ON PROGRESS DURING PHASE 1 OF NEGOTIATIONS UNDER ARTICLE 50 TEU ON THE UNITED KINGDOM'S ORDERLY WITHDRAWAL FROM THE EUROPEAN UNION

Hmmm, there’s an awful lot of comment in the media regarding the TF50 report presented by the negotiators of the EU and UK.

There are so many commentators and vested political interests (on both sides) are having their moment in the sunlight, each trying to justify their own position, that I thought I’d take a close look at the actual document before passing judgement.

Sadly, so many people are too busy (or lazy) to search out the facts for themselves, preferring to believe simply what their favourite newspaper, political party, social media site or, God forbid, celebrity, churns out. It is a sad reflection on human society that a large proportion of the population doesn’t like thinking for itself and has a compulsion to follow the herd.

We see this herd mentality everywhere, from virtue-signalling celebrities, companies caving into online pressure groups or simply thoughtless likes and retweets on social media without taking a moment to check the accuracy or truth of what they are spreading. Fake news, indeed.

So, in the spirit of trying to be impartial, here’s my take on the fifteen-page document. The original can be found in this link (Phase 1 Joint Report) and I strongly recommend you to read it for yourself and make your own mind up. It is written in legalese, but have patience!

To begin, we need to go back to the UK’s stated position at the beginning of these negotiations, namely, that everything was discussed at the same time, following the EU’s standard negotiating mantra of, and I quote, “Nothing is agreed until everything is agreed.” For their own reasons, the EU rejected this stance and insisted that “substantial progress” had to be made on three things before talks could move on to trade:

1.  protecting the rights of Union citizens in the UK and UK citizens in the Union;
2.  the framework for addressing the unique circumstances in Northern Ireland; and
3.  the financial settlement.

It’s a little more long-winded than how I have described it, but I hope you get my drift. Now, to my simple way of looking at things, each of the three is intimately tied up with what the final Brexit agreement will look like, and the UK’s position of no agreement on anything, until everything is agreed, seemed totally reasonable. However, the EU disagreed and held firm, resulting in eighteen months of talks, posturing and disinformation coming from all sides.

The most interesting (and to me, important) line in the entire document can be found on the first page, point five, and I quote verbatim: “Under the caveat that nothing is agreed until everything is agreed, the joint commitments set out below in this joint report shall be reflected in the WithdrawalAgreement in full detail. This does not prejudge any adaptations that might be appropriate in case transitional arrangements were to be agreed in the second phase of the negotiations and is without prejudice to discussions on the framework of the future relationship.”

I’ve highlighted the interesting bit in yellow and bold. Unless I have missed a trick here, what both sides are saying is that the entire contents of the document are a bullshit political fudge by the EU so that trade negotiations can take place, and that the British stance at the very beginning was the correct one, namely, nothing is agreed until everything is agreed!! Think that statement through logically as it is very important. Nothing in the document is agreed until everything about the entire exit agreement is agreed.

It has taken eighteen months of talking to arrive at the original British position. WTF!
It makes me wonder why the EU has given ground. I have no more idea than anyone else, but will set out some possible reasons:

• ·         The EU was worried Theresa May would be deposed by a coup of hard-line Brexiteers, possibly Gove, Redwood, Rees-Mogg and Boris. Not a good scenario from their point of view.
• ·         A General Election would be called after a vote of no confidence, resulting in a Corbyn PM. Given Corbyn has been a virulent anti-EU campaigner and his stated aims nearly all tend to be impossible under EU law for as long as we remain in the EU (renationalisation is one example), he would revert to type.
• ·         Worries that Eire would follow the UK and leave. Eire is now a small nett contributor to the EU and the UK is its largest trading partner.
• ·         They see a hardening of the UK population towards leaving under WTO terms and an unhappiness at the way the EU has been conducting themselves.
• ·         The ramifications of what happens to EU businesses if the UK left on WTO terms.
• ·         The nightmare of no more UK money and how to fill the budget hole if we leave with no deal.
• ·         Possible withdrawal of UK troops from Eastern Europe and a cancellation of information sharing under the Five-Eyes agreement, especially around Islamic terrorism.
•          They wanted to see if the UK would roll over and blink first, confusing us with a poor, bankrupt and powerless nation such as Greece. When we didn’t (to their surprise and bafflement, hence the nastiness and snide comments) it was on to phase two eg trade talks

But who knows for sure? Certainly not me, but it does make one wonder why the EU has caved in. Don’t let the pro-EU commentators hoodwink you…the EU has given major ground here and has realised the negotiations are between equals, not supplicant and master.

