Would you like your taxes to be collected by a private company acting on behalf of the government under contract? No, me neither. I'd be concerned about tax collectors behaving a bit like aggressive private car clamping companies, while mindlessly pursuing targets set by their public sector bosses.
But would you prefer to have the option of hiring a builder, a removal company or even a hairdresser who works for a not for profit, public sector organisation rather than a private company? The very idea seems a bit bizarre, I know. But I ask because "profit" is a dirty word for many in our society. And it was for me as a socialist-leaning long-haired student in the 1970s, when Stevie Winwood sang "The percentage you're paying is too high a price/When we're living beyond all our means/ and the man in a suit has just bought a new car/with the profit he's made on your dreams"*.
The example of a removal company wasn't randomly selected. The first time we came to move house we decided to do the equivalent of buying IBM, so we couldn't go wrong. But we did, because we chose Pickfords, then the leading national removals company. They were poor. Now this was a while ago - 1980 - but our things were literally packed into tea chests. Many folk won't have seen a tea chest but they're made of rough plywood and, unsurprisingly, are used to ship tea. Indeed the scruffy chests that Pickfords used still had a fair bit of tea in them! This wasn't the only aspect of the service we weren't impressed with. Having made a mental note to take more care in future, get multiple quotes and ask questions etc, we moved house several more times and I thought no more about Pickfords until I was reading Ken Clarke's autobiography last year. What I hadn't realised was that Pickfords, until much later in the 1980s, was still owned by the people, as John McDonnell might put it, being part of the enterprises nationalised by Labour in the 1940s, along with coal, steel, railways etc and was still in the public sector. Clarke happened on this as a government minister and proposed it should be one of the Tories first privatisations. Hmm, I thought. That explains a lot, in particular why they didn't seem to care very much and provided such a poor take it or leave it service at the time.
Now I accept 1980 is a long time ago, but human nature and behaviour patterns don't change much. I take the view that public sector organisations are institutionally less able to provide good customer service. They are often very large, so senior management is remote from the coalface. They are usually highly unionised, so middle managers have little empowerment, indeed they generally have less power, influence and knowledge of what is going on than their team member who is a union rep. That doesn't mean the public sector can't provide good service. But decisions to 'flex' the system to meet specific situations in real time are problematic in such organisations, especially where there is a jobsworth culture. But where the service is fairly standard there's no inherent reason why public ownership should result in a less efficient or responsive service. Apart, of course, from the obvious dynamic that private companies can go bust, so the employees naturally think about what is good for the business. In contrast, state owned enterprises can't go bust and, more importantly for customer service, public sector enterprises tend to be very poor at performance management, being slow to take action when employees under-perform and generally unwilling or even practically unable to sack people who aren't doing their job. There is no fundamental reason why this has to be the case, but it just is.
The public-private mixed economy is ubiquitous throughout the world. Well maybe not in North Korea, but in countries like Russia and China there are quite significant private sectors, albeit in Russia overwhelmingly owned by a small group of oligarchs. If you count black market activity, I'd venture there must be private "business" even in north Korea. The question is all about the mix - what should the state do and what should be left to the market?
I hold the view that the shift towards private provision made by the Thatcher government was a colossal improvement. That doesn't mean everything the privatised companies do is perfect - clearly it isn't. Some private supply arrangements haven't worked at all well, though there are always provisions for the contract to be rescinded if that is the case. And it doesn't mean that more private provision is necessarily for the best, though it would be odd if we just happened to be at the optimal point.
Of course, the real issue isn't whether the operation is publicly or privately owned, it's competition. I recall reading my favourite journalist in the early 90s, Norman Macrae, who used to say "don't throw money at it, throw competition at it" about everything from education to the railways. I suppose you could have competing publicly owned companies, but it wouldn't be for real: everyone would know they couldn't fail in the sense of going bust. It would be sham competition, not red in tooth and claw as they say.
The left accuses the right of pursuing privatisation through dogma. I think it's the other way round. It seems to me that most people on the right want to get it right - make the services work well and cost effectively. But they are prepared to make a case and listen to argument. And few of them think everything should be run by private firms. It's the left who are actually totally dogmatic on this issue, always raising scares about privatisation of the NHS, crying wolf and seeing plots everywhere when there usually aren't any. And remember, the NHS was set up as a public-private partnership - most GPs are self-employed private suppliers providing services to the NHS under a commercial, not employment contract, that pays them to provide the surgery and employ the people who work there, none of whom are generally NHS employees. It's been this way since 1948.
As noted above, one of the reasons why the private sector is generally more efficient is the simple survival motive - lose money on a sustained basis and the company goes out of business. It struck me in the 1970s, organising football club socials, that if you planned to break even you usually lost money. It didn't seem to work out 50-50 and balance out. There are always unexpected costs, often lower revenues, etc. If you set out to make money, you generally didn't lose money. And, when you did well, you created the financial scope to put on a better event next time. Now there is no reason why, given a cost budget to manage to, managers shouldn't succeed in any type of enterprise. It doesn't have to be about making a profit. Except in a public sector organisation there is often an implicit, or even explicit, driver to "spend the budget", for many reasons amongst them that, otherwise, next year's budget will be smaller. Which is lazy management, but tends to happen. Guess what happens if you make sure the budget is spent? There aren't savings, anywhere in the system, to balance the inevitable higher costs that occur in some places. However hard the managers try, overspends for the enterprise as a whole are culturally hard wired into the system.
And there is the feeling in those organisations that it doesn't really matter to overspend; it just shows there weren't enough "resources" (i.e. money) for the task at hand. Commenting on the fascinating underground "Mail Rail" that Royal Mail operated underneath London's streets from 1927 to 2003, Alan Johnson noted that it cost twice as much to build as envisaged and incurred an initial loss of £100,000 a year (a whacking great sum in the 1920s). "Yet the principle objective of the Post Office was not profit but public service"**. So that's alright then? This just confirms for me that it's a good job Johnson, upright member of society and all round good guy that he seems to be, only ever made it to Home Secretary and that, while shadow chancellor for a period, he didn't become chancellor or PM. I expect he'd be a fascinating and very pleasant chap to talk to, but I also expect I'd conclude that, while his heart was in the right place, he'd have the wrong solutions for every economic issue that we face, every time.
The issue of the public-private mix is sharper than it has been for many years, with Labour's plans to "take back" all sorts of activities into the public sector and Nicola Sturgeon's plans for a public sector energy company in Scotland. In the case of the railways, many reports say that it's a popular policy. Not with those of us who used to commute into London in the 1980s, where I remember the refrain on the platform when trains were late: "Privatise the bastards, it's the only thing that will sort them out". While not claiming that it did "sort them out" I would argue that it is probably not a coincidence that rail passenger journeys have doubled since privatisation, after 50 years of decline before that. The railway has problems but they are, relatively speaking, problems of success now (e.g. far more overcrowding) rather than failure. (OK, apart from cost which remains a big issue).
Many of the problems the railway has are due to the failure to tackle union power. So the unions get away with concealing their insistence on outdated working practices behind an unprincipled smokescreen on safety. Pay levels are stratospheric compared with broadly equivalent jobs elsewhere, partly because management won't take on the medieval guilds of drivers and signallers. And, even though the train companies are privately run, the culture is still very public sector. It can take a long time to get people in a privatised entity thinking in ways that aren't steeped in public sector culture. (I have an allegorical story, about monkeys and bananas, which my boss often made me repeat for people, as it showed how attitudes can persist through generations of change. But not now, I can't type that much on the tablet). The issue with Train Operating Companies is the unions know the franchise will be re-bid eventually, so they view all management as 'empty suits', temporarily in charge till the next round of changing the cap badges. (Cap badging being the phrase used in BR for the initial separation into units that would become new entities).
As another example, many of Corbyn's young supporters would have extreme difficulty in understanding what it was like being totally dependent on British Telecom for your phone service in the days before mobiles and broadband. If they really would prefer to go back to 1980s BT and wait many weeks for their phone line to be installed, I'd eat my hat.
Nevertheless, for some, the idea that someone is making a profit out of providing a vital service sticks in their craw. I can understand that, but only a bit. All that matters to me in these situations is the total cost and actual quality of the service. While I don't think utility type services should earn high profit margins (and some of them have been pushing their luck on this), I've never seen why I should care if part of the cost I pay is someone's profit, as long as the total price I pay is as low as it can be. I am much more agitated about an under-performing non- profit making service I rely on paying huge sums to their Chief Executives. This is the case for some local authorities, for example. I'm sorry, I can't accept poor quality and high cost just because the organisation isn't making a profit when I can see a lot of high paid individuals in a management team that I think is taking the mickey. (Polite choice of word there.... but the fact that they aren't making a profit doesn't mean that they aren't, effectively, profiting from us and ripping us off big time through their pay levels.)
And where do the profits of privatised utilities go? Into the pockets of rapacious shareholders? Substantially into pension funds actually.
So, if you think something should be totally owned and operated by the public sector and not privately operated under any circumstances I issue a challenge. Aren't you the one being dogmatic? Where is the evidence that running that particular activity in the public sector will make it better in terms of service delivery to customers and cost? I accept that some might say it would be better for the employees of the business and other stakeholders such as unions, but that surely can't be the primary concern. And, having spent around half of my career in the public sector and half in the private, mainly in former public sector enterprises, I would reject as untrue the idea that employees are happier in public sector enterprises. I have seen too much frustration in public sector teams in organisations I have belonged to and in enterprises that were customers, where the employees know things could be done better and can't get anything done about it. As a result they don't enjoy their jobs as much as they should and many end up indulging in organisational game playing rather than getting on with satisfying their customers.
However, all current evidence shows that pay levels are probably higher in the public sector, though there is an issue about like for like job weight comparison, the public sector reputedly having more higher weight jobs, though I've never seen any evidence for that. What is clear is that when the value of pensions is included, the pay levels in the public sector are much higher. (Please don't try to tell me pensions are in some way separate - they are simply deferred pay and their value should always be counted in comparisons of employment packages).
My experience trying to make former public sector companies competitive and responsive to customers was fascinating, tough and only partly successful, which I'm sure is typical. Relapses in behaviours by the teams could happen at any moment for no apparent reason, years after change appeared to have been embedded. But I don't think this is an argument for not attempting to privatise enterprises.
It doesn't need a crystal ball or the powers of the oracle to see that taking back water, energy and rail into public hands will increase the power of the unions and decrease competition. It is very unlikely to improve service delivery and will probably increase cost in the long term, even if shareholders aren't there to take out dividends.
That's why I'm the not-for prophet. Because it's a very easy prophecy to make.
*from Traffic's song The Low Spark of High Heeled Boys from the eponymous album, released in 1971. With sound quality what it was in those days I'd always thought he sang "beans" not "dreams", which also kind of works. Either way, not the most risible lyric I sang along to - or still do!
** Alan Johnson's fascinating column on the Mail Rail was in the Sunday Times on 3 Sept 2017
Friday 27 October 2017
Sunday 22 October 2017
So you're saying there's a chance....
I have a reputation for speaking in song lyrics (often unintentionally, I just realise after I've said it). But sometimes it's (deliberately) dialogue from films. Both me and Mrs H will announce a discovered non-trivial problem to the other by saying "Hello Houston. We have a problem." (This is a common misquote. The actual line spoken by Apollo 13 astronaut Jim Swigert and used in the film was "Um, Houston. We've had a problem").
Another favourite comes from Dumb and Dumber, where Jim Carrey's tongue tied character says to the attractive woman:
What do you think the chances are of a girl like me and a guy like you.... ending up together?
Eliciting the icily polite response Not good.
You mean not good, like one out of a hundred?
Bringing the even cooler I'd say more like one in a million.
This response is slowly digested, Carrey's serious face breaking into a grin:
So you're saying there's a chance. Yeah!
Me parroting "So you're saying there's a chance" always makes Mrs H smile, as she knows I've recognised that, whatever dumb proposition I've just propounded, has a one in a million chance of getting her agreement.
Which brings me back to the current real dumb and dumber subject, Brexit.
What I hadn't factored in to the Brexit negotiations outlook was personal ambition. It's obviously there in the Tory machinations - Boris's scheming, the others jockeying behind May and Corbyn's positioning based primarily on making mischief for the government rather than any principle. And dear old Nick Clegg, still hoping we exit Brexit so he can have a go at being an EU commissioner (a scurilous suggestion, I know, but am I totally on the wrong planet there?). But I hadn't considered it on the EU side.
It is being reported that Michel Barnier harbours ambitions to take over from Jean Claude Juncker as EU Commission President. This is one of the 5 EU presidents, which tells you a lot. Well, I was sure there were 5 but the EU's website now only lists 4. If they think that's a positive rationalisation, I think I despair of them even more than before.
Be that as it may, Juncker's term ends in October 2019. So if Barnier can get a deal by the time his clock stops ticking in March 2019 then he could be a candidate. Of course it can't be a deal that influencers in the EU think is generous to the UK. But it can't be no deal either, or we'll sort everything out later, in a transition period. And it can't be less than half-baked, even if he hands over to someone else to tie up loose ends.
So, maybe there's a chance of a deal. Whether it's any bigger than Carey's one in a million chance with the woman we'll just have to wait and see. You've got to ask yourself one question. Do I feel lucky? Well, do ya, punk?
