On the verge of ...

John Prescott today warns the Labour party that it is £20m in debt, "on the verge of bankruptcy"

John Prescott is, by the way, hoping to become Labour party Treasurer. The introductory piece in the Guardian is here, the main article here.

Mr Prescott seems to blame Gordon Brown for the Labour Party's problems, although he doesn't seem to condemn him for the state of the country's economy. He says,... the so-called "election that never was", in 2007, cost the party £1.5m in preparation costs ...

Prescott also thanks the various backers who are, currently, keeping the party afloat, namely,

... party staff and volunteers, trade union contributions, high value donations and the goodwill of the Co-op bank ...

Iain Dale highlights Unite's cost-cutting efforts, which somehow managed to increase the Union's 'surplus' by more than £9million in a mere twelve months - a truly astonishing sum of money in these cash-strapped times. And Bob Crow's salary has been increased by 12%. So it would seem that, at the moment at least, the Unions are flush with funds.

When an organisation is deep in debt it's easy for it to be pressurised by those with a bit of cash to push their way and because of this Mrs R thinks the next few months in the life of the Labour Party will be more than a little interesting. She thinks it's not only on the verge of bankruptcy, time will tell.

Mrs R hasn't the time to write more, so suggests you read what other bloggers have to say about this - John Ward in Medway "Labour almost Bankrupt" and Raedwald "Thieves operate in this area".

Edit : And Iain Dale has an idea that might help save Labour from bankruptcy.

....

Forgemasters' government loan(s).

A factory's expansion plans ... have been halted after the government cancelled an £80m loan.

Oh dear, that doesn't look good. It'll probably annoy a few people.

Let's just, very quickly, look at a couple of 'tweets' about this cancellation. First from Edmund Conway who wrote,

... mandelson's big pre-election pr stunt

Mrs R recalls that there suddenly seemed to be an awful lot of spare money just before the election, a lot of things were promised but, in reality, Labour knew the country was broke, had said there 'would be cuts' but hadn't said where, and knew they were not going to be re-elected. So instead of things being widely publicised and then quietly dropped (as had happened during the previous 13 years) all the cost-cutting and all the cancellations were part of the poisoned chalice passed on to the next government.

Lord Drayson tweeted that this £80m was,

a real investment in low carbon jobs

Mrs R isn't quite sure how these would have been 'low carbon' jobs, because the money was intended to help the company to install a 15,000 tonne press to make large forgings for the nuclear energy industry. Mrs R understands that nuclear power might be 'low carbon' because it doesn't involve using fossil fuels, but steel production uses quite a lot, and tends to look a bit like this. (pic BBC).

The £80m was meant to help 'create' about

about 180 skilled jobs

And that, you see, is something Mrs R "'just doesn't get".

If jobs were so important to the last government, why they didn't make a bit more of a fuss or do something a bit more proactive that could have stopped other companies being bought out, with jobs vanishing from Britain for ever. There really are too many instances to list, but do include a lot of chocolate manufacturers including Cadbury's, with 400 jobs lost at Keynsham. Then there was Corus on Tyneside, with the loss of 1,700 jobs to India. The 180 jobs to be 'created' at Forgemasters is all well and good, it's a start, but is tiny by comparison with elsewhere. Were, for example, the thousands of Corus workers meant to be happy to be put on the dole scrapheap?

Looking back to 1998 the government didn't seem to do anything much when, according to Forgemasters own site

the company was sold in two parts to USA buyers - the aerospace business to Allegheny Teledyne, and the River Don and Rolls businesses to Atchison Castings.

It went a bit pear-shaped, and then the situation improved ...

Atchison's management failed to develop the business and in 2003 their whole enterprise went into liquidation. A major turnaround at River Don enabled local management led by Graham Honeyman to ring fence the business from administration.

After two years of negotiation to overcome major hurdles including a difficult market and pension problems, management was able to complete an Management Buy Out [under Dr Graham Honeyman].

who fortunately

... returned Sheffield Forgemasters International Ltd to profit in just six months when he took over the loss-making company in 2002.

Within less than three years turnover increased from £35m to £100m, rising from £83,000 to £150,000 per employee. Today the company is an internationally competitive business with investment in people at its core.

It's a truly remarkable turnaround, and in such a short time too - from being in liquidation to making so much money. It's no wonder Mr Graham Aubrey Honeyman was awarded an CBE and all sorts of other prizes from the RAE and so on. Picture Yorkshire Post

It's strange that, such an important and successful man doesn't have a profile on Wikipedia, but that's by the by - he's done well, and there are people who are grateful to him and his business acumen.

