice.  Either you cut those bits out of the paper, relying on overlap to cover the gaps and pleading origami if  that doesn’t work, or you flatten the sellotape onto the paper in an “I just did this for a bit of extra ornamentation” sort of way, slightly undermined by the fact that it isn’t quite flat.  The trouble with both systems is that you will need more sellotape to straighten things up, so you cut a few more pieces from the roll and stick them on the empty fingers and, if there are not enough of those, onto your nose and ears as well.  Then the phone rings.  You forget about the sellotape and seize the receiver.  It is the Vicar asking you to read the lesson at carols.  Yes, of course, it would be a pleasure.  You go to put the receiver down but that is easier said than done because it is stuck to your ear.  It hurts and you swear.

“What did you say?” asks the Vicar, his tone one of surprise.  You repetition owes more to politeness than it does to veracity.

It’s when the box is all wrapped up into something which resembles a large carbuncle that you begin to have doubts.  Is the present really suitable for its recipient?  The trouble is that you have no Christmas list for them and you cannot really tell whether they liked last year’s present or not.  “Thank you” letters are so anodyne these days.

It was not always so.  People used to be a lot blunter.  I remember my parents sending my Great Aunt May a magnificent metal tray.  It had come as part of the free box of goods which the Metal Box Company used to distribute to its shareholders, but we thought that she wouldn’t know that.  On it there was painted a large pheasant, some eggs and a few hedgerow plants, all things which seemed likely to warm the grand-materteral heart.  Two weeks later the tray came back through the post.

“Thank you for your present which I find vulgar,” said the accompanying note rather bluntly.  And then, to make sure that we got the point: “I am therefore returning it to you as you may have a use for it.” Well, at least it gave us a clue as to her likes and dislikes for the future.

It is as you are worrying about whether the present you have just wrapped is appropriate that the lady of the household intervenes.

“Come on, that’ll have to do or we shall be late to church,” she says.  So off you go to carols followed by mulled wine.  It is a truly festive gathering and only slightly spoiled when you hear the verger comment to the gravedigger that this is the first time he has heard St Matthew’s Gospel read by someone with a piece of sellotape stuck on the end of their nose.

Issue 34: 2015 12 24: The need for abuse, deceit and manipulation

24 December 2015

The need for abuse, deceit and manipulation

An apology which says too much

By John Watson

Watson,-John_640c480The thirteenth stroke of the clock. “It’s quiet, Carruthers, too damned quiet”.  Yes, we all recognise those little indications that, although everything may seem fine on the surface, matters will not stand closer scrutiny.  In the case of the apology issued to Helen Steel, Belinda Harvey and others by the Commissioner of the Metropolitan Police on 20 November 2015, the indications came just over half way through:

“I can state that sexual relationships between undercover police officers and members of the public should not happen.  The forming of a sexual relationship by an undercover officer would never be authorized in advance nor indeed used as a tactic of a deployment.  If an officer did have a sexual relationship despite this (for example if it was a matter of life or death) then he would be required to report this in order that the circumstances could be investigated for potential criminality and/or misconduct.”

Before analysing these unusually fatuous words it is necessary to give some context.  The apology related to periods up to about 2011 when units of the Metropolitan Police known as the Special Demonstration Squad and the National Public Order Intelligence Unit used undercover officers to infiltrate environmental protest groups.  As a part of their cover, some of those officers formed long-term relationships with women.  In some cases they had children by them.  Understandably the women felt abused and betrayed because that is exactly what they were.  Scotland Yard paid them compensation.

The accepted view seems to be that the operation got out-of-control and that the relationships should never have happened.  Probably that is right but, whether it is not or not, no one could possibly justify the drivel set out in italics above.

The use of undercover officers is not what most of us regard as sporting.  Spying has always been looked down on as underhand and that is why, in wartime, spies are shot.  Even in peacetime I do not suppose that the consequences of being discovered by the people you are infiltrating are particularly pleasant.  No doubt it is a game for men or women with strong nerves.  In the apology, the activities of the officers are described as “deceitful, abusive, manipulative and wrong.”  If you take out the word “wrong” for the moment, that would seem to be a good description of what going undercover is all about.

