Monday, 19 July 2010

Rolling Out The BS

I really want to like this 'Big Society' thing, truly I do.

If I understand it correctly, the BS (oh dear, that's an unfortunate acronym, isn't it?) is libertarian by its very nature. A reduction of public reliance on the state is very long overdue after the country has, over decades, allowed itself to be seduced into believing that any problem - however inconsequential or unrelated to the original role of government - can only be solved by a larger state, unsustainable expenditure, and higher taxes to pay for it.

I'm sure we can all point to tasks which are currently undertaken by the state, or local authorities, which shouldn't be their concern and can, and arguably should, be handled by the public or by community associations. Better not go there or we'll be listing them all night.

Community can only benefit by a greater contribution from citizens, rather than just expecting someone else to do it on their behalf ... hand-in-hand with the inflated cost in taxes that involving the public sector brings. Plus, people always, but always, do things better than anything which gets within an inch of authority.

It all sounds so good, doesn't it?

Except that I can't quite get past this bit without feeling a trifle irked.

Also announcing plans to use dormant bank accounts to fund projects, Mr Cameron said [...]
Err, sorry, I wasn't hearing what he said after that. Because isn't this, as Longrider calls it, theft? And, as others have mentioned, if not theft, how is this different from taxation?

It's not government's money, every penny of it belongs to an individual. The banks have the investors' names - God knows they make damn sure of that - and even if addresses have changed, with modern technology it's easily possible to allow them the opportunity to reclaim it, though I don't see anything here which mentions such a thing.

If the account holder has been pushing up daisies for decades, there will still be a value which could come in very handy (especially with compound interest added) for their next of kin, and it should be returned there. Good for a re-energising of the economy, no?

Even if - and I certainly don't subscribe to this view - you believe that one loses the right to claim your money after a certain period of inaction, why is this liquidity to be taken away from the banks?

Horace Arkwright's nest egg of £8 10s 6d which he invested with the National Provincial Bank in 1951, before dying of a stroke whilst 'on the job' with Maud from the baker's, has been pinging around the system for so long, it's now quite a tidy sum. It's probably overnighted so many times that Horace would be applauding jealously from his cloud, and each investment by the bank grew his contribution to the financial sector's reservoir of ... lending cash.

Add these little pots together and you have a great big financial monster bucket of cash to lend to, well, those who are crying out for ... more lending in a recession. Horace may have once dreamt of buying a new pigeon loft, but his dormant money has probably helped facilitate any number of newly-wed love nests over the years, and maybe even a few business start-ups too.

Cameron says this isn't a clever way of disguising cuts. I believe him. Instead, it's a clever way of redirecting privately-held money into a new state-administered 'Big Society Bank'. And that is quite obviously nothing to worry about at all, is it? No, not in the slightest. None would ever be so cynical as to suggest such a thing, eh?

Well, maybe one.

- The Big Society Bank will of course be controlled by the politicians, or their chosen appointees.

I wonder if the government will be able to keep their sticky little fingers off the millions that will be hoovered up by the Big Society Bank?
Hmmm, whaddya think?

There was someone talking perfect, and incontrovertible, sense today though.

Shadow Cabinet Office minister Tessa Jowell called Mr Cameron's speech "a brass-necked rebranding of programmes already put in place by a Labour government".
Yep. Can't argue with that.

It was the Labour government, while Gordon was scrabbling around squeezing every possible financial lime till its pips squeaked to pay for his excesses, who introduced the legislation which allows Cameron to steal other people's money.


Witterings From Witney said...

The point is DP, as MW pointed out on his blog, this money just doesn't exist as it has already been lent on other ventures!

Do read:

Yet another spot-on post by MW!

Dick Puddlecote said...

I think MW is saying the same sort of thing as me.

The £400m has already been lent out with just the liability remaining.

This is now just a £400m bank grab.

It's not stealing investor money unless a law exists which allows them to (which there is).

Another state-owned bank.

Just another tax.

New boss, old boss.

Twisted Root said...

DP, type into a search engine 'Big Society Saul Alinski', Dave's a big fan apparently. It's where he got his 'nudge economics' idea from.

Bucko said...

I haven't really immersed myself in this BS thing but it still troubles me. When a government sees a problem and wants to be seen to be doing something, they are not content with removing the problem, they feel a need to replace it with something else.

They often do something wrong and get a public outcry, but instead of putting things back the way they were, they have to come up with something else.

Repealing all the unnecessary laws should be enough. I see no reason for new ideas and media soundbites to be brought in as a replacement. If they just left people alone, the "Big Society" would probably create itself without any need for the government.

It looks like the big repal is going to be a load of BS too though. If they won't even look at the smoking ban then all their liberal words are meaningless.

Trooper Thompson said...

Twisted Root,

spot on (although typo on Alinsky). 'Big Society': straight out of the vision of the anointed.

Sam Duncan said...