Mrs R is more interested in that £80m government loan which's just been cancelled. You see, she's not too thrilled with that amount of taxpayer's money going to any private business, more especially one that's apparently so successful and which, she's fairly sure, could attract private investments and loans - leaving the cash available for smaller business and, maybe, even to pay for things that benefit the whole country. She wonders if it's a sort of sideways nationalisation, even though it was a 'loan' not a gift, but she could easily be wrong, because she's really quite ignorant about that sort of thing. And anyway, how would you go about nationalising, or part nationalising, just a small part of a multinational company? Anyhow, that aside, Mrs R does note that

The Government loan comes in addition to funds lent by other businesses including nuclear power firm Westinghouse Electric and the Sheffield office of the Lloyds Banking Group.

Errm, Lloyds? That rings a rather loud bell.

Would that the same Lloyds the Labour government pumped a fair bit of money into, so that now the British government is the major shareholder?

And Westinghouse Electric Company? It would appear that this company was bought, in 1999, by British Nuclear Fuels plc. And BNFL is owned by the UK Government.

So, to Mrs R's slightly ignorant eyes it looks as if the previous government had managed to push quite a bit of cash in the direction of by Sheffield Forgemasters - in a roundabout sort of way. She could, of course, be wrong - as she's already said, she's quite ignorant about this sort of thing.

Anyhow, while Mrs R was wandering around the internet learning about companies and loans she discovered that Sheffield Forgemasters was awarded a £2.7million R&D grant from Yorkshire Forward?

Yorkshire Forward is the Regional Development Agency for Yorkshire and the Humber, it was set up in 1999 after people in the north east voted against regional agencies and assemblies - and they got an assembly too, but nobody gets to vote for anybody who works there. There are regional agencies all round the country, and not one of them makes any money, none of them is a business, they are all funded by central government and via the EUs 'Regional Development Fund'.

So it does look as if Forgemasters might have done quite well out of the last government and, actually, there's nothing wrong with that if there's plenty of money to splash around, but there isn't because, as Liam Byrne said, "There's no money left!".

Mrs R wishes Forgemasters' management and all their employees well. She hopes they never find themselves in the same situation as other companies formed as a result of management buyouts, such as Ineos, who decided to base themselves in Switzerland because of the UK tax situation. But they might not have to do that, not with 'global' offices dotted around the world in Africa, Asia, Australia, Europe, North America and South America.

Despite predictions of gloom from Pat McFadden and Dennis McShane The BBC says they'll manage okay without this cash loan, and quote Dr Honeyman, who said

"While the press would have placed the company at the forefront of civil nuclear manufacture, it is important for us now to focus on other elements of the company's development.

"The government clearly has a remit to reduce spending and cut the economic deficit and it is for them to decide how best to do that.

"Sheffield Forgemasters will continue to develop its significant involvement into civil nuclear, thermal and hydro power generation markets and seek other ways to develop the business."

..........

No idea what happened to this post, it was queued to be 'live' yesterday, but blogger disagreed - maybe the software decided it was too bitty and fragmented, and not worth publishing!

....

Debt

In pictures, from BBC

And, according to the Telegraph

The global credit system is flashing the most serious warning signals in almost a year on triple fears of a Spanish banking crisis, escalating political risk in Asia, and a second leg to the US housing slump.

So maybe UK journalists have stopped being distracted by the new government, and the period of apparent calm between the election and yesterday's Queen's Speech. At least they're now catching up with the blogosphere and are writing about the financial situation that will affect us all.

But it might not, eventually, be all gloom and doom, as Simon Heffer says

... we may indeed be about to see an economic debacle of unprecedented proportions in the recent history of the developed world. We shall just have to steel ourselves for it. It may, though, have the legacy of ending the neo-sovietisation of our continent, and allowing a resurgence of democracy in Europe and among European peoples; which would prove, at last, that every cloud does indeed have a silver lining.

....

Gold

If Brown had not sold much of Britain's gold, British taxpayers would be nearly £6 billion better off. Not to mention having an important monetary asset that might help protect the British pound as its sovereign debt faces a possible credit rating downgrade and fiscal deficits and red ink as far as the eye can see.

Having that £6 billion worth of gold reserves would mean that the pain that we all feel as taxpayers in footing the bill for the follies of the government and the banking system would be significantly less. And it would protect sterling from falling in value in international markets leading to inflation.