The focus of the apology seems to be on sex and long-term sexual relationships but officers who go undercover have to deceive a lot of other people as well.  There will be lonely people who believe that they have found a friend.  People with emotional problems who believe that the officers seek them out because they like them.  All these people are abused.  They are all deceived.  They are all manipulated.  If we believe that that is always wrong, then we should not have undercover policemen and should take the consequences.  Why then does the apology not go on to say that all undercover work is to be abolished?

The reason for that is that the public would not be prepared to give up the protection which undercover work by the police affords; so the work will continue.  All sorts of people will be deceived, manipulated and abused and that is the price which the public is prepared to pay for its protection.  Why does it make a difference if the particular relationship happens to be sexual?  Emotional betrayal may be just as damaging in other circumstances.

Obviously the use of undercover officers should not be undertaken lightly and there should be a proper supervision system in place so that they all have someone back at base they can talk to to keep them grounded; but once you approve the use of undercover officers you also accept abuse, manipulation and deceit.  To do so but to try to cut it off with a red line at the level of sexual intercourse shows a bizarre neo-Victorian prudery.  It wouldn’t really work either.  Suppose that officers are infiltrating, as I believe was in fact the case, groups which are highly promiscuous.  It is really going to be a giveaway if the undercover officer is the one who never has sex.  Scotland Yard would have to keep a list of plausible sexual diseases which could be rolled out to avoid awkward encounters.

The truth is of course the once you have accepted the need for underground officers, this prohibition makes no sense at all.  What on earth, then, is it doing in a statement by the Metropolitan Police?

I’m afraid we know the answer to that only too well.  Someone, somewhere, either at Scotland Yard or in the gloomy recesses of the Home Office, has decided that the best way to defuse the embarrassment over something that got out of hand is to supplement the apology with a restriction on future action.  That will sound good to the public.  That will satisfy the politicians.  That, in fact, will suit everybody except for those who still have to do difficult and dangerous undercover work and who will now, in addition to the obvious risks that they take, have the additional difficulty that if it is necessary to start a relationship they may be exposed to prosecution.  To go back to that wretched apology again:

“If an officer did have a sexual relationship despite this (for example if it was a matter of life or death) then he would be required to report this in order that the circumstances could be investigated for potential criminality and/or misconduct.  I can say as a very senior officer of the Metropolitan Police Service that I and the Metropolitan Police are committed to ensuring that this policy is followed by every officer who is deployed in an undercover role.”

Police officers must be getting used to seeing those who control them lurch from one extreme to another in reaction to criticism.  The force is criticised for racism?  Well, let’s prove our liberal credentials by not coming down on groups of Muslim youths who abuse children in the Midlands.  Oh dear, criticised for going light on child abuse?  Let’s roar around arresting some high profile politicians for murders in Dolphin Square.  Goodness knows whether it is senior commanders or the Home Office but someone needs to take a tighter grip.  Let’s go back to that apology and see if we can find something more sensible. Yes:

Undercover policing is a lawful and important tactic but it must never be abused.”

Yes, that’s where the truth really lies.  The use of undercover policing has to be justifiable and reasonable.  That isn’t achieved by red lines but by human judgement.  If those who command the police force have made a mess of it in the past, that isn’t a sign that we need red lines but that we need better quality senior police officers.

For a final word let’s go back to that apology.  Try this:

“In light of this settlement, it is hoped that the Claimants will now feel able to move on with their lives.  The Metropolitan Police believes that they can now do so with their heads held high

Fine, but what about the police themselves?  Should they as a force hold their heads up high?  I certainly hope so.  Serving in the police force is an honourable and difficult occupation and things will inevitably go wrong from time to time.  Most of them have much to be proud of.  And the monkeys who drafted the apology?  What about them?  Yes, well, we all make mistakes and they are probably good enough people when they are not trying to be political.  Still, as apologies are their thing, perhaps they ought to offer a private one to their colleagues who do difficult and dangerous work and could well be feeling under-appreciated at the moment.

