Tag Archives: Political

Mrs May, it’s time for you to sort out the law for our armed forces

Friday’s Telegraph reported that, on Thursday, Mrs May told Defence Chiefs “to make every effort” to prevent abuse of the legal system by lawyers suing British servicemen over events in Iraq (and, presumably, Afghanistan).

Excellent start, and I hope that the Defence Chiefs immediately cease the current 1,500 investigations, consign them all to the shredder and redeploy the resources to defending the Realm.

However, it is not the role of the Armed Forces to regulate the operation of UK law.

The problem arises because of fears that if the UK does not investigate claims, they may instead be investigated by the UN’s International Criminal Court (although this has never actually happened). This has led the Attorney General, Jeremy Wright, to advise that ceasing the current inquiries might be risky. Mrs May needs to have a word in his ear.

She should start by pointing out that the ICC is a UN body that has less than unanimous support and membership. The USA, Israel, Iraq, China, Russia and India are all not signatories. Why is the UK? (Answer: some deluded concept of ethical foreign policy invented by St Tone). Perhaps we should leave.

She could go on to point out that the UK armed forces are regulated by the Armed Forces Act, passed every 5 years, last time in 2011 and a Bill is currently before Parliament. The Armed Forces Act makes any UK offence an offence under the act. Last time I checked, murder, detention without trial, rape and the rest were all UK offences. The point, therefore, is that the British armed forces are perfectly well regulated. Ask (ex) Sergeant Blackman, who is currently in jail for shooting a prisoner in Afghanistan, or those members of the Army who were prosecuted for failings in Abu Ghraib.

On that basis, she could suggest that Mr Wright mans up, and informs the ICC (and the world) that as far as the UK is concerned its armed forces operate to the highest professional, ethical and legal standards and are perfectly capable of maintaining them.

She might also invite him to note that while MPs have the legal cost of any action against them arising from their duties covered by the State, soldiers have a means-tested form of legal aid. So the MPs who sent them to war are safe from the financial consequences – but Tommy Atkins is not. Perhaps a change to the law is necessary.

Surely she will not have to remind him of the problems of double jeopardy, exacerbated by the evidential problems of dealing with incidents some time ago with an absence of witnesses. Or to point at the ludicrously expensive fiasco of the Saville Enquiry.

She could also point out that the majority of the actions threatened have been brought by two firms. One is already closed (due Legal Aid finding accounting problems). The other, Leigh Day, is under investigation for “irregularities” in the handling of some cases.

While she is at it she should also suggest that the Attorney General reminds the Law Society (the solicitor’s trade union) that the rule of law is not the rule of lawyers. Moreover, she could invite him to point out to them that if access to law is unaffordable, justice is threatened. Perhaps all lawyers should be required to perform (say) 200 hours work per year free, pro bono? Or perhaps Parliament, whose concerns included justice, the law and the economy, should set the rate for all lawyers.

She could end by pointing out that world class armed forces are very rare and hard to replace. Lawyers are three a penny…

NOTE – I am now proud and delighted to be a regular blogger about defence matters on The Conservative Woman http://www.conservativewoman.co.uk  where this post first appeared.  If you like this you may well like some of the other posts on TCW so click here and have a look

Corbyn is correct (possibly for the wrong reasons)

Today Parliament is debating whether RAF jets should be used to drop bombs on IS in Syria as well as Iraq. Cameron wants to do it, as it seems do many MPs, Corbyn does not. Having been a soldier I’m no terrorist sympathiser, but I do think that Corbyn’s conclusion is correct. Let’s review the facts.

Firstly there are plenty of jets from other nations already dropping bombs on IS in Syria. The availability or otherwise of a few RAF Tornados will not make a significant difference as there are already plenty. There is a technical point, which is that only the RAF has Brimstone (a very clever weapon) but this has not been widely raised and although Brimstone may be best other systems are adequate. So whether or not the RAF joins the bombing has no significant military relevance.

Some have stated that it’s time we stand shoulder to shoulder with are allies. We already are, as we have done since the end of the cold war. Bosnia, Gulf War Kosovo, Iraq, Afghanistan, Libya and Iraq again. Where were the Germans? Or most of the rest of the EU? It’s a fatuous point.