Housing Crises? What housing crises?

I haven't Blogged for a long time, having been too busy finishing off my last book, writing the new one (working title: Imperium:Quintus) and adding Kindle X-Ray to the first three novels.
However, the recent ill-informed press commentary on what some parties refer to as the "Crises in Housing" has finally stirred me up enough to put finger to keyboard (pen to paper is so last century!) and set out my views and a potential solution.

Firstly, the Blog's title sums up my feelings. There isn't a housing crisis, for if there was one, we would have tens of thousands of families without a roof over their heads, wandering the streets every evening. They don't. What we do have, however, is an affordability crisis, whether you wish to buy or rent.

Despite what we are led to believe, there is plenty of land to build on, even in London. You don't even need to touch the green belt, playing fields or parks. Unfortunately, much of it is held in land banks owned by well-known supermarket chains, national property development firms or private speculators. By restricting how much of it they free up for new homes, these canny bastards are profiting from the increasing land values without having to spend a penny. It is in their interest to build as little as possible, as they can just sit back and watch the land banks go up in value.

So, how do we crack the supposedly difficult problem of not enough houses being built? It's quite simple if you break the problem down, so here's my take:

In the Budget, Hammond should announce a tax on land purchased by builders, investment companies etc that isn't been developed after a period of say three years. An annual tax of perhaps 10% on the purchase price would encourage them to develop or sell on. In addition, any profit on a sale after three years is taxed at 50%, no exemptions allowed. Safeguards would be required to stop firms simply selling on to a subsidiary etc before the three years is up to stop them resetting the 'clock.' This will encourage firms not to hold onto vast land banks, nor to speculate on ever increasing land values.

Next step. Cancel Right to Buy and stop Councils selling off their remaining housing stock to Housing Associations. While RTB helped many get onto the property ladder, it also kick-started the property price boom. What possible incentive does a Council have to build new homes for the rental sector when they then have to be sold at a loss or steep discount? Utter madness.

Next step, but this will need some explaining, so bear with me.

First off. How does the Government fund its massive annual deficit? It issues Gilts, which are bought by banks and investors. UK Gilts are seen as ultra-safe as the UK has never defaulted on its debts, not even during post WW2 austerity (which makes the current one seem insignificant). These Gilts are sometimes sold at a small discount to the face value and pay a fixed interest rate to the holder, currently very, very low. These are issued for varying terms, six months right through to thirty or more years, at which time the Government has to pay the holder its face value.

Secondly, let's look at our housing stock. From what I understand, new timber-framed houses have a design life of somewhere between 50 to 100 years. Old fashioned brick and tile ones last for centuries, but let's assume 150 years. To build a decent, three bedroomed house, with a bit of garden (assuming you are a not for profit organisation-I'll come back to this later), taking advantage of economies of scale, is around £150,000. Build 100,000 of these every year and the cost is £15,000,000,000. Fifteen Billion. Borrow this sum, via 50 year Gilts at 1% and the interest cost is £150,000,000 (one hundred and fifty million) every year. But, if you rent them as Council Houses at £150pw the income is £780,000,000 (seven hundred and eighty million), at least SIX TIMES the annual cost of borrowing. The more you borrow and build, the greater your income.
Now comes the complicated bit, so pay attention:
Of the £780m annual income, £150m goes to servicing the interest, leaving £630m spare. Let us be generous and allow the Councils to keep another £150m, which leaves £480m to be put aside by the State to eventually pay off the 50 year Gilts when they fall due. Dividing £15billion by £480m actually gives a payback time of just over 31 years.
Think about it, for every 100,000 Council houses built, Councils would benefit to the tune of £150m and the debt would be completely paid off in just 31 years. For the next 119 years of the property's life, all the rental income is going back to the Exchequer. Far from being a drain, we are really investing for the future of this country.
Go on, check my maths.


