INFORMED COMMENT

                                         JOHN BARKER MA

                                Accepts commissions to write 
                                on politics, economics and 
                                business, together with social
                                comment, speeches and market
                                reports. 

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                                executiveprofiles@btconnect.com 

REALPOLITIK AND TOKENISM

President Putin has clearly flouted the

international rule of law by annexing the Ukraine.

He is putting in place a strategy of real politik for

rebuilding Russia's former empire.This could well

be through the evential annexation of the twelve

countries where Russian is the main secondary

language and the insistence that the 'human

rights' of its speakers must be protected. The
similarities with Hitler's policy over sudetenland
in 1936 are stark.
 

The Russian President is assisted in planning his

aggressive domino effect by impotence and

indecision:policy paralysis caused by the

increasing dependency of the EU's major

economies on Russian trade and, of course,its

growing stranglehold on energy supplies.

 

At the same time, the inevitable schism that will

open up between the EU and the US on what to

do about the invasion of a sovereign country plays

into Putin's hands.

 

The Ukraine is the first piece in the jigsaw and the

question is not if, but when, others will follow in

Russian expansion, facilicitated by vacuous talk

and empty threats.

 

WIT OF ONE WHO WOULD BE LEADER

 

The changing name of the former secretary

of state for energy from Anthony Wedgwood

Benn, 2nd Viscount Stansgate to plain Tony

Benn, always raised a few eyebrows. Attempting

to present himself as a working-class warrior

and not a son of privelege could tend to

detract from something that never changed:

his rapier-like wit.

 

He once remarked "Clement Attlee had as

much charisma as a mouse. He was absolutely

mono-syllabic. People say conversation is

supposed to be like a game of tennis, but with

Attlee it was like tossing biscuits to a dog."

It has been said of Tony Benn that he made

enemies and kept enemies. Not so with the

Tory Party. His extreme left-wing views were

a factor in Margaret Thatcher's victory at the

1979 general election and in the eighteen years

of Labour opposition that followed.

 

BBC LICENCE FEE - SPECIAL PLEADING

The BBC's Director-General's article Leave our licence fee

alone (Times, February 24) sounds like special pleading,

not only for the BBC, but also for the entire broadcasting industry,

He suggests that all broadcasters are in danger of being

nationalised, which is clearly preposterous.

Lord Hall's supplication will be viewed with a sense of irony by

the BBC's commercial competitors. The Corporation's existence

relies not on creative output, but on legally-enforced licence-fee

payers' contributions. A significant proportion of the £3.6bn

budget is channeled into the corporation's generous pension

fund. Some 200 people are currently imprisoned for

non-payment of the licence fee.

Lord Hall makes the absurd assertion that top-slicing means

less funding for content we know and love. This does not

reflect the reality of endless old repeats, quiz shows and the

admitted political bias of an institution that has clearly lost its way.

The BBC should return to its core values of its founder, Lord

Reith, as a disinterested, public-service broadcaster,

informing and educating, rather than chasing meaningless

ratings in competing with its commercial rivals.

This calls for a fundamental restructuring of the Corporation,

reducing the global reach of its output, shrinking its

bureaucracy and putting more of its licence fee into

delivering balanced, high-quality news and documentary

programmes.

.

LOWER TAXES, HIGHER REVENUES

Commnetators are right to suggest that we may be

approaching a tipping-point, where raising taxes
becomes counter productive.

Evidence suggests that there is an inverse
relationship between the tax rate and the amount
of revenue collected. The higher the tax rate the
lower the Government's revenue In making the
case for lower taxes, we need only look to the
Russian Federation, following the demise of the
Soviet Union in

1991. In order to invigorate a sclerotic economy,
the introduction of a flat tax resulted in a 25% rise
in revenue from personal income tax, followed by
a similar increase in the second year and 15% in
year three.

The Laffer curve predicts such an outcome,
attributing the primary reason for increased
revenues to higher levels of economic growth,
stemming from the introduction of the flat tax. If
the UK Government were to adopt this model it

would also benefit the exchequer by increasing
declared income and reducing bureaucracy by
simplifying the way tax is calculated and collected.

 A flat tax would have a transformative effect on
employers and employees alike. It would
incentivise, generate growth, boost consumer
confidence and raise living standards.

 

TO SMOKE OR NOT TO SMOKE

 

King James 1 observed the perils of smoking over

four hundred years ago: A custom loathsome to
the eye, hateful to the nose, harmful to the brain
and dangerous to the lungs, nearest resembling
the horrible Stygian smoke of the pit that is
bottomless. Nothwithstanding that smokling kills
at least 100,000 a year and harms countless others,
the debate on the freedom to cause premature death
and incapacity will doubtless continue.

 

 

EU - NEED TO EMBRACE ECONOMIC REALITY

Any critical analysis of the

eurozone crisis does not have

an obvious solution beyond that

of greater fiscal and political

integration. While this may indeed

come to pass, it would not address

the disparity in productivity

between the countries of northern

and southern Europe.

In the absence of a cultural change

in the work ethic, which is hard to

imagine, the inevitable consequence

would be Germany keeping the

southern states on extended

financial life-support.

It will continue to fund
accelerating social cost, until such
time as the German economy ran
out of money. The strategy will
merely prolong, perhaps for a
generation, the misery to which
millions will continue to be
subjected.

The only practicable way
forward is for insolvent
eurozone members to rebalance
their economies through the
re-introduction of their former
currencies.

This would, of course, be
extremely painful in the medium
term. However, exhange rates
reflecting competitive performance
rather than a single currency, would
enable tourism and other activities
to flourish and economies to grow.

Such an outcome would not satisfy

the federalist deciples of Ardanauer,

Monet and Schuman, the founding

fathers of the EU. It would, however,

bring hope to those countries that
would prefer economic and political
self-determination with all its initial
pain, to a slow but remorseless
descent into even more dystopian
misery.

David Cameron's speech at Davos
articulated the need for change. The
EU has 7% of the world's population,
generates 25% of global GDP, but
spends 50% of GDP on welfare, which
is unsustainable. The question is does
the EU have the political and economic
will to change, or will reality impose
change upon it?