Secondly, as any soldier or historian can tell you, bombing alone cannot deliver a military outcome. The one exception was the nuclear bombing of Japan; otherwise no strategic military result has been delivered by air action alone. Yes, the Vietnamese were brought back to the peace talks by B52s, but at the time there were several hundred thousand GIs on the ground (who lost). Yes Serbia was cowed by a bombing campaign, but it was ground troops who liberated Kosovo. And if you are reliant upon ground action there is no point in starting to prepare their battlefield though air strikes until you have a workable plan. As far as I am aware there is not yet any such plan for Syria (let alone a workable one).

Thirdly, dropping bombs always causes some collateral damage, which is jargon for demolished buildings and dead innocents. While it is not the case that the infidel west is waging war on Moslems, pictures of bomb damaged buildings adorned in scattered Arab body parts is an image that is easily exploited to support this argument. This risk is of course exacerbated by the bombs that miss their target, and many bombs do miss. Even when they hit, there is often some question as to whether the target was legitimate, or the intended one. There are better, more accurate ways to destroy individual terrorists, but these can only be performed on the ground.

Anyway, all the evidence points to the perpetrators of the Paris killings coming from within Europe. They may or may not have received their motivation, training and equipment from IS in Syria (as opposed to IS in Iraq – which we are bombing already) but they were home grown, as were the 7/7 bombers and that maniac who killed Fusilier Lee Rigby. As Rod Liddle pointed out in last week’s Spectator, the logical retaliation for the French Air Force wold be to bomb Brussels (which, incidentally, would probably get UKIP support).

Finally bombs are expensive, and so are the planes required to drop them. Flying two Tornadoes from Cyprus to Syria and back is not cheap; I estimate the fuel alone as costing £50,000. One Brimstone bomb is another £100,000 so a cost of £250,000 per sortie in fuel and bombs seems sensible. Add in some maintenance, supporting aircraft and 100 or so airmen and £1,000,000 per day seems about right. Let’s just remember our country is bankrupt.

If you want to prevent terrorism in the UK (which is part of Dave’s job) then all you need to is secure the borders and keep the militant parts of the domestic population in check. That has far more to do with getting a grip on immigration control, the UK Border Agency and supporting police and security services than dumping HE in middle east. We are in a more secure position than mainland Europe as we have the additional vetting opportunities arising from being an island. We also have very strict gun controls and more cameras than France and the rest.

The terrorist threat IS poses to UK is not existential. It is far more akin to Bader Meinhoff and the Red Brigades than the IRA. The clue to defeating terrorism is not to be terrified, and I am not. The jihadist morons are far less likely to kill me than bad drivers and this point needs to be emphasised. Yes, at some stage there will probably be another outrage in UK. If it was as effective as 9/11 and killed 3,000 then my chance of being one of them is under one thousandth of a percent. I’m more likely to win the lottery – and so are you.

If you want to bring peace to the Middle East then good luck with that; my guess is that the choice is either supporting a nasty, secular dictator type like Assad or breaking up the artificially created countries a la Yugoslavia is the way to go. If Saint Tony can’t achieve it then Call Me Dave has no chance. But, lunatic terrorists aside, I don’t much care if there is a caliphate or not. The British Empire had few problems with the Ottoman Empire as we’re separated from them by the rest of Europe. I see no reason to fear one being created, particularly now that there is a world glut of oil.

If Cameron really wants to solve the problem he needs to put reliable (spelt British and other NATO) troops on the ground and keep them there until the job is done. Unfortunately he’s sacked most of them and already demonstrated that he does not have the ability to persuade the British population that it is worth the effort.

While I disagree with Corbyn’s creed, on this matter his analysis is broadly correct.

Terrorism is defeated by intelligence, which seems to be in short supply in Westminster.

Labour Never Was The Party of The Working Man

Following the Rochester by-election (in which the Labour vote plummeted from 28% to 17%) there has been much commentary to the effect that Labour is no longer the party of the working man. This opinion, in conjunction with the Milliband 35% strategy, may account for Labour increasingly seeking to exploit the politics of envy and class war with recent announcements on mansion tax and the charitable status of public schools.

Labour was never the party of the working man; it was (and is) the party of the Trade Unions. As trade union membership has fallen by over 50% (to under 6 million) in the past 30 years it should not be surprising that the Labour vote is under extreme pressure. The Thatcherite privatisation of major companies and the ending of the closed shop account for much of the fall, as does the fundamental change in the UK economy.

