Sunday, March 31, 2013

An Easter Message from Pope Francis

Greetings, earthlings... I mean fellow peoples of the Earth.

Please excuse my inelegant translation into English. I come from a country of Spanish-speaking Catholics, mainly thanks to the Conquistadors. They were a little like those Crusades you English used to go on, except they were smart enough to wait until they had guns before they started trying to enslave an entire continent to their belief system.

In my first Easter message since my promotion to the top job, I want to try and get the Catholic church to reconnect to the youth of the world. Although some might say we've been getting a little too connected to the youth of the world, if you get my meaning! Still, as my predecessor might have said "Zey ver only followink zeir holy orders" - I'm kidding Benny, relax. This isn't Nuremberg.

There have been allegations made against a number of our brethren who were less than discrete, some of whom were kind enough to die before any of it could get all Lionel Messi in a court of law. Let me say right now that the Catholic church abhors the sexualisation of children. If you make them all look pretty, how are we supposed to choose between them?

Like any business, the Catholic church needs new customers in order to survive. Our congregations are dwindling and ageing, and the policy of banning contraception against procreation doesn't seem to be churning out as many new ones as it used to. That's why we need to reach out to the young people.

You know kids, Easter is about more than complaining because your Nan could only afford to get your egg from Poundland this year what with the gas prices going up and everything. It's a time when we remember the sacrifices of Jesus, who came from God to save us all and ended up getting happy-slapped by the Romans in a drive-by nailing.

Yet Jesus rose again, a bit like that Tupac hologram at the Snoop Dogg concert (draft note - do kids still listen to Snoop, isn't it all Little Mix and Beiber these days?) except in a more touchy feely kind of way. He came back, and then he was gone again. A bit like B*witched, but without the double denim.

While we're on the subject of comebacks and history repeating, a quick hello to all of you on Las Malvinas. I haven't forgotten you're there, and I look forward to seeing you all sooner than you think.

So to summarise for you my children, remember the message of Easter. Don't fuck with authority, or they'll hang you out to dry and bury you under a rock. Remember that next time your priest tells you to keep something quiet, capiche.

This is P-Frankie, saying peace out.

Wednesday, March 20, 2013

I Condemn This Budget To The Bin

So, at 12:30pm George Osborne stood up in the House of Commons and told us all straight.

His target for reducing the national debt - missed.

His growth forecast - halved.

Government borrowing - up on one measure, only down on another due a freak underspend by Government departments.

Not a great start. Still, now these things are all out in the open we can get back to putting the ship back on course, right?

Apparently not.

Despite the cupboard being bare, apparently there was just enough left to play belated Santa.The rise in the income tax personal allowance to £10k has always been on the cards. It was a Lib Dem commitment at the last election and will lift a lot of people who are working part time out of tax altogether.

Based on previous rises in the personal allowance however, it will be accompanied by a lowering of the point at which the 40% tax rate kicks in. So while some will be taken out of tax altogether, others will find their take home pay falling.

Not those with income over £150k of course, who will benefit from the 5% lowering of their tax rate already announced, having already managed their income in such a way as to avoid the 50% rate.

There was also enough in the cupboard for the government to start underwriting mortgages and lending money for deposits. To cut the main rate of Corporation Tax to 20%. To put an extra £15bn into road, rail and other construction projects. To give tax breaks to the shale gas extraction industry, despite their dubious environmental credentials. To compensate those who lost money on Equitable Life policies.

Not everyone got a gift under their tree from George this year however. Most government departments are finding their budgets cut by 1% in each of the last two years. At a time when their fixed costs are rising (utilities, transport, consumables) these savings are going to have to come from more "efficiencies". It cannot be done without there being some effect on services.

The level of cuts in public spending is going to be deeper than originally planned, an additional £1.5bn on top of the £10bn scheduled. Again, how can this be achieved without an adverse impact on public services?

Public sector staff find their wage rises capped at a level well below the rising cost of living again. Those who we rely on to provide essential services are being denied the opportunity to earn a living wage.

Still, if you drive a car (which we're all supposed to be doing less of to be "green") or like a pint of beer (which we're all supposed to be doing less of to avoid putting strain on the NHS) then good news. The planned fuel duty escalator increase has been canned, and duty on beer has actually been reduced by 1p per pint - a decision that may find Osborne in conflict with the European Courts of Justice, who ruled in 2008 that treating beer and wine differently for duty purposes offers indirect protection.

From the outside, this is a budget that lacks focus. It's as if a whole load of different policies have been placed in a National Lottery machine, and the first few out have made it into the speech. Carrots have been dangled, sticks wielded but with not with the intention of getting the donkey that is the economy to go in any one particular direction.The acid test is whether in 12 months time when Osborne stands up again, he has the better news to report that the "independent" OBR forecasts suggests he will.

I won't hold my breath.

Thursday, March 07, 2013

On The Origin Of Competition


When you think about it, competition makes a lot of sense.

If I can only buy something from one particular shop, then that shop can set its prices at whatever level it feels like in the knowledge that I have no choice but to buy it from them. Particularly if that item is something that I really need in order to survive.

Competition is the reason our planet, and indeed our species, looks the way it does today. Over billions of years different plant and animal life has learned to out compete others, in order to make best use of the conditions and resources available to it. In terms commonly associated with (but never actually used by) Charles Darwin, it's survival of the fittest.

So if instead of being able to buy my gas from just one supplier, or use just one bus or train company to get me to work every morning I had a choice of two or more, it stands to reason that I would get a better deal, right?

These businesses are going to be competing for my money. They'll be falling over themselves to offer the best service at the lowest prices in order to get my business rather than have it go to their competitors.

That's the theory at least, behind a lot of economic and political ideology.

So why doesn't it work? Why have welfare to work programmes contracted for on this basis failed spectacularly to deliver? Why do utility prices continue to rise? Why do service standards and cost to the customer seem to be drifting apart in the wrong direction on public transport?

It's us. Homo sapiens. In particular, the first world variety.

We're greedy. That's not an insult. I'm not using it as a pejorative term here. It's our greed that has enabled us to survive and flourish as a species. We understand the value of having resources and keeping them to ourselves.

Once upon a time that might have been having the biggest stash of berries in the settlement, or the most number of goats on your particular farm. These days it's about having as much cash in your bank, or your pension pot, or on your company balance sheet as you can possibly get.

If you're a business, you do that by winning and keeping as many customers as you can. The best way to do that, so the ideology says, is to keep your prices low and your service standards high. Give people good service at reasonable prices and they'll keep coming back. Problem with that, is that it tends to eat into your profit margins.

If you're not making profits, then you're not an attractive proposition for those investors with the really big money to sink their capital into. Not Joe Public, who buys and sells the odd few shares here and there and fancies himself as a bit of a trader, but the pension funds and hedge funds who have billions to invest, all in the interest of making money for their own investors.

Drive down costs, keep prices as high as you can get away with and you'll have these big boys beating a path to your door in search of a quick return on their clients money. If you can get together with your competitors on the quiet and all agree to set your prices at a particular level, then there's money to be made for everyone and no need to really compete. Instead of struggling to get to the trough and having the weakest starve, just agree to build a longer trough.

So we've tried competition as a business model, and found it sadly lacking for the end customer in the utilities market, in train and bus travel, in telecommunications.

So why on earth does anyone in their right mind want to introduce it wholesale into the way we educate our children, or the health services required to keep us alive?