These three lines are, of course, the actual dialogue that Clint Eastwood's Dirty Harry says in the eponymously titled 1971 film, after musing out loud whether he has fired five or six shots. It's often misquoted as "Do you feel lucky, punk?" Of course, Harry Callahan had only fired five shots, so the punk got blasted by the Magnum 44, "the most powerful handgun in the world". We haven't got a BATNA (see post of 20 October). Maybe we've got a Magnum? If so, I'll bet it's Walls, not Smith and Wesson. Make mine a white one. At least that won't blow my head clean off, even if we crash out with no deal.
However, now I've got Dumb and Dumber in my mind for the two chief negotiators, David Davies and Michel Barnier. It's a mental image that will take some shifting, as it's alarmingly apposite.
PS I've remembered the 5th EU President, which they don't list on their website, is the President of the European Central Bank, which I accept is a separate, defined and valid role. It's the other 4 I have a problem with, especially since the EU seems so proud to have 5 presidents, given it's press release on the five presidents' report on strengthening monetary union published in 2015. Even if I could be convinced that the other 4 were required roles, it shows such a lack of imagination in calling them all "president", doesn't it, Bruce? (A comment which will be lost on you if you have never seen the Monty Python sketch)
Another favourite comes from Dumb and Dumber, where Jim Carrey's tongue tied character says to the attractive woman:
What do you think the chances are of a girl like me and a guy like you.... ending up together?
Eliciting the icily polite response Not good.
You mean not good, like one out of a hundred?
Bringing the even cooler I'd say more like one in a million.
This response is slowly digested, Carrey's serious face breaking into a grin:
So you're saying there's a chance. Yeah!
Me parroting "So you're saying there's a chance" always makes Mrs H smile, as she knows I've recognised that, whatever dumb proposition I've just propounded, has a one in a million chance of getting her agreement.
Which brings me back to the current real dumb and dumber subject, Brexit.
What I hadn't factored in to the Brexit negotiations outlook was personal ambition. It's obviously there in the Tory machinations - Boris's scheming, the others jockeying behind May and Corbyn's positioning based primarily on making mischief for the government rather than any principle. And dear old Nick Clegg, still hoping we exit Brexit so he can have a go at being an EU commissioner (a scurilous suggestion, I know, but am I totally on the wrong planet there?). But I hadn't considered it on the EU side.
It is being reported that Michel Barnier harbours ambitions to take over from Jean Claude Juncker as EU Commission President. This is one of the 5 EU presidents, which tells you a lot. Well, I was sure there were 5 but the EU's website now only lists 4. If they think that's a positive rationalisation, I think I despair of them even more than before.
Be that as it may, Juncker's term ends in October 2019. So if Barnier can get a deal by the time his clock stops ticking in March 2019 then he could be a candidate. Of course it can't be a deal that influencers in the EU think is generous to the UK. But it can't be no deal either, or we'll sort everything out later, in a transition period. And it can't be less than half-baked, even if he hands over to someone else to tie up loose ends.
So, maybe there's a chance of a deal. Whether it's any bigger than Carey's one in a million chance with the woman we'll just have to wait and see. You've got to ask yourself one question. Do I feel lucky? Well, do ya, punk?
These three lines are, of course, the actual dialogue that Clint Eastwood's Dirty Harry says in the eponymously titled 1971 film, after musing out loud whether he has fired five or six shots. It's often misquoted as "Do you feel lucky, punk?" Of course, Harry Callahan had only fired five shots, so the punk got blasted by the Magnum 44, "the most powerful handgun in the world". We haven't got a BATNA (see post of 20 October). Maybe we've got a Magnum? If so, I'll bet it's Walls, not Smith and Wesson. Make mine a white one. At least that won't blow my head clean off, even if we crash out with no deal.
However, now I've got Dumb and Dumber in my mind for the two chief negotiators, David Davies and Michel Barnier. It's a mental image that will take some shifting, as it's alarmingly apposite.
PS I've remembered the 5th EU President, which they don't list on their website, is the President of the European Central Bank, which I accept is a separate, defined and valid role. It's the other 4 I have a problem with, especially since the EU seems so proud to have 5 presidents, given it's press release on the five presidents' report on strengthening monetary union published in 2015. Even if I could be convinced that the other 4 were required roles, it shows such a lack of imagination in calling them all "president", doesn't it, Bruce? (A comment which will be lost on you if you have never seen the Monty Python sketch)
Friday 20 October 2017
Send for Batman, I've gone all Ozzy Osbourne on Brexit
I found an interesting website recently which provides rich fodder for any exit-Brexit types out there - it's called InFacts (infacts.org) and is dedicated to stopping Brexit (hmm, that impartial sounding website title isn't very suitable then, is it?)
They work themselves into a real lather with several posts most days. The one that caught my eye was "Brextremists are the real saboteurs" on 13 Oct, a response to old Tory warhorse Nigel Lawson calling Phil 'Spreadsheet' Hammond a saboteur for refusing to release money to government departments to spend on contingency planning for 'no deal'. Lawson argued cogently that such plans would make a negotiated deal more likely. InFacts ran a dubious argument that, as customs arrangements are two way, any money spent in advance would inevitably be wasted as the systems have to 'mirror' what the other party sets up. This is nonsense as most people in business know that if you wait for the market to be clear what it wants, or for the customer to finalise their spec you have missed the starting gun by a long way. You have to identify the broad outlines and what you can do to be ready. There will be infrastructure and systems that we will need and we can be doing things about it now. For example, hard standing near ports if we want to avoid the permanent version of Operation Stack on the M20 probably wouldn't be wasted. If it isn't already too late. Any business would take a view that 'no deal' is a real risk and start taking sensible business continuity measures. Mind, Lawson got to Hammond judging by his amazing gaffe, referring to the EU negotiators as 'the enemy' in TV interviews while in Washington for an IMF meeting. Still it was the most interesting thing Hammond has said in ages - perhaps ever!
Another InFacts post was titled "Exit scenario begins to take shape" on 9 Oct. They actually mean looks sh!te which, to be fair, it does. Even the WTO angle, which was meant to be easy as the UK is already part of the club, is looking complicated as seven major third party countries including Canada, New Zealand and the USA are saying that the EU and UK can't just bilaterally assign shares of quotas between themselves without negotiation with the other countries. Who may want to extract concessions for playing ball. (https://infacts.org/exit-brexit-scenario-begins-take-shape/, 9 Oct)
InFacts also expects the EU will wring "more billions" out of the UK compared with what has been offered post May's Florence speech before being prepared to move the talks on (https://infacts.org/eu-will-wring-billions-uk-talks-move/, 12 Oct), while also saying "May threatens no deal but has no plan" as the PM will not answer MPs' questions on how much money has been set aside for contingency planning (https://infacts.org/may-threatens-no-deal-no-plan/, 10 Oct).
And they say Hammond is being "honest", unlike Johnson, while May is in denial, but it's not too late (er, it's getting that way) (https://infacts.org/not-late-honest-brexit/, 11 Oct).
InFacts claims to "make the fact based case against Brexit" but it seemed to me to be about 10 parts opinion for every fact and probably at least as tendentious as anything I write.
Meanwhile Danny Finkelstein, writing in the Times on 17 October, dusted off his MBA notes to tell us about the 1981 Fisher-Ury BATNA concept. They were Harvard dudes and much of the Harvard Negotiation Project they set up had become standard received wisdom by the time I was being sent on management training courses in the 90s (I know, it doesn't show, you didn't need to think it!). Your BATNA is your best alternative to a negotiated agreement. Without one you can't walk away - you daren't. You have to get a deal. And if your BATNA is much weaker than the other side's you won't get a good deal. They can hold out and use the clock against you.
Which of course is what the EU is doing. Though actually we do have a strong lever, which the EU recognised and tried to negate from the outset: they need our money to balance their budget till 2020. That is why they have insisted we agree the divorce settlement up front, because then we won't have any strong levers in the other areas. Foolishly we went into the negotiation going along with their strategy of discussing their three red lines first. We thought that the fact we buy more from them than they do from us would counter this and they would also need to talk trade, so the clock would act in our favour. I always thought this would prove to be wrong and it has. The trade issue is asymmetric: it's around half our exports, but no more than 10% or so for any individual EU state. So guess who will hurt the most? (Apologies to dedicated readers for repeating this again but it is important and it's a penny that hasn't fully dropped here yet). It has been reported that Germany is pushing as hard a line on trade as anyone - maybe they think we'll continue buying Mercs and BMWs whatever.
Though my other newly found website, eurointelligence, said on 19 October that the German view is softening. They got this from Bloomberg who have seen a German foreign ministry paper that calls for a broad EU-UK partnership covering, at minimum, foreign and security policy, fighting terrorism, co-operation on criminal justice, agriculture and fisheries, energy, transport, research and "digital issues" (I doubt this is a reference to the Churchillian salute). It seems some key German players think this is all at least as important as money and they won't necessarily prioritise the integrity of the single market. It's not clear they have Merkel on board, mind. Banking and finance are significant omissions from the list. But it sounds as if some of them have remembered that Poland isn't much of a buffer from Putin and that, in an era of cyber-hostility, access to GCHQ is useful since they don't like spending much on that kind of thing themselves. Mind, this was the German foreign ministry not their treasury or trade mandarins, who might be more concerned about the integrity of the single market.
But back to Finkelstein, who says we don't really have a BATNA, so our only option is to play for time, having as long a transition period as necessary. I don't agree. A Brussels based think tank has said that the only logical debt we owe the EU is our share (14%) of the EU's accumulated deficit. This comes out at less than £10 billion, nowhere near the sum Juncker and Barnier are reported to be demanding. So we should say until you talk about trade, that's our maximum offer. Because no deal means no payment at all, zilch, zero. May made her conciliatory speech several months too late. She should now be getting ready to give a tough "talk or we walk" speech, while there is still time for sense to prevail. Except her electoral gamble, her unhelpful Tory referendum result deniers (Anna Soubry et al) and Labour's opportunistic positioning, with Lady 'white van man' Nugee confirming how thick she is every time she opens her mouth, means she hasn't got a Commons majority for it. So we have got a BATNA, but we can't use it.
No wonder the Europeans say the EU 27 are more united than the UK 1.
The Sunday Times USA economic correspondent, the admirable Irwin Stelzer, stuck his nose in to say Juncker and Barnier understand four things our team don't:
In the meantime two cabinet ministers who voted Remain (Liz Truss and Jeremy Hunt) have said they now back leaving. Hunt's reason was that the EU has been so arrogant in the negotiations that he's seen it in a new light. Which is no surprise: I said before the negotiation started that EU intransigence could be expected to harden anti-EU views here. Truss has changed her mind because of the more positive economic results than Project Fear forecast. This was also a factor in Hunt's Damascene conversion. I think this is an amazingly Daily Mail/Panglossian type view of the economy: "see, everything's actually going great" while conveniently ignoring the fact that nothing has actually changed yet, we are still in the EU and trading accordingly but our forecasts are downgrading while the world economy is improving.
Moreover, the Office for National Statistics has found a half billion pound hole in the UK balance sheet. The Telegraph reported on 16 October that global banks and bond strategists were left "stunned" by the revision, which showed Britain is £490bn poorer than thought and no longer has any reserve of net foreign assets. The massive balance of payments write down shows the net international investment position has collapsed from a surplus of £469 bn to a deficit of £22 bn, a swing equivalent to a massive 25% of GDP. I couldn't tell from the rather sensationalist article (by Telegraph standards, anyway) whether this is a post Brexit swing or just one of those "oops, we got the numbers wrong" revisions. It sounded like the latter, as it has been concluded that Britons own fewer foreign shares than thought, foreigners own more British assets, company profits are lower than estimated and what was thought to be ownership of foreign debt securities is actually loans to over-leveraged UK citizens. (Maybe I shouldn't have got that Santander credit card.....)
But a definite Brexit impact has been seen in the FDI (foreign direct investment) numbers: down from a surplus of £120bn to a £25bn deficit over the first half of 2017. As was obvious to a dullard (but not the paper that Lord Salisbury famously said was for people who can read but not think, i.e. the Daily Mail) the fact that this stat held up after the referendum was because commitments had already been made. The idea that the economy is a supertanker whose engines have been cut but hasn't slowed much because of favourable currents appears not to have occurred to Truss and Hunt. What the Telegraph says is that we headed into Brexit with a much weaker financial position than was thought.
Mark Carney has said that our persistent current account deficit means we are reliant on "the kindness of strangers". Of course it's not actually kindness. Investors give us their money because they know they'll get a return. But if they perceive the risk is going up they'll want a larger premium. Strangely, one of the "kind" investors is (drum roll for effect) - the ECB! The European Central Bank is covering most of the UK current account deficit (!) - a bizarre situation caused as a side effect of the ECB's quantitative easing policy. Many of the ECB's bond purchases occur in London. Banks rotate the proceeds into UK bonds. The ECB's purchase of UK debt securities was a whacking £68.7bn in the second quarter of 2017. So what happens when the ECB steps back? We run a current account deficit of almost 5% of GDP which will not be sustainable in a post-Brexit world. Or even when the ECB start to run down its QE programme at the end of 2017. Commentators say this could easily go pear-shaped for Britain and end up being like 1976 and the IMF all over again.
Even so, I think Hunt's reaction to EU arrogance is understandable and he won't be the only one: it's another trend I predicted and it didn't need a crystal ball. I'm sure there will continue to be a majority for exiting, if only for Osbourne's famous 'medical reasons'. (Not George Osborne - the Black Sabbath Osbourne was once asked if a member of the band had left because of musical differences. Ozzy replied it was medical reasons: "we were all sick of him").
After all, while the referendum was Cameron's doing, Merkel and co gave him absolutely nothing in the non-renegotiation. Either that's how much they wanted us to stay, or they arrogantly thought we wouldn't dare vote to leave so they didn't need to concede anything. Either way - not friends, not partners, not interested, couldn't care, got their own furrow to plough.
