Snouts in the Trough

The recent shame-faced admission by the “warmist” Met Office that there has been little to no global warming since 1998 and that there’s unlikely to be any till 2017, gave a wonderful opportunity to get some calm and reason into the man-made global warming debate. Unfortunately, that opportunity was lost due to the intransigeance of both the warmists and the global warming sceptics.

After the Met Office’s announcement – naturally not reported by the Guardian or the BBC – the warmists shouted that the earth is still warming despite the last 14 years of negligible warming. Whereas the sceptics yelled that this proved global warming was a fiction and the warmists had been fiddling their figures to all along prove something that wasn’t happening.

But the importance of the Met Office’s announcement seems to have been missed. It’s probable that the earth is warming. But the key issue is not whether it is warming, but what is causing the warming. In the 14 years since 1998, with the rise of the Chinese and Indian economies and the massive increase in greehnouse gases caused by the coal-burning power stations in China and India, more Co2 has been released into the atmosphere than at any time in human history. Yet this massive increase in Co2 has not led to any noticeable warming. Why not?

The obvious and only conclusion must be that, if there has been warming prior to 1998, it cannot have been caused by human activity. If it had been caused by human activity, then warming could not have stopped in the 14 years in which more CO2 was emitted than ever before.

So, there may be a long-term trend of warming, but it cannot be a result of mankind’s activity. More likely is that the warming is cyclical, caused by the sun’s activity and that we will soon enter a cooling phase.

Remember, in the 1970s the Met Office and other climate experts told us we were entering a new mini Ice Age and that there would be massive crop failures in the Northern hemisphere because of the cooling and a migration of people south in order to survive the cooling. That didn’t happen, yet we’re still waiting for an apology from the Met Office and other like-minded “experts”.

Conclusion, there may be a warming trend. But it cannot be caused by human activity.

As I predicted in my blog on 16 November, our MPs have started lobbying for a pay rise from about £65,700 to somewhere around £86,000. Of course, they’re not demanding this directly. Oh no. Instead, the misleadingly-named Independent Parliamentary Standards Authority (IPSA) is recommending the pay rise. In my latest book (GREED UNLIMITED pp 72-76) I explain how IPSA has been turned by Bercow, Cameron, Adam Afriyie, Tom Harris and others from a supposed “watchdog” into a neutered, toothless and thoroughly obedient lapdog that does whatever its masters tell it.

But let’s remind ourselves how much of our money our MPs get. Salary – £65,700. Their allowance to pay staff was recently increased from £115,000 to £137,200 (and £144,000 for London MPs). Many MPs hand around £30,000 a year of this to wives, partners, children, friends, friends of friends and so on. Then there are MPs’ generous, taxfree expenses. So successful have our MPs been in watering down IPSA’s rules and increasing their own allowances that in the year before the 2010 election they claimed about £130m in expenses, yet last year this had shot up to nearer £150m – about £30,000 per MP more than before the expenses scandal broke.

But we’re not finished yet, there’s much more of our money flowing into MPs’ pockets. A truly incredible 90 MPs are supposedly “government ministers”. With 362 MPs in the Coalition, about one in four is a minister, giving Britain over twice as many ministers as Germany, Italy, Spain or France. Why so many ministers? Because it gives MPs (and some Lords) real salaries of from £89,435 (33 parliamentary secretaries) to £92,000 (20 whips) to £98,740 (29 ministers of state) to £134,565 (21 cabinet ministers). Top civil servants have been known to complain that they can’t find enough things for all these ministers to do. One parliamentary committee wrote a rapidly-buried report “What do ministers do?” recommending a cut in the number of paid ministers.

Then, of course, many MPs have second, third and fourth jobs – which they only get because they are MPs – earning them £100,000, £200,000, £300,000, to socialist David Miliband’s £500,000 a year while being paid by us to represent their constituents.

But all this is not enough for our greedy, self-serving, hypocritical, lying, thieving MPs. They want much more. They now plan a two-pronged attack on our money. On the one hand they want to increase their salaries. On the other, they want further loosening of the rules on what they can claim in expenses. Also they want to have their expenses claims exempt from Freedom of Information rules so we can never again find out how much they are stealing.

Sadly, there is nothing we can do to stop this new attack on our money by our utterly corrupt, hypocritical, self-serving, thieving MPs. But as our MPs appear on the media justifying bigger salaries and bigger expenses, please remember we don’t need 650 MPs any more. With the EU and the regional assemblies making most of our laws, 200 MPs at Westminster would be quite enough – after all, the US only has 435 members of Congress for over 250 million people.

I apologise that I’ve written about this before. But it’s important.

I was in the bank yesterday. At the counter beside me was an elderly couple, probably in their mid-seventies. They’d come in because one of their fixed-interest bonds had matured and they needed to reinvest the money as they required the interest to live on. They looked pretty shocked when the best 2- and 3-year deals the bank would offer were around 2.3% – less than the level of inflation. The reason interest rates are so low, of course, is idiot Osborne’s Funding For Lending (FFL) scheme which means the banks don’t need to attract our savings.

But the elderly couple needn’t have worried. The ever-helpful bank offered to arrange a meeting with the bank’s “financial adviser” (commission-based salesperson). I don’t know what would happen at that meeting. But I imagine the elderly couple would have been persuaded to put their savings in some crappy supposed “investment” that would earn the bank and the salesperson plenty of commission.

