Quis custodiet ipsos custodes? as the Roman satirist Juvenal observed two millennia ago (Who will guard the guards themselves?). This is highly relevant in Britain today. Accountability has all but collapsed across many areas of public life, and the checks and balances have been largely neutered – in Parliament, local government, the big corporations, the banks, the utilities, to name but some. To this list is now being added some aspects of health and social care, as well as education with serious criticism of Ofsted. The discrepancy between the assessments of the new official watchdog CQC (Care Quality Commission) and the part-private, part-public data analysis organisation Dr. Foster is disturbing. No less than 8 hospital trusts named by Dr. Foster as ‘significantly under-performing’ had previously been given the all-clear by the official regulator as delivering excellent or good overall care. The difference is largely explained by the methodology. CQC has hitherto depended heavily on self-assessment, while the data collators look for quantifiable external evidence regarding outcomes, especially death rates. The lessons of this are that we urgently need a fundamental review both of regulatory procedures and their funding.
The possible default by Dubai World and Nakheel, the region’s major property developer, could cause more than a blip in the world’s fragile financial-economic recovery. The main exposure of Western banks lies through £14bn of syndicated loans made to Dubai World, of which RBS had helped to arrange £2.3bn, though it may have passed some of that on to other lenders. Altogether the Dubai city state has run up £37bn of outstanding debts, and British banks are the biggest lenders to the Emirates. HSBC as been the largest lender with £17bn of outstanding borrowings which have played a major part in funding the rapid expansion in the region. The reason this is potentially so serious is that Dubai’s request for a repayment standstill on its multi-billion dollar debts has triggered fears of debt defaults elsewhere in the global economy. As with the Lehman Brothers debacle, it could spread a contagion generating a second wave in the global credit crisis. This is especially likely if Dubai’s debt includes off-balance sheet liabilities that carry its total debt burden well above the £60bn estimated so far.
The revelation that the main safety regulator, HSE (the Health and Safety Executive), cannot approve the current nuclear reactor designs which are central to the Government’s intended nuclear renaissancecarries enormous implications. The leading designs come from the French companies, which make the EPR reactor, Areva and EDF, and the US multinational power comapny, Westinghouse, which produces the AP1000 reactor. The HSE report identifies several safety concerns. One focuses on the non-separation of the safety protection system from the control system on the EPR reactor, such that a fault on one could disable the other as well. Second, the EPR has a concrete shell encasing the nuclear reactor where the steel cables are grouted over, preventing maintenance checks as the reactor ages, whereas British practice is that the steel cables should be able to be inspected and removed. Third, there are problems with the positioning and operation of fire doors and alarms. HSE also believes that the Westinghouse safety case has significant shortfalls, with questions also about the mechanical engineering and structural integrity. These are not minor points. The implications for the Government’s plans to have new nuclear plants up and running by 2017 are devastating.
The discovery at Basildon and Thurrock University Hospitals of blood-spattered floors, half the privacy curtains soiled, commodes soiled under the seat, and mattresses stained through to the foam has sent shock waves through the whole regulatory ststem. When the hospital trust was rated ‘good’ on quality of service by the Care Quality Commission (CQC) in their 2008-9 assessment, ‘excellent’ for financial management and scoring 13 out of 14 for cleanliness, 7out of 8 for care, and full marks for keeping patients healthy, yet the death rate was almost 50% above the natural average and blood splatter, dirt and staining were found to be widespread, confidence in the regulatory system collapses. But what makes this so significant is that this is not an isolated example. Earlier this year similarly poor standards were found at Mid-Staffordshire NHS foundation trust and it was estimated that some 400 deaths had occurred there needlessly over 3 years because of healthcare failures. Every time the authorities assure us that lessons have been learned and that these failings will never happen again. And then they do.
When several UK citizens alleged that they had been tortured in Pakistan on suspicion of terrorism and that MI5 officials were aware of this, indeed encouraged it, the Government stonewalled by saying that it did not condone torture. This did not of course answer the question of whether they had indeed been complicit in the brutal treatment of certain named individuals. The allegations are extremely serious. Salahuddin Amin from Luton said that in between interviews by MI5 he was beaten, whipped, deprived of sleep, and threatened with an electric drill. Rengzieb Ahmed from Rochdale said he was beaten and whipped and had three fingernails ripped out. The lawyers of Rashid Rauf from Birmingham say they saw physical evidence of his torture. Zeeshan Siddiqui was beaten, drugged and forcibly catheterised, and became so traumatised he couldn’t stand trial and was had to be transferred to hospital. A doctor from the English south coast was tortured for 2 months before being questioned by MI5. What is significant now is that these claims, which have long been known, have been corroborated by officers within the notorious Pakistani ISI who did the torturing and confirm that it was undertaken with the full knowledge of British intelligence. So how can those responsible – not American jailers at Abu Ghraib or Guantanamo, but British officials outsourcing torture to countries known to practise it – be brought to book?