But the real reason for Hunt and Truss's change of mind? And Hammond's 'enemy' meltdown? Could their target audience have been the Tory MPs who will nominate their next leader? Oh, what a cynic I am.
But with such good reason.
I said before the referendum (see my anguished posts when I was deciding how to vote) that the problem was the transition, not the end state. It's proving that way and more. We've no BATNA, or we're too polite (or chicken) to use it. And the opposition see political advantage in sending us in to negotiate naked, as Nye Bevan put it, refusing to accept that a threat of no deal might be necessary to get an acceptable deal. So I'm with Ozzy: I'm sick of Barnier, Juncker, Merkel, the lot of them. I'm now for Brexit for medical reasons.
Maybe we should send for Batman to get us a BATNA or just get us out of the hole. Anyone got any better ideas?
They work themselves into a real lather with several posts most days. The one that caught my eye was "Brextremists are the real saboteurs" on 13 Oct, a response to old Tory warhorse Nigel Lawson calling Phil 'Spreadsheet' Hammond a saboteur for refusing to release money to government departments to spend on contingency planning for 'no deal'. Lawson argued cogently that such plans would make a negotiated deal more likely. InFacts ran a dubious argument that, as customs arrangements are two way, any money spent in advance would inevitably be wasted as the systems have to 'mirror' what the other party sets up. This is nonsense as most people in business know that if you wait for the market to be clear what it wants, or for the customer to finalise their spec you have missed the starting gun by a long way. You have to identify the broad outlines and what you can do to be ready. There will be infrastructure and systems that we will need and we can be doing things about it now. For example, hard standing near ports if we want to avoid the permanent version of Operation Stack on the M20 probably wouldn't be wasted. If it isn't already too late. Any business would take a view that 'no deal' is a real risk and start taking sensible business continuity measures. Mind, Lawson got to Hammond judging by his amazing gaffe, referring to the EU negotiators as 'the enemy' in TV interviews while in Washington for an IMF meeting. Still it was the most interesting thing Hammond has said in ages - perhaps ever!
Another InFacts post was titled "Exit scenario begins to take shape" on 9 Oct. They actually mean looks sh!te which, to be fair, it does. Even the WTO angle, which was meant to be easy as the UK is already part of the club, is looking complicated as seven major third party countries including Canada, New Zealand and the USA are saying that the EU and UK can't just bilaterally assign shares of quotas between themselves without negotiation with the other countries. Who may want to extract concessions for playing ball. (https://infacts.org/exit-brexit-scenario-begins-take-shape/, 9 Oct)
InFacts also expects the EU will wring "more billions" out of the UK compared with what has been offered post May's Florence speech before being prepared to move the talks on (https://infacts.org/eu-will-wring-billions-uk-talks-move/, 12 Oct), while also saying "May threatens no deal but has no plan" as the PM will not answer MPs' questions on how much money has been set aside for contingency planning (https://infacts.org/may-threatens-no-deal-no-plan/, 10 Oct).
And they say Hammond is being "honest", unlike Johnson, while May is in denial, but it's not too late (er, it's getting that way) (https://infacts.org/not-late-honest-brexit/, 11 Oct).
InFacts claims to "make the fact based case against Brexit" but it seemed to me to be about 10 parts opinion for every fact and probably at least as tendentious as anything I write.
Meanwhile Danny Finkelstein, writing in the Times on 17 October, dusted off his MBA notes to tell us about the 1981 Fisher-Ury BATNA concept. They were Harvard dudes and much of the Harvard Negotiation Project they set up had become standard received wisdom by the time I was being sent on management training courses in the 90s (I know, it doesn't show, you didn't need to think it!). Your BATNA is your best alternative to a negotiated agreement. Without one you can't walk away - you daren't. You have to get a deal. And if your BATNA is much weaker than the other side's you won't get a good deal. They can hold out and use the clock against you.
Which of course is what the EU is doing. Though actually we do have a strong lever, which the EU recognised and tried to negate from the outset: they need our money to balance their budget till 2020. That is why they have insisted we agree the divorce settlement up front, because then we won't have any strong levers in the other areas. Foolishly we went into the negotiation going along with their strategy of discussing their three red lines first. We thought that the fact we buy more from them than they do from us would counter this and they would also need to talk trade, so the clock would act in our favour. I always thought this would prove to be wrong and it has. The trade issue is asymmetric: it's around half our exports, but no more than 10% or so for any individual EU state. So guess who will hurt the most? (Apologies to dedicated readers for repeating this again but it is important and it's a penny that hasn't fully dropped here yet). It has been reported that Germany is pushing as hard a line on trade as anyone - maybe they think we'll continue buying Mercs and BMWs whatever.
Though my other newly found website, eurointelligence, said on 19 October that the German view is softening. They got this from Bloomberg who have seen a German foreign ministry paper that calls for a broad EU-UK partnership covering, at minimum, foreign and security policy, fighting terrorism, co-operation on criminal justice, agriculture and fisheries, energy, transport, research and "digital issues" (I doubt this is a reference to the Churchillian salute). It seems some key German players think this is all at least as important as money and they won't necessarily prioritise the integrity of the single market. It's not clear they have Merkel on board, mind. Banking and finance are significant omissions from the list. But it sounds as if some of them have remembered that Poland isn't much of a buffer from Putin and that, in an era of cyber-hostility, access to GCHQ is useful since they don't like spending much on that kind of thing themselves. Mind, this was the German foreign ministry not their treasury or trade mandarins, who might be more concerned about the integrity of the single market.
But back to Finkelstein, who says we don't really have a BATNA, so our only option is to play for time, having as long a transition period as necessary. I don't agree. A Brussels based think tank has said that the only logical debt we owe the EU is our share (14%) of the EU's accumulated deficit. This comes out at less than £10 billion, nowhere near the sum Juncker and Barnier are reported to be demanding. So we should say until you talk about trade, that's our maximum offer. Because no deal means no payment at all, zilch, zero. May made her conciliatory speech several months too late. She should now be getting ready to give a tough "talk or we walk" speech, while there is still time for sense to prevail. Except her electoral gamble, her unhelpful Tory referendum result deniers (Anna Soubry et al) and Labour's opportunistic positioning, with Lady 'white van man' Nugee confirming how thick she is every time she opens her mouth, means she hasn't got a Commons majority for it. So we have got a BATNA, but we can't use it.
No wonder the Europeans say the EU 27 are more united than the UK 1.
The Sunday Times USA economic correspondent, the admirable Irwin Stelzer, stuck his nose in to say Juncker and Barnier understand four things our team don't:
- Markets hate uncertainty. Which is why they keep saying they can't talk about trade yet, playing on uncertainty to weaken the UK position
- Make the other person negotiate with themselves. Which is why they keep saying "try again, Theresa" without saying what they would work for them, other than leaking clearly preposterous numbers. A great tactic to see just how far the other side will go: sometimes further than you would dare ask
- Brussels is not interested in the welfare of its member states. They have no interest in a mutually successful Brexit: they daren't encourage the nations with crippling unemployment, trapped in an EU with a currency that is under-valued for Germany, to dream of life on the outside. This is the EU I have repeatedly portrayed as a self-harming psycopath that is deaf when our team talk about mutually beneficial future arrangements
- To Juncker's amazement, the British negotiators won't use the powerful negotiating tools they do have. Stelzer is amazed that Britain said up front it would continue to put its superior security and military resources at Europe's disposal. Why should it? As he points out, Putin is not going to take a slice off a piece of Britain and surely a Britain that has been put at a financial disadvantage should not be bound to the defence of a Europe in which most nations don't meet their obligations to NATO.
Maybe we should be taking out ads in national newspapers in the relevant countries making clear how much the French wine makers, German car manufacturers and Polish workers' families get out of the UK market. I do hope we have them ready to roll. Stelzer also says we should be ready to walk away from Rene - he says "if you aren't prepared to walk away from a negotiating table, don't take a seat at it. The other side can smell weakness and desperation. And the Eurocrats are acting as if they have got more than a whiff of it.
In the meantime two cabinet ministers who voted Remain (Liz Truss and Jeremy Hunt) have said they now back leaving. Hunt's reason was that the EU has been so arrogant in the negotiations that he's seen it in a new light. Which is no surprise: I said before the negotiation started that EU intransigence could be expected to harden anti-EU views here. Truss has changed her mind because of the more positive economic results than Project Fear forecast. This was also a factor in Hunt's Damascene conversion. I think this is an amazingly Daily Mail/Panglossian type view of the economy: "see, everything's actually going great" while conveniently ignoring the fact that nothing has actually changed yet, we are still in the EU and trading accordingly but our forecasts are downgrading while the world economy is improving.
Moreover, the Office for National Statistics has found a half billion pound hole in the UK balance sheet. The Telegraph reported on 16 October that global banks and bond strategists were left "stunned" by the revision, which showed Britain is £490bn poorer than thought and no longer has any reserve of net foreign assets. The massive balance of payments write down shows the net international investment position has collapsed from a surplus of £469 bn to a deficit of £22 bn, a swing equivalent to a massive 25% of GDP. I couldn't tell from the rather sensationalist article (by Telegraph standards, anyway) whether this is a post Brexit swing or just one of those "oops, we got the numbers wrong" revisions. It sounded like the latter, as it has been concluded that Britons own fewer foreign shares than thought, foreigners own more British assets, company profits are lower than estimated and what was thought to be ownership of foreign debt securities is actually loans to over-leveraged UK citizens. (Maybe I shouldn't have got that Santander credit card.....)
But a definite Brexit impact has been seen in the FDI (foreign direct investment) numbers: down from a surplus of £120bn to a £25bn deficit over the first half of 2017. As was obvious to a dullard (but not the paper that Lord Salisbury famously said was for people who can read but not think, i.e. the Daily Mail) the fact that this stat held up after the referendum was because commitments had already been made. The idea that the economy is a supertanker whose engines have been cut but hasn't slowed much because of favourable currents appears not to have occurred to Truss and Hunt. What the Telegraph says is that we headed into Brexit with a much weaker financial position than was thought.
Mark Carney has said that our persistent current account deficit means we are reliant on "the kindness of strangers". Of course it's not actually kindness. Investors give us their money because they know they'll get a return. But if they perceive the risk is going up they'll want a larger premium. Strangely, one of the "kind" investors is (drum roll for effect) - the ECB! The European Central Bank is covering most of the UK current account deficit (!) - a bizarre situation caused as a side effect of the ECB's quantitative easing policy. Many of the ECB's bond purchases occur in London. Banks rotate the proceeds into UK bonds. The ECB's purchase of UK debt securities was a whacking £68.7bn in the second quarter of 2017. So what happens when the ECB steps back? We run a current account deficit of almost 5% of GDP which will not be sustainable in a post-Brexit world. Or even when the ECB start to run down its QE programme at the end of 2017. Commentators say this could easily go pear-shaped for Britain and end up being like 1976 and the IMF all over again.
Even so, I think Hunt's reaction to EU arrogance is understandable and he won't be the only one: it's another trend I predicted and it didn't need a crystal ball. I'm sure there will continue to be a majority for exiting, if only for Osbourne's famous 'medical reasons'. (Not George Osborne - the Black Sabbath Osbourne was once asked if a member of the band had left because of musical differences. Ozzy replied it was medical reasons: "we were all sick of him").
After all, while the referendum was Cameron's doing, Merkel and co gave him absolutely nothing in the non-renegotiation. Either that's how much they wanted us to stay, or they arrogantly thought we wouldn't dare vote to leave so they didn't need to concede anything. Either way - not friends, not partners, not interested, couldn't care, got their own furrow to plough.
But the real reason for Hunt and Truss's change of mind? And Hammond's 'enemy' meltdown? Could their target audience have been the Tory MPs who will nominate their next leader? Oh, what a cynic I am.
But with such good reason.
I said before the referendum (see my anguished posts when I was deciding how to vote) that the problem was the transition, not the end state. It's proving that way and more. We've no BATNA, or we're too polite (or chicken) to use it. And the opposition see political advantage in sending us in to negotiate naked, as Nye Bevan put it, refusing to accept that a threat of no deal might be necessary to get an acceptable deal. So I'm with Ozzy: I'm sick of Barnier, Juncker, Merkel, the lot of them. I'm now for Brexit for medical reasons.
Maybe we should send for Batman to get us a BATNA or just get us out of the hole. Anyone got any better ideas?
Monday 16 October 2017
Best Musicians I've Seen - 2
OK, the second choice I didn't have to give more than a second's thought to: the best keyboards player I've ever seen was Keith Emerson.
A lifelong friend and I fondly remember one of the first gigs we ever sent to see: Emerson's band The Nice at the Liverpool Phil around 1969. We were already aware of Emerson, who had a reputation and was sometimes called the "Hendrix of the keyboards", from his antics on Top Of The Pops, when The Nice had a minor hit in 1968 with an unconventional cover of America, the Sondheim-Bernstein song from West Side Story. You know, the bouncy song of Puerto Rican immigrants:
I like to be in America
OK by me in America
Everything free in America
For a small fee in America.....
Except Emerson's take on the song was very different. Schoolmates were agog the next day about the chap who stuck daggers into his (Hammond) organ, ostensibly to hold notes down but more probably just for effect.
