Monthly Archives: March 2009

Almost £215bn of Lloyds £260bn toxic dump on state can be tracked to HBOS

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The first of a double whammy on the Scottish taxpayer is our share of the debt burden of £260 billion of toxic ‘assets’ (as expensive mistakes are known in the upside-down world that is banking) that Lloyds have just dumped on the state for ‘insurance’.

The second hit is on pride rather than pocket. It is the traceability of around 5/6ths of this debt to HBOS – or what we still think of as the Bank of Scotland. This amounts to around£215 billion.

And in doing this neat transfer, Lloyds have arranged a valuable bonus not given to RBS in its own dump of £365 billion on the ‘state asset protection scheme’. In exchange for its generosity in this ‘asset’ insurance, Lloyds has negotiated a tax concession likely to cost the exchequer at least £7 billion in lost corporation tax.

The deal is that Lloyds ‘pays’ (and yes, this is no more a payment than the ‘assets’ are assets) the Government £15.6 billion as its insurance premium to protect the £260 billion of assets now lodged in the ‘scheme’ (now there’s an accurate word).

Lloyd’s will then be responsible for the first £25 billion of any – inevitable – losses but will be allowed to offset these losses against taxable income, a revenue loss to the exchequer of £7 billion.

Lloyds will also bear 10% of losses over £25 billion, with the state carrying the other 90%.

And the ‘paynent’ that isn’t a payment? Well, it’s payment in kind. Lloyds is giving the Government new ‘B’ shares in the bank with the right to convert these later into ordinary shares.

Quite how £15.6 billion can be translated to any particualr number of Lloyds ‘B’ shares in today’s gravity-affected market in banking shares is another matter.

No more premium music videos as YouTube and Performing Rights Society fall out over licence fees

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Within the last year YouTube struck a new and courageous deal with the UK Performing Rights Society (PRS). This saw it agree to pay an unspecified flat rate fee to PRS to cover the rights to all copyright music featured on videos posted on its website.

Apart from making straight music videos available to users, the YouTube agreement allowed home video makers to use copyright music in their sound tracks without a liability to pay the music rights which were covered by YouTube.

This has now fallen apart with YouTube walking away from negotiations and making thousands of videos unavailable to UK users from today.

Steve Porter, CEO of PRS, described himself as ‘outraged… shocked and disappointed’ by YouTube’s decision, saying that the action ‘punishes British consumers and the songwriters whose interests we protect and represent’. He has asked YouTube to reconsider its decision as a matter of urgency.

The disagreement appears to be about the level of the charge.

PRS say: ‘Google has told us they are taking this step because they wish to pay significantly less than at present to the writers of the music on which their service relies, despite the massive increase in YouTube viewing’.

YouTube’s Director of Video Partnerships,Patrick Walker,  has told the BBC that he had not wanted to take this action but that PRS was seeking a rise in fees many times higher than the previous agreement.

With negotiating positions so far apart he feels that YouTube has no choice but to take music content off the site while negotiations with PRS continue.

The dispute looks like becoming a mutual blame-fest, possibly with chauvinist overtones. Our own first hand experience would suggest that any Brits fired up to rush the barricades in defence of PRS would be advised to stay their feet.

Patrick Walker told the BBC that the rise PRS had demanded was ‘prohibitive’. He said: ‘The rate they are applying would mean we (YouTube) would lose significant amounts of money on every stream of a music video. It is not a reasonable rate to ask’.

From a very much more humble position in the online media food chain, this is a scenario we recognise. ForArgyll.com evolved from an early notion of being a largely speech-based online radio station. In putting our business plan together, we calculated that, with the number of streams we would need to attract, we would pay music fees of over £10,000 per annum for playing no more than 15 tracks every 24 hours.

At that stage we decided to avoid copyright music altogether because we could not afford it; and instead make a feature of unsigned Argyll musicians. That remains our policy against the time that we develop this side of our service. It means that we can use our audience strength to support new bands while avoiding the significant losses that we would otherwise certainly have incurred.