Probably the bank would have flogged the couple one of their “structured products” promising something like “80% of the growth in the stock market but a guarantee of your money back in full if the stock market fell”. Around £60bn of (mainly elderly) people’s savings have gone into these worthless products. I assume the people persuaded to put their savings into these products don’t understand that almost all the benefits of any stock-market investment come from the dividends paid by companies whose shares you own, not from rises in the overall market. Yet these structured products don’t pay any of these dividends to savers. With the banks earning probably 3% upfront when selling these products and 1% a year in trailing commission, the banks have probably pocketed around £1.8bn in upfront commission and are taking £600m a year in trailing commission.

Osborne has created a disaster for the elderly. His FFL has led to interest rates on savings being slashed. This has forced people with savings to look for financial products with supposedly better rates of return – usually complicated, risky, stock-market linked schemes. The older generation are much more trusting of banks than younger people and so believe what banks’ “financial advisers” say.

A few years ago, Barclays and other banks managed to wipe out up to half of many elderly people’s life savings by convincing them to put often hundreds of thousands of pounds into two horrific funds run by Aviva. Now the banks are flogging structured products to the unwary.

This week my mother, who is in her mid-eighties, had a meeting with her bank about reinvesting money from some bonds that had matured. I had a really difficult conversation in which I tried to warn her about what her bank would try to sell her. Her reply was “I’m not stupid”. But the hundreds of thousands of other elderly people who put £60bn into structured products weren’t stupid people either. If they had been, they wouldn’t have managed to amass so much money. Yet they still got conned by their banks. 

If you have any elderly relatives, you have to start talking to them about their money. It’s not an easy conversation to have. But if you don’t have it, their bank will fleece them.

Today our honest, hard-working, selfless politicians go into battle about whether many benefits should only increase by 1% a year. Our TV screens are taken up with fools from both parties pontificating about the issue. What a complete waste of time.

It was the Coalition that increased benefits by around 5% just over a year ago. So their claims to be holding down the cost of benefits are ludicrous. As for Labour, the idiot Gordon Brown, aided and abetted by Ed “borrow-borrow” Balls created an unbelievably complex and administratively expensive system where 5 million unemployed and 15 million employed rely on state handouts. With benefits costing over £200bn a year, a third of all tax receipts are given back in benefits.

Unfortunately, having never had a proper job, most of our politicians don’t understand that complexity drives up cost. The more people who receive some form of benefit, the more administrative transactions there are and the more expensive the whole thing is to run. Moreover, there is a simple rule of thumb – with money given out by the UK government 10%-20% will be lost to administration costs, fraud and incompetence: for the EU it’s over 30%: for foreign aid to Africa, India and Pakistan, repeated UN studies have shown that over 80% disappears due to administration, fraud and incompetence.

What’s needed is a massive simplification of the tax and benefits system with the aim of taking as many people as possible out of paying tax and out of receiving benefits. This could include raising the rate for basic rate tax to £12,000 taking millions out of paying tax and then claiming tax credits. Lowering the threshold for higher-rate taxpayers, so they don’t get the money from a higher basic-rate threshold. Scrapping child benefit, or at least restricting it to the first two children.

There was a useful principle that consultants sometimes used when thinking about making changes in an organisation – USA. That stood for Understand: Simplify: Automate. No doubt helped by Osborne’s useless Office for Tax Simplification (remember the pasty tax, the caravan tax and the granny tax) our hopeless politicians keep tinkering with tax and benefits making them more complex, more expensive to run and easier to defraud. Perhaps the Office for Tax Simplification’s motto is not USA but CCC – Complicate: Complicate: Complicate.

Anyway, restricting increases in benefits to 1% will save around £1.5bn a year. When one million Romanian and Bulgarian families move to Britain over the next year, this will cost us over £30bn a year in schooling, housing, healthcare and benefits. Saving £1.5bn while increasing public spending by £30bn is a strange way to reduce the deficit.

When thinking about Britain’s future, “6%” may be the most important number you need to know. Why?

Because in an opinion poll, people were asked: “Which of these statements do you believe to be the most accurate?

A) The Coalition is planning to cut the national debt by £600bn between 2010 and 2015
B) It is planning neither to reduce or increase it
C) The Coalition is planning to increase the national debt by £600bn

Only 6% gave the correct answer: C; 49% thought the Coalition was planning to slash national debt; 14% said it would keep it the same and 31% didn’t know.

So why is this so important? Because only around 6% of voters understand that our national debt will rocket under the Coalition. Because only 6% of voters understand that the Coalition is hardly making any cuts to public spending. Because 94% of voters don’t realise that by the 2015 election, Britain will owe around £1.4trn and to all intents and purposes be bankrupt.

And if 94% of voters don’t understand that there is no money left, then many will believe Ed “borrow-borrow-borrow” Balls when he and Miliband claim they can save our economy by borrowing more and more and more.

With only 6% of voters understanding that our debt is increasing, Labour are virtually guaranteed a landslide victory at the next election. That will lead to a crisis in investor confidence, a huge increase in interest on government debt and a collapse in the value of the pound. To stave off national bankruptcy, Miliband and Balls will launch punitive tax raids on our savings and pension funds. We have about £3.5trn in savings and pensions. By 2016, the Miliband/Balls government will owe close to £2trn. “Go figure”, as the Americans say.

It’s truly  staggering – only 6% of Brits realise that a deficit means debt increases. God help us!