Issue 34: 2014 12 24: Pass On The Right

24 December 2015

Pass On The Right

by J R Thomas

Rogue MaleThe more astonishing the remark, the more offensive the comment, the more the voters seem to love him.  It could only be The Donald of course; who, having managed to get more than  half a million names on a petition to ban him from setting foot on UK soil as a protest against his calls for Muslims to be banned from entering the US, turned the spotlight on to Scotland.  He accused Scottish First Minister Nicola Sturgeon of making a “rookie mistake” when she stripped Mr Trump of his membership of an elite Scottish business club, ostensibly because of remarks made by the Republican US presidential candidate about the Scottish courts after they turned down his appeal (his third) to block the construction of a wind-farm offshore from the Trump Organisation’s new prestigious golf course in Aberdeenshire.  He also called former First Minister Alex Salmond “a has been”; Mr Trump’s spokesman adding, in case anybody did not get the point, that Salmond was an embarrassment and a disgrace… “a deadbeat politician”.  For a man owning two championship golf courses in Scotland this seems to be bold language, indeed.

All this however appears to do Donald nothing but good in the polls back home.  His call for a temporary ban on Muslims entering the US (details not yet pencilled in) caused him to move up sharply in the polls, his national share of Republican voters leaping from 28% to 38%.  Meanwhile the rest of the field is running many lengths behind him, with Dr Carson slowly falling away through the middle teens and Messrs Cruz and Rubio rising to pass Carson, with Cruz currently the leader, narrowly.  Everybody else is well back, with Jeb Bush on 4%, as is Carly Fiorina, and several contenders now barely registering at all.

But Trump is far from the winning post yet.  And what may be a black cloud on the Trump horizon is what is happening in the two states that will poll first in the race, Iowa and New Hampshire.  In both states Trump is not doing nearly so well.  In Iowa he has given way as front runner to Ted Cruz – on 28%, to Trump on 26%, and Marco Rubio is not far behind him.  And in New Hampshire his lead is falling fast, down to 32%, but then with a three way split of Cruz, Rubio and local boy (more or less) Chris Christie splitting 40% of the vote between them.  What seems to be happening, or so Republican leaders in Washington hope, is that as the voters get nearer to actually having to make a choice, they start to take it all more seriously, and they don’t want Donald in charge.

What Republican voters may also be starting to reflect on, irrespective of what they think about The Donald, is that a vote for him might actually be a vote for Hillary.  NBC have been doing a series of polls in Iowa as to voter’s intentions in various permutations of Presidential contests.  This is not great news for Trump – or indeed Clinton.  Trump is about the one candidate Hillary can beat; by a margin of 10%.  Rubio and Carson are potential winners in this theoretical contest, with Cruz level with the lady.  What might also cause Hillary some concern is that, although she is ahead of Sanders in Iowa, the gap is narrowing, and Sanders is fourteen points ahead in New Hampshire.  If that is how thing are in the vote, Hillary is looking very vulnerable, though there is only her and Sanders in this race, O’Malley being on around 4%.  (This is before any polls after the Democrat candidate’s debate in New Hampshire on Saturday, where Hillary seemed triumphant.)

So, you might think, a victory for Sanders would give the Republicans a walkover in the Presidential?  Well, not if you believe the polls.  On that one, Sanders would beat Trump, Bush, Cruz and Carson, (just); in fact, only Rubio would emerge as President against Sanders.  (Mr Cameron, take note of the dangers of eccentric white haired lefty seniors.)