Today the private sector employs 24.3 million people, of which 60% of UK private sector employment is in firms with fewer than 250 employees, and few of these have trade union representation within the company. The public sector employs a further 5.6 million people. The largest unions, Unite and (particularly) Unison comprise 50% of the TUC by membership (Unison is the public service union). Their members are predominantly employed by the government. Other unions include the National Union of Teachers, The Fire Service Union, The Prison Officer’s Association and the National Association of Probation Officers. The TUC is effectively the representative of government employees.

The Labour party therefore has become the party of the government machine, which is of course why it is unable to sanction the cuts in the machine necessary to balance the budget. Its “falling attraction to the working man” is in fact a reflection of the massive increase in SMEs and the growing public realisation that the government machine has bankrupt this country.

The transformation of employment from the nationalised behemoths of the 1970s to the nimbler companies of today has promoted a far wider understanding of how capitalism works and in many cases removed the need for any organised labour representation. In a workforce of 5,000 employees an individual worker has little power or realisation of how he (or she) adds vale. In an organisation of 50 employees (which is 98% of all SMEs) that same employee will know the boss personally and be well aware of their value. As the need for trade unions recedes the purpose of its party diminishes as well.

In fact the Labour party has a worse problem; as former TUC members become embedded in the private sector they become more aware of the failings of government service. Most employees want overtime, and many want to work well in excess of the 40 hours/week imposed by the EU Working Time Directive. They are increasingly intolerant of the falling public sector productivity while their own is rising. The Labour party is forced by to trumpet the benefits of state education and the NHS to voters who are increasingly aware of the shortcomings of and alternatives to these (and other) state supplied services. It is doomed.

If it were not for the fatuous invention of “New Labour” which created “the third way” of economics (which was never really defined, but led to the current massive debt) at a time when a fourth term of Conservative government was looking unappealing Labour could have died in 1997. It may have escaped then, but the rise of UKIP as a credible alternative worthy of a vote has given the British electorate, most of whom neither belong to a trade union nor work for the government, a wonderful opportunity to kill off the failed party that represents the dysfunctional government machine.

Labour’s time has passed and it has no future.

What I Want From the Next Government

With a little over 5 months before the next election we can all look forward to being bombarded with manifestos, promises and statements from those vying to rule us. This seems to be to be back to front, so I thought I would tell Dave, Nick, Nigel and (God help us) Ed what I expect from them. They can then contemplate the ways in which they will disappoint me.

I will deal with the topics more or less in order of my priorities and, where possible, share the arguments that lead me to the conclusions. However this is not a manifesto, so in the interests of brevity and clarity I will not necessarily develop them fully. Of course, I am happy to expand and expound upon request.


The simple fact is that the country owes £1,500 Billion, and this is still increasing in spite of the incredible efforts of those working in the UK private sector, who are delivering growth. The implication of this is that the tax take is at about the maximum that it can be, and therefore government spending has to fall, urgently. Five years of austerity and cuts via salami slicing has not delivered sufficient savings and it is unlikely to. We therefore need a plan B, which is a total restructuring of government spending.

The first step is for the government to publish where the money goes and what liabilities exist. This can only be achieved if the government adopts the same accounting policies that all other enterprises are compelled to, i.e. UK GAAP (or its replacement FRS102). The Civil Service will whine that this is not possible or appropriate; my answer is that if they don’t know how to do it they are not fit for purpose. The ONS is a start, but it needs to go much, much further. The accounts (which I think would be best generated by department or agency) should be published annually, possibly bi-annually. Once we have established where all the money is going we will be in a position to spend less of it.

The second step is for it to become unlawful to set a budget that involves a deficit. The blithe assurances of ministers and officials over the past years have dumped a huge burden on the economy and the people who have to service the debt (and at some stage repay it). Most of these people weren’t born at the time the spending was incurred so their consent was not explicitly given. Taxation without representation started the US War of Independence. So far taxation before conception has not triggered social upheaval, but as the consequences become clearer I’m not confident that the peace will hold.

The government’s accounts should be examined by those capable of doing so and free from political affiliations. Rotating it through auditors, including accounting firms other than the big 4, should avoid that potential problem. Each firm gets to do it once, at commercial rates. Smaller firms could form consortia were there a manpower shortage. The audit would have the same objective as any commercial audit, i.e. to produce a true and fair view of the country’s financial position.