Even though I was there at the time, I didn't know the full story behind the song till recently and it's remarkably topical. The Nice hadn't been gigging in their own name long, as well as earning a crust as P.P. Arnold's backing band (you know, she had a hit with The First Cut Is The Deepest, a Cat Stevens song; she also sang backing vocals on the Small Faces' Itchycoo Park) when Emerson conceived the idea of a cover version of America. The band were driving back from a gig in June 1968 when they heard that Robert Kennedy had been shot and killed. Emerson is quoted as saying "That got me thinking. JFK had been shot, then Martin Luther King. It seemed to me that America was ruled by the gun. It's even in their constitution: the right to bear arms." In the era of the protest song, Emerson conceived it as "the first protest instrumental", stripping away the lyrics and using an angry, aggressive sound. Bass player Lee Jackson added a single spoken word line at the end to give a clue and "hammer home the song's bitter irony":
"America is pregnant with promise and anticipation, but is murdered by the hand of the inevitable"
This line was taken from one of the band's songs from their first album, but with the first word changed from "dawn" to "America". It was spoken by P.P.'s 3 year old son. The "bitter irony" was lost on me, as I always wondered what the hell this line was about and didn't have a clue that it was meant to be a protest song about guns.
But there's more. The song was released as a single in June 1968 and, despite being six and a half minutes long, got some radio airplay leading to an invitation to appear on ToTP. The band were asked to cut 90 seconds but refused. (However, they did appear, I remember it!) But the Nice were also booked to play at an anti-apartheid gig at the Royal Albert Hall with a bizarre variety line up including Sammy Davis jr, jazz stars Johnny Dankworth and Cleo Laine and the cast of Till Death Us Do Part. The US ambassador was in the audience, though it's not clear if Emerson knew that when he decided to drape a stars and stripes flag behind the band, with a view to setting fire to it at the end of the set, which finished with America. He couldn't get his matches to light but Warren Mitchell provided a lighter. "Up it went" said Emerson. "Everyone went silent. We'd been going down well till then".
The band were quickly ushered off stage. Driving home they found out from Radio Luxembourg that they had been banned for life from the Albert Hall. On the upside, they got loads of publicity and the next evening in Norwich punters were queueing up to get in. The single climbed the charts, though only to number 21.
The American authorities were less impressed and, on the eve of the band's first US tour later that year, they were summoned to the American embassy and made to swear "on a stack of bibles" (as if) that there would be no more flags burnt. The tour went ahead and Emerson claims to have burnt one more while in America, to the discomfort of his band colleagues.
But Leonard Bernstein wasn't pacified, saying he "loathed what they'd done" and that they had corrupted his work. Emerson met Bernstein a few years later. He says he's met many of the composers of songs he has covered "and got on with them all. And then there's Bernstein.....I'll leave it that he liked my leathers, if you get my drift." (Bernstein was openly gay, Emerson liked wearing leather jackets and trousers).
Many years later Emerson said "It was done to highlight what a corrupt society America was - and still is: if you don't like the president, shoot him."
Emerson wasn't classically trained though his parents were musicians and he had piano lessons from the age of 8 from "local little old ladies". He would walk around with Beethoven sonata scores under his arm, but the fact that he also played Little Richard and Jerry Lee Lewis meant he didn't get bullied.
Emerson scored a piece with orchestra (I know, several groups did, including Pink Floyd's Atom Heart Mother and Jon Lord's Concerto for Group and Orchestra, the group being Deep Purple, but for me Emerson's Five Bridges Suite is the best) and covered many classical pieces (Tchaikovsky, Sibelius, Mussorgsky) amazingly convincingly with a 3 piece band (The Nice, then ELP). Not that he met those composers - unless it was in the great concert hall in the sky: sadly Emerson took his own life in 2016, ironically with a gun. He suffered from depression, reportedly because he had nerve damage which hampered his playing and made him worried about performing, but internet trolls might also have been a factor.
The comparison with Hendrix wasn't just about showmanship - Emerson was a virtuoso. Indeed I can't think of many keyboard players have been anything like as talented in the rock pantheon; Rick Wakeman (who I've also seen)? - maybe.
Emerson's main instrument of choice was the Hammond organ, which he used majestically and abused relentlessly. Not just with daggers, but dragging it around the stage then tilting it backwards then letting it drop at specific points in the music, producing an enormous crashing-hissing sound, probably associated with the amplification, I guess. Remember, kids, this was in the days before synthesisers. Well almost, because Emerson was fascinated by the earliest synthesisers, in particular the experimental inventions of Dr Robert Moog. Emerson was apparently the second person in Britain to buy a Moog synthesiser.
And it wasn't just virtuoso playing and wailing feedback noises that gave Emerson the Hendrix of the Keyboards monicker. His party piece in live performances was to vault over the Hammond, pull it towards him and play the keyboard from the wrong side, backwards as it were, while perfectly holding the tune. Then letting it crash to the floor before resuming his position at the front of the instrument.
Emerson was a very accomplished pianist and some of my favourite pieces of his work are on the grand piano. Some are played "straight" as it were, but in live shows he would stick a microphone inside the lid and drag it across the strings, with some finger plucks thrown in. Indeed I laboriously edited an example short MP3 clip to add before finding that, as anyone who uploads to youtube knows, it has to be in MP4 format. Yes, I realise you can run a converter but many of them are notorious for putting malware onto your PC so some more research is needed first. If you know a reliable one please do let me know.
I saw Emerson 3 times, once with The Nice and twice with Emerson, Lake and Palmer. While still admiring his playing, I was never a fan of ELP who struck me as pomp rock rather than prog rock. While Lake and Palmer were arguably more competent musicians than their predecessors in The Nice (Lee Jackson and Brian Davison) it didn't gel for me. And, while Lake was more prolific than Jackson at writing, the band still struggled to come up with material, other than stuff plagiarised from the classics, just as in The Nice. For example, the concept for their second album, Tarkus, was a mutant cyborg armadillo with caterpillar tracks and tank style gun turrets. Eh? I always assumed Lake was culpable for the concept, as he wrote the lyrics, but apparently the idea came from Emerson and a graphic designer and Emerson had to cajole Lake to get him on board. The band shelved their subsequently released competent adaptation of Mussorgsky's Pictures At An Exhibition because their record label thought this riduculous tosh was 'more commercial'. Hmm: ok, it was a number 1 selling album, but it's still tosh. It's not just me: while some say it is one of "prog's greatest epics" the reviews at the time were generally unfavourable, including one in Rolling Stone which said "Tarkus records the failure of three performers to become creators. Regardless of how fast and how many styles they can play, Emerson Lake and Palmer will continue turning out mediocrity like Tarkus until they discover what, if anything, they must say on their own and for themselves".
So, as I do, I will listen again and again to Rondo 69, recorded live in America from the 1969 album The Nice - funny, that, as I also listen to Colosseum's live version of Rope Ladder To The Moon again and again (see Best Musicians I've Seen - 1, 30 September) and I don't listen to many live recordings over and over.
Emerson's vituoso playing and visual showmanship, together with his fusion of rock with classical, mark him out as a unique talent; possibly the only one to make such fusion attempts really work. Two other classical adaptations are very much worth hearing. The third movement of Tchaikovsky's 6th Symphony (Pathetique) is available as band and band plus orchestra recordings. Both are very special but how Emerson, backed only by bass guitar and drums on the band only version, produces something that sounds remarkably like the range of simultaneous melodies of a full orchestra on just his keyboards is a wondrous feat. The other piece was picked up by Emerson when another hero of mine, Roy Harper, turned him on to the Intermezzo from Sibelius's Karelia Suite. My uncle, whose taste for rock music went no further than Elvis Presley but who was partial to a bit of Elgar, thought it one of the most amazing and wonderful pieces of music he had ever heard. And so do I. Thanks, Roy.
And thanks, Keith.
Sources: teamrock.com (http://teamrock.com/feature/2016-12-10/story-behind-the-song-america-by-the-nice), ultimateclassicrock.com (How Emerson, Lake and Palmer turned a kooky concept into Tarkus), Wikipedia, and lots of my own stuff.
A lifelong friend and I fondly remember one of the first gigs we ever sent to see: Emerson's band The Nice at the Liverpool Phil around 1969. We were already aware of Emerson, who had a reputation and was sometimes called the "Hendrix of the keyboards", from his antics on Top Of The Pops, when The Nice had a minor hit in 1968 with an unconventional cover of America, the Sondheim-Bernstein song from West Side Story. You know, the bouncy song of Puerto Rican immigrants:
I like to be in America
OK by me in America
Everything free in America
For a small fee in America.....
Except Emerson's take on the song was very different. Schoolmates were agog the next day about the chap who stuck daggers into his (Hammond) organ, ostensibly to hold notes down but more probably just for effect.
Even though I was there at the time, I didn't know the full story behind the song till recently and it's remarkably topical. The Nice hadn't been gigging in their own name long, as well as earning a crust as P.P. Arnold's backing band (you know, she had a hit with The First Cut Is The Deepest, a Cat Stevens song; she also sang backing vocals on the Small Faces' Itchycoo Park) when Emerson conceived the idea of a cover version of America. The band were driving back from a gig in June 1968 when they heard that Robert Kennedy had been shot and killed. Emerson is quoted as saying "That got me thinking. JFK had been shot, then Martin Luther King. It seemed to me that America was ruled by the gun. It's even in their constitution: the right to bear arms." In the era of the protest song, Emerson conceived it as "the first protest instrumental", stripping away the lyrics and using an angry, aggressive sound. Bass player Lee Jackson added a single spoken word line at the end to give a clue and "hammer home the song's bitter irony":
"America is pregnant with promise and anticipation, but is murdered by the hand of the inevitable"
This line was taken from one of the band's songs from their first album, but with the first word changed from "dawn" to "America". It was spoken by P.P.'s 3 year old son. The "bitter irony" was lost on me, as I always wondered what the hell this line was about and didn't have a clue that it was meant to be a protest song about guns.
But there's more. The song was released as a single in June 1968 and, despite being six and a half minutes long, got some radio airplay leading to an invitation to appear on ToTP. The band were asked to cut 90 seconds but refused. (However, they did appear, I remember it!) But the Nice were also booked to play at an anti-apartheid gig at the Royal Albert Hall with a bizarre variety line up including Sammy Davis jr, jazz stars Johnny Dankworth and Cleo Laine and the cast of Till Death Us Do Part. The US ambassador was in the audience, though it's not clear if Emerson knew that when he decided to drape a stars and stripes flag behind the band, with a view to setting fire to it at the end of the set, which finished with America. He couldn't get his matches to light but Warren Mitchell provided a lighter. "Up it went" said Emerson. "Everyone went silent. We'd been going down well till then".
The band were quickly ushered off stage. Driving home they found out from Radio Luxembourg that they had been banned for life from the Albert Hall. On the upside, they got loads of publicity and the next evening in Norwich punters were queueing up to get in. The single climbed the charts, though only to number 21.
The American authorities were less impressed and, on the eve of the band's first US tour later that year, they were summoned to the American embassy and made to swear "on a stack of bibles" (as if) that there would be no more flags burnt. The tour went ahead and Emerson claims to have burnt one more while in America, to the discomfort of his band colleagues.
But Leonard Bernstein wasn't pacified, saying he "loathed what they'd done" and that they had corrupted his work. Emerson met Bernstein a few years later. He says he's met many of the composers of songs he has covered "and got on with them all. And then there's Bernstein.....I'll leave it that he liked my leathers, if you get my drift." (Bernstein was openly gay, Emerson liked wearing leather jackets and trousers).
Many years later Emerson said "It was done to highlight what a corrupt society America was - and still is: if you don't like the president, shoot him."
Emerson wasn't classically trained though his parents were musicians and he had piano lessons from the age of 8 from "local little old ladies". He would walk around with Beethoven sonata scores under his arm, but the fact that he also played Little Richard and Jerry Lee Lewis meant he didn't get bullied.
Emerson scored a piece with orchestra (I know, several groups did, including Pink Floyd's Atom Heart Mother and Jon Lord's Concerto for Group and Orchestra, the group being Deep Purple, but for me Emerson's Five Bridges Suite is the best) and covered many classical pieces (Tchaikovsky, Sibelius, Mussorgsky) amazingly convincingly with a 3 piece band (The Nice, then ELP). Not that he met those composers - unless it was in the great concert hall in the sky: sadly Emerson took his own life in 2016, ironically with a gun. He suffered from depression, reportedly because he had nerve damage which hampered his playing and made him worried about performing, but internet trolls might also have been a factor.
The comparison with Hendrix wasn't just about showmanship - Emerson was a virtuoso. Indeed I can't think of many keyboard players have been anything like as talented in the rock pantheon; Rick Wakeman (who I've also seen)? - maybe.
Emerson's main instrument of choice was the Hammond organ, which he used majestically and abused relentlessly. Not just with daggers, but dragging it around the stage then tilting it backwards then letting it drop at specific points in the music, producing an enormous crashing-hissing sound, probably associated with the amplification, I guess. Remember, kids, this was in the days before synthesisers. Well almost, because Emerson was fascinated by the earliest synthesisers, in particular the experimental inventions of Dr Robert Moog. Emerson was apparently the second person in Britain to buy a Moog synthesiser.
And it wasn't just virtuoso playing and wailing feedback noises that gave Emerson the Hendrix of the Keyboards monicker. His party piece in live performances was to vault over the Hammond, pull it towards him and play the keyboard from the wrong side, backwards as it were, while perfectly holding the tune. Then letting it crash to the floor before resuming his position at the front of the instrument.