The ingenious Obama proposal to offer a provisional US figure for carbon emission cuts just might, might just, save the Copenhagen summit from deflating embarrassingly. Obama can’t pre-empt a final Congressional decision in January or February at the earliest, but he is at least doing the next best thing. All the other big industrial countries have offered emission reductions, though with huge variation in carbon-cutting ambition, but without America, the world’s biggest per capita polluter, this precarious package will collapse. With a proposed US offer of some 14-20% below 2005 levels (a 17% cut has already passed the House of Representatives), subject to later ratification by Congress, the US offer, especially if Obama himself were to attend, might just be enough to get an political framework agreed. But the drama of this should not be over-stated. This summit isn’t, never was, a final, once-in-a-lifetime, conclusive deal to save the world, as some media have portrayed it. It is rather one step along the way of tedious, aggravated, semi-continuous, draining cross-global negotiations – but still undoubtedly an important one. But it’s not Kyoto Mark 2. Does that matter?
The significance of the publication today of the House of Commons Reform Committee report, entitled ‘Rebuilding the House’, has been largely swamped by the press spectacular over the Chilcot Iraqgate inquiry. Which is a pity, because Parliamentary reform is the irreducible necessity for any recovery of public confidence in the political system, and the Wright Committee report offers a very good start. It was (deliberately) given a narrow remit, to examine the case for a Business Committee of the House elected by secret ballot of all Back Benchers, for election of the chairs and members of Select Committee, and for new procedures to allow the electorate to press by public petition for key issues chosen by them to be debated and voted on on the floor of the House or be referred to the appropriate Select Committee for full consideration. Collectively these reforms would make the Government much more accountable both to Parliament and to the electorate and they would begin to shift significant power away from the Executive, particularly No.10, and in favour of the legislature. Parliament would begin again to be fit for purpose.
The £11m pay-out now being made to the disgraced MG Rover 5, bringing their total ill-gotten gains to £42m, raises yet again the neglected issue of corporate ethics which are now in their worst state for decades. The understandable feeling among the workforce who lost their jobs overnight, had their pensions cut and got only basic statutory redundancy pay, is that they should be taken to the courts for fraud. In fact the Phoenix 4 were extremely careful to follow legal advice whilst elaborately extracting over £40m from the company wind-up which should have been put into the workers’ trust fund that they set up before the company failed in 2005. Instead they paid much of the money into an offshore trust registered in Guernsey. The fact that the report finally published into MG Rover two months ago did not accuse them of actual law-breaking (though being acutely critical of their behaviour) prompts again the urgent need to establish OPSE – a statutory Office to regulate Private Sector Ethics. Several other scandals in recent weeks and months justify the same requirement.
The one-in-a-thousand-years event at Cockermouth and Workington, as Hilary Benn has described it, starkly reveals the cataclysmic power of natural phenomena in their more extreme manifestations. Torrential rainfall of 12.4 inches within just 24 hours is unprecedented in England, and combined with waterlogged ground and swollen rivers had produced another natural disaster. There have been precedents: the East Midlands flooding a decade ago which swamped 7,000 homes, the recurring floods around Tewkesbury, Carlisle, Hull, Doncaster, and parts of the fenlands gradually yielding to the sea after 400 years of drainage. It would be unwise automatically to ascribe all of these events to climate change since severe flooding has frequently occurred in the past when climate change was less apparent, e.g. at Lynmouth on the south coast in 1953. Bu the increasing frequency and ferocity of these irruptions does suggest that something more is happening over and above the natural variability of the climate. These latest floods cary a warning like the canary in the mine. So what should we do about it?
The biggest issue at the election in May ought to be, may even turn out to be, the taming of the City and the reform of the banks. So far New Labour and the Tories are not offering much on this, certainly nowhere near the critical mass of reform needed to transform a dangerous finance-driven economy. The former is proposing in this week’s Queen’s Speech powers to limit greedy bonuses and excessive risk-taking (though the FSA already possesses such regulatory authority) plus some increase in capital ratios without indicating by how much (which is the key factor), but that will still leave the City dominant and the real economy dependent and hobbled. The Tories are proposing living wills (by which banks can wind themselves down in the event of collapse), higher capital reserves, and more support for long-term equity finance (how exactly?). That is also minimalist reform, and given the Tory Party’s dependence on huge support from City institutions and the British Bankers’ Association (whose chief executive was a former Tory MP), neither of whom want any change, it must be doubtful if even these minimal aspirations ever materialise. But the real point is that neither party is seriously addressing the problem.
