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Entries in G20 (2)

Tuesday
Apr142009

The Crisis in British Policing

The accidental release of information about terrorist suspects that lead this week to the resignation of its Head of Counter-Terrorism is only one of a long series of incidents that have cast doubt on the competence of the Metropolitan Police.

At one level, it was a simple mistake (he showed inadvertently to camera a list of largely foreign-born terror suspects) that could have been made by any overworked executive in any industry.

Similar blunders, related to intelligence material and to loss of government data, have plagued Government. They have in common the human weakness of heavily worked staff unaware of the dangers presented by technological advances- whether that of a long range lens or a memory stick.

Government & Technology

Government has still not caught up with technology by creating the necessary protocols for the guarding of data, protocols that can also help hard-pressed officials keep their wits about them under constant pressure.

The gut instinct of Government is always to suppress technological access and to introduce draconian measures against 'receivers of information' where it can. This can result in daft legislation - for example, that on photography which has outraged amateur photographers and irritated tourists.

The stupidity of this legislation beggars belief. It ignores the fact that the activities of the police or security arrangements can be picked up simply by slyly pointing a mobile phone in the right direction. It is another ham-fisted 'sledgehammer to crack a nut' policy that brings Government into disrepute.

And it is this disrepute that we now have to worry about. The public is beginning to edge away from its assumption that the police are a good thing towards seeing it as a threat in itself. Worse, police forces outside London are being tarred by a very London brush.

The London Met & Heavy-Handedness

The Metropolitan Police are increasingly being seen like the 'federales' in a Mexican bandit movie, accumulating their counter-terrorist cash and treating the outlying country bumpkin police as mere agents for the new intelligence-based policing.

The police have struggled in some areas since the 1980s to recover, with some success, a damaging image in depressed areas of being, first, the bootboys of Thatcher in relation to the pit closures and, then, the street managers of the poll tax riots.

In general, the role of the police as protectors of political order has taken second place by far to a warmer image of the police as protectors of the community against both organised crime and petty criminals - assisted by the kindly vision on television of murders solved by Wexford and Alleyne.

In fact, this is naive. As elsewhere in the world, the police are the sensible alternative to the army in keeping the angry mob from following 'V' into Parliament. And if provincial forces get sucked into managing strikes and direct action, it is the Met that is at the heart of national internal security.

The Confidence Factor

This role of maintaining order depends on the public believing that the preservation of order is wholly in its interest - much as the banking system depends on the belief that the saver will always get his money back with interest.

The latter belief has been knocked a little, now it is the former that is under pressure. Resentment at perceived police excesses on the one side face off a frightened property-owning element who think a stronger police presence might require turning a blind eye to the occasional abuse.

There are many factors merging to create this sense of a resumption of the hostilities of the 1980s but with this difference. The real rage is emerging in the South of the country and its middle class element is wobbling between the two extremes in its interpretation of the current crisis.

The alliance of environmentalists and property owners over the extension of Heathrow is not an isolated instance of rebellion verging on direct action. Whether credible or not, many middle class people have been sold on the environmental damage from industry and want something done.

Quantum Revolt

Of course, bad feeling is one thing, direct action is another. But we have seen a quantum leap only yesterday in police action against protest. The typical arrest until now has been of up to 10 to 12 persons connected with terrorism or (say) animal rights extremism or republican terror.

Some of these are then whittled down so that a few stand trial and are incarcerated using new legislation that makes it much easier to criminalise 'strong dissent'. Yesterday, the police moved in on a direct action group and arrested well over a hundred in a raid.

This may be exceptional but it indicates that over a hundred, even excluding the police narks, were prepared to meet late at night to effect a direct action operation. If this becomes the 'norm', then an overstretched police will be dealing with a similar quantum leap in intelligence policing.

And then the next stage, if things get worse, could be mass arrests of a thousand or more by aggressive police dealing with street protests made more aggressive, in turn, by the events in London during the G20 Summit. At this level of intensity, a few deaths become almost inevitable.

Middle Class Revolt

Meanwhile, many middle class people were angry enough at the banking crash, the bail-outs and the prospect of high taxes and low spending to cheer on the protesters at the G20 Summit in spirit if not in body.

Police and Home Office behaviour in the run-up to the Summit is only explicable as an attempt to frighten the Home Counties middle classes from jumping on a train and joining a demonstration that was otherwise peaceful and was easily accessible from St. Albans and Tunbridge Wells.

