Policy Announcements, Tuesday 20 February

  • The Economic Secretary to the Treasury, Ed Balls MP, brought representatives from the European Commission together with leading representatives of London's financial sector, while also announcing the implementation of tax measures to boost the competitiveness of the City of London. The measures announced will modernise the tax system to remove obstacles to competition and expand choice in trading financial instruments in the UK. They will allow firms to benefit from the new opportunities offered by liberalisation of financial regulation in the European Union, and specifically from the introduction of the Markets in Financial Instruments Directive (MiFID).

The pharmaceutical price fixing scheme

The Office of Fair Trading is expected to expose the extents to which the NHS will go to waste money. Incredibly, the Department of Health has been cosying up to the big pharmaceutical companies and paying well over the odds for drugs with our money! Why is this not plastered all over the front pages??

The scam basically revolves around the PPRS (pharmaceutical price regulation scheme) that prevents drug companies from making excessive profits from the NHS, by effectively capping them. However, within that profit margin, any new drugs can be charged out at as much as they want. This has been quoted in the Guardian as high as £40k per patient per year for some new drugs. So what does a company do if it’s going to make a load of cash from a new drug? It passes its rights to older drugs to other companies who haven’t reached their cap yet. This is costing us millions each year. Yet another reason why the NHS is in serious need of reform.

Review of the Papers, Tuesday 20 February

  • Gordon Brown is failing to persuade the public that he would make a better prime minister than David Cameron, according to a Guardian/ICM poll published today which suggests the Conservatives could win a working majority at the next general election. Voters give the Tories a clear 13-point lead when asked which party they would back in a likely contest between Mr Brown, Mr Cameron and Sir Menzies Campbell. The result would give the party 42% of the vote against Labour on 29%.,,2016791,00.html
  • A secretive price-fixing scheme operated between the Department of Health and the major pharmaceutical companies has resulted in the NHS spending many millions of pounds more than it should have for drugs, the Office of Fair Trading is expected to say.

Policy Announcements, Monday 19 February

  • Jack Straw has abandoned controversial plans to use a preferential voting system for deciding on the future of the House of Lords. MPs will instead use the traditional 'ayes and noes' method of voting to decide the upper chamber's composition. The leader of the Commons said he was responding to criticism from MPs after publication of his white paper on Lords reform earlier this month.
  • Cancelling plans for ID cards would render Britain "defenceless in the war against illegal immigrants", according to Home Office minister Liam Byrne. Speaking at Home Office questions in the Commons, Byrne told MPs that 70 per cent of the cost of introducing the ID card system would have to be spent on new biometric passports. He dismissed suggestions that the scheme - intended to combat illegal immigration, identity fraud, organised crime and terrorism - could be scrapped in its entirety.
  • The government has come under fresh pressure to scrap the ban on the intelligence services tapping MPs' phones. The annual report of the independent interception of communications commissioner published on Monday called for the 'Wilson doctrine' to be abolished. Named after former prime minister Harold Wilson, the doctrine exempts MPs and peers from the security services' reach. But Sir Swinton Thomas said it placed parliamentarians "above the law".
  • Thirteen local health areas today pledged to meet the government's 18 week treatment target a full year before the rest of the NHS. The government has said that by the end of 2008, patients can expect a maximum wait of 18 weeks from referral to the start of treatment. Eighteen weeks is the maximum but many patients will be treated more quickly, most in approximately seven weeks. In the past it was not uncommon for people to wait over 2 years for an operation, now no-one waits longer than six months and the average wait for inpatient treatment is around eight weeks.
  • A draft guide was published today to help planners better understand how planning policy should be used to manage flood risk, as climate change continues to impact on traditional weather patterns. The 'living draft' of a Practice Guide Companion to Planning Policy Statement 25 (PPS25) will act as a consultation document as well as an interim support document for planners on applying PPS25 policy and seeks to help create consistency in how PPS25 is implemented across the country.
  • A wind farm with the power to supply clean electricity to over 415,000 homes, more than all the demand in Suffolk, will be confirmed by Alistair Darling, Secretary of State for Trade and Industry. The Greater Gabbard (GG) scheme supplying 500MW through 140-turbines will cut CO2 emissions by 1.5m tonnes a year - the equivalent of taking 350,000 cars off the road. The project is being developed by the companies Airtricity and Fluor. It will be placed close to two shallow sandbanks - the Inner Gabbard and the Galloper - around 23km (12 miles) from the Suffolk coast. The sites will occupy an area of nearly 150 square kilometres within the outer Thames Estuary strategic wind farm area.
  • A landmark minimum wage ruling handed down by the Court of Appeal on Friday means thousands of Butlins' and Haven Holidays' staff will share up to £1million in pay arrears. HM Revenue & Customs took enforcement action against Leisure Employment Services, which owns Butlins and Haven Holidays, over deductions taken from employees' wages to cover utility bills. The deduction of £6 per fortnight from staff living onsite meant pay fell below the national minimum wage. The case began at Employment Tribunal in 2005.
  • The culture secretary is to meet the Conservative leader in a bid to shore up cross-party support for the London Olympics. Tessa Jowell will hold talks with David Cameron on Thursday after the two fell out over the escalating cost of staging the event. The meeting follows a row over Conservative plans to set up a committee of experts to monitor progress in the lead-up to the 2012 Games.
  • Good views, nearby shops and "peace and quiet" have all been used to calculate how much council tax homes should be liable for, the Tories have complained.  Details of the criteria were contained in an internal Government handbook related to a revaluation of properties in Wales, which has obtained by the party.  Spokeswoman Caroline Spelman warned they could be applied to houses elsewhere in the UK, creating a "punishing and cynical tax on people's quality of life".
  • Senior civil servants employed at the Department of Health do not believe the ministry is well managed, according to figures uncovered by the Conservatives. With more than five of every six of the Department's top officials giving the thumbs down to the way the Labour government is running the health service, Shadow Health Secretary Andrew Lansley declared: "This is a vote of no confidence in Patricia Hewitt's leadership from the people who work closely with her and so experience her incompetence at first hand."