Emerson was a very accomplished pianist and some of my favourite pieces of his work are on the grand piano. Some are played "straight" as it were, but in live shows he would stick a microphone inside the lid and drag it across the strings, with some finger plucks thrown in. Indeed I laboriously edited an example short MP3 clip to add before finding that, as anyone who uploads to youtube knows, it has to be in MP4 format. Yes, I realise you can run a converter but many of them are notorious for putting malware onto your PC so some more research is needed first. If you know a reliable one please do let me know.
I saw Emerson 3 times, once with The Nice and twice with Emerson, Lake and Palmer. While still admiring his playing, I was never a fan of ELP who struck me as pomp rock rather than prog rock. While Lake and Palmer were arguably more competent musicians than their predecessors in The Nice (Lee Jackson and Brian Davison) it didn't gel for me. And, while Lake was more prolific than Jackson at writing, the band still struggled to come up with material, other than stuff plagiarised from the classics, just as in The Nice. For example, the concept for their second album, Tarkus, was a mutant cyborg armadillo with caterpillar tracks and tank style gun turrets. Eh? I always assumed Lake was culpable for the concept, as he wrote the lyrics, but apparently the idea came from Emerson and a graphic designer and Emerson had to cajole Lake to get him on board. The band shelved their subsequently released competent adaptation of Mussorgsky's Pictures At An Exhibition because their record label thought this riduculous tosh was 'more commercial'. Hmm: ok, it was a number 1 selling album, but it's still tosh. It's not just me: while some say it is one of "prog's greatest epics" the reviews at the time were generally unfavourable, including one in Rolling Stone which said "Tarkus records the failure of three performers to become creators. Regardless of how fast and how many styles they can play, Emerson Lake and Palmer will continue turning out mediocrity like Tarkus until they discover what, if anything, they must say on their own and for themselves".
So, as I do, I will listen again and again to Rondo 69, recorded live in America from the 1969 album The Nice - funny, that, as I also listen to Colosseum's live version of Rope Ladder To The Moon again and again (see Best Musicians I've Seen - 1, 30 September) and I don't listen to many live recordings over and over.
Emerson's vituoso playing and visual showmanship, together with his fusion of rock with classical, mark him out as a unique talent; possibly the only one to make such fusion attempts really work. Two other classical adaptations are very much worth hearing. The third movement of Tchaikovsky's 6th Symphony (Pathetique) is available as band and band plus orchestra recordings. Both are very special but how Emerson, backed only by bass guitar and drums on the band only version, produces something that sounds remarkably like the range of simultaneous melodies of a full orchestra on just his keyboards is a wondrous feat. The other piece was picked up by Emerson when another hero of mine, Roy Harper, turned him on to the Intermezzo from Sibelius's Karelia Suite. My uncle, whose taste for rock music went no further than Elvis Presley but who was partial to a bit of Elgar, thought it one of the most amazing and wonderful pieces of music he had ever heard. And so do I. Thanks, Roy.
And thanks, Keith.
Sources: teamrock.com (http://teamrock.com/feature/2016-12-10/story-behind-the-song-america-by-the-nice), ultimateclassicrock.com (How Emerson, Lake and Palmer turned a kooky concept into Tarkus), Wikipedia, and lots of my own stuff.
Friday 13 October 2017
Can I be your spin doctor, Theresa?
Theresa May got in a pickle on LBC radio this week with an obvious "have you stopped beating your wife" type of question: how would you vote if there was another referendum?
D'Oh!
On three occasions she dodged the question on the grounds that it was hypothetical. Of course, she had to say that, but the problem was it left the impression that her view hadn't changed since the referendum, leaving her open to the jibe: how can she deliver Brexit when she doesn't believe in it?
I have no idea why she didn't she say "I voted remain in the referendum. But the whole point was to ask the people and the people voted. I don't believe there should be another referendum but, if the were to be, I'd vote leave because it's what the majority voted for and so that's what should happen".
The supplementary question, "but do you really believe that's would should happen?" is then easy to answer: either simply "yes" (provided you want to deal with "why have you changed your mind?", which is easy - see above) or "that's irrelevant, see above".
Of course, this is an easy answer for me, as it's what I think. But her flat-footed approach had me holding my head and shouting at the television.
Part, but only part, of Theresa's problem is that she isn't as sharp and instinctive as a Cameron or Blair. And she doesn't have an Alistair Campbell watching her back.
I'm not as clever (or as devious) as Campbell, Theresa, but I'd be a lot cheaper!
D'Oh!
On three occasions she dodged the question on the grounds that it was hypothetical. Of course, she had to say that, but the problem was it left the impression that her view hadn't changed since the referendum, leaving her open to the jibe: how can she deliver Brexit when she doesn't believe in it?
I have no idea why she didn't she say "I voted remain in the referendum. But the whole point was to ask the people and the people voted. I don't believe there should be another referendum but, if the were to be, I'd vote leave because it's what the majority voted for and so that's what should happen".
The supplementary question, "but do you really believe that's would should happen?" is then easy to answer: either simply "yes" (provided you want to deal with "why have you changed your mind?", which is easy - see above) or "that's irrelevant, see above".
Of course, this is an easy answer for me, as it's what I think. But her flat-footed approach had me holding my head and shouting at the television.
Part, but only part, of Theresa's problem is that she isn't as sharp and instinctive as a Cameron or Blair. And she doesn't have an Alistair Campbell watching her back.
I'm not as clever (or as devious) as Campbell, Theresa, but I'd be a lot cheaper!
Thursday 12 October 2017
Should we be more like France?
In OECD countries only Finland has higher government spending than France, which spends a whacking 57% of GDP. The UK figure (43%) is pretty well in the middle of the range. Ireland, having gone for austerity big time and seen benefits in economic performance is the lowest at 29%. (All this is 2015 data from the OECD).
Of course, the main reason why France's public sector spending is higher than ours is because they have a very different balance to their mixed economy, with much more state ownership of industry. Their main railway company, SNCF, is state owned. The main electricity company, EDF, is 85% state owned and was a monopoly until Brussels forced France to open up 20% of its electricity market to competition nearly 20 years ago. The French state owns all or part of at least 81 companies, from Alstom to Orange, Air France-KLM and Peugeot. So, with all the costs and revenues of those enterprises swilling through the books of the French state, naturally their total state spending is higher than ours. It's not a like for like comparison. Nevertheless, with Labour's proposals to take back control of activities from Royal Mail to the railways, water companies (and beyond?) it's interesting to look at what is happening in France. Should we be more like them?
How are they doing? Well, I recall French GDP used to be higher than ours. It's now about 6% lower, with a very similar population, 66.9 million compared with our 65.6M (2016 data). And France does have very high unemployment - at 10% of the workforce and a scarily high 24% of under 25s, both figures around double Britain's. France's deficit is actually lower than ours (3.4% v 4.1% of GDP in 2016) but, of course, you pay interest on the debt not the deficit and France's debt is higher (98% of GDP v our 87%). Maastricht rules required eurozone states to be below 60% or at least converging on that number at a satisfactory pace (great weasel words!) but Gordon Brown's target, at the time, was 40%. In the late 1990s, before Brown's spending mushroomed, France's debt was 50% of GDP, ours was on target at 40%. But when the credit crunched our deficit was ginormous at 11%, France's only a worrying 7%. So how come we are now in better nick, albeit not out of the wood? The answer is that the UK has grown, albeit modestly, since the financial crisis: 4.5% to France's 2.2% between 2008 and 2015. Also we've had slightly higher inflation. While not always a good thing, that has eroded our debt mountain (by paying savers and government bond holders sub inflation interest rates, but never mind). Contrasting the French and British positions economist Roger Bootle noted that France's economy is "more sclerotic" than ours but also that Britain had been able to pursue its own monetary policy which France, tied to the eurozone, could not.
Our bete noire, EU Commission president Juncker, noting that the French deficit was deteriorating again having only just got back to the 3% eurozone target, said that "the French spend too much money and spend it on the wrong things".
So we've done a lot better than France, because of this small but significantly better growth performance. And yet....
David Smith, writing in the Sunday Times a while ago, noted that France has a better balanced economy than we do and is less reliant on consumer spending. French productivity is "embarrassingly" higher than Britain, producing their GDP from fewer workers who work shorter hours. There is a theory that their 35 hour week, hated by most businesses, may have the effect of making workers more productive in the hours available. So they have higher productivity but we have more people in work. My own theory is that businesses will look more positively on investment to reduce labour requirements in France because they don't want to take on more bolshie workers than they have to, especially since they can't get rid of them easily if they aren't any good.
Smith concludes that the French economy is fundamentally strong and demonstrates that you can throw a lot of bad policy at an economy and do less damage than you might expect: France has had "more than its share of terrible policy in recent years but continues to have a lot of strengths". (This isn't something I'd want to see tested here by J. Corbyn).
Nevertheless, Smith also concludes that the French state is too large and the labour market too tied up in red tape. But it's not just red tape: governments have a predilection to take stupid decisions, often influenced by producer lobby groups. As an example, the FT article referenced below on state ownership noted that France had bought €500M of high speed trains it didn't need from Alstom in 2016 in order to save an engineering plant. The state of the art TGV trains, which can run at 320 kph, will be used on regional tracks with a maximum speed of 200 kph. Now it can make sense for governments to bring forward orders if a company is facing a temporary shortfall. Older high speed trains could be redeployed onto the lower speed routes, for example, extending their life. Such a decision could make economic sense. But, judging from the ribald response from French industry ("use fighter jets as buses", "replace tap water with milk" etc) this wasn't one of those - it was just as riduclous as it seems at face value. But it was in a pre-election period.Which is why these decisions aren't safe left to politicians. Consider the very different and comparatively mature response to this week's news here about job losses at BAE Systems as their order book for Typhoon Eurofighter jets isn't being replenished quickly enough.
At least one Frenchman seems to agree with Smith: President Macron, who is seeking to cap redundancy payments, streamline collective bargaining and curb union power, in a kind of Thatcher-lite, rather than Thatcherite, package of reforms. Although only 8% of French employees belong to a union (it's more than 20% in Britain), the 3,000 page labour code, whose origins date back decades, handed unions a voice in the day to day running of business, something Macron wants to start to roll back. He has also upset the grey vote, with proposals to reform state pensions.
Smith reckons France has been a strong competitor even when held back by misguided policies: "with some right ones it could become a stronger one".
My instinct is that Macron will need to be much more radical in cutting back the state to get France going properly. Which, even with his big majority, he may struggle to do, even if he has the inclination.
In the meantime it's to the barricades, mon ami! France isn't a basket case yet but is steadily heading there unless Macron can turn back the tide and either make the state smaller or get it to take better decisions - neither of which will be easy.
The other point I take from this is that George Osborne, who I have been very critical of for not achieving his target set in 2010 of eliminating the deficit by 2015, might actually have pragmatically got it about right. All the time Ed Balls was talking about double and triple dip recessions and doing that silly flat-lining gesture in the Commons (though maybe he was practising for Strictly) the economy was actually recovering. There never was a double dip. The opposition was demanding more spending when it wasn't necessary and would have meant debt stayed higher. Equally, deeper cuts might have caused a further recession.
Getting this balance right isn't easy, especially when the real time economic data is often inaccurate and is subsequently adjusted. Roger Bootle says the contrast between the Franco-British experience and Greece shows that "you cannot cut your way to prosperity". I'm not sure about that, as the Irish economy has grown quite strongly to deep cuts. But the Greek cuts imposed by the German economic establishment who, as Bootle says, haven't read or understood Keynes, were too deep, reducing the level of economic activity too far. But while you might or might not cut your way to prosperity, you can cripple an economy by overspending, leaving a debt hangover which takes years to ease.
While not advocating that we should have imposed Greek style austerity, we don't know whether it would have been better to go the Ireland route, as I worry that our debt is still too high going into the choppy waters of Brexit, even if we are, for the time being, in slightly better shape than France. Of course Osborne would say that Brexit was never in his plan and we'd be in good shape economically had we voted Remain. I would find it hard to argue with that. Osborne couldn't have been expected to plan for Brexit when setting his economic policy in the last but one Parliament. Unlike Phil Hammond, who is reluctant to spend money now preparing for a no-deal Brexit which is entirely forseeable, though not desireable. Hammond doesn't seem to understand that preparing now will make the outcome he doesn't want less, rather than more, likely.
I think we should be trying to improve productivity so we can pay people more for doing fewer hours. Other than that, I don't think we should be more like France, at least in terms of economic policy.
Sources:
OECD data is at https://data.oecd.org/gga/general-government-spending.htm
David Smith's column Vive la France - and an economy on the up at last, was published in the Sunday Times on 30 April 2017
Michael Sheridan, 'Hot Autumn' looms as militants fight Macron's union reforms, Sunday Times 3 September 2017
France - the politics of state ownership, FT 13 Nov 2016 is at https://www.ft.com/content/9be75d5c-a72e-11e6-8898-79a99e2a4de
EU Commission lays out the scale of Macron's French budget woes, FT 11 May 2017
Roger Bootle: France's staggering debt levels are far more worrying than ours, Telegraph 19 July 2017
Of course, the main reason why France's public sector spending is higher than ours is because they have a very different balance to their mixed economy, with much more state ownership of industry. Their main railway company, SNCF, is state owned. The main electricity company, EDF, is 85% state owned and was a monopoly until Brussels forced France to open up 20% of its electricity market to competition nearly 20 years ago. The French state owns all or part of at least 81 companies, from Alstom to Orange, Air France-KLM and Peugeot. So, with all the costs and revenues of those enterprises swilling through the books of the French state, naturally their total state spending is higher than ours. It's not a like for like comparison. Nevertheless, with Labour's proposals to take back control of activities from Royal Mail to the railways, water companies (and beyond?) it's interesting to look at what is happening in France. Should we be more like them?
