On Will Hutton for a Sunday
Capitalism is the best and worst of systems. Left to itself, it will embrace the new and relentlessly follow the logic of prices and profit, a revolutionary catalyst for necessary change. But it can only ever react to today’s prices, which cannot capture what will happen tomorrow. So, left to itself, capitalism will neglect both the future and the cohesion of the society in which it trades.
What friggin‘ nonsense is this? Has no one ever told Willy that markets are forward looking?
Wasn’t he a stockbroker at one point? Didn’t anyone tell him that the current value of a share is the discounted net present value of all future income from that share?
That, inevitably, the whole system is making decisions on what they think is going to happen in the future?
How does this buffoon get taken seriously?
Caroline Flint is an opportunist little bitch isn’t she?
Flint said: “I am really shocked by these allegations. These companies say they want to rebuild customers’ trust, but with practices like this it’s no surprise people are mistrusting of the energy industry. It is simply not acceptable for suppliers to overcharge people on top of the extortionate bills they are already paying. When customers are in credit, this should be repaid. If companies can’t find customers to repay them, they should use this money to keep bills down or help other vulnerable customers, not boost their profits.”
Under the current system, energy companies estimate customers’ future usage and charge accordingly. If less energy is used, credit is built up which can be reclaimed or used to offset higher-than-expected subsequent bills.
The profits from “credit” were taken by British Gas in cases where private or business customers had been overcharged on the basis of estimated bills, and then changed to another supplier, or ceased using British Gas for other reasons, with the outstanding sum owed to them still on their accounts.
British Gas – which argues that it is unable to track down all customers who have left them, changed addresses, or gone bankrupt – used to wait six years before taking the cash. But the whistleblower claims a special team was set up – partly based at a Leicester call centre – to fast forward this process so that investigations to locate people would be launched, and the money then taken into company accounts over a much shorter timescale.
Under this new arrangement, British Gas then took years of accumulated credit owed on accounts to augment its income. While there is nothing illegal about this, the source said British Gas was apparently nervous about how the move would be viewed if it became public. “We were briefed about how sensitive this was and there was endless talk about how this would look if it ended up on the front page of a newspaper,” said the whistleblower. He believes that all the other power companies also take this kind of money back into their accounts as profit but only after six years.
British Gas confirmed that it had set up a team to improve its credit balances but declined to say exactly what contribution it made to the business. A spokeswoman said customers in credit could always ask for the money to be refunded. She added: “We did improve our revenue and billing processes and this was fully audited and highlighted in our annual report in 2011.”
Right, now try to think through this. Estimated amounts sometimes led to overpayment. That overpayment belongs to the customer, of course. Not all of whom can be traced. The traditional system is to leave it there for 6 years then, well, it’s an orphan payment, someone’s got to have it so why not the company?
British Gas decided that it wouldn’t just leave it there for 6 years. It appears that it tried to speed up this process. Note what speeding up the process means: trying to get those orphan payments back to their rightful owners faster. This new faster system also accelerates the finding that some of the amount is indeed orphaned: but note again that it speeds up the process of returning not properly orphaned funds.
And for this BG is being criticised?
By the way. Caroline Flint was a member of the Cabinet (I think? She was certainly a Minister and absolutely damn certainly voted for the bill that did this) when Gordon Brown accelerated the confiscation of orphan bank accounts. Some journalistic type might well want to contrast her acquiescence in that change with her horror at this one.
Well, yes Richard
He may be right of general opinion blogs, but he helped pioneer their success. I wish him well in the next stage of his career and campaigning and thank him for what he’s done.
For more specifically focussed blogs, like this one, I think there remains a strong demand. With 10,336 posts published over more than 7 years and with more than 3 million words writen, I have undiminished enthusiasm for the medium. Tax Research UK will be going for some time yet.
You do get a £35k a year bung from the Rowntree folks to write your blog. I’d be perfectly happy to blather a couple of times a day for such a sum too.
Sunny was doing it all off his own bat though…a slightly more difficult undertaking.
Supreme social happiness is being able to wipe your bum
Just thought I’d pass on that little piece of advice to the Venezuelan President, Maduro.
Nicolas Maduro, Venezuela’s president, creates Vice Ministry of Supreme Social Happiness, despite chronic shortages of basic goods like toilet paper
They do themselves well then
Post Office customers wondering where the trade union barons who called the strike last week go in their spare time need look no further.
The Labour Party paymasters at Unite visit a Grade II-listed country house in Surrey that is owned by the union.
Esher Place is a £100million property where the union bosses can stay in one of 52 bedrooms.
They can browse free copies of the Morning Star and enjoying fine dining in the restaurant, or relax in the extensive lounge and bars.
The residence is billed as being “modelled on a French château”, although Unite, which has donated £9.2 million to the Labour Party since Ed Miliband became leader, claims that it is used merely for “residential courses and training”.
However, on its website, it advertises weekend breaks at Esher Place for officials, playing on its proximity to various attractions including racing at Sandown Park, the Hampton Court Flower Show, and “London Sights, Shows and Shopping”.
Dawn Anderson, a Unite official, praised the dining at Esher Hall, saying recently: “The food is wonderful!”