As the primaries get underway voters start to think of course – not “Who do I want in the White House” but “Who do I really not want…”.  Many Republicans detest Hillary, to the extent that they would, if they must have a Democrat President, prefer Bernie.  But there is not a lot they can do to influence that, so the next best thing is the candidate who can best beat both.  That is starting to look like Marco Rubio.  Mr Rubio should not yet be choosing curtains for the Oval Office, though.  Ted Cruz has risen fast and is an ambitious man.  He has risen by use of two factors – a manner of engaging with voters which goes down very well with them, and by stealing some of Mr Trump’s thunder – he is the acceptable face of the Tea Party, one might say (acceptable on the Republican right, anyway).  If he is to stay in the race, and not be crushed between the smooth wheels of Mr Rubio on the one side and the constantly flailing tank tracks of Mr Trump on the other, he has to navigate a more middle course.

In the end, how voters tend to behave in elections is that the party loyalists will vote, as they say, for a pig as long as it is party registered.  It is true to say that most voters are of one persuasion or the other, and rarely change their allegiance.  But there are such things as floating (undetermined) voters and even if only ten per cent of voters are floaters, that is enough to swing elections quite dramatically, especially if a number of normally loyal voters think their own candidate is untrustworthy, or over-impulsive (fill your own nominations in for those descriptions) and decide to stay at home on polling day.

So Mr Rubio looks increasingly appealing as a compromise candidate (a compromise among sixteen candidates).  His CV is remarkably like Ted Cruz’s –in his mid 40’s, happily married, a lawyer, of Cuban Latino heritage, a junior Senator (for Florida, in his case).  He rose through political activity in Miami, his home town, being elected to the Senate in 2010, where he has quickly made his mark and is noted for his speaking skills; he is a fine man with a large audience.

He had strong Tea Party support for his initial Senate run, but since then has moved away from their positions (especially on international affairs) to a more traditional mainstream Republican one, though he remains anti-regulation, low tax supporting, anti-big government, and cynical on man-made climate change.  He has managed to garner Republican hierarchy support but still somehow not seem too much of an establishment figure – essential among the present atmosphere of disaffected voters.  In short, he is an ideal candidate for mainstream Republican supporters.  The question is, are there enough of those to deliver him the nomination?

That is a serious question.  Trump might be best described as a Tea Party inclining Republican independent (as Bernie Sanders is an independent Democrat); but Cruz and Carson are both acceptable to the Tea Party.  That gives the rightist faction of the Republican coalition above half the votes in the nomination nationally, with Trump on around 38%.  So could Rubio capture, say, 40%?  As we touched on above, the answer may well turn out to be “yes”, though he will need to start winning primaries fast to capitalise on his poll showing.  If he starts to look  to be somebody who can beat Hillary or Bernie, then he starts to look like a winner and that impetus will carry him far.  He has already knocked out, so it seems, those who might have been expected to be the centrist candidate, most noticeably his fellow Floridian Jeb Bush.

The main threat (apart from The Donald finding even more insults that resonate with the Republican hard-core, which one should not discount) is probably now the ever-ambitious Mr Cruz subtly moving towards the centre until Marco and Ted start to look like identical twins.  Then how will voters distinguish between them?

Issue 34: 2015 12 24: A Likely Story

24 December 2015

A Likely Story

or

Inspired by Yorkshire Generosity

by J R Thomas

Rogue MaleIt is the best-selling Christmas tale of all time (bar the original, of course), has inspired numerous films (from a Donald Duck version to enchanting hamming by George C Scott), is a perennial favourite on the stage, and the original book has never been out of print since it was first published in 1843.  It is a tale that has everything that a seasonal morality ghost story could possibly encompass.  It popularised the expression “Merry Christmas!”  Redemption mingles with charity and gentleness to overcome greed and austerity, our heartstrings are tugged by a simple worthy family, our humane instincts infuriated by meanness and needless austerity; ghosts rattle chains, snow falls and carol singers charm, the butcher opens on Christmas morn, and even the bankers are suitably wicked.

You couldn’t make it up, except of course Charles Dickens did make it up; and thought of the perfect title, ‘A Christmas Carol’.  He knew himself that he was onto something very special, so much that he would not agree his usual deal with his publisher but instead published the tale himself at his own expense.  That, wryly, he soon came to realise as an error.  There were endless revisions and difficulties before publication, and although it sold well after a slow start (no publisher to push it along), it made Dickens very little money in its first couple of years – though before long it became a money-spinner and stayed so for the rest of his life.