In terms of running the economy the government actually has little to do. It must provide a legal framework and provide that infrastructure which cannot be provided by other means. As the government is bankrupt its capacity for major spending programmes is limited. It has no business trying to run companies competing in open markets.

It should instead look in particular at enabling a wider adoption of crowdfunding solutions to allow more investment of wealth into the SMEs that produce growth, rather than chasing the small number of fully listed companies. Investment in real estate should not be encouraged.

In terms of taxation it should take the minimum possible commensurate with delivering the services required, plus a bit to reduce the debt. Where possible taxes should be hypothecated so that, for instance, the income from road tax, fuel taxes etc. should be applied to transport and environment. If there is a surplus then the tax should be cut. Indirect taxation (e.g. income tax) should be used for defence, welfare and the like.

Before looking at the spending departments in detail, we need to address the elephant in the room. Our economy functions differently to the ones in Europe, but too much of our law comes from there, and is therefore beyond correction and development by the UK government in the interests of the UK. Saving the UK is unlikely to be achieved by staying in Europe.


As it stands the EU is not working. Its accounts are a mess and its policy is (understandably) focussed on saving the Euro. Whether this is wise or possible is not relevant.

I expect the next UK government to produce detailed rational arguments for staying, renegotiating (if possible) or leaving as they see fit. After a period of serious public scrutiny I want a referendum (no later than May 2017 and earlier if possible), the results of which to be enacted in the shortest possible time, or one year – whichever is faster.


According to ONS data, the single largest slice of government spending is on Social Protection and Personal Social Services which will consume £253 billion in 2014. That is £9,800 per household. This simply can’t be right and a huge amount of this spend must be tied up in the administration of a complicated system. The only data I can find is for 2011-12, but that gives a total benefit spend (i.e. the money handed over to recipients) as £160 billion. Allowing for a bit of inflation, the inescapable conclusion is that the benefits system is costing over £80 billion to administer. That’s just ridiculous – it’s almost the size of the entire education budget.

The system needs complete reform. I think Iain Duncan-Smith is doing well on this; but with £80bn to save he needs further encouragement. It should not be difficult to establish the income required for an individual to exist at various ages and locations. If his/her income is short of that then the government should top it up. This involves means testing, but that is reasonable and necessary to ensure that money goes to where it is needed, and only where it is needed. As HMRC has all the data that it needs it should be possible to automate much of this process from existing software and data. If Tesco can tell where I shop, what I buy and what I am likely to buy tomorrow (which it can through its Clubcard) it’s not unreasonable to expect the government to know what I earn and what I need. If HMRC management says it can’t be done sack and replace them (which is what would happen in the private sector).


I want an explicit admission from the government that the state pension scheme is in fact a Ponzi scheme and, unsurprisingly, is in huge trouble. Moreover, those who will be paying for the pensions were not consulted. The pension system should be subsumed into the welfare system (i.e. means tested).

Private pensions should be liberated further from state control. It’s the pension owner’s money and he can do what he likes with it. It is unlikely that the public pension will be so generous as to encourage the feckless.

Public sector employees should be required to fund their own pensions rather than impose a burden on future taxpayers. They won’t like this, and will probably strike. But my children were not created to pay the unfunded pension of someone in the public sector.

The retirement age should continue to increase, although of course those with sufficient wealth in their pension pots can retire whenever they like. Those senior citizens unable to work will be covered by other welfare payments.


The NHS should be broken up into manageable parts, which should transferred to a range of ownerships, predominantly in the private sector. Any funds generated from the sale should be applied to reducing the national debt.

The government should pay insurance premiums for those on welfare and consider making private health premiums tax deductible. Given that health care cost £4,000 per household it should be possible to provide a pretty good insurance solution, with individuals able to buy more extravagant cover if they like.

Diabetes is a problem caused primarily by sugar. So tax sugar and apply the revenue to the health service budget.

Coordination of the availability of suitable heath facilities (if necessary) should be led by county councils. The role of the Department of Health should be trimmed to one of supervision and inspection.


The state education model should mimic the private education one; each school should be owned in trust and run by a board of governors who appoint the headmaster, secure funding and set salaries etc. The governors are mostly elected. They are unpaid, but insured.