Seems a tad unkind really, as they do seem to be offering the rooms etc to the average member at very reasonable rates.
In order for this (quite light but all the same) smear to work it would need to be shown that the union bosses had preferential access to the place. Of which there is no evidence that has been presented…..
Timmy elsewhere
At the ASI.
There is still, vilely, slavery in the UK. But not as much as some tell us there is.
Oh for fuck’s sake get over it woman!
Grr.
Waters and Byrne were careful to be precise and not exaggerate what happened to them, which is that they felt very uncomfortable when their conversations with one of the most powerful people in their profession turned sexual. They weren’t raped or groped, and they suffered no obvious career setbacks by failing to take Zivkovic up on what they perceived as the implicit request for sex. But they felt lousy and confused. Here’s what I found most distressing in Waters’ post: “At my most insecure moments, I still come back to this: Have I made it this far, not based on my work and worth, but on my value as a sexual object? When am I going to be found out?”
This is science bloggers please do recall. Those who one might expect to have a passing familiarity with the insights of evolution? You know, those fairly basic ideas about our and other species in which it is social status for males that gets to decide which bird gets bonked? Or, rather, that it is the social status of the male that decides whether a bird will bonk him?
That, possibly, only 40% of men that have ever lived have had children, while 80% of women who have had?
Now, I do understand that elderly men leering at younger women can be distressing for the second party. I seem to have that effect myself. But what the fuck has got into these “scientists” when they try to deny the very basics of the evolution of our (and many other) species?
Social status of men determines access to hot babes. For the reason that hot babes decide upon men on the grounds of social status of those men. Why is it the fucking scientists complaining about this?
This is fairly vicious about Sunny Hundal
In what must have been a highly embarrassing process for Sunny, as I remember it he then had to declare current and future earnings to me in order to reach some reasonable financial settlement. During that process it became entirely clear that Sunny did not have a career. His main organ of distribution was a pointless self-published website which earned him no money. He occasionally earned small fees for intermittent blogs for the Guardian. But in no way did this add up either to a salary or a funded career.
I’ve actually often wondered. What was Sunny’s income? Not for any good reason, just being nosy. I know what The Guardian pays for online pieces and I know he wasn’t doing enough there to be making a living. I also know roughly what someone will get running a reasonably decent traffic UK blog. And that’s nice to aid with the beer bill but no more than that.
I’d always assumed that Sunny had some other gig as well only I didn’t know what it was. But is this correct, that he didn’t have that other gig?
Of course none of this would matter if it weren’t for the wider lesson that comes from it. I have always thought that there is something not just ludicrous but wicked in colleges and universities holding themselves out as providing ‘degrees’ in things like ‘media studies’. Generally run by hopeless individuals, they rarely help students to get into those professions they ostensibly study, and in reality do little more than mislead hopeful young people into running up large debts to get onto a ladder their ‘degree’ will not help them with. Sunny Hundal’s move to Kingston might serve as the apex of this trend: someone lecturing students on how to be employed in a profession he himself was never properly employed in.
It does sounds about as sensible as having me lecture on journalism. Someone who a) has never been a journalist and b) never lectured.
Are The Guardian’s Leader Writers Entirely Ignorant And Stupid?
I give this to you in full as it is so appallingly obtuse as to rather require all of it to get the full flavour:
The Gay Hussar is both an elderly central London restaurant, and one of the most celebrated venues in the history of the post-war left. On these red plush banquettes, immortalised by the great cartoonists of the past 60 years, Bevanite heroes – Aneurin Bevan himself, Michael Foot, Barbara Castle – would scheme and plot, usually unsuccessfully. But they are long dead now, and the place needs a new owner. To the dismay of the loyal staff, it’s to be auctioned at Christie’s sometime in early December. Time surely to reclaim history and bring its traditional values into a modernised setting. Mark Seddon, the former editor of the journal of the old left, Tribune (which once treated it as the office canteen), proposed it should be the subject of a diners’ co-op. And why not? Plum in the middle of London, it’s a great location for a restaurant. Its menu, starring the legendary cold cherry soup and smoked goose, is the last place anywhere in the world where you can find food still cooked to weighty mid-20th century Hungarian recipes. It could be modernised to reflect contemporary central Europe’s considerable culinary advances. The real change would come from a new model of ownership, the previously untried diners’ co-operative. This would not mean having to cook one’s own dinner, far less wash up afterwards. Rather it would be somewhere between the John Lewis model of profit-sharing for the staff and the Co-op model of dividends for regular customers. A socialist model for today’s politicians.
Nothing wrong with the idea at all. Why the hell not?
But the idea that this would be a new model, the “previously untried diners’ co-operative”. This is actually one of the oldest economic models for a restaurant around. It’s how gentlemens’ clubs operate for example.
Seriously people, why are people this ignorant employed to preach to us?
How did this idiot get to be PM?
Energy companies are morally wrong to increase bills by more than the wholesale cost of gas and electricity, David Cameron has suggested.
Monstrous fucking stupidity.
Does the wholesale cost make up the totality of the bill? No?