What the authorities did not want and could not afford was a massive 250,000 plus protest against capitalism. This would easily have been more dangerous than the million against the War in Iraq.

From that perspective, the politically-driven police tactics at the G20 Summit were a success. Numbers at the demonstration were moderate. There was a stage-managed bit of token violence at the RBS branch office in the City that caught the tabloid eye and the police showed their fist to the 'crusties'.

It Goes Sour for the Government

And this is where technology and incompetence come in. The Government 'spin' should have demonstrated that dangerous anarchists had been kept from more damage to property and averted risk to life and limb. But it did not quite turn out that way despite the connivance of the tabloids.

Unfortunately for the police and the Government, there were a lot of mobile phones and independent cameras in the neighbourhood.

Social networks, notably Facebook, were soon full of accounts 'from the front' that suggested that the vast bulk of the demonstration had been peaceful and that the police had been provocative. Moreover, not only peaceful demonstrators but ordinary citizens had been pinioned into blocks for hours at a time.

The truth should have been crushed by the dominance of the print media, dominated in turn by spin doctors. But it is no longer the 1990s when such methods worked. What now happened was that mobile and other footage and evidence of harm circulated social networks that included journalists.

An Unwilling Martyr to Truth

The critical development was the death of Ian Tomlinson, a local news vendor, who died of a heart attack on the street during the riots. In fact, he had beaten to the ground, despite not being a protester, and the heart attack took place after that assault.

The police lied - or rather did not tell the full truth. But there he and it would have lain if social networks had not started to circulate witness statements and then a call for evidence. Whether this was directly responsible for the discovery, ironically by a fund manager, of incriminating footage is not known.

The Guardian to its credit published footage of Mr. Tomlinson being walloped and then how the matter was handled started to come out of the woodwork. There was no suppression of the facts now or their marginalisation amongst already disgruntled activists.

Credible accounts of police brutality were soon complemented by footage that showed some very aggressive policing against legitimate protest. Finally, a thumping great copper bearing down and walloping a small female protestor became another bit of samizdat film.

The System Takes a PR Hit

A short term PR victory for the police based on traditional media manipulation was replaced within a few days by the nightmare scenario of computer-literate middle classes, human rights groups and even opposition politicians expressing more than grave doubts about the boys in blue.

The anarchists had scored a PR coup of their own - getting the system frightened of what was really a rather small group of disconnected demonstrations, causing the system to over-react and then allowing informal and truly anarchic social networks to spread the message through new technologies.

But the dissent did not happen in a vacuum. Let us summarise what has been happening recently:

  • the Government has been struggling to reverse a major economic crisis which it cannot entirely blame on 'global conditions';
  • 'our' money has gone to bail-out financiers who have caused serious economic damage and yet have been allowed to keep the rewards of their greed;
  • the general public has seen, in some cases, job losses and, in more extreme cases, financial collapse and loss of their homes while the middle classes on their own have seen massive falls in their net asset value;
  • the public knows it is faced with higher taxes and lower spending on services because of what it sees as incompetent business and governmental management;
  • the Government is not only struggling to cope but, equally important, is mired in petty scandals that cast serious doubts on its judgement.

Now, add to this:

  • national planning is imposing major infrastructural projects like Heathrow that appear to benefit the business community rather than local communities;
  • for seven years, draconian legislation affecting civil liberties and personal rights has been put in place without any demonstration of the serious incidents that justifies the loss of those rights;
  • there is no popular support for the small wars, most notably Afghanistan, that place the country in the terrorist firing line;
  • there is a cultural irritation both at the mass migration that came with the boom but which has left the migrants stranded and at a culture of political correctness that appears to diminish both individual responsibility and indigenous rights.

Ressentiment

All in all, the State is losing control of the agenda. An anarchistic resentment of its lack of competence is beginning to develop in response.

Until now, the primary concern has been the potential alienation of minorities and keeping a lid on the spread of endemic breakdown and disorder within the white working class, whose problems worsen but which are scarcely reported except in terms of moralising at some extremecase of family breakdown.

Take the Muslims - an island of brown in a sea of white despite what the fascists imply. The communications culture of the Home Office requires a tone of hysteria about terrorism based on the supply of dossier material, not always credible, to favoured media.

Insiders have not trusted this material for a decade but it has served to mobilise the respectable working class and the small business class into a periodic frenzy of fear at the 'enemy within'. But the repetition of half truths has equally created a profound distrust of police claims amongst the educated.