Quoting Nick Leeson in an interview with Mark O’Byrne at The Market Oracle

Read the rest, it's interesting.

h/t Demetrius in a comment at Anna Raccoon

....

Money pits and poison pills.

It was the Times that broke the story, in their 'Politics' section with the headline "Labour hid ‘scorched earth’ debts worth billions".

Billions of pounds in public money was committed in the run-up to the election campaign in a deliberate strategy to boost Labour’s chances at the ballot box and sabotage the next government.

One former Labour minister told The Sunday Times: “There was collusion between ministers and civil servants to get as many contracts signed off as possible before the election was called.”

One former adviser to the schools department said there was a deliberate policy of “scorched earth”. “The atmosphere was ‘pull up all the railways, burn the grain stores, leave nothing for the Tories’,” he added.

Nothing, so far, in the Telegraph, the Sun, Express, Mail, Mirror, Guardian/Observer, Star, Independent, but today NoTW carries "What a mess they’ve left behind" and the issue has been vaguely covered by the BBC report on Mr Cameron's 'Andrew Marr' interview

Okay, so what's the point in Mrs R saying anything at all about this when there are others with both more financial acumen and better political knowledge who can do better? Well, there are lots of things Mrs Rigby isn't, and she hopes that one of those things isn't nasty. She hopes she's seen by some as being 'concerned' by some of the cheap political tricks that might now be being uncovered - cheap tricks that aren't even new and that have, in the past, been akin to sleight of hand or even gerrymandering. Tricks that hurt ordinary people, people who deserve so much more.

Rigby Town is fairly close to a 'Big City' whose seats were quite narrowly won by Labour, and last week she had cause to go to a fairly deprived part of that Big City. Whilst she was there she met some local people who were absolutely delighted that, at long last, some of their community buildings will be upgraded - including demolition of leaky-roofed old ones. These, they said, are to be replaced with state of the art, brand new buildings - that will be built 'on that bit of waste ground, over there'.

At the time Mrs R's heart sank, because she was fairly sure she'd seen, read, and heard about this sort of thing before. But she didn't say anything, it was neither the right time nor the right place.

Mrs R was shown the plans and the artist's impression - which looked fantastic, a truly wonderful thing for this area, where people have to live with the bird-scarers, several stories up in their tower blocks. She was told the "money has been guaranteed" - they were sure of that.

Then Mrs R was told it was a bit of a last-minute decision that happened not long before the election, even though it was something local groups have been campaigning for for years and years. They've been campaigning because the existing buildings were falling apart, with some sections cordoned off as being unusable and unsafe.

So, let's backtrack a bit, because Mrs R recalls, a year or so ago, how some colleges found themselves in a bit of a muddle. These places had been 'given' money to expand, had demolished old buildings and had barely started construction when they were told they weren't going to get any money after all, even though the building programmes had been approved and all the right forms had been signed - including the PFI loans.

They were told they'd been silly to build, or start building, on a promise, rather than waiting until they had their cash in their hands. It was, Mrs R thinks, Mr Balls who told them off - so she's looked it up. Here's the BBC report, 16 July 2009.

MPs have condemned the "catastrophic mismanagement" of a college building scheme in England which could cost hundreds of millions of pounds.

The Learning and Skills Council, which ran the scheme, and the government are criticised in a report by the committee which deals with further education.

The LSC encouraged colleges to bid for funds and approved projects it did not have money for, their report says.

All this was, it seems, allowed to happen because LSC was to vanish. Maybe they thought the loans/debts would also vanish?

The MPs said that at the time building projects were being approved, the body had been preparing to be disbanded and "wanted to go out with a bang", and had encouraged colleges to "big up" their plans.

But there was no process for prioritising bids and by last November, when the alarm was finally raised, 144 colleges had together invested tens of millions of pounds in preparing bids and getting approval from the LSC.

Recently, it was announced only 13 of those projects would go ahead this year.

Committee chairman Phil Willis, a Liberal Democrat MP, said: "It really beggars belief that such an excellent programme which had showed real success in transforming the further education experience for students was mismanaged into virtual extinction.

"Warning signs were missed and even worse, ignored. LSC didn't notice as the total value of the projects it was considering began to overshoot the budget and a review which could have prompted action was shunted around committees and policy groups."

It would seem that this gung-ho approach to finance might have continued right to the end of Labour's time in office. Get people/schools/businesses/local groups to spend their money putting together the right sort of funding claim, which put money into consultants pockets and, in these instances, took it away from education - where it was most needed.