How are they doing? Well, I recall French GDP used to be higher than ours. It's now about 6% lower, with a very similar population, 66.9 million compared with our 65.6M (2016 data). And France does have very high unemployment - at 10% of the workforce and a scarily high 24% of under 25s, both figures around double Britain's. France's deficit is actually lower than ours (3.4% v 4.1% of GDP in 2016) but, of course, you pay interest on the debt not the deficit and France's debt is higher (98% of GDP v our 87%). Maastricht rules required eurozone states to be below 60% or at least converging on that number at a satisfactory pace (great weasel words!) but Gordon Brown's target, at the time, was 40%. In the late 1990s, before Brown's spending mushroomed, France's debt was 50% of GDP, ours was on target at 40%. But when the credit crunched our deficit was ginormous at 11%, France's only a worrying 7%. So how come we are now in better nick, albeit not out of the wood? The answer is that the UK has grown, albeit modestly, since the financial crisis: 4.5% to France's 2.2% between 2008 and 2015. Also we've had slightly higher inflation. While not always a good thing, that has eroded our debt mountain (by paying savers and government bond holders sub inflation interest rates, but never mind). Contrasting the French and British positions economist Roger Bootle noted that France's economy is "more sclerotic" than ours but also that Britain had been able to pursue its own monetary policy which France, tied to the eurozone, could not.
Our bete noire, EU Commission president Juncker, noting that the French deficit was deteriorating again having only just got back to the 3% eurozone target, said that "the French spend too much money and spend it on the wrong things".
So we've done a lot better than France, because of this small but significantly better growth performance. And yet....
David Smith, writing in the Sunday Times a while ago, noted that France has a better balanced economy than we do and is less reliant on consumer spending. French productivity is "embarrassingly" higher than Britain, producing their GDP from fewer workers who work shorter hours. There is a theory that their 35 hour week, hated by most businesses, may have the effect of making workers more productive in the hours available. So they have higher productivity but we have more people in work. My own theory is that businesses will look more positively on investment to reduce labour requirements in France because they don't want to take on more bolshie workers than they have to, especially since they can't get rid of them easily if they aren't any good.
Smith concludes that the French economy is fundamentally strong and demonstrates that you can throw a lot of bad policy at an economy and do less damage than you might expect: France has had "more than its share of terrible policy in recent years but continues to have a lot of strengths". (This isn't something I'd want to see tested here by J. Corbyn).
Nevertheless, Smith also concludes that the French state is too large and the labour market too tied up in red tape. But it's not just red tape: governments have a predilection to take stupid decisions, often influenced by producer lobby groups. As an example, the FT article referenced below on state ownership noted that France had bought €500M of high speed trains it didn't need from Alstom in 2016 in order to save an engineering plant. The state of the art TGV trains, which can run at 320 kph, will be used on regional tracks with a maximum speed of 200 kph. Now it can make sense for governments to bring forward orders if a company is facing a temporary shortfall. Older high speed trains could be redeployed onto the lower speed routes, for example, extending their life. Such a decision could make economic sense. But, judging from the ribald response from French industry ("use fighter jets as buses", "replace tap water with milk" etc) this wasn't one of those - it was just as riduclous as it seems at face value. But it was in a pre-election period.Which is why these decisions aren't safe left to politicians. Consider the very different and comparatively mature response to this week's news here about job losses at BAE Systems as their order book for Typhoon Eurofighter jets isn't being replenished quickly enough.
At least one Frenchman seems to agree with Smith: President Macron, who is seeking to cap redundancy payments, streamline collective bargaining and curb union power, in a kind of Thatcher-lite, rather than Thatcherite, package of reforms. Although only 8% of French employees belong to a union (it's more than 20% in Britain), the 3,000 page labour code, whose origins date back decades, handed unions a voice in the day to day running of business, something Macron wants to start to roll back. He has also upset the grey vote, with proposals to reform state pensions.
Smith reckons France has been a strong competitor even when held back by misguided policies: "with some right ones it could become a stronger one".
My instinct is that Macron will need to be much more radical in cutting back the state to get France going properly. Which, even with his big majority, he may struggle to do, even if he has the inclination.
In the meantime it's to the barricades, mon ami! France isn't a basket case yet but is steadily heading there unless Macron can turn back the tide and either make the state smaller or get it to take better decisions - neither of which will be easy.
The other point I take from this is that George Osborne, who I have been very critical of for not achieving his target set in 2010 of eliminating the deficit by 2015, might actually have pragmatically got it about right. All the time Ed Balls was talking about double and triple dip recessions and doing that silly flat-lining gesture in the Commons (though maybe he was practising for Strictly) the economy was actually recovering. There never was a double dip. The opposition was demanding more spending when it wasn't necessary and would have meant debt stayed higher. Equally, deeper cuts might have caused a further recession.
Getting this balance right isn't easy, especially when the real time economic data is often inaccurate and is subsequently adjusted. Roger Bootle says the contrast between the Franco-British experience and Greece shows that "you cannot cut your way to prosperity". I'm not sure about that, as the Irish economy has grown quite strongly to deep cuts. But the Greek cuts imposed by the German economic establishment who, as Bootle says, haven't read or understood Keynes, were too deep, reducing the level of economic activity too far. But while you might or might not cut your way to prosperity, you can cripple an economy by overspending, leaving a debt hangover which takes years to ease.
While not advocating that we should have imposed Greek style austerity, we don't know whether it would have been better to go the Ireland route, as I worry that our debt is still too high going into the choppy waters of Brexit, even if we are, for the time being, in slightly better shape than France. Of course Osborne would say that Brexit was never in his plan and we'd be in good shape economically had we voted Remain. I would find it hard to argue with that. Osborne couldn't have been expected to plan for Brexit when setting his economic policy in the last but one Parliament. Unlike Phil Hammond, who is reluctant to spend money now preparing for a no-deal Brexit which is entirely forseeable, though not desireable. Hammond doesn't seem to understand that preparing now will make the outcome he doesn't want less, rather than more, likely.
I think we should be trying to improve productivity so we can pay people more for doing fewer hours. Other than that, I don't think we should be more like France, at least in terms of economic policy.
Sources:
OECD data is at https://data.oecd.org/gga/general-government-spending.htm
David Smith's column Vive la France - and an economy on the up at last, was published in the Sunday Times on 30 April 2017
Michael Sheridan, 'Hot Autumn' looms as militants fight Macron's union reforms, Sunday Times 3 September 2017
France - the politics of state ownership, FT 13 Nov 2016 is at https://www.ft.com/content/9be75d5c-a72e-11e6-8898-79a99e2a4de
EU Commission lays out the scale of Macron's French budget woes, FT 11 May 2017
Roger Bootle: France's staggering debt levels are far more worrying than ours, Telegraph 19 July 2017
Friday 6 October 2017
The chaos that awaits
I saw two things bout Brexit in the newspapers this week that, for the first time in a while, made me smile. Well, smirk, actually.
The first was under the headline "British drugs face Brussels ban". The Sunday Times* said that biotech bosses would be meeting regulators on Wednesday this week to try to work out how to ensure that drugs shipped out of the UK aren't rendered illegal by Brexit. So this seemed to be a another trade/economic downside for us.
But what is worrying the industry is that medicines manufactured and packaged in Britain won't be recognised by EU laws when exported to Ireland, Malta and Cyprus. Eh? The reason is that there is a complex system in which drugs with instruction leaflets printed in English can be sold in those EU countries. You know, those irritating leaflets that none of us read anyway and I usually throw away so the foil will slide back into the packet. If drugs in these so called "multi-country packs" shipped out of the UK are no longer authorised for sale in the EU, stocks held in warehouses could become illegal overnight when we exit/crash out/plunge over the cliff, or whatever pejorative phrase you prefer.
So, another irritating complexity that needs to be fixed. But for who? If the regulated information packs were no longer valid outside the UK, it could mean that Ireland, Malta and Cyprus are pushed to the back of the queue (to use an Obama phrase) after Brexit as pharmaceutical companies concentrate on getting things sorted for their bigger markets. Sounds like a bigger concern for the EU consumers than for our industry to me.
This was to be discussed at a meeting of the European Medicines Agency this week. As the Sunday Times noted, a bigger concern for the EMA, which eurocrats announced with glee would be moved from London straight after we invoked Article 50, is the continuity of its operations when it relocates. A number of countries are jostling in the unseemly bid to host the EMA, but the relocation poses "a real threat to public health" according to the European Federation of Farmers. Sorry, Pharmas. (It's real title is European Federation of Pharmaceutical Industries and Associations, but that's a big pill to chew on). This club of drug pushers, sorry trade body, carried out a study to find out how many of the EMA's staff would quit when the agency moves from London. If those London dwellers aren't prepared to relocate there could be disruption and delays with medicine approvals meaning Europe could fall behind countries such as America and Japan in this key, competitive global market.
The EMA is currently pretty efficient, judging by the simple fact that the public version of the minutes of its 5 October Management Board meeting had already been published by 6 October**. It is silent on the issue of multi-country drug packs, though there is an anodyne comment about the board being informed about the next phase of the EMA's Brexit preparedness business continuity plan. We will see for ourselves as the minutes go on to say, confusingly, that the plan will be released next week but launched in January (must be some form of slow release medicine then?). A key part of this plan will be staff retention when the agency moves: "The capacity of the new host city to retain current staff and attract new people at the same level of quality is key..." As there are a lot of French people, for example, living in London who don't seem at all keen to move back to France, it will be interesting to see whether they prefer to go with the EMA or find new jobs in their adopted city. I'm sure the EMA will eventually attract enough of the right sort in its new, no doubt palatial accommodation. But the troublesome transition doesn't just affect the UK.
The second smirk came when I read "EU faces Brexit chaos in threat to £20 trn deals"***. Hmm, twenty trillion is a lot of dosh. As well as the druggies, the banks are gearing up for complex negotiations, in their case about derivative contracts. Sounds even drier than a drug information leaflet but bear with me. These financial trades are widely used by thousands of businesses and banks to guard against sudden economic changes and, without a deal being agreed, the derivatives traded between EU and UK banks would have no legal basis after we depart. The Bank of England is in talks with the dealers' trade body, the International Swaps and Derivatives Association (one wonders just how many obscure trade bodies there are!) but governor Mark Carney says the problem can't be solved by the relevant institutions, the Bank or the UK government, it needs the UK and EU27 to solve it. Well, it could be solved by London-based lenders setting up a European operation and shifting their contracts into it, but this is complicated, expensive and apparently would take longer than the 18 months while Barnier's clock ticks before its battery runs out.
So these derivative contracts are meant to protect against sudden economic change but lapse on Brexit, which is the current clear and present danger in terms of financial risk. A fascinating example of what, in risk analysis, is known a common-mode failure.
There are similar issues in the insurance market. You won't be surprised to hear that one of the many issues to be untangled concerns data security, as Brussels only allows non-EU nations to store information about its citizens if it considers their rules to be adequate.
Underlying the banking issue is the simple fact that, while Frankfurt and Paris are fluttering their eyelashes at London based banks and would dearly like a bigger piece of the action, they could only swallow a small piece. London is the world's biggest financial market and, even if the continental banks thought they could take over large chunks of what London does, the French and German governments would probably throw their hands up at the level of risk. London has the lion's share of the people who understand these risks and not only can no-one acquire that overnight in the necessary numbers, it probably wouldn't happen in several decades. If London were to lose its pre-eminent status as a financial centre, the spoils would go to New York or the Far East, not Europe.
Anyway, hallelujah. As I thought it must, the cliff edge works both ways.
That of course doesn't mean that solutions will just appear. Barnier & Co won't allow the UK to get any of the benefits of club membership without being a member, or at least paying. They'll close their eyes to things that rub the other way wherever they can, or just try to bully us into giving them the things they need. A transitional deal in which, basically, nothing changes and we continue paying so they don't have a hole in their budget, buys time. But it really only kicks the can down the road. There's no point in staying in the departure lounge indefinitely, at some point we have to jump. So I am in agreement with people who say any transitional deal must be time limited.
Many people think these kind of difficulties are being exaggerated. Can't they all just agree to carry on as before? Can't we all just be friends, as it were. Well, no. Rules and regulations are there for a purpose and can't just be hand waved away. But even if that was agreed, it wouldn't last. To understand why, just imagine it is agreed that, as part of a "frictionless" trade deal goods can continue to move across the border between the UK and Europe without customs controls. And, of course, between Northern Ireland and the Republic. Imagine now some hullabaloo when, say, there is a terrorist incident on mainland Europe and it turns out that the weapons had come into the UK and then to Ireland and on to mainland Europe via a container of supposedly everyday goods. The agreement to carry on as before couldn't possibly survive such an event. So even if there were such an agreement it would, in my view, be fragile.
I also predict (this doesn't need any kind of crystal ball) that there will be much noise about how long the transition should be, whether it should be time limited or keep on being renewed until everything is sorted and whether we should stay in some kind of half way house purgatory, in the single market and customs union and unable to consummate our own trade deals, checked out but never actually leaving. And after all of that the arguments will begin about whether we should have left and whether we should rejoin.
If you thought this Brexit malarkey had already got very boring, I'm sorry but it hasn't really even started yet.