The BS rang alarm bells for me long before I discovered the Alinsky connection.

More citizen involvement is a good thing, don't get me wrong, but minor citizen involvement in something that's still essentially centrally-planned and tax-funded isn't anything like libertarianism. Big Society is not incompatible with - indeed, it's a programme of - big government.

Amusing Bunni said...

Stealing money from people just because the account is "dormant" is horrible.

You guys should all withdraw some money from a bank account every so often, if you have some "nest egg"

BS is accurate on what this is, DP.

banned said...

That £400m will have been lent out X 10-40 as 'leverage' which is why the banks got into trouble in the first place.

There was a time when I used to know how to do compound interest and would have been able to work out what Horace Arkwright's nest egg of £8 10s 6d would now be worth.

Guthrum said...

They did exactly the same over the TSB bank it was a 'mutual' movement that was bigger than Barclays run for the benefit of its depositors. The TSB was owned by its depositors.

In 1986 the Government 'privatised' it handing control over to shareholders. Twenty years later it is part of the Bankrupt Lloyds TSB group.

Only the Airdrie Savings Bank stayed outside of the TSB conglomerate, and still thrives.

Mick Turatian said...

Interest does not accrue to dormant accounts.

Anonymous said...

The Big Society WILL stumble at its
first challenge , the need for most
citizens to participate.
Humans achieve most when they join
together in debate,discussion,communication and
fraternal endeavour. Thanks to
governmental regulation,restriction,dictat,
short sighted interference and
corrupt advice they have nullified the centres of communities
The pubs ,the clubs ,the Legions,
the institutes,once the hallmarks of social cohesion are now closed,
empty, places of division,venues
of segregation and distrust.
Without a re appraisal of current
restrictive regulations , the
Big Society is a worthlless ,stillborn dream of
poorly advised fools.

The Ferryman.

Pat Nurse said...

NuLab was made up of thieves, liars, cowards and bullies so what's changed under The Moron? I'm still waiting for this "nu way of doing things" with his "nu-style of politics" - all sounds like a nu load of Balls to me!

hangemall said...

From the BBC link:

"Each of the project areas - which Mr Cameron said had approached ministers asking to be involved - will be given an expert organiser and dedicated civil servants to ensure "people power" initiatives get off the ground."

What's the betting that the "organisers" will turn out to be controllers and the civil "servants" turn out to be masters?

Just another way to keep the underlings under control?

If it isn't, what would happen if the local people wanted something different from the organisers and civil servants?

In any event, who honestly thinks that the government could appoint anybody who could locate his own arse with both hands?

If you have to get someone in from central government give the jobs to those who have reduced their government departments' costs by at least 40% (and not by dumping work onto others.)

Give them a very generous salary for two or three years to set things up and then fuck them off. If they make a cock-up of it, they never get a penny of taxpayers' money again (except the old age pension.)

J Bonington Jagworth said...

"Interest does not accrue to dormant accounts"

It does to the banks, though!

As for Horace Arkwright, I make his investment over 59 years worth £2358 at 10%pa. If it had made a steady 12%, it would be worth £6828. Of course, interest rates were at an historic low in 1951, but there were some rather higher ones in between!

Going off at a slight tangent, I learned today what BT charges retailers every time they use a PIN machine to process a card transaction, a call that lasts about 8 seconds. It's 18p, which explains why so many shops won't touch plastic for goods under a tenner. This might not sound much, but that's on top of the percentage raked off by the credit card company and multiplied by a hundred or so per day, results in a quarterly bill (there is also a £199 rental charge for the 'secure' line) of some £2000.

So BT is charging small businesses 2p per second and is still, apparently, pleading poverty!

Anonymous said...

So, let's test this BS idea and set up a club for disabled smokers, you know, where they can meet, have a drink and a smoke, play darts....


banned said...

J Bonington Jagworth said
"I make his investment over 59 years worth £2358 at 10%pa. If it had made a steady 12%, it would be worth £6828."

Thanks for that, I only add this comment because the WV is ponsi, honest!

Dick Puddlecote said...

JBJ: Thanks very much for the figures. You're right that banks will have made out of Horace's money ... and re-lent it too.

Though I have to say that if Mick is correct, I find not adding interest to dormant accounts would appear to be crooked in itself if the investor were to claim their money at some time.

I'm wondering how much overnight lending might suffer from Dave's initiative. The biggest payer of interest relies on the least liquid funds being utilised. Taking £400m out of that seems to be rather counter-productive if we want our banks back healthy again. No?

J Bonington Jagworth said...

Horace has reminded me of the episode in Futurama where Fry (who has been thawed out 1000 years hence) visits his bank and discovers that he's worth rather more than he expected.

Even 5% interest on £8.52 compounded over that period would come to
so cryogenics might have some interesting side-effects (although, of course, if inflation proceeded at the same pace, the currency might have to be revised).