Muslim Frustration

Relations between the Government and the younger elements in the Pakistani community are now becoming very tense and not only because of the recent arrests which many are convinced are for ‘thought crimes’.

The association of the UK with American drone attacks on the North West Frontier appears to make the Government complicit in murder. Within the UK, most counter-terrorism efforts outside London are based in the West Midlands because this contains the largest concentration of Muslims.

Additional funding has created a unit of 400 dedicated officers and a plethora of ‘soft’ anti-radicalisation efforts in schools and amongst imams in the region, creating a new sub-class of Muslims and inter-faith workers who are bottom-feeding off the state’s patronage

The net result is a small class of favoured Muslims who speak for cohesion and inter-faith initiatives and a smaller group of angry activists who may or may not be seriously contemplating direct action. Between the two lie the vast mass of British-Pakistanis opposed to extremism but alienated by police action.

Where We Are ...

The tide is just beginning to turn against government policies that demonise all protestors instead of dealing with a tiny minority of trouble-makers effectively and that de-humanise the police through the use of masks and unnecessary body armour.

The inappropriate use of anti-terrorism laws, as well as the creation of other laws which are regarded as draconian and unnecessary, builds concern about what all this legislation is actually for.

There have been 1,450 terrorism related arrests between 2001 and 2008 in the UK. The question now arises how many of these people actually intended harm and how many were guilty of little more than expressing extreme sentiments.

On the upside, the rest of the country does not look like the quasi-militarised zone that now surrounds the political and bureaucratic classes in Central London. The suspicion, however, has to be that these classes are protecting themselves at public expense far more than they are protecting the nation.

Our view? The police, under political influence, are throwing away over two decades of growing respect and reform. London has damaged the country.

And why? Because of an hysterical panic over future blame for a rogue security incident and then naked fear of what might happen if direct action became a natural response to the unresponsiveness to the public of Parliament and Whitehall.

This is a very serious moment in British history. Recovery might make many of these fears irrelevant but the systematic degradation of public trust in the police is as dangerous to the nation as the earlier collapse in confidence in its banking system might have been to its economy.

www.tppr.co.uk

www.pendrywhite.com

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Tuesday
Apr072009

'Green Shoots'

Something strange is going on. Business confidence in the services sector is returning even if export-led manufacturing is in dire straits. House prices appear to have stopped falling. Banks seem to be getting ready to lend substantial sums in the late Spring.

Service Collapse - A Sign of Better Times!

One sign that domestic demand is holding up a little better than expected is the paradoxical problems so many of us are having with service suppliers. I have decided not to embarrass them but many suppliers of basic services to us have screwed up in some way recently and it is not because they are bad people.

Think back to November 2008 and the dire predictions of disaster, including ours. The natural reaction was to cut costs. Banks were not lending and some badly managed or unlucky companies, especially those related to retail or property, were going to the wall.

The obvious high cost alongside property is people. Yet service delivery in service companies requires, you guessed it, people. And people in offices.

The requirement for technical and administrative services can only fall so far if businesses are to survive so that demand for very basic business services, rather than for higher added value advice, has remained solid.

Maintained demand but slashed service delivery costs have meant a loss of redundancy in the system, errors, slower response times and client irritation at best and anger at worst.

In one case, after five years of perfect service, an IT-related supplier of ours had its first set of serious service problems earlier in the year and then faced a mega-weekend breakdown.

Our complaint was less the breakdown and more the complete failure of communications to us about it so that we still cannot say for certain whether the supplier fits the analysis that we have given above, but we would guess on circumstantial evidence that it was more than likely.

Those In Glass Houses Should Not Throw Stones

After a long period in which clients stayed loyal (for which we are exceedingly grateful) but did not increase budgets and where little new business appeared on the horizon, the last three weeks have seen a sudden and startling surge in both opportunities and new business wins.

A month ago we were, like everyone else, pleased with survival. Now, we are back to obsessing about ensuring service delivery to meet growth and to considering (admittedly not for a few months yet) new investment.

The problem is 'once bitten, twice shy'. How do you dare invest and take risks when two difficult facts are staring you in the face. And yet if you don't invest, you may well restrict your growth and become little more than a lifestyle business without the lifestyle - nothing but work and constant risk.

The first fact is the coming 'lending boom'. This is a national economic stimulus that is not matched by adequate stimulus elsehere. There are no signs that the G20 Summit did much more than offer us a long term regulatory regime of no help to immediate growth prospects.