*Sunday Times Business 1 Oct 2017
** http://www.ema.europa.eu/ema/index.jsp?curl=pages/news_and_events/news/2017/10/news_detail_002824.jsp&mid=WC0b01ac058004d5c1
*** Daily Mail, 2 October 2017
The first was under the headline "British drugs face Brussels ban". The Sunday Times* said that biotech bosses would be meeting regulators on Wednesday this week to try to work out how to ensure that drugs shipped out of the UK aren't rendered illegal by Brexit. So this seemed to be a another trade/economic downside for us.
But what is worrying the industry is that medicines manufactured and packaged in Britain won't be recognised by EU laws when exported to Ireland, Malta and Cyprus. Eh? The reason is that there is a complex system in which drugs with instruction leaflets printed in English can be sold in those EU countries. You know, those irritating leaflets that none of us read anyway and I usually throw away so the foil will slide back into the packet. If drugs in these so called "multi-country packs" shipped out of the UK are no longer authorised for sale in the EU, stocks held in warehouses could become illegal overnight when we exit/crash out/plunge over the cliff, or whatever pejorative phrase you prefer.
So, another irritating complexity that needs to be fixed. But for who? If the regulated information packs were no longer valid outside the UK, it could mean that Ireland, Malta and Cyprus are pushed to the back of the queue (to use an Obama phrase) after Brexit as pharmaceutical companies concentrate on getting things sorted for their bigger markets. Sounds like a bigger concern for the EU consumers than for our industry to me.
This was to be discussed at a meeting of the European Medicines Agency this week. As the Sunday Times noted, a bigger concern for the EMA, which eurocrats announced with glee would be moved from London straight after we invoked Article 50, is the continuity of its operations when it relocates. A number of countries are jostling in the unseemly bid to host the EMA, but the relocation poses "a real threat to public health" according to the European Federation of Farmers. Sorry, Pharmas. (It's real title is European Federation of Pharmaceutical Industries and Associations, but that's a big pill to chew on). This club of drug pushers, sorry trade body, carried out a study to find out how many of the EMA's staff would quit when the agency moves from London. If those London dwellers aren't prepared to relocate there could be disruption and delays with medicine approvals meaning Europe could fall behind countries such as America and Japan in this key, competitive global market.
The EMA is currently pretty efficient, judging by the simple fact that the public version of the minutes of its 5 October Management Board meeting had already been published by 6 October**. It is silent on the issue of multi-country drug packs, though there is an anodyne comment about the board being informed about the next phase of the EMA's Brexit preparedness business continuity plan. We will see for ourselves as the minutes go on to say, confusingly, that the plan will be released next week but launched in January (must be some form of slow release medicine then?). A key part of this plan will be staff retention when the agency moves: "The capacity of the new host city to retain current staff and attract new people at the same level of quality is key..." As there are a lot of French people, for example, living in London who don't seem at all keen to move back to France, it will be interesting to see whether they prefer to go with the EMA or find new jobs in their adopted city. I'm sure the EMA will eventually attract enough of the right sort in its new, no doubt palatial accommodation. But the troublesome transition doesn't just affect the UK.
The second smirk came when I read "EU faces Brexit chaos in threat to £20 trn deals"***. Hmm, twenty trillion is a lot of dosh. As well as the druggies, the banks are gearing up for complex negotiations, in their case about derivative contracts. Sounds even drier than a drug information leaflet but bear with me. These financial trades are widely used by thousands of businesses and banks to guard against sudden economic changes and, without a deal being agreed, the derivatives traded between EU and UK banks would have no legal basis after we depart. The Bank of England is in talks with the dealers' trade body, the International Swaps and Derivatives Association (one wonders just how many obscure trade bodies there are!) but governor Mark Carney says the problem can't be solved by the relevant institutions, the Bank or the UK government, it needs the UK and EU27 to solve it. Well, it could be solved by London-based lenders setting up a European operation and shifting their contracts into it, but this is complicated, expensive and apparently would take longer than the 18 months while Barnier's clock ticks before its battery runs out.
So these derivative contracts are meant to protect against sudden economic change but lapse on Brexit, which is the current clear and present danger in terms of financial risk. A fascinating example of what, in risk analysis, is known a common-mode failure.
There are similar issues in the insurance market. You won't be surprised to hear that one of the many issues to be untangled concerns data security, as Brussels only allows non-EU nations to store information about its citizens if it considers their rules to be adequate.
Underlying the banking issue is the simple fact that, while Frankfurt and Paris are fluttering their eyelashes at London based banks and would dearly like a bigger piece of the action, they could only swallow a small piece. London is the world's biggest financial market and, even if the continental banks thought they could take over large chunks of what London does, the French and German governments would probably throw their hands up at the level of risk. London has the lion's share of the people who understand these risks and not only can no-one acquire that overnight in the necessary numbers, it probably wouldn't happen in several decades. If London were to lose its pre-eminent status as a financial centre, the spoils would go to New York or the Far East, not Europe.
Anyway, hallelujah. As I thought it must, the cliff edge works both ways.
That of course doesn't mean that solutions will just appear. Barnier & Co won't allow the UK to get any of the benefits of club membership without being a member, or at least paying. They'll close their eyes to things that rub the other way wherever they can, or just try to bully us into giving them the things they need. A transitional deal in which, basically, nothing changes and we continue paying so they don't have a hole in their budget, buys time. But it really only kicks the can down the road. There's no point in staying in the departure lounge indefinitely, at some point we have to jump. So I am in agreement with people who say any transitional deal must be time limited.
Many people think these kind of difficulties are being exaggerated. Can't they all just agree to carry on as before? Can't we all just be friends, as it were. Well, no. Rules and regulations are there for a purpose and can't just be hand waved away. But even if that was agreed, it wouldn't last. To understand why, just imagine it is agreed that, as part of a "frictionless" trade deal goods can continue to move across the border between the UK and Europe without customs controls. And, of course, between Northern Ireland and the Republic. Imagine now some hullabaloo when, say, there is a terrorist incident on mainland Europe and it turns out that the weapons had come into the UK and then to Ireland and on to mainland Europe via a container of supposedly everyday goods. The agreement to carry on as before couldn't possibly survive such an event. So even if there were such an agreement it would, in my view, be fragile.
I also predict (this doesn't need any kind of crystal ball) that there will be much noise about how long the transition should be, whether it should be time limited or keep on being renewed until everything is sorted and whether we should stay in some kind of half way house purgatory, in the single market and customs union and unable to consummate our own trade deals, checked out but never actually leaving. And after all of that the arguments will begin about whether we should have left and whether we should rejoin.
If you thought this Brexit malarkey had already got very boring, I'm sorry but it hasn't really even started yet.
*Sunday Times Business 1 Oct 2017
** http://www.ema.europa.eu/ema/index.jsp?curl=pages/news_and_events/news/2017/10/news_detail_002824.jsp&mid=WC0b01ac058004d5c1
*** Daily Mail, 2 October 2017
Wednesday 4 October 2017
Actually, Brexit is about Dunkirk
Or, more likely, the Battle of Britain.
I said (27 July) that Brexit wasn't like Dunkirk, though potentially a colossal economic disaster, to paraphrase Churchill.
But I have now seen the film (it's great, go watch it if you haven't). And, co-incidentally a few days earlier, a film set in France in 1940 as the Germans rolled into Paris. And it struck me that, yes, even for those of us too young to have lived through WWII, there are attitudes and beliefs which are deeply ingrained in our societies and which are relevant, at least.
In the film about German occupied France there were scenes of refugees, in that case walking many miles from Paris to try to find safety having left everything behind. For those old enough to have experienced it - and their children who have heard them talk about it - the scenes of migrants tramping through Europe in recent times must have been like an echo of a nightmare they thought would never return.
I entirely understand the view of the Germans and French that led to the founding of the Common Market and then EU, that they must ensure politically that those events can never recur. It is in the deepest part of their values.
The British experience was different. Britain stood alone and came so close to losing its proud independence. Without the British standing firm - and crucially engaging the Americans without whom Europe would not be free - the modern Europe would not exist. Or, if it did, it would have been created much later in a very different way.
We share much of the same value set with the Germans, French and other continental Europeans. But most of us have never shared their prescription for the means to achieve it, i.e. a European superstate.
I find it hard to accept my own conclusion that these historic events have anything to do with forming our views of how to ensure a safe and prosperous future for us all in the continent of Europe. Surely it's about - well, what? A strong trading block, immigration, loss of sovereignty, freedom of movement and so on?
But feelings and emotions are relevant as well. The continental Europeans have decided long ago the way ahead is to merge. We survived alone and then played a key role in enabling them to have the luxury of taking those decisions.
We have never ploughed the same furrow. We don't have the same shared experience. I can't help feeling, whether I like it or not, that's a key part of why we feel we don't belong in the federal European state. Even though it's ancient history.
We are better getting out of their way and letting them form the federal state that we never voted for and, I believe, a majority of Brits instinctively don't want to belong to.
In 1975 we were sold a "common market". But even in 2016 the Remain campaign was fought on the basis of the status quo. Remainers are wont to say that the Leave option was vague and unspecified and people didn't know what they were voting for. A valid point, but what about the silence of the Remain campaign on the EU's direction of travel? I guess we all knew this was dissembling on a grand scale. The Leave campaign offered nothing concrete beyond the "bring back control" mantra and the obviously contentious, even at the time, "£350M a week for the NHS". But the Remain campaign, in its deliberate silence about the future of the EU, was equally morally bankrupt. There was, deliberately, no discussion at all about what the future "Europe" might look like, what influence we would have over it, what potential developments we could veto or have to accept. I contend that the choices were both unspecified, admittedly perhaps unknowable. No wonder many people voted on feeling and instinct.
It is often suggested that Leavers (I wasn't one) voted that way because they didn't like immigration or even because they were racist (a totally out of order accusation). And we hear the refrain "people didn't vote to make themselves poorer". I believe many people voted Leave because they don't feel they belong in what Europe wants to become. They feel separate.
They are allowed to feel that. And it means they won't easily change their minds. It's why we haven't seen much "buyer's remorse" from leave voters. And aren't likely to either.
I said (27 July) that Brexit wasn't like Dunkirk, though potentially a colossal economic disaster, to paraphrase Churchill.
But I have now seen the film (it's great, go watch it if you haven't). And, co-incidentally a few days earlier, a film set in France in 1940 as the Germans rolled into Paris. And it struck me that, yes, even for those of us too young to have lived through WWII, there are attitudes and beliefs which are deeply ingrained in our societies and which are relevant, at least.
In the film about German occupied France there were scenes of refugees, in that case walking many miles from Paris to try to find safety having left everything behind. For those old enough to have experienced it - and their children who have heard them talk about it - the scenes of migrants tramping through Europe in recent times must have been like an echo of a nightmare they thought would never return.
I entirely understand the view of the Germans and French that led to the founding of the Common Market and then EU, that they must ensure politically that those events can never recur. It is in the deepest part of their values.
The British experience was different. Britain stood alone and came so close to losing its proud independence. Without the British standing firm - and crucially engaging the Americans without whom Europe would not be free - the modern Europe would not exist. Or, if it did, it would have been created much later in a very different way.
We share much of the same value set with the Germans, French and other continental Europeans. But most of us have never shared their prescription for the means to achieve it, i.e. a European superstate.
I find it hard to accept my own conclusion that these historic events have anything to do with forming our views of how to ensure a safe and prosperous future for us all in the continent of Europe. Surely it's about - well, what? A strong trading block, immigration, loss of sovereignty, freedom of movement and so on?
But feelings and emotions are relevant as well. The continental Europeans have decided long ago the way ahead is to merge. We survived alone and then played a key role in enabling them to have the luxury of taking those decisions.
We have never ploughed the same furrow. We don't have the same shared experience. I can't help feeling, whether I like it or not, that's a key part of why we feel we don't belong in the federal European state. Even though it's ancient history.
We are better getting out of their way and letting them form the federal state that we never voted for and, I believe, a majority of Brits instinctively don't want to belong to.
In 1975 we were sold a "common market". But even in 2016 the Remain campaign was fought on the basis of the status quo. Remainers are wont to say that the Leave option was vague and unspecified and people didn't know what they were voting for. A valid point, but what about the silence of the Remain campaign on the EU's direction of travel? I guess we all knew this was dissembling on a grand scale. The Leave campaign offered nothing concrete beyond the "bring back control" mantra and the obviously contentious, even at the time, "£350M a week for the NHS". But the Remain campaign, in its deliberate silence about the future of the EU, was equally morally bankrupt. There was, deliberately, no discussion at all about what the future "Europe" might look like, what influence we would have over it, what potential developments we could veto or have to accept. I contend that the choices were both unspecified, admittedly perhaps unknowable. No wonder many people voted on feeling and instinct.
It is often suggested that Leavers (I wasn't one) voted that way because they didn't like immigration or even because they were racist (a totally out of order accusation). And we hear the refrain "people didn't vote to make themselves poorer". I believe many people voted Leave because they don't feel they belong in what Europe wants to become. They feel separate.
They are allowed to feel that. And it means they won't easily change their minds. It's why we haven't seen much "buyer's remorse" from leave voters. And aren't likely to either.
Tuesday 3 October 2017
Worst Everton team in over a decade
Everyone can see Everton are struggling but I saw it for myself, first hand last week in the Europa League game at Goodison against Apollon Limassol, which ended in a shambolic 2-2 draw. One might say "hardly the mighty Apollon Limassol, of Cyprus". Things got worse with the 0-1 home defeat to Burnley on Sunday and Everton have gone into the international break badly needing to regroup.