It really is a case of killing the goose. Ths current stand-off with YouTube has all the hallmarks of a sort of PRS heist – an early agreement to seal them in, followed by a swift hike from which YouTube have simply walked.

We’re with YouTube in this dispute. Their initial move was a bold one, liberalising access to copyright music and freeing up the creative conjunction of music with other expressive forms for ordinary people to develop and share – at YouTube’s expense. PRS is behaving like a Rachmanist landlord for the music industry which, in its own interests, needs to change its culture.

9 members of HMS Gannet Search and Rescue crew honoured for outstanding bravery

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An almost unprecedented number – nine – crew from a single Search & Rescue (SAR) team – the twenty-man HMS Gannet – based at Prestwick and often in action around Argyll and west coast waters – have been honoured for outstanding bravery.

The unit covers a 98,000 sq mile area from the Northern Irish coast to the Lake District, to Edinburgh and to Ben Nevis. In 2008 it was the busiest SAR unit in the UK  for the second consecutive year, with 347 rescues to its name.

But the 8 crew were  honoured specifically for two operations. The main one was when the ferry Riverdance started listing badly in high winds in the waters off Blackpool in January 2008. The HMS Gannet crew winched 23 people off safely in extremely difficult conditions. There was also a significant rescue in Loch Long in Argyll.

  • Two members were awarded the Air Force Cross – Lieutenant Commander Martin Lanni and Lieutenant Mike Paulet.
  • Two members were awarded  the Queen’s Commendation for Bravery in the Air – Lt Cdr Martin Ford and Petty Officer Darren Craig.
  • Four members were awarded the Commander in Chief Fleet Commendation – Flight Sergeant Euan Gibson, Lt Olivia Millies and Lt Tony Sherwin.
  • One member was awarded the Queen’s Gallantry Medal – Leading air crewman Kevin Regan.

Action Plan for Open Spaces in Lochgilphead

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On Tuesday 24th March, between 2.00pm and 9.00pm the Action Plan for Open Spaces in Lochgilphead will be on display and open to discussion at the Community Education Centre in Manse Brae.

Everyone is invited to drop in when they can during these times, see the results of the Lochgilphead Open Spaces Survey and share their views.

The things to focus on during the day, according to the organisers, are:

  • What have we got?
  • What do we need?
  • What are the priorities?

The menu includes facilities such as:

  • Play areas
  • Sportsfields and recreation areas
  • Parks and gardens
  • Amenity greenspace and woodland
  • Green corridors

The project is led by Argyll and Bute Council and Lower Clyde Greenspace – which itself is a collaboration between Argyll and Bute Council and Inverclyde Council.

A total of five Argyll towns are involved in the project. They are: Rothesay, Dunoon, Lochgilphead/Ardrishaig, Oban and Campbeltown.

Enterprise Minister Jim Mather challenges Alan Reid MP to say where he stands on part-privatisation of the Post Office

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Argyll’s MSP and Enterprise Minister, Jim Mather has fired a range-finding shot at Alan Reid MP, Argyll’s representative at Westminster. He has effectively challenged Mr Reid to come out and say exactly where he stands on the issue of the UK Government’s determination to part privatise the Post Office.

For Argyll has already reported on a significant contradiction in Mr Reid’s behaviour. He has been active in making supportive statements of Post Offices in the fastness of Argyll from where news of his words is unlikely to get back to Westminster. He has not, however, yet signed the Early Day Motion lodged at Westminster by Labour MP Geraldine Smith, opposing the planned privatisation.

Mr Mather now says: ‘I am surprised at the lack of public response from Labour and LibDem sources in Argyll & Bute to what is a genuine threat of privatisation to a vital public utility.

‘Some weeks ago there was a great deal of furore raised about legislative proposals to lease a part of the Forest Estate to private operators and the unions and political opponents were quick to suggest that this was some form of privatisation. We are in the process of arranging a local public meeting that will enable the very newly appointed Minister for the Environment, Roseanna Cunningham, MSP,  to elaborate on what is proposed,  to rebut misrepresentations and to explain how the consultation process will contribute to the debate.