The role of the government is simply to collect and distribute fees, following the pupil. Pupils should be free to attend whichever school they like. The level of fee will be set by the governing body on the basis of the operating and maintenance costs. Their accounts will be subject to inspection and challenge by the charities commission and/or the Department of Education and/or Local Education Authorities (if the latter remain necessary).

Teaching hours shall be extended to match the working day. Access to and participation in sport shall be increased.

Technical colleges shall be re-introduced to produce an alternative to academic education, the transition being made at 16 (i.e. post GCSE). The number of places at university shall be reduced as a proportion of the school leaving population to reflect the number that actually graduate, as opposed to the number that enrol.


I want a government that is able to acknowledge that something has gone terribly wrong in the MOD, as evidenced by our near-disastrous performance in the Iraq and Afghan wars. That is going to require a Defence Secretary (or his nominee) who commands sufficient respect to demand answers and impose solutions, a latter day Cardwell. Either Senior Officers advised Cabinet to proceed as they did, or the advice they gave was ignored. In the former case the Senior Officers were incompetent, in the latter case spineless. In either case they were massively over-promoted. The system that enabled this needs addressing, urgently.

We need far greater integration with reserves and a structure that reintegrates the armed forces with the communities that they serve. The super-garrison may or may not be the best structure.

The Armed Forces are almost certainly too small. A plan needs to be put in place for their expansion. This is likely to be particularly challenging for the Navy given their addiction to aircraft carriers and the exorbitant cost of new destroyers and submarines. But more ships are necessary, particularly if we are to leave Europe. A review of the need for the carriers, including cost benefit analysis, should be conducted and made available to the public.

The funding of the nuclear deterrent to be made part of a separate service (albeit one with manpower on secondment from the Navy).


Given that there is no money, HS2 & 3 are to be scrapped unless the private sector is prepared to take it on.

Runways to be authorised at both Heathrow and Gatwick, and regional airports and internal flights to be further facilitated. If this requires an Act of Parliament, so be it. But the runways are to be built with private money.


Irrespective of the decision on Europe, the aim of foreign policy will be to turn the Commonwealth into a free trade area in as short a time as possible.


Build nuclear power stations. Stop subsidising absurd offshore wind.


The right of recall should be enacted, and the sanctions available against miscreant MPs should be increased.

The Boundary Commission should become independent and its decisions binding.

Political parties should have their budgets capped, and the amount allowed to be spent on elections also capped. Under no circumstances will parties be funded from taxation, so the cap will set on the basis of the total raised by the poorest party (on a per candidate basis).

The House of Lords to be restructured by a body that includes no-one who has ever been an MP. Until a solution is found, and approved by referendum, there should be no further appointments to the House of Lords.


That’s it. I hope that adoption of this agenda, or similar ones, will prevent this country being bankrupted again by misguided politicians. It should also shake the executive branch into reforms that suit it to the 21st Century, without losing the long traditions of probity and service.

ARRSE REVIEW of My Book: The Dangerous World of Tommy Atkins

The author, an ex British Army Officer, has produced a much needed guide to what today’s soldier faces on the battlefield. Drawing on twelve years experience, including two as an Officer Cadet Instructor at Sandhurst, he has written a jargon-free book with humour, a dash of irony and some gentle sarcasm.

This is not a training manual, but is for those with an interest in land warfare but with no military experience. It is eminently readable and provides a valuable insight into what “Tommy Atkins” faces when sent to war. Rather than the simplistic Hollywood portrayal of good versus evil with obvious heroes and villains the reader quickly comes to realize the complex nature of modern war-fighting, the technology available, the necessity of logistic back up and the pressure of having to make split second decisions which may be questioned in the comfort of a committee room many months later.

List Price: £12.00 GBP
New From: £11.27 GBP In Stock
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Television has given us unprecedented access to a whole range of “fly on the wall” programmes following recruits through training as well as “embedding” reporters with units in the field. Similarly, many service personnel have written excellent accounts of their time on the front line. These are all valuable and welcome additions to our understanding of modern day warfare but, are of necessity, written largely from one persons perspective.

This book aims to fill the gap between an individual’s personal experience and large unit operations. It enables the reader to better understand the part played by the smallest effective unit on the battlefield, the fire-team (with four members) or the section(two fire teams).

