Six Word Saturday

It's the season for Party Conferences
Last week it was the Liberal Party Conference.
This weekend the Labour Party is gathering for its annual conference.
I suppose the Conservative Party will congregate next weekend for their bash.

Each party proclaims sweeping changes and ambition. The Liberals stand almost no chance of getting into power. The Labour Party has proved itself duplicitous and unreliable and must, at heart, know that it will not be elected to government again. That leaves the Tories who are as zealous and unrealistic in their projections as all parties are when they have been out of power for an extended period. As it's the Civil Service that really runs the country there's little chance that any change of government will effect much change. I think we should have a coalition!
Each party leader receives a standing ovation for his speech 'de rigueur'.

You may have gathered I'm not a political animal, at least not in the sense of supporting one party rather than another!
Thank you to Cate at 'Show My Face' for developing and hosting this meme.
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In the Red

Have you ever been overdrawn? Have you agreed an overdraft with your bank which legitimises being in the red? If or when you overreach that limit does your bank charge you?

It's not a pleasant feeling, knowing that you are incurring the displeasure of your bank manager. Actually it's more likely to be a computer that clocks the fact that you've overspent again and then a human is alerted and sends you a standard letter.

Well, imagine how Gordon Brown must be feeling. That huge piggy bank called the Treasury is empty; more than that it is overdrawn to the tune of around £17.5 billion. That's £17.5 billion. Time to pull in the horns, tighten the belt, hold on to the purse strings, count every penny, make £1 do the work of two and all those other useless and overdue bits of folk wisdom.

As Chancellor of the Exchequer GB was doing a grand job, or so we were told repeatedly by Tony Blair. Perhaps he knew the mess canny Gordon was getting into and maliciously allowed him to continue knowing that he'd get his just rewards once he became the unelected successor to the Prime Minister. Maybe he didn't know. Possibly he didn't care.

Whatever the circumstances of the downslide the net result is that Great Britain Limited is severely strapped. Don't worry though, GB – that's the man, not the country – will pull something out of the hat just as he has before, but it will undoubtedly be a short-term remedy to try and drag his government out of the mire and spray them with rosewater before the General Election.

Meanwhile the Civil Service has been guaranteed huge pensions that are on average six times the size of pensions of people in industry. Unlike industry pensions which are already funded by employees paying into their funds, Civil Service pensions are not already financed but are funded later on through tax revenues. Add to the equation the fact that Civil Servants can retire early, even at the age of fifty, on full pension. This creates an enormous problem for the country in years to come.

Gordon Brown has made matters worse by raiding funds in the private sector; he has taxed pension accounts leaving a problem for industry which faces reduced pensions. In not too many years from now there will be a very large aged poor population and how will they be supported?

A lesson to be learned?

A few years ago the Telecoms Industry suffered enormous losses; several trillion pounds were lost, a sum of a similar order to that lost by our banks (and they are increasingly our banks – yours and mine) and yet the industry was not bailed out by the Government. Not only have the banks been salvaged like broken-backed wrecks from the rocks of poor judgement but some of the people whose decisions were in part to blame were then invited by the Government to help rebuild the ship of finance and refloat it.

As in the case of Telecoms, drastically failing businesses which changed their boards seemed to succeed. Those that didn't change their boards continued to fail.

Public sector pay rises are planned for the next three years. Those in the private sector have not only had their pay rises frozen but some also face pay cuts. Hewlett Packard, which announced global job cuts of 24600 last September, has recently advised its employees that they can expect pay cuts of between 5% and 10%. The larger pay cuts will be made in the salaries of the higher-paid employees. Are the banks doing this?

Another thorny problem is that relating to Public Sector pensions. The country faces massive debt because of the pensions which must be paid in the future. Not only can Public Sector employees retire at the age of sixty (and in some cases earlier) and receive a full pension but their average pensions are six times higher than those of private industry employees. Their pensions are paid from taxes.

There seems to be a lack of understanding in the Government or perhaps a loss of sense of reality. Industry is not protected and has been forced to cut jobs and take wage cuts. Why haven't the banks and the Civil Service followed the same procedures?

Another multi-billion pound injection of public cash has been pumped into Lloyds. The Treasury takes a 65% stake in Lloyds as it lends £25 billion. The bank has clearly failed so why are Sir Victor Blank, the chairman of Lloyds, and Eric Daniels, his chief executive, still in position? The buck has clearly stopped a long way short of the main protagonists.