Review of the Papers, Monday 19 February


  • Most doctors believe that Labour has failed to reform the NHS and that funding by taxation alone will not improve the quality of care. An online poll of more than 3,000 doctors carried out for The Times offers the most striking picture yet of the level of disillusionment within the profession. Most say that the billions of pounds injected into the service since 2002 have not been well spent and that services have not improved.
  • Working for the NHS may once have been a decision that lasted the length of a doctor’s career but many of today’s medics are now considering early retirement or work abroad, The Times / poll reveals. Many said they still felt that the NHS was one of the best health services in the world but their loyalty was being sorely tested by what they viewed as excessive bureaucracy. Only a minority believed the Government’s reform agenda would maintain or improve standards of care. These are not doctors disillusioned with the NHS per se (although a minority are) but with the direction it has taken under Labour.
  • Tony Blair will today call on hospitals to keep operating theatres open into the evenings for non-emergency procedures to ensure that NHS patients on average wait no more than seven to eight weeks. On a tour of a London hospital the prime minister will hail late-night surgery as an example of the sort of reform that will allow the government to meet its waiting time target. Labour pledged in its manifesto for the last election that by the end of 2008 NHS patients would wait a maximum of 18 weeks for surgery after referral from their GP to a consultant.,,2016210,00.html
  • Motorists face a potential bill of more than £600 to fit a black box needed to make a full pay-as-you-drive road pricing system work, Whitehall documents have revealed. A blueprint drawn up by the Department for Transport showed it could cost £62 billion to set up and £8.6 billion a year to run. Every motorist could end up paying nearly £300 just to cover the expense of collecting the charge, according to the department's feasibility study. Details of the study emerged as the Prime Minister signalled his intention to press ahead with road pricing in the teeth of fierce opposition.;jsessionid=WPSXQ22PWQIWVQFIQMFSFGGAVCBQ0IV0?xml=/news/2007/02/19/nroads19.xml
  • Car dealers selling environmentally friendly models exempt from London's congestion charge have reported record business as motorists get set for today's western extension. The charge zone nearly doubles in size this morning, taking in some of London's most fashionable streets in Knightsbridge, Kensington, and Chelsea. Ken Livingstone, the mayor, has pressed ahead with despite research showing that 63% of local residents oppose the change.,,2016384,00.html
  • The British biodiesel industry will this week tell the Treasury it must act urgently to salvage a central element of the government's environmental policy. Biodiesel is expected to account for more than half of the government's drive for greener transport fuels over the next few years. Companies have invested in enough capacity to provide almost half of the UK's requirement of biodiesel from next year. But rising feedstock prices and the fall in the price of crude oil since last year have put the industry under severe pressure.It argues that the 20p-a- litre fuel duty rebate for biofuels, meant to encourage uptake, is now insufficient to bridge the gap in costs between the new fuel and traditional diesel.
  • Organic food may be no better for the environment than conventional produce and in some cases is contributing more to global warming than intensive agriculture, according to a government report. The first comprehensive study of the environmental impact of food production found there was "insufficient evidence" to say organic produce has fewer ecological side-effects than other farming methods. The 200-page document will reignite the debate surrounding Britain's £1.6bn organic food industry which experienced a 30 per cent growth in sales last year. 
  • The design of the default fund for the government's planned national pensions savings scheme will be "critical", the National Association of Pension Funds is to warn. The warning follows fresh evidence that very few of the millions expected to join the scheme when it launches in 2012 will make an individual choice over how their money is invested, instead opting for the default fund.That is expected to be an index tracking investment, or a so-called "lifestyle" fund in which investments are moved out of the stock market into less risky assets such as cash or bonds as individuals near retirement, thus reducing exposure to big stock market swings. 
  • Chemical spills, leaks and explosions put up to 27,000 people at risk of injury in a single year, according to the most extensive government survey yet of chemical accidents. More than 3,000 people suffered effects including poisoning and burns from contamination during 2005.,,2016137,00.html