So, my simple suggestion is for a new, not for profit national house building agency to be set up and for it to be tasked with building Council Houses. New Towns, complete with parks, pubs, schools and all the relevant infrastructure. The money is to be borrowed via 50 year Gilts, backed by the difference between income and servicing costs held in escrow to ensure future Governments can't spend it.

So, when you next listen to a politician bang on about the housing crisis and spout there isn't anything that can be done, ask yourself this simple question: Why not?

The ears have it.

I haven't blogged for quite a while, so thought I'd start 2017 off with something only mildly controversial...Vinyl.

Vinyls sales are apparently at a 25 year high. Who would have thought it?
https://www.theguardian.com/music/2017/jan/03/record-sales-vinyl-hits-25-year-high-and-outstrips-streaming
Now, I have reasonably strong views on the subject of music, having spent a not so small fortune on stereo equipment over more years than I care to remember in that elusive search for the ultimate sound reproduction.
My eyes and ears were literally opened nearly forty years ago by a good friend, Stephen Lynch, who then lived in a flat in Strawberry Vale and had a kick-arse stereo. From memory, it consisted of Infinity electrostatic speakers, a Rega Planar arm and a Linn deck. He played Paul Simon's Graceland (on vinyl) and I was literally blown away by the sound quality.
Fast forward many years and, as my ears have slowly deteriorated through age, that ultimate sound (and the huge expense that goes with it) is not so important to me now, so for most of my listening I use either a Sonos system linked to Ruark speakers or a very convenient Ruark Vita R2i radio linked wirelessly into my NAS and Spotify.
I've watched as vinyl has made a comeback and confess to being somewhat confused as to what all the fuss is about. If you have been brought up listening to music via cheap music centres/speakers (I'm showing my age) and poor radios or even iPods/phones through crappy headphones where the music has been compressed to death, then yes, any vinyl record played through a half decent amplifier and speakers will sound bloody marvellous. Consider, the average tune people listen to digitally has been compressed to buggery if it's at a bit rate of 128kb. CD standard is deemed to be around 320kb. The music on my NAS was ripped or downloaded in a lossless format at around 1400kb and sounds superb via my system, knocking the spots off any vinyl I've ever listened to.
I think there are two types of people that bang on about how much better vinyl is; those who have never heard uncompressed music before so naturally don't know any better, and those who want to believe it is, you know, the Emperors new clothes syndrome.
That said, vinyl may sound different (not better) to some ears due to the artificial artefacts which are introduced because they are inherent in the system, somewhat like valve amps, which tend to produce a softer or smoother sound compared to solid state amps. My view is you cannot beat the sound coming from uncompressed music, free of crackles or pops. Also, sooner or later, your vinyl will wear out or begin to degrade. However, even though I no longer have a record player, I still hand on to my vinyl LP's as, well, there is something nostalgic about them, especially as they bring back so many memories. Personally, I think music is almost as evocative as a scent is in taking you back to happier times.

As an aside,whether or not you prefer analogue (vinyl) or digital music, if anyone is thinking of investing in a decent stereo system, please don't be fooled by all the "you must spend 20% of your budget on the speaker wire and interconnects" that the hi-fi shops and magazines collude in as a plot to part you from your money. ALL copper cabling is oxygen free and it is the thickness of the wire that makes a difference, not the brand. I use mains cable for mine and it costs pennies per metre instead of the insane prices quoted by hi-fi retailers.

Really? £372.50? A fool and their money.

Another point when buying TV interconnects. TV's are all digital these days and the beauty of digital is that it either works or it doesn't. A £3 HDMI lead will work just as well as a £579 one; just make sure it is the right version number eg 1.3.

Now they are seriously taking the wee-wee!

That said, as with art, music or wine, we all have different tastes and I know one or two very nice people that will vehemently disagree with me, after all, what do I know?

To all of you that read this blog, I do wish you a brilliant 2017. As the late, great Dave Allen used to say, " Goodnight, thank you, and may your God go with you."