Like a searchlight on a night landscape, the appointment of the obscure couple, the Belgian PM Herman Van Rompuy and the British peer Cathy Ashton, casts a revealing insight into the current state of the EU. Despite the Lisbon Treaty paving the way for a powerful new European voice in world affairs, the opportunity has been passed up in the interests of preserving the dominance of the main few key nation States. Despite the pressure to balance the widening of the EU with a deepening of accountability to its citizens, the democratic deficit has been intensified. Despite the need to create a fairer balance of power between the big States and the medium/smaller States, the horse-trading has been confined to the traditional carve-up within the handful of the biggest States. Despite the desirability of transparency to usher in a new era of glasnost, the decision has been taken with the usual secrecy behind close doors as though only half a dozen persons mattered and the other half million were irrelevant. Welcome to the new, or rather very old, Europe.
It has just been reported that a big-name industry organisation is complaining that a DECC-commissioned Wicks Review into energy issues complacently played down, even largely ignored, the whole question of peak oil. Given that even the International Energy Agency (IEA), which is always close to the oil industry, is now fiercely debating within its own ranks how soon the oil will run out, which would herald an unparalleled economic dislocation for the world economy, this head-in-the-sand approach seems bizarre. Is this because lead elements in the oil industry, and particularly the US, are keen to talk up the availability of oil supplies lest a panic sends the present precarious global economic recovery into a tailspin? Certainly whistleblowers have claimed that there is political pressure from the US to massage projections of future oil reserves and production levels, though such claims have been rejected by the IEA. Whatever, this is an issue which it would be suicidal to duck, given its implications.
The really big issue in the 6 months left before the election is the restoration of Parliamentary democracy so that post-election the Commons can exercise its real role (which it has not done for years) of vigorously and effectively holding the Government to account. But despite the cross-party Wright Committee having just reported 4 days ago on their remit to examine the need for an elected Business Committee of the House, for elected chairs and members of Select Committees, and for members of the public to have their petitions seriously examined and responded to, there is no mention in the Queen’s Speech on how this should all be taken forward. That is not to say that many of the actual Bills presented do not have considerable merit – certainly the dismissal of them by the media and the Tories as insubstantial or mere electioneering is unfair and clearly wrong. Requiring parenting assessment of ASBO children, a mandatory social price support scheme for the fuel poor, the blocking of monstrous City bonuses and excessive risk-taking by the banks, free personal care for a third of a million pensioners in greatest need, and making 0.7% of GDP going to overseas aid a legal requirement are all significant advances. Even so, the Parliamentary accountability issue remains critical – and absent.
Bowing to the inevitable over a postponement of a legally binding global package for the next stage of tackling climate change is all very well, but the price of failure – or another elastic deferral – can be severe. Nature does not hang about waiting for politicians. And postponement sends out its own baleful message – that this is off the agenda for the time being and urgency and priority take a back seat. This can ricochet unhelpfully across the world, not least to those points of greatest resistance such as the US Congress. It can also weaken the resolve of other big and important countries, including China, India, Japan and Brazil, who might be discouraged from taking gthe painful decisions so deperately needed within a comparatively short timescale. The ultimate danger is that the whole global drive for meaningful, decisive and sufficient action against climate change begins to unravel. Falling back into the comfort zone of untrammelled economic growth and an unyielding power structure based on the dominance of the Washington Consensus is all too easy, but medium and long-term risks calamitous consequences.
The Financial Services Bill to be presented to the Commons on Wednesady, is the first sign that the dithering over the banks is over. Giving the FSA the power to crack down on bankers’ bonuses and to tear up contracts that expose the banks – and the taxpayer behind them – to excessive and unreasonable risk will be wildly popular. It will also be entirely justified. Their bonuses have been pitched at obscene levels, unwarranted at any time, and brazenly provocative during a deep recession which they caused. But the central question still remains: is this enough to prevent any recurrence of the epidemic of bankers’ greed and recklessness that so nearly brought down the entire global financial system? It clearly isn’t. These are important steps that will help to curb the most obvious visible banking excesses that rile the public most, but they fall well short of the root-and-branch reform of the whole banking sector that is now so urgently needed. Without deeper and more fundamental reform, these latest proposals are little more than window-dressing.