But some of it Dickens did not make up.  The locations at least were based on a real place and one that has little changed.  This is far from London, in the town of Malton, in North Yorkshire, now a slightly decaying market town halfway between York and Scarborough.  Dickens’s connection with the town was purely fortuitous.  The Smithson family were the leading solicitors in the town, and had a partnership also in a London firm which had easier access to the main law courts.  Dickens, early in his success, stood surety for a friend to become an associate at that London office, and met Charles Smithson who had worked in the London office and was now taking over the family practice back in the North Riding.

Smithson and Dickens became instant friends, and Dickens began in the late 1830’s a series of visits to Malton, staying for quite long periods with Smithson and his family.  Dickens did not write ‘A Christmas Carol’ here, but he did write part of Martin Chuzzlewit, and also gave a performance at the town theatre.  Several locals inspired characters who featured in various Dickens novels, mostly notably Charles Smithson himself, who formed the model for Mr Spenlow in David Copperfield.  And Smithson’s two pet ravens inspired the raven “Grip” – and its name – in Barnaby Rudge!

Smithson and his family lived at Easthorpe Hall, a fine Georgian house about four miles west of Malton.  Easthorpe stood in a most magnificent position on one of the highest points of the eastern ridge of the Howardian Hills, looking over Castle Howard (later itself to become a literary star as Brideshead in a rather different morality tale) and across the Plain of York to the Pennines.  Sadly, Easthorpe Hall was demolished in 1967 after a fire and is now the site of a small housing estate, but the wonderful views and unspoilt rural outlook remain.

But what is perhaps more interesting to lovers of Tiny Tim and Bob Cratchit and even those who exclaim “Bah! Humbug!” at every inconvenience to life caused by Christmas cheer, is not Smithson’s house, but Smithson’s office.  For this was the original of Scrooge’s counting house – acknowledged to be so by Dickens.  And it is still there today, and very fitting to the imagination it is.  It stands in Chancery Lane, Malton, which to those who know the London version of Chancery Lane will be not as they might imagine.  Malton’s Chancery Lane is a narrow alley, suitable only for foot traffic, leading from the market place through an anonymous arch next to a greengrocer, down to Yorkersgate, the main route through the town until the bypass arrived in the early 1980’s.  On the east side of the lane was the corn exchange, and opposite it, Scrooge and Marley’s office.  Or rather, Smithson’s office.

It is a brick Georgian building, rather dark and grim, with a grandish front door, suitable for a lawyer.  And on the front door, a glaring iron face of a scowling man, constituting the knocker.  The current version was placed there when the office became a museum to Dickens’s local activities and inspirations, but forty years ago it was still an office and had then a large and grim knocker – it is tempting to believe that it was the one that Smithson had and that it inspired Dickens.

Also still there is St Leonards Church (since 1971 the Roman Catholic church for the town when it was gifted to the local Catholic community, in fact the oldest Catholic church in use in England).  It has the same eight peal of Georgian bells which rang in early Victorian times across Malton and found their counterpart in those which awoke Scrooge from that terrible night of dreams on Christmas morning. Halfway between Chancery Lane and St Leonards is a crossroads always known as “Butcher Corner” – there were at least three butchers close to the corner until recent times, and more in Victorian times, so getting a boy down to the butcher to buy a turkey for the Cratchit family would have been easy.

In fact the whole geography of the town fits that of supposed Scroogian London remarkably neatly.  In spite of that, and that the Dickens connection was well known (indeed Smithson’s descendants still live locally), very little has been made of it until the relatively recent opening of Scrooge/Smithson’s office as the Counting House Museum.  This low-key and touchingly non-commercial approach fits the ethos of that great Christmas story rather aptly, and on a busy market day and especially under a blanket of snow the town does still feel nicely… well….Dickensian.