Wasting no time, after a quick introduction to “Tommy Atkins”, we are off for a short walk in the countryside. This is often the soldiers workplace for as the author observes “land warfare is about ground and who controls it”. In such an apparently benign environment only bulls, barbed-wire and irate farmers are the hazards faced by the public. However, we soon realize that moving and fighting in such an environment requires an entirely different mind and skill set other-wise life expectancy is reduced to minutes or even seconds!

We are reminded that “Everything in war is simple, but even the simplest thing is very difficult” – von Clauswitz. This maxim is as relevant today as it was when first expounded and the reader soon comes to appreciate the difficulties facing today’s soldier.
Every job has its tools of the trade as well as particular ways of doing things. For “Tommy” this translates into weapons and tactics. These are described in simple, straightforward terms easily understood by the lay-person. This sets the tone for the rest of the book where we are introduced to other “players” on the battlefield along with a wide range of assets and resources that can be called upon or incorporated with “Tommy” in the fighting to improve the chances not only of his success but also of his survival.

By the final page the reader will be far better informed about the requirements, equipment and capabilities of our troops as they are sent on yet another “foreign adventure” following the failure of the politicians to find a solution. In fact, this book should be required reading for politicians and journalists whose knowledge and expectations of our soldiers can at times be profoundly naïve.

5 out of 5.

Ebola – don’t panic yet

First a disclaimer. Although in a previous life I was fairly proficient in nuclear, chemical and biological warfare I am not an Ebola expert, not a public health one.

But I am increasingly concerned that measures are not being taken with sufficient urgency to contain Ebola. Nor am I convinced that the implications of uncontained Ebola have been thought through and the necessary actions planned.

First the facts:

  • Ebola kills 70% to 90% of its victims.
  • There is no cure.
  • There is no inoculation.
  • Ebola is transmitted via contact with infected bodily fluids, and the nature of the disease is that it produces lots of such fluids from each victim.
  • It is highly infectious – one droplet is enough.

For more technical details see http://www.phac-aspc.gc.ca/lab-bio/res/psds-ftss/ebola-eng.php

There is an outbreak in West Africa, and some victims have become infected in US and Europe. The problem is that in its early stages Ebola’s symptoms are like flu, but the droplets are of course lethal, even through the skin. There is therefore a very high probability that one person with Ebola will infect another. If more than one person is infected then an epidemic has the potential to kick off.

As there is no treatment for Ebola, the object of the medical profession is to support the victim in isolation while his body fights it off. If it doesn’t, then it’s a case of palliative care until the victim dies. Death can take up to a week, so on this regime every victim requires an isolation bed for a week. If infection rates are higher than one per isolation bed per week (as seems probable) then health facilities will be swamped. If alternative isolation facilities are not found quickly infection rates will accelerate as the volume of bodily fluids leaking increase, and thus the infection rate rises further and the disease infects more people over a wider area. Unchecked, at some point civic order will fail.

There is little good news. While Ebola may not be airborne, as the link makes clear, that is not certain. Also a droplet from a cough can travel a fair distance. The incubation time is from 2 to 20 days, so there could already be tens, if not hundreds of cases in Madrid. And elsewhere.

In the absence of a cure, prevention is the only sure option. The only way to not get Ebola is to not encounter any victim, but they can’t be identified. While at the moment the balance of probability is that you have not met a victim, that probability decreases alarmingly as the number of victims rise, particularly in modern cities. If you work in London, how many people do you pass within a metre of in a day? At some stage avoiding meeting others becomes prudent. A bit later it will become vital.

But we are not yet at that apocalyptic state yet. The best option is to contain the disease in West Africa. That means that their medical facilities need support and order needs to be imposed. With 70% mortality properly run mortuaries are crematoriums are probably more important that actual medical care. Disinfection and isolation regimes must be enforced. If the local governments can’t do it then others must step in. The simple fact is that Ebola poses a far clearer and more potent threat than the ISIL lunatics. And yet our government is focused on the latter.

If it was up to me I would cease all flights to and from the infected area. Now, and until at least one month after the last reported outbreak. I would also encourage other countries to do the same, and reserve the right to cease flights to and from countries that do not impose a similar ban. We did it because of a volcano that might have damaged jet engines so we can certainly do it for Ebola.

I would also get the armed forces ready to move. Not just medics, all of them. As was shown in the foot and mount epidemic here (which is an alarmingly similar problem), their ability to impose order onto a situation that might otherwise become chaotic is well established. They are all trained and equipped for chemical and biological warfare too. I would urge the infected countries to invite them in to help. If necessary, I would seek a UN mandate. The only other alternative is to seal the infected countries borders until the outbreak has run its course. That course could include 70% of the population dying.