I was suspicious of the almost unbounded optimism during the transfer window. £142M was splurged with the biggest buys being Sigurdsson (£44M), Pickford (£26M), Keane (£26M) and Klassen (£24M). In addition Vlasic came for (£10M), Henry Onyekuru (who he? bought for £7M from Belgian first division side KAS Eupen and loaned straight out to Anderlecht for the season) and Sandro Ramirez came from Malaga for £5M.
I was pleased with the acquisition of Pickford and Keane - good players in needed positions. Pickford has done well, though alarmingly he patted down shots and crosses on multiple occasions against Burnley before gathering the ball. I expect Keane will be a good player for the club, but he doesn't look like the Burnley player who won two England caps last season. After a sound start, he's not looking quick or confident. He badly needs the injured Jagielka alongside rather than the accident prone Williams, who clearly reached his peak for Wales at the Euros 15 months ago and seems to be in steep decline, aged 33.
But the other new players aren't looking good. 7 Premier League games and a few cup ties against modest opposition is early days - though nearly 20% through the Premier League season. However, Sigurdsson looks one paced. I asked whether he would prove to be a good swap for Barkley (my post of 19 July) when it looked like one would arrive and the other depart. The fact that most of Sigurdsson's assists come from set plays worried me and I noted that there were 71 players who created more open play chances than Sigurdsson in the Premier League last season, including Kevin Mirallas and Ross Barkley of Everton. Indeed, Ross Barkley created 54 to Sigurdsson's 25. Adam Bate's comment on Sky Sports (he said "buyer beware") worried me. I'm even more worried now.
In common with many, I thought the club couldn't go wrong with Sandro Ramirez - a Barca academy graduate who scored 14 goals for Malaga in 30 La Liga appearances last season. Even if it didn't work out, they wouldn't lose money, a no-lose deal if ever we saw one. But Ramirez (as an aside why do the Premier League allow players to put what name they want on their shirts? Sandro isn't either of his family names) looks ever more like a startled rabbit and seems to have no idea where the net is. The answer is the club can lose if it goes into a tail spin because the squad is so weak. I'd already be planning to offload Ramirez in January.
Of course, it's not Ramirez's fault that Everton didn't replace Lukaku. He was only ever bought as a squad player/no 2 striker. Had Everton kept hold of Lukaku, which was never likely, the situation would be very different I'm sure. And there has been much emphasis on the gross spend of £142M when the net spend was "only" £46M and would have been fairly small if, as expected, Barkley had been sold before pulling out of a move to Chelsea and then getting injured. The squad needed a much bigger net spend, especially in view of the age profile of the squad with Jagielka, Baines, Williams, Rooney and Lennon all the wrong side of 30, the loss of Lukaku and the seemingly planned loss of Barkley, Koeman saying the player would be sold as he was within 12 months of the end of his contract.
Gary Neville, speaking on Sky, has clearly posited the problem for teams with too many players over 30: they play too deep. Forwards don't run in behind the defenders any more and prefer to drop off and defenders drop ever deeper, Williams being a case in point, ending up nearly treading on his own goalkeeper's toes when Burnley scored their excellent goal on Sunday.
Nevertheless, the failure to buy a proven striker is hugely culpable given the lack of surprise in Lukaku's departure. During the feelgood period when Everton, unusually, got the bulk of their business done early, many thought Rooney provided back up in case a replacement for Lukaku wasn't secured, but I was sceptical (see The Homecoming Prince, 12 July). I wondered if he still had the legs. He has, but not the speed of thought. Moreover, I wonder why Koeman can't get the team to play more aggressively and go forward more. Could it be that the players are looking to Rooney for their lead? He likes to drop off and be involved in the play, often slowing it down.
That tendency of Rooney's has exacerbated the other problem Everton have. The players they have acquired are too similar. There is no balance and variety in the squad. Many have noted that they have signed three "number 10s" in Rooney, Sigurdsson and Klassen. So there is no striker and no width. Which is further aggravated by Koeman having fallen out big time with Mirallas, who has had hardly any game time and is, I assume, heading for the exit in January.
Mirallas is missed because there is no zip in the team, no-one who can speed the game up, in particular by going on a run and drawing players in to them. All the players Everton have signed prefer to pass and move. Or maybe just pass. Sideways or back. Especially Schneiderlin. But I've got another bee in my bonnet about him, besides negativity. I've always said (partly from my own playing experience) that a good big fella will beat an equally talented little fella most of the time. But Schneiderlin strikes me as being one of those footballers who, while blessed with a perfect physique, play as if they are frightened of heading the ball. I hate to see him marking a danger man at corners and free kicks.
Barkley, of course, is different. Even without Lukaku he would bring a different dimension to the current team. Jamie Redknapp, writing in today's Daily Mail, notes:
"...they are lacking a creative spark. I do not see players in this Everton team with pace who are prepared to take on defenders and go past people. They desperately miss Ross Barkley. He creates so many chances and when he is fit I would have him in the team ahead of Sigurdsson."
I've been saying the same. But it seems to be assumed Barkley is still likely to leave, on a free transfer by next summer if a deal can't be found in January, which I expect it won't be. I think Barkley turned down Chelsea because he had no guarantees about his role there - the manager didn't even speak to him directly - and is now pinning his hopes on Spurs. Indeed, perhaps Spurs suggested to Barkley's agent that he should wait. Maybe they will pay him a bit more if they get him for nothing in the summer. It wouldn't surprise me if a deal had been pre-agreed. I still think he'd be daft to go there as I can't see him displacing Eriksen or Alli and I can't imagine Pochettino playing both of them and Barkley except against the weaker teams at home. So he'd only get splinters in his arse sitting on the bench most weeks.
The really worrying thing for me is that this Everton team, admittedly drained of confidence, looks weaker than any in the past decade. Indeed, since Wayne Rooney was last there, as a teenager. Maybe even the weakest since the Walter Smith dog days, but more reasonably since 2003-04 when, in Moyes's 2nd full season, Everton finished 17th. Scary.
If you doubt this, answer me these questions: On what we've seen so far, would you prefer:
So, yes, Everton need a striker. But I suspect that alone might not be enough to stop me being nostalgic for players I hadn't expected to miss so badly after the progress of recent years. It looks to me like a huge snake that they've managed to slide down.
Still, with any luck, Colleen will keep Wayne at home this international break to avoid the ignominy of him being arrested. After all, I don't know how she lives with the shame - of him driving a VW Beetle!
*The Everton fans song for Arteta was to the tune of Scott Joplin's The Entertainer:
Follow, follow, follow
Everton's the team to follow
Cos there's nobody better than Mikel Arteta
He's the best little Spaniard we know
I also liked the Fellaini song they sang, to the tune of Can't Take My Eyes Off You, though this was rather more ribald.
I was suspicious of the almost unbounded optimism during the transfer window. £142M was splurged with the biggest buys being Sigurdsson (£44M), Pickford (£26M), Keane (£26M) and Klassen (£24M). In addition Vlasic came for (£10M), Henry Onyekuru (who he? bought for £7M from Belgian first division side KAS Eupen and loaned straight out to Anderlecht for the season) and Sandro Ramirez came from Malaga for £5M.
I was pleased with the acquisition of Pickford and Keane - good players in needed positions. Pickford has done well, though alarmingly he patted down shots and crosses on multiple occasions against Burnley before gathering the ball. I expect Keane will be a good player for the club, but he doesn't look like the Burnley player who won two England caps last season. After a sound start, he's not looking quick or confident. He badly needs the injured Jagielka alongside rather than the accident prone Williams, who clearly reached his peak for Wales at the Euros 15 months ago and seems to be in steep decline, aged 33.
But the other new players aren't looking good. 7 Premier League games and a few cup ties against modest opposition is early days - though nearly 20% through the Premier League season. However, Sigurdsson looks one paced. I asked whether he would prove to be a good swap for Barkley (my post of 19 July) when it looked like one would arrive and the other depart. The fact that most of Sigurdsson's assists come from set plays worried me and I noted that there were 71 players who created more open play chances than Sigurdsson in the Premier League last season, including Kevin Mirallas and Ross Barkley of Everton. Indeed, Ross Barkley created 54 to Sigurdsson's 25. Adam Bate's comment on Sky Sports (he said "buyer beware") worried me. I'm even more worried now.
In common with many, I thought the club couldn't go wrong with Sandro Ramirez - a Barca academy graduate who scored 14 goals for Malaga in 30 La Liga appearances last season. Even if it didn't work out, they wouldn't lose money, a no-lose deal if ever we saw one. But Ramirez (as an aside why do the Premier League allow players to put what name they want on their shirts? Sandro isn't either of his family names) looks ever more like a startled rabbit and seems to have no idea where the net is. The answer is the club can lose if it goes into a tail spin because the squad is so weak. I'd already be planning to offload Ramirez in January.
Of course, it's not Ramirez's fault that Everton didn't replace Lukaku. He was only ever bought as a squad player/no 2 striker. Had Everton kept hold of Lukaku, which was never likely, the situation would be very different I'm sure. And there has been much emphasis on the gross spend of £142M when the net spend was "only" £46M and would have been fairly small if, as expected, Barkley had been sold before pulling out of a move to Chelsea and then getting injured. The squad needed a much bigger net spend, especially in view of the age profile of the squad with Jagielka, Baines, Williams, Rooney and Lennon all the wrong side of 30, the loss of Lukaku and the seemingly planned loss of Barkley, Koeman saying the player would be sold as he was within 12 months of the end of his contract.
Gary Neville, speaking on Sky, has clearly posited the problem for teams with too many players over 30: they play too deep. Forwards don't run in behind the defenders any more and prefer to drop off and defenders drop ever deeper, Williams being a case in point, ending up nearly treading on his own goalkeeper's toes when Burnley scored their excellent goal on Sunday.
Nevertheless, the failure to buy a proven striker is hugely culpable given the lack of surprise in Lukaku's departure. During the feelgood period when Everton, unusually, got the bulk of their business done early, many thought Rooney provided back up in case a replacement for Lukaku wasn't secured, but I was sceptical (see The Homecoming Prince, 12 July). I wondered if he still had the legs. He has, but not the speed of thought. Moreover, I wonder why Koeman can't get the team to play more aggressively and go forward more. Could it be that the players are looking to Rooney for their lead? He likes to drop off and be involved in the play, often slowing it down.
That tendency of Rooney's has exacerbated the other problem Everton have. The players they have acquired are too similar. There is no balance and variety in the squad. Many have noted that they have signed three "number 10s" in Rooney, Sigurdsson and Klassen. So there is no striker and no width. Which is further aggravated by Koeman having fallen out big time with Mirallas, who has had hardly any game time and is, I assume, heading for the exit in January.
Mirallas is missed because there is no zip in the team, no-one who can speed the game up, in particular by going on a run and drawing players in to them. All the players Everton have signed prefer to pass and move. Or maybe just pass. Sideways or back. Especially Schneiderlin. But I've got another bee in my bonnet about him, besides negativity. I've always said (partly from my own playing experience) that a good big fella will beat an equally talented little fella most of the time. But Schneiderlin strikes me as being one of those footballers who, while blessed with a perfect physique, play as if they are frightened of heading the ball. I hate to see him marking a danger man at corners and free kicks.
Barkley, of course, is different. Even without Lukaku he would bring a different dimension to the current team. Jamie Redknapp, writing in today's Daily Mail, notes:
"...they are lacking a creative spark. I do not see players in this Everton team with pace who are prepared to take on defenders and go past people. They desperately miss Ross Barkley. He creates so many chances and when he is fit I would have him in the team ahead of Sigurdsson."
I've been saying the same. But it seems to be assumed Barkley is still likely to leave, on a free transfer by next summer if a deal can't be found in January, which I expect it won't be. I think Barkley turned down Chelsea because he had no guarantees about his role there - the manager didn't even speak to him directly - and is now pinning his hopes on Spurs. Indeed, perhaps Spurs suggested to Barkley's agent that he should wait. Maybe they will pay him a bit more if they get him for nothing in the summer. It wouldn't surprise me if a deal had been pre-agreed. I still think he'd be daft to go there as I can't see him displacing Eriksen or Alli and I can't imagine Pochettino playing both of them and Barkley except against the weaker teams at home. So he'd only get splinters in his arse sitting on the bench most weeks.
The really worrying thing for me is that this Everton team, admittedly drained of confidence, looks weaker than any in the past decade. Indeed, since Wayne Rooney was last there, as a teenager. Maybe even the weakest since the Walter Smith dog days, but more reasonably since 2003-04 when, in Moyes's 2nd full season, Everton finished 17th. Scary.
If you doubt this, answer me these questions: On what we've seen so far, would you prefer:
- Klassen to Osman or Pienaar? Osman was technically very proficient and had a goal in him. Pienaar had that zip from a standing start and willingness to drive at defenders
- the current centre backs to Weir and Stubbs? Or Joe Yobo?
- Sandro Ramirez to Andy Johnson? (I agree Johnson cost more but he was the player we had. And of course there was Yakubu.....)
So, yes, Everton need a striker. But I suspect that alone might not be enough to stop me being nostalgic for players I hadn't expected to miss so badly after the progress of recent years. It looks to me like a huge snake that they've managed to slide down.
Still, with any luck, Colleen will keep Wayne at home this international break to avoid the ignominy of him being arrested. After all, I don't know how she lives with the shame - of him driving a VW Beetle!
*The Everton fans song for Arteta was to the tune of Scott Joplin's The Entertainer:
Follow, follow, follow
Everton's the team to follow
Cos there's nobody better than Mikel Arteta
He's the best little Spaniard we know
I also liked the Fellaini song they sang, to the tune of Can't Take My Eyes Off You, though this was rather more ribald.
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