 

The Counting House Museum, Chancery Lane, Malton, North Yorkshire, is open on Saturdays from May to October, admission free. No admittance, sadly, on Christmas Eve, even to Jacob Marley, but the two town churches, St Michaels (Market Place) and St Leonards (Church Hill) will be glad to see visitors.  Merry Christmas!

 

Issue 34: Crosssword – Merry Christmas – printable

24 December 2015

Crossword by Boffles

boffles

Merry Christmas

SS34 grid

Across

    1  Key figure (6,9)

    8  1ac’ s helpers (8)

    9  Festive 4dn was in short supply or this in the Scrooge household (6)

  11  So synonym for Latin frankincense (4)

  12  What people will be doing to the turkey on Boxing Day – turning it into curry etc (9)

  14  Where the Magi’s guiding star stopped when it reached the stable (8)

  16  Schools put on Nativity ones (5)

  19  Mulled wine usually is with brandy or another spirit (5)

  21  Accurate description of Mary but prosaically usually refers to your old school (4,5)

  24  Black ones probably going to be needed after the office party (7)

  27  Three were seen sailing in on Christmas morning (5)

  28  The lessons will be during the Christmas service (4,3)

  30  Common pub order at this time of year (1,6)

  31  Required in large quantities by 1ac to perform his role (8,7)

 

Down

    1  What the angels did say (5,4)

    2  What the Magi  gave to Jesus (7)

    3  It does on Twelfth Night (4)

    4  It is a time of good ……… (5)

    5  A little drink of champagne or whatever you fancy (3)

    6  How the bells went ding dong on high (7)

    7  Part of 1ac’s equipment (6)

  10  Add ‘H’ to this exclamation to get what 1ac says (3)

  13  Birthplace designed for cattle (4)

  15  Dessert, not a tryst (1,4)

  17  Product of 24dn and Twelfth Night drink (9)

  18  Origin of vegetable that traditionally accompanies the turkey but is not to everybody’s taste (8)

  20  Chocolate log essential (5)

  22  Sewing aid that brings luck or thrift if found in your pudding (7)

  23  See 24dn (5)

  25  What the shepherds tended (5)

  26  The shepherds would have carried one (5)

  29  and 22dn = They prance about after nine dancing ladies (3)

Issue 34: 2015 12 24: Week in Brief: Financial

24 December 2015

Week in Brief: BUSINESS AND THE CITY

NEWS, the word in pink on a grey background

ADDING UP, TAKING AWAY:  It’s been a bad year for accountants, at least for the major UK firms.  Increasingly they find themselves in the firing lines from disaffected clients and shareholders, mostly in relation to audit work, but also for problems with their advisory roles.  KPMG is the one in the public eye at the moment, where much of the discontent is internal, as partners criticise the firm’s management for falling revenues (down 2.6%) and profitability (down 7%).  This has occurred in spite of £200m being injected into the business to support technology and systems, and the creation of ever increasing numbers of partners –which should lead to revenue going up.  Instead, partnership earnings have gone down 13%.  Adding to the firm’s discontent, their great rival E&Y (formerly Ernst and Young) has pulled ahead of them on almost every measure of success.  In the Belfast office four senior partners, including the firm’s local chairman, have been arrested on a range of charges relating to tax evasion.

But the biggest cloud over the firm is the still growing one of its role in the collapse of the HBOS banking group.  KPMG was the auditor of the bank prior to its collapse in 2008 and a Parliamentary enquiry has recently heavily criticised the accountants for not spotting the degree of risk the bank was running and in particular, for its approval of the bank’s loan loss provisions, which proved to be totally inadequate.  KPMG has an unfortunate record on bank audits – the local regulator is probing its audit role at Bank of New York Mellon which has been confusing its own money with that of its clients, and in the UK for its role as auditor of the Co-operative bank which turned out to be £1.5bn light on assets after an attempt to buy a portfolio of Lloyds branches fell apart two years ago, amid many lurid allegations about the banks management and their abilities.