Environmental showboating

Richard Branson is going to create an "environmental showcase for the world" on the Caribbean island of Moskito. He "wants to transform Moskito into the world’s first carbon-neutral holiday resort, complete with wind power, recycling and Balinese-style huts for eco-friendly families."

How are these eco-friendly families going to get there? What are they going to do with the recyclate? What happens when the wind isn't blowing hard enough (which is a lot of the time on the British Virgin Islands)?

The answer is blowing in the wind

I am no fan of wind energy. It is hugely over-rated. But, like most energy sources, it has its place. To dismiss it or condemn it out-of-hand is as distorted a view as to hail it as the solution to all our energy problems.

The Times today printed a damning article on an urban wind installation. A turbine installed four weeks ago at the home of Mr John Large, it reports, "has so far generated four kilowatts of electricity", compared to an average household's consumption of "23kw every day", and offering a return of "9p a week" compared to the £13,000 that Mr Large spent on the installation.

As many were quick to point out in comments on the article at The Times's website, and on many blogs, the journalist's ignorance of basic energy and engineering was revealed by his use of terminology. Kilowatts (or kW - lower-case k, upper-case W) are a measure of potential - the capability to deliver a given amount of energy in a given time if working at full load. Kilowatt-hours (kWh - as above, plus lower-case h) are a measure of energy - specifically the amount of energy produced if an engine with the potential to produce 1 kW is run at full load continuously for one hour. The phrase "has so far generated four kilowatts" is therefore a nonsense - kW contain no notion of time, so one cannot say that any number of kW have been generated "so far".

"23kw every day" is likewise wrong, not only in the spelling, but also in fact - to the extent that averages are in any way meaningful (which is a very limited extent), the figure should be 23 kWh, not 23 kW. 23 kW every day would, according to the best interpretation one could put on it (23 kW of demand continuously for 24 hours) equate to 552 kWh per day, which is way over the top. As it is, even 23 kWh per day is excessive - total domestic consumption of electricity in the UK is around 115 TWh (1 TWh = 1 billion kWh) each year, which is equivalent to around 4,800 kWh per household annually (there are just over 24 million households in the UK), or 13 kWh per household per day.