Money was there 'for the bidding', and promises were made, but nobody seems to have taken the time to sit down and add all the numbers together - but it didn't matter too much, because somebody else's name would soon be on the office door, somebody else could deal with the mess. And nobody had thought it might have been wiser to spend some of the consultation money on renovation and extension - because they were told things had to be new.

That, to Mrs Rigby, epitomises what Labour has done to Britain. It promised, and failed to deliver. It raised hopes, then secretly withdrew promises. It told people they were silly when they were upset, that it was their own stupid fault when things went wrong.

Nobody in government ever put up their hand and admitted they were wrong, nobody ever admitted a scheme or policy was flawed - the most that happened was that 'flagships' were quietly disappeared, and replaced by a distractingly shiny new one, in the hope that nobody would notice.

The Labour government spent millions on putting together plans that were never brought to fruition, they spent millions on rebranding departments and creating pretty logos that, ultimately, only led to public confusion over who had responsibility for what 'thing' - because they even changed the names of the 'things' so we didn't know what they were talking about.

And in the meantime the coffers were running on empty and, because they were all scurrying around thinking up new ideas, neither Government nor Unions seemed too bothered, not really, that Cadbury's was being sold, nobody seemed too bothered that Corus was bought by some Asian chaps, nobody seemed too worried about the demise of Jaguar - none of it mattered because the redundant and unemployed would be able to claim benefits.

There was never a consideration that every single penny of the money to pay those benefits originated within the private sector, which was rapidly disappearing, and no consideration that some people prefer to go to work, and not be dependent on state handouts.

And, nobody seems to have cared much about the community in 'Big City', who have patiently waited, for almost the whole term of the last government, for their building to be either renovated or replaced - because they believed their MP. This community's high hopes may be dashed because his last minute promises of funding for their sparkling new building are likely to have been empty promises, that would have vanished even had Labour been returned to office - because that's the way they were, building castles in the air. People didn't count, just politically expedient promises to ensure personal advancement and a seat in Westminster.

....

Great?

According to 'Burning our Money' Britain has become great again, but not in a good way. We have the greatest government deficit of the developed world

Here's an extract :

we must just record an eye-popping chart recently published by the OECD. It shows their estimate of the fiscal deficit each of their members will clock up this year (as a percentage of GDP). And as we can see, we are at the very bottom of the league.

THE VERY WORST GOVERNMENT DEFICIT IN THE DEVELOPED WORLD.

You should remember this chart next time you hear Brown/Darling or one of their media apologists telling us we are helpless victims of an international problem. The reality is that we are worse placed than anyone else - including basket cases like Ireland and Iceland.

See the chart here and weep, for us, our children, our grandchildren and probably our great-grandchildren too.

Who would have thought that a mere twelve years of socialism could do this - thanks Gordon!

Territorial Army loses out to FairTrade

On 10th October the FairTrade organisation carried an article announcing this

The Fairtrade Foundation is celebrating 15 years of the FAIRTRADE Mark with news that the UK Government is to provide £12 million over the next four years in funding to Fairtrade and its international partners

On 10th October our newspapers report this

The Territorial Army has been told to stop training for six months to save millions of pounds from the Army’s budget because of growing financial pressure on the Ministry of Defence.

Mrs Rigby notes that the Ministry of Defence carries no article referring to the cuts, nor does it carry any recent article referring to the well-known fact that members of the Territorial Army are being used on operations overseas, alongside the regular Army.

The Mirror is pretty annoyed :-

Britain's part-time soldiers will be at risk in battle after devastating cuts to the Territorial Army's training budget, experts warned last night.
In a desperate drive to save money, defence chiefs have ordered £6.4million a year to be saved. They have even axed live firing on ranges for the TA.
Just two weeks ago, a TA soldier was shot dead in Afghanistan while guarding his base.

Mrs Rigby knows that her comment about this is late, but put alongside last night's little announcement that bits of England are up for sale to the highest bidder it all smacks of Britain being a "posh coat and no drawers" country.

The British Government is giving FairTrade more than twice the amount that the TA needs - and that money will have been either borrowed or will be fresh off the printing presses as a result of 'Quantitative Easing'.

Brown and his chum Darling know we can't afford overseas aid - but they don't care any more. They know that by sometime next year they're unlikely to be in charge of anything governmental, so it doesn't matter.

Brown seems determined to pretend that Britain is rich. He prances around the world stage telling everybody who'll listen that we're well-off. He tells them that his policies have staved off recession and to prove it he has to send loads of money overseas.