KPMG is not the only firm with problems – PWc – formerly Price Waterhouse Coopers–had to settle a major claim earlier in the year in relation to its audits of Cattles, a secondary lender; and Grant Thornton has continuing battles over its role on behalf of the Department of Trade and Industry in its investigation into and the collapse of the Tchenguiz family property empire, and now over its role as auditor of the Globo mobile phone business, which collapsed in October this year.  Not a great time to have unlimited liability in an accountancy firm…

YET MORE OIL:  We cannot avoid this continuing story; the oil price continues in more or less free fall, now trading at just under US$36 per barrel.  Perhaps needless to say, this is a recent record low and there is still no sign of the pumps being switched off – though the lack of space to store much more of the black stuff may force this onto producers soon.  Cheap energy is of course overall a “good thing” for economic growth generally, but the dislocation caused to individual producers and oil dependent states by such sudden movements is very damaging to financial and currency stability, and also politically in some countries, at least in the short term.  Whatever the original reason for the upswing in output and endless drop in prices – and most observers now blame the Saudi government for a failed attempt to force high cost shale producers out of the market – the fall has become almost self-perpetuating as the oil states try to stabilise falling state revenues by producing ever more of the stuff.

STACK IT HIGH: Ken Morrison is one of Britain’s great business successes, building his father’s Bradford egg and butter stalls into one of Britain’s big four supermarket chains.  Ken had his own way of doing things and continued to run Morrison’s long past standard retirement age.  His last great coup was the takeover of struggling rival Safeway, for which he was much criticised when the merged vehicle proved slow to integrate; but in the end proved successful, enabling Sir Ken to finally retire on a high note.  Since then Morrison’s has struggled again, not least because it was too slow to grasp internet technology and a linked doorstep delivery model.  The Morrison family disposed of a large chunk of its shareholding – realising some £400m in cash. Now it has come to light that Sir Ken has been investing some of that in great rival J Sainbury.  “Why not?” said the grand old man when asked by journalists as to why he had done this – pointing out he had spent only about 1% of his fortune on his Sainsbury stake, and held very much more in his continuing stake in Morrison’s.  Maybe he should have put more into Sainsbury – over the last twelve months its share price is up 9% whilst the business he founded has fallen 15%.

CRATCHIT GETS THE MEMO:  In a seasonal message, the CBI has warned that the government’s intention to raise the minimum wage and its continuing loading of costs onto employers will cause a growth in costs that will affect profitability, hinder new investment, and slow growth.  This, it said, will lead to higher unemployment. A survey of its members has shown that 43% of them intend to increase headcount and are expecting a good 2016.  This survey represents employers with total employees of around a million, compared with the UK labour force which is thought to be about 13 million, but is probably a reasonable cross-section of views and intentions.  The survey also shows caution on wage rises – only 16% planned to give rises above inflation (with inflation hovering around nil, that is not hugely demanding!) and most expected inflation linked or nil rises (and presumably further cuts in the coal allowance for the office fire.).  But it is the respondents comments on longer term prospects that caused the CBI to give its further warning regarding rising costs and reversals of employment growth.  Most respondents with large number of low wage employees expressed great concerns over the above inflation growth in minimum wage costs and other social costs such as funding the government’s (generally regarded as  successful) apprenticeships scheme.  This, several critics of the CBI position have observed, is in business’s long term interests to meet the improved skills base that the CBI has often called for; nor does the CBI call for restraint to boardroom pay to further keep costs down.  Mr Scrooge had no comment.

A Merry Christmas to all our readers

KEY MARKET INDICES: (at 15th December 2015; comments refer to change on week; $ is US$)

Interest Rates:

UK£ Base rate:0.5%, unchanged: 3 month 0.57%(steady);5 year 1.34%(rising).