Then changes in those other costs, the not wholesale costs, would justify price changes, would they not?
Indeed, our favourite Baumol’s Cost Disease would tell us that we would actually expect those other costs to rise faster than wholesale costs. For those other costs are services (the billing, distribution, all that malarkey) rather than the manufacturing that is the actual production costs. And we all know that we expect the price of services to rise against the prices of manufactures over time.
Cameron obviously didn’t spend much time on the E in his degree. Indeed, we’d probably be better served if he’d spent the entire three years taking E.
But the kiddies might see porn!
Newly-released tablet computers from Tesco and Argos could put children at risk of stumbling across porn because they do not come fitted with filters, an expert warned last night.
Erm, do any tablets come with filters pre-installed?
John Carr, from the Children’s Charities’ Coalition on Internet Safety, said he was worried that the devices could expose young children to hardcore imagery.
Many other popular tablets, such as the iPad, also do not come with such filters, but Mr Carr said Tesco and Argos had greater responsibility because their cheaper models were more likely to be used by children.
Ah, no, no they don’t.
So we’ve in fact just got some fatuous arsewipe trying to get his name in the papers.
Ritchie and accounting
Rather than losing money, as the company claim, the chemical plant at Grangemouth delivered £7million in profits last year, analyst Richard Murphy told the Daily Record.
Murphy said: “It is like buying a car. You can spread the cost over 10 years, you don’t spread the cost over a day.
“That is not the way I would recognise accounts to be done normally.
“The accounts are figures which are hard to understand.
“If we actually look at the accounts of the chemicals operation for 2012, the actual basic profitability, it made £7million. The year before, it made £6million. That is basic trading.
“What they did was quite unusual.
“They said they were facing major financial difficulties. They then said they were going to write off£390million of plant and equipment at the site. That is extraordinary.
“But Ineos chemicals was not loss-making.
“They then said, if we write off this sum, we won’t be able to pay off the money we have borrowed from other Ineos companies. So they were released from repaying loans of £464million.
“The net effect was they made a gain, they actually made an exceptional profit. Ineos said, you don’t have to repay the loans, so the loans they wrote off were greater than the assets.
“The net effect was they made a profit on the write-offs of £69million.
“As a result of the write-offs, they also did something else. They reckoned they had a tax credit of £79million.
“We have two conflicting stories. One is that the company were doing badly. On the other side, they are saying we are going to recognise we have got deferred tax assets.
“That means they think they are going to get profits in the future.”
Murphy added: “Using their numbers, they think they are going to save £117million in tax in future, at the rate of Corporation Tax they use in their accounts. That means they are expecting to make more than half a billion pounds in profits.
“The plant now has no more assets to write off, the loan has been written off. And actually, that massively improves the profitability of the site.
“I think there is an odd story in those accounts.
“The future of this company at the chemical plant could be quite profitable. It could make quite a
lot of money.“How do you reconcile that, what’s going on here?
“They are using accounting rules I don’t recognise. They are using numbers I can’t find in any actual published accounts.”
Murphy said he would not have signed off the accounts.
He added: “There looks to me here to be a profitable plant. Why they want to close it, I don’t know. Are they preparing the business for sale? I just don’t know.”
Dear God.
In MurphyWorld Ineos writing off £464 million it had lent to a subsidiary is actually a profit.
Actually, what’s truly amusing here is that the world’s greatest advocate for proper and full corporate accounting decides not to use proper and full corporate accounting when Unite asks him to cobble something together. He’s looked only at the effects on the accounts of that specific subsidiary and entirely ignored the effects (ie, the loss of that £464 million which will now never get paid back) on the corporation as a whole.
Shameless, quite shameless.
Timmy elsewhere
At the ASI.
Given that regulation is a fixed cost you can’t get a diverse marketplace via regulation.
You what?
The FT notes this morning that ‘a 30-year trend of trade growing at twice the speed of the global economy has ended’.
There is wailing and gnashing of teeth at the prospect of the crash to follow. But I suggest another hypothesis. It is that materially many (by no means all) simply have enough ‘stuff’ now and the idea that growth is dependent upon forever having more may be an extrapolation that simply does not hold true anymore.
Three thoughts then follow. The first is that the time for redistribution of material well being is already long overdue and should now happen.
The second is that if we have enough stuff what will the impact be on services?
And thirdly, just possibly, might this suggest we can move to a more enlightened era where the achievement of potential and not the accumulation of material goods becomes the goal of society? I know it’s a long shot, but it has to be mentioned.
Eh?
If everyone’s got enough then why do we need redistribution? If everyone hasn’t got enough then we need to get on with creating more, don’t we?
And who in buggery has ever said that the goal of society is the acquisition of material goods? Especially given that what 80% (or whatever) of what the society actually does is already services.
Ritchieism of the day
I take slight satisfaction from noting that but for this wholly unforeseen change my forecasts for unemployment as a result of the Coalition’s policies would have been correct.
To translate: I was right it’s just that reality doesn’t agree with me.
We likes this we do
There are two types of human beings: people who want to interfere in the way other people live their lives, and people who are content to mind their own business. Which type of people do you think go in to politics?