The other fact is that the UK's national stimulus is filled with economic bear traps. The Institute of Fiscal Studies has come out with some horrendous figures for the annual level of tax rises/spending cuts necessary to balance the British books over the coming years.

It has estimated that extra spending cuts or tax rises of £40bn per annum would be required by 2015-2016 to bring borrowing under control and that the deficit would rise above 10% of national income in 2009/2010.

This means that business is going to face higher taxation without a crack at the tax avoidance schemes that made life bearable for some. It means that, eventually, inflation will be back on the agenda with supplier prices chasing prices charged to clients and customers.

For some businesses, the chance is offered of engagement with the delivery of public services on contract to save money but if the schools meals business is anything to go by, competitive tendering will make these fairly low margin opportunities that still do not deliver much for the public.

And an environment in which the necessity for higher taxation can only be offset by reduced public spending suggests a vicious political battleground that will be little more than a cover for naked class war, and for economic wars between regions and nations within the UK, for shares of the reduced cake.

The crisis is also now one of structural reform as much as it is one of recovery. The Government has been meeting with the Bank of England and the FSA to implement the G20 agreement.

Although largely targeted at the financial sector, it is hard not to see the 'burden' of regulation increasing rather than diminishing.

But one of the biggest problems is likely to be the massive national pensions deficit where employers are going to have to pay more into funds in good times to offset the need to provide lower payments during recessions.

The G20 Summit

The domestic coverage of the G20 Summit indicated how badly the media (and presumably the public) wanted it to be true that it had kick-started the global recovery. But the first signs of recovery based on 'quantitative easing' within the UK does not mean that export markets will recover quickly.

We and the IMF have our doubts (considerable doubts) about the Summit but the people wanted to believe. The G2O Summit ended with apparent unity and a smiling, even slightly embarrassing, group love-fest photo.

If the intention was to provide a de minimis communiqué that would bamboozle the world’s media into positive headlines in order to create confidence – it worked. Markets rose on the news worldwide.

However, if it was designed to deal with some of the fundamental problems in the global economy, then the best that could be said about it was that it created a framework to ensure that things did not get worse.

There was a serious disconnect between the front pages ‘spun’ by governmental press offices ‘on site’ and the opinion of informed commentators who drew attention to two fundamental flaws in the agreement.

First, most promises have to get through national parliaments and assemblies. This is far from assured.

And nothing was agreed to deal with what the IMF had identified as the fundamental problem in the system - the continued existence of a further estimated but unknown $1.3 trillion of toxicity in the US and Europe.

The considered and expert consensus was that, if you sweep away the hype, the G20 was a modest success in getting world leaders to talk to each other and buttress the IMF. It also represented a serious change of mood on the regulation of finance capitalism.

However, it was only the start of any global recovery programme. Few really believe that, at best and assuming no shocks, it will do much more than bring the global recovery forward by more than a matter of weeks. It will certainly not do much about immediate pain.

The market rise on the conclusion of the Summit was not so much on hopes of recovery but on a far more sensible hope of stabilisation. The problem started in the US and now needs resolution in the US. This fact has not changed. Toxicity is still locked into the US system and it still needs handling.

The Financial Times was helpful in summarizing what remains problematic from the perspective of an economic liberal.

  • stimulus has to remain on the agenda if any recovery falters
  • bank balance sheets remain unrepaired
  • the Doha round is still in suspension and protectionist measures continue to creep in by the back door.

All this does not make the G20 Summit a ‘failure’ by any means but it is certainly not the success that the hype-merchants have tried to bamboozle the public into believing for domestic political reasons.

Where Does This Leave British Business?

Well, of course, the answer depends on type, size and location of business. This does not seem to be manufacturing's time in the sun after all. The overhang of sovereign crisis and the effect of toxicity on trade finance are seriously screwing up export trade.

But service businesses should be wary of moving forward too fast and too furiously. The new bank lending and the resilience of basic demand should enable most to survive if they have a decent business model and can ensure service delivery but there are a few traps yet in the wood.

We may see, within a year or so, a malign convergence of weak public spending, increased taxation, inflationary pressures, regulation trickling down from the reform of the financial sector and intense competition for a slightly smaller cake.

The sigh of relief that the tiger of collapse has walked away from the cave mouth may be replaced by the watchful fear that he may still be lurking in the undergrowth, waiting to pounce on a first misstep.

www.tppr.co.uk

www.pendrywhite.com

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