We must be clear about what we are seeking to achieve. It is not to cure the afflicted, but to save the as yet uninfected.

Finally I would start to educate the UK public about what might be necessary, and why. I assume (and hope) that contingency plans exist and are being reviewed urgently and in secret. The government needs to get ahead of the game on this – last night’s revelation that there were only 4 isolation beds in the country was not prudent. While precipitate action might cause some panic the consequences of delay are far worse.

As an individual I am fortunate to live in the countryside. We were spared Foot and Mouth on our farm, although we were in the quarantine zone. I hope the rest of the country is as lucky as our cows.

How To Fix The Deficit

A deficit arises in any organisation when expenditure exceeds income. For a company or individual if this is not immediately resolved an unpleasant trip to the bankruptcy courts is likely. Prudent companies and individuals therefore maintain reserves for a rainy day and prudent executives keep a close eye on cash flow. What may or may not constitute a profit is debatable. Running out of cash is not.

Some governments have one other option, which is to run a deficit by borrowing money on the international bond markets, pledging to pay it back with future taxation. This is analogous to using a credit card to pay off an overdraft, and to anyone not cursed with a degree in PPE seems a bad idea. Eventually you run out of credit card or, in international finance jargon, you suffer a bond strike – no one wants to buy your bonds. At which point the government is screwed, as are the people who elected it and, tragically, those under 18 who didn’t vote for it, but get the liability anyway. About the only good news for the UK is that we haven’t had a bond strike, yet. If you run lots of one year deficits you get an accumulation of debt called the national debt.

Time for some numbers. The best source of these would be the ONS, but their website is too detailed so I have used Wikipedia. (It tells you something about government when it’s hard to get to the numbers…). Of course, these are all government numbers, so they may be subject to revision etc. But they’re the best I could find and the message is stark:

In 2014:

  • UK GDP will be £1,470 Billion
  • Tax Receipts will be £648 billion
  • Government spending will be £732 Billion
  • The UK national debt will reach £1,272 Billion

Two key observations:

  1. This year, like every other year for over a decade the government is spending more that it raises.  2014’s aspiration is £90 billion.  Or, to put it another way, of every £10 that the government spends is borrows £1.50
  2. The national debt is approaching the size of the entire economy, and represents twice what the government raises in taxation.

The statement of the obvious is that this is unsustainable and we must be getting close to the point at which the bond market will decide that they have had enough.

Now, in any household or company facing insolvency what you do is simple and unpleasant (but less unpleasant than bankruptcy). Unfortunately there are few in government with corporate experience, so I’ll outline it for you here.




Only at the end of that third stage do you get to celebrate. So let’s look at how the government spends money. The chart below is pretty self-explanatory. The data is from:


141001 UK Govt Spending

The first number worth noting is the £53 Billion spent annually on debt interest. That is 8% of all government spending is paying the cost of the borrowing that governments (of all persuasions) have racked up to date. This amount can only continue to rise until we have a government that actually balances the budget. The next thing is “Other.” I don’t know what constitutes other, but at 8% of the budget if I was the chancellor I’d bloody well find out and stop it. The third point is that much of this seems to be covered by euphemism. I guess Public Order & Safety is pretty much the police and Social Protection is welfare, benefits and pensions.

So balancing the budget requires a cut in expenditure of £90 Billion from £640 billion (we can’t cut the interest bill). That is 14%. If we think that we have had austerity so far, we ain’t seen nothing yet. So far pay freezes for public servants have delivered a little, but given the magnitude of the problem that is simply shuffling the deck chairs on the Titanic. The government either has to stop doing something or impose a pay cut on public services. If 50% of the cost of government is wages that represents £365 billion per year. A 5% cut to public sector pay would therefore save £18 billion per year. This is what Ireland did. A  5% cut to manning levels would be better, as these workers would then be redeployed into the public sector where they would generate wealth.

Social protection, at £222 billion comes out at over £8,500 per household. This seems very high given the low level of unemployment and that the UK average income is around £23,000.  Surely one in 3 can’t be on benefits?  Part of it must be pensions, which could be easily reduced by accelerating the rate at which the retirement age is increased.  Today.  Most pensioners caused the deficit – why should they be immune? This level of government provision has only been made possible through bankrupting the country. The older generations are living beyond their means, and it is the young generations who will be paying for it.