Policy Announcements, Friday 16 February


  • Home Secretary John Reid announced that he has commissioned another two new prisons to manage the growing prison population and protect the public from dangerous and persistent offenders. Speaking at the first prison he has personally commissioned, HMP Kennet in Merseyside, the Home Secretary said that the Home Office was "working flat out to deliver additional capacity within the system".
  • The NHS, patients and industry will benefit from bar coding technology, which will increase patient safety, improve efficiency and save the NHS £millions in extra bed days, announced Lord Hunt. By wearing a bar-coded wristband a bar code reader can be used to verify the patient's identity at any time, and be an extra check that the right patient is about to received the right care. At present errors, many of which are caused by getting the patient identity wrong, cost the NHS around £2 billion in extra bed days.
  • Speaking in Glasgow on the second day of his visit to Scotland, the prime minister urged Labour supporters to step up their campaigning. Tony Balir said Labour would set out how the partnership benefits both Scotland and England, and could "help each other advance" as well as spelling out the negative consequences of separation."I actually want people excited about the prospect of even greater progress and prosperity through a modern union of nations who know they are stronger together than apart," he told the Labour audience.

'Allo 'allo 'allo, what's all this then?

Local government have been given £29.5m to train up snooping jobsworths council staff to hand out on the spot £50 fines to evil smokers when the public ban comes in to force on July 1st. The Chartered Institute of Environmental Health has said “Officers [seriously, he called these un-needed drains on tax payers’ money ‘Officers’] do not have to identify themselves when they go into premises and they can film and photograph people to gather evidence.” Creepy.

This is not only a waste of tax payers’ money, but also a little sinister. I do not like the idea of having these people who clearly love and crave a bit of power to be able to hand out £50 on the spot fines to the general public. Hasn’t the experience of countless dodgy traffic wardens told us that you can not trust these types of people with so much power? Policemen and women go through extensive training and are heavily regulated and by and large do a good job – but even after all they go through you still get plenty of stories about corrupt and bent coppers. So why invest so much money and entrust the power hungry to carry out such a narrow and easily abused and corruptible task? There will not be suitable checks and balances on these ‘officers’ and will virtually be a law unto themselves.

Review of the Papers, Friday 16 February


  • Tony Blair's plan to pave the way for a new generation of nuclear power stations by the time he leaves office was in disarray yesterday after the high court ruled the government had carried out a "misleading" and "seriously flawed" consultation on its energy review. Mr Justice Sullivan's judgment forces the government to canvass public opinion once again and is likely to force a delay of several months in the publication of the energy white paper, which had been expected in March.,,2014491,00.html
  • Home secretary John Reid is set to announce that two new prisons will be built by 2010.

Lies, damn lies and UNICEF reports

Britons have been indulging in a bout of self-flagellation over our bottom-ranking in a recent UNICEF report on childhood well-being. Each person, of course, chooses to blame the result on their personal bête noire. No doubt there are many things wrong with British society and many complex causes, but before rushing to our knee-jerk reactions, no one seems to have bothered to consider how much water this report holds. It's from the international body representing children, so it must be impartial and accurate, right?

Well, not exactly....

Is inflation back?

Rather a big question for a blog posting. This is not going to provide an answer, but a couple of observations.