But, surely it's all a long-term con. They know their speeches will be on record for all to see, and so will the proof of their largesse. They're sure to refer to all this once another party holds the reins and has to do the mopping-up exercise and try to find realistic ways of paying the burgeoning bills - including those currently concealed by creative accounting and PFI.

When is Brown going to realise that there's no news blackout? When is he going to realise that the rest of the world knows very well what's happening in Britain and is sniggering behind their curtains?

Brown and Darling refuse to even think about cutting benefit payments. They daren't, because if they did the bubble would burst and the idle would have to think before they spend - and when that happens they get angry and march on Parliament, at least they did last time and managed to bring down a government.

So what does our Labour government do? It tells the world our Army is underfunded, and proves it by shutting down our reservist training - neither of which are particularly clever things to do when you're fighting a war. Then Government announces that it's going to sell off bits of the country, whilst also thinking of new money-raking scams such as fining people up to £1,000 for putting dirty rubbish in the bin.

The country is beginning to feel a bit like a sale at a decaying big house - one that's being sold off to pay death duties. Some are viewing the crumbling remains with dismay, a little surprised by the trash and soiled linen that's up for sale, whilst others are picking over the spoils of our once-wealthy nation, hoping to pick up a bargain that will eventually line their own pockets.

Britain was once rich. Britain was once proud. Labour has destroyed our pride. Labour has spent the country's money.

Labour policies have quietly stoked the flames of dissent, whilst ordering us to be 'inclusive' and introducing draconian laws that stifle free speech - except for the favoured and sometimes violent few who mustn't be upset. Social policies have split the country into warring factions. Labour has encouraged a culture of envy, greed and spite, whilst hiding behind a smokescreen of tolerance and equality.

Labour has encouraged an apologist state, one that denies the good in our past. Britons are ordered to welcome the diversity of incoming hordes, rather than encourage newcomers to assimilate, acknowledge and respect not only our language but also our own rich history and culture. A culture that Labour has done its utmost to dilute - claiming those who cling to our tattered banners are either racist or xenophobic.

Labour, when it eventually falls from power, will leave Britain resembling a dying lion, our proud national beast. Rather like a dead lion Britain will quietly succumb to the circling vultures who care only for themselves.

Bits of England for sale.

The Government has announced, late on a Sunday (article timed 6.56 pm BST in the Telegraph) and the day before Parliament returns from the Summer Recess, that it's going to be selling off bits of England to the highest bidder.

They will be selling :-

Both Dartford Crossings (bridge and tunnel) - part of which were meant to be toll free by now.

The Student Loan Company - that hasn't even managed to "loan" enough money for the current years' students to pay their tuition and accommodation fees.

The Channel Tunnel rail link.

The Tote, about which Mrs R knows absolutely nothing.

A 32% stake in Uranium Mining company Uremco.

A proportion of the state -owned property portfolio - which of course won't cause a property market crash.

They hope to raise a total £16 billion pounds, which should be enough to clear a bit of Britain's current debt - but will leave the country poorer in the long term because income from these sources will no longer land in government coffers, instead it'll go into a private company's pockets. (Mrs R thought Labour preferred socialism to capitalism.)

Of course they won't have made the same mistake as when they sold off the gold, causing the price to plummet, or will they?

Mrs R notes that each of the tangible assets is in England, nothing from either Scotland, Wales or Northern Ireland is being sold, and there's no consideration of reducing public spending by, perhaps, reducing payments made to layabouts who can't even be bothered to get out of bed to earn enough to put food on their table.

Asset stripping? Surely not!

UK's debt increases by £10.6 billion

Just spotted on Letters from a Tory.

On the 23rd May 2009, the Government put in place a new Statutory Instrument (in effect, a law that doesn’t need Parliamentary approval) that altered the Industrial Development Act of 1982

and

We are going to have to borrow a record £175 billion a year to balance the books and national debt is going to double, yet Gordon Brown is just burning our money for the fun of it

and

In the last few days alone, our national liabilities have increased by £10.6 billion. Gordon Brown has crippled this country for years to come

Please read today's Letter (addressed to Hazel Blears), it's here.

It's all very unsettling, and desperately worrying for the future.

Mrs R isn't at all pleased with the way this government appears to be deliberately removing any chance this country may have of a decent future, and doing it without parliamentary discussion because legislation put onto the statute books using Statutory Instruments.

For a few years Mrs R has had a bee in her bonnet about government's use of SIs to push through almost secret laws, her family told her she was bonkers.

Seems not.