Euro€: 1 mth -0.12% (steady); 3 mth-0.11% (falling); 5 year 0.15% (steady)

US$: 1 mth 0.87% (falling); 3 mth0.73% (rising); 5 year 1.64% (rising)

Currency Exchanges:

£/Euro: 1.37,£ steady

£/$: 1.49, £steady

Euro/$: 1.0, €steady

Gold,oz: $1,065falling

Aluminium, tonne: £1,010rising

Copper, tonne:  £3,148 rising

Oil, Brent Crude barrel: $35.90,further fall

Wheat, tonne: £112, steady

LondonStock Exchange: FTSE 100: 6,035 (rising).  FTSE Allshare: 3,340 (rising)

Briefly: After the dramas of the previous week this was a return to stability, with most commodities and markets reversing previous losses.  The exception was of course oil, now hovering ever lower at around US$36 per barrel.  The markets will now be in slow motion until the resumption of business life on 4th January 2016 – when we hope to see you again.

Issue 34: Crossword – Merry Christmas

24 December 2015

Crossword by Boffles

boffles

Merry Christmas

 

To see a printable version of this crossword

Issue 34: 2015 12 24: Week in Brief: UK

24 December 2015

Week in Brief: UK

Union Jack flapping in wind from the right

LIBYA: The Government is preparing to send 1,000 troops to Libya to support local forces in an attempt to stop Isis fighters from dominating the country.

LABOUR PARTY: Jeremy Corbyn has been warned by Peter Mandelson that the party has lost 30,000 members recently, through the resignations of long-term members.  Neil Kinnock has expressed concern that moderate MPs might be removed as a result of a possible new re-selection process which some hard line activists want to impose.

FRACKING: The House of Commons has voted in principle to allow fracking to take place under National Parks, but not on the surface of the areas which may be involved.

MUSLIM BROTHERHOOD: It has been reported that the Muslim Council of Britain, which has about 500 Muslim organisations affiliated to it, may have links with the Muslim Brotherhood.  The latter is a political party proscribed in some countries, but not in the UK, for alleged links with fundamentalist terrorism.

ASYLUM SEEKERS: It has been accepted that there are 10,000 missing asylum seekers whose whereabouts within the UK are unknown.  The report by the Government also records that more than 30,000 failed asylum seekers have not been deported even though their appeals to stay were rejected over 2 years ago.

GANGS: A leaked report has alleged that a Kurdish gang called the Tottenham Boys, a reportedly criminal gang in London, has channelled funds to the PKK, the Kurdish independence militants who are considered a terrorist group in Turkey.  It is thought that one of the gang was the target of a raid to free him from a security van, when one of those allegedly trying to secure his escape was shot dead by the police.

SLAB: Thomas “Slab” Murphy, a resident in the Republic of Ireland, has paid €1.5 million in unpaid back tax & now faces another demand for unpaid tax in the sum of £3.7 million.  It is thought that Murphy engaged in smuggling operations and fraud and transferred large sums to the Provisional IRA.

ARMED POLICE: The Government intends to give more protection to police officers who use firearms against suspected criminals.  The decision follows representations made to David Cameron by senior police officers who are concerned about the possible prosecution of police officers if there were to be a Paris style terrorist attack in London.

LORD JANNER: Lord Janner (formerly Greville Janner MP) has died.  There were serious allegations made against him concerning child sex abuse which were going to be examined in a “Trial of the Facts” and not a full criminal trial because he was deemed to be unfit to plead, due to his dementia.  It remains to be seen whether the “Trial of the Facts” will go ahead.  In the meantime, those who allege that they were abused are considering whether or not to take civil action in a claim for damages against his estate.

BINGE DRINKING: A survey has caused increasing concern about excessive drinking among young teenage girls.  It shows that the number requiring hospital treatment has doubled in 5 years and there is a worry that the drinking may cause long term health problems.

ANTIBIOTICS: There have been warnings in the past that the unrestricted use of antibiotics has led to an increase in resistant strains of bacteria.  It has been reported that for the first time in Britain Colistin, the last resort antibiotic, has lost its effectiveness against infections caused by so-called “Superbugs.”

 

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