  1. Trying to measure inflation objectively by means of indices is nearly impossible. Take wage inflation, often seen as one of the two principle causes of an inflationary spiral (and intimately connected with the other commonly-cited cause - cost-push inflation - on the basis that wage inflation is often the result of inflation in the cost of living). The FT carried an article today entitled "Comfort for Bank on wage increases", in which they reported the ONS's figure for wage inflation of 3.7% for the final quarter of 2006 and the EEF's (Engineering Employers Federation) assessment that settlements amongst their members had averaged 2.9% in the three months to the end of January 2007. On the other hand, the Daily Telegraph's jobs supplement (ironically printed on FT-pink paper, and not currently available online) led with "Inflation fear as pay rises touch 4.5pc", based on the Daily Telegraph Croner Reward index, which showed rises in basic pay increasing from 4.2% in November 2006 to 4.6% in January 2007. Strangely, however, Croner Reward's own figures showed that the average settlement over the last 4 months upto January 2007 was just 2.6%. What is a poor central bank to do? Perhaps that explains the FT's other headline on the subject: "MPC plagued by inflation uncertainty". Even if it is no longer in the power of the Bank of England to control, we need a return to the concept of inflation as the measure of expansion of the money supply, not the measure of some artificially-constructed, and subjectively-compiled index.
  2. This might sound like general economics, and nothing to do with Picking Losers. But allowing inflation to take hold is, in fact, one of the classic ways for a government to create winners and losers. Naive economists, who treat aggregate statistics as though they represent a generality that exists in real life, talk of inflation-levels, wage-levels, price-levels etc as though those things move homogeneously across the economy. In practice, the averages conceal wide variations across the economy. Inflation does not occur equally at all places and at all times. Some parts of the economy experience it before others. Those whose incomes inflate ahead of cost inflation are winners in the process. Those whose costs inflate ahead of their wage-increases are losers. Those who make goods whose prices inflate early in the process (e.g. ahead of the prices of their suppliers) are winners. Those who make goods whose prices are pushed up towards the end of the process to take account of already-experienced increases in costs are losers. Hence the complaints of the many (perhaps the majority) who feel themselves to be considerably worse off than they are told that they should be, according to the aggregate statistics. They are experiencing reality, not some artificial average.

What effect it has depends on where the money is injected, but inflation is always a monetary phenomenon. We need to find a way to bring the spiralling growth of our money supply back under control.

Consultation - what's the point?

Everyone in the energy industry knew that last year's Energy Review was a fix. Now a judge has recognised it too, and told the Government to consult properly on the nuclear issue. Labour have such contempt for the public that they couldn't even pretend to be listening.

What is really revealing is Tony Blair's response to the decision. "This won't affect the policy at all", he says. So what exactly is the point of consultation, if the Prime Minister rules out the possibility that any submissions will present any argument or evidence that might affect his thinking?

Review of the Papers, Thursday 15 February

  • Plans to shake up the way the government combats terrorism have been put on ice until Tony Blair leaves Downing Street, senior Whitehall officials said yesterday. The prime minister was sent proposals before Christmas by John Reid, the home secretary. They included a plan to split the Home Office into a ministry for national security and a separate ministry of justice.,,2013423,00.html
  • A national road pricing scheme will not solve Britain's congestion problems and the Department for Transport is incapable of pushing through the policy, a committee of MPs said yesterday.

Labour spend more on advertising than Tesco and M&S combined!

Supermarket giant Tesco and revitalised high-street giant Marks & Spencer spent £67m and £66m on advertising last year respectively. If you combine their advertising budgets you are still a way off matching the amount of money this government has wasted in its own self-publication advertising in the past twelve months. They have managed to burn up £137m television adverts, radio stations, billboards, newspapers, cinemas and other outlets. What an incredible waste of money!  When they are not telling us how to live our lives, they are misusing public money to further the Labour party’s agenda and self-interest. It is not how the electorate expect their money to be spent and yet they appear to be getting away with it. Our taxes are not meant to be spent on publicising the Labour party nor drumming home relentlessly on how we should live our lives. Stop wasting our money and stop nannying us.

More issues "kicked in to the long grass"

As my earlier post’s wishful thinking suggested, it seems that issues being kicked in to the long grass is going to be a more common theme than anyone could have hoped for. The infamous road pricing scheme looks set to be kicked in to the long grass for now. Not because one and half million people have wasted their time signing an e-petition – a tool used to make it feel like we’re entering in to the democratic process, but is actually a way of shutting us up. No, the latest weapon against introducing road charging is the incompetence of the government itself.

You can't fool all the people all the time

A quick update on a story I ranted about earlier this week. Apparently none of us are philanthropists – or at least none of us are falling for this new version of the stealth tax. In reports in the Daily Telegraph, there have been no immediate offers to pledge money to Universities from senior executives. Grant Hearn, chief executive of Travelodge said, "There is a growing engagement within the business community to get involved in philanthropy. But in my view contributing time is a much better way than giving money.”