But the stark reality is that cutting alone is unlikely to solve the problem. What can be done to increase income or realise cash?

Increasing government income either comes through a higher level of taxation on the current economy, or a constant rate of taxation on a growing economy. The great hope was that growth would deliver a proportionate increase in tax revenue without hurting anyone and the problem would be solved. Sadly though, this has not happened. The growth is being delivered but it is not translating into increased revenue.

The 2014 tax take of £648 billion represents 44% of GDP. Although GDP has grown by 3% (i.e. by about £43 Billion) this has not delivered an additional £18 Billion of tax. Why? The chart below shows where the UK tax take comes from (same source as expenditure):

141001 UK Govt Income

Again, if I were Chancellor I would be worried about “other” constituting some 15% of my income. I guess that includes inheritance tax and capital gains tax.

National Insurance and Income Tax come from employment. If wages are flat, then receipts will be as well, and wages are flat at the moment. Corporation tax is raised on commercial profits. While there are lots of games that multi-nationals can play, most of this comes from SMEs and for those profits are flat, reflecting the reduced margins that companies are operating on. VAT is a tax on consumption, only actually paid by individuals (most companies are VAT registered and can therefore nett off VAT paid against VAT collected).

Of the £648 Billion raised, £425 Billion is paid by individuals (VAT, NI, Excise Duty and VAT).

The total raised is flat because although the economy is growing well it is achieving this through tight cost control. This keeps wages and prices flat, and reduces corporate profits. While this may or may not change (and those who think it might will need to come up with a compelling reason as competition is now global) as it stands the Treasury can only increase the tax take through raising taxes. If margins are tight then this will not help and it could be that the tax take would fall further. There is some evidence that reducing taxes (particularly corporation tax) boosts the tax take as more companies will domicile in the UK. But the prudent course for the purposes of this debate is to assume that the tax take is constant.

The only other option for balancing the books is to sell assets for cash. At the moment the government has significant holdings in two banks (which caused part, but by no means all, of the national debt). Its holding in RBs cost £44Billion and is currently worth about £26Billion. The holding in Lloyds is worth around £15Billion and it may make a profit of about £2Billion when that is sold down. In terms of the numbers facing the UK that is a rounding error.

I can think of only one asset that might solve the problem, and that is to sell off the NHS. At the moment it’s a money pit and it is perfectly possible for private companies to run hospitals – BUPA does for a start. Rather than running one of the largest employers in the world the government would just have to find some way of underwriting health insurance for those who can’t afford it. Every other county in the EC manages this, so there are plenty of precedents and costing models.

The immediate benefit is that government expenditure falls by £140 Billion, which balances the budget and leaves a surplus of £30Billion or so before the costs of providing healthcare insurance to the poor. That is about £500 per head. As a 51 year old that would reduce my personal healthcare cost to about £1 per day. Bargain.

The next benefit is that as the likely buyers will be domiciled in the UK and making a profit, corporation tax will rise. Similarly the insurers will do more business, invest more premiums into the economy and make more profit.

But the greatest benefit of selling the NHS is that it generates a capital income. So what’s it worth?

BUPA has revenues of £9.1 Billion and a net operating income of £0.638Billion, or 7%. Assuming that the NHS could achieve the same, it would generate a net operating income of £9.8 billion. Treating that as earnings and applying the customary prudent p/e ratio of 10, that makes the NHS worth about £100 billion to take straight of the national debt. Of course, people more talented than me might be able to get much more for it.

Reducing the national debt by £100 Billion (to a still shameful £1,170 Billion) is a 8% reduction. This should reduce annual interest payments by the same proportion, saving £4 Billion per year which would put the government into surplus. That alone would get out AAA rating back, and further reduce the cost of debt.

Of course, it won’t happen as the British public are irrationally fond of the NHS – in spite of a spate of scandals that could only happen in a state run enterprise. And of course the Unions (which includes the BMA and the RCS) would be dead against it. But then unions are inherently socialist and oppose all privatisation as it emasculates them. But, as any objective observer can see, privatisation worked well for BA, BT, and British Gas and very well for the UK, which in 1979 was in another socialism induced debt crisis. It would work well again.