‘In the case of the Westminster Government’s plans for the privatisation of part of the Royal Mail business no such  debate is envisaged and there could be no mistaking the intentions of Lord Mandelson of Foy when he introduced the proposals in the House of Lords.

‘Far from any scrutiny from the elected chamber of the House of Commons far less a local public meeting, the stark facts were spelled out. The effect that this will have on rural mail services and the preservation of the Universal Service Obligation can all too easily be projected. We can be confident that the private operators will be much more interested in delivering mail to Derby than to Dervaig and to Colchester rather than Colonsay’.

MoD grounds Nimrod fleet 30 months after inquest blames aircraft for 14 in-flight refuelling deaths

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BAE NimrodThe Ministry of Defence has now announced that it is grounding the BAE Nimrod fleet from 31st March. The aircraft will have their engine bay hot-air ducts and their fuel seals replaced.

These were each thought to have played a critical role in an accident in September 2006 that claimed the lives of 14 servicemen based at RAF Kinloss. The men died when fuel leaking during in-flight refuelling hit a hot pipe.

The coroner at their inquest in May 2008, Andrew Walker, said that the aircraft had ‘never been airworthy’ and called then for the entire fleet to be grounded. The then Defence Secretary, Des Browne, multi-tasking as Scottish Secretary, insisted that the aircraft were safe to fly.

The families of those who died back in September 2006 will reasonably wonder why it has taken so long to make this decision.

Those who have had to fly Nimrod since then will wonder why their safety has been consistently compromised.

The crew who must continue to fly the aircraft until 31st March – and their families – will  wonder why the, now admittedly unsafe, aircraft are to be kept in the air for another three weeks.

All the aircraft concerned are based overseas and the MoD says that there will be no operational impact from their withdrawal. This rather defies logic since, in his written statement to the House of Commons, Defence Minister Bob Ainsworth says that the temporary halt to overseas operations ‘will allow us to free up the maximum number of aircraft for the modification programme while also allowing Nimrod to continue with its critical homeland security tasks’.

It is hard to see how a temporary halt to overseas operations can be described as without operational impact.

Then there is a bit of compensatory spin on continuing ‘homeland security’. This is itself undermined by the fact that the movement of engineering staff from Nimrod’s home base at RAF Kinloss to work on the modifications at RAF Waddington ‘will cause a temporary reduction in routine UK-based Nimrod flying but will not affect our ability to protect UK interests at home’.

Again, where’s the logic. Any reduction to what is considered a necessary flight frequency cannot but ‘affect our ability to protect UK interests at home’.

Then the MoD say there will be no operational impact in Afghanistan because they plan to use other UK and coalition aircraft to cover any shortfall. This begs the question why they have not done this long before now.

Nothing adds up. It never did. We can only hope that the Nimrods in the air between now and 31st March get back to base safely.

The photograph, above, of a BAE Nimrod in flight is reproduced here under the Creative Commons licence.

Scotland two-thirds off the hook over EU repayments on HIE’s historical errors on Structural Funds project management

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The Scottish Government confirmed this morning that a ten year-old issue over a European funding audit in the Highlands and Islands has been resolved.

Following extensive negotiations between the Scottish Government and European Commission, it has been agreed that Scotland will repay Euro 10.42 million (£9.47 million at current exchange rate) to the Commission. This is two-thirds less than the Commission sought to reclaim from Scotland in its original demand in 200.

The agreement brings to a close the outstanding issues concerning the 1994-99 Highlands and Islands Structural Funds programme.

Scottish Ministers have already budgeted for the repayment. This means that it will have no impact on the delivery of public services.

The issues relate to inadequate audit trails and document retention among projects managed largely by Highlands and Islands Enterprise (HIE) over a decade ago. The European Commission had originally sought Euro 31.9 million.

Enterprise Minister Jim Mather says: ‘Having made every effort to minimise this repayment, I welcome the Commission’s decision to significantly reduce the repayment amount. This follows the considerable efforts of Scottish Government officials and partner organisations and constructive liaison with the auditors.

‘These are issues that date from more than a decade ago, but the Scottish Government takes its audit and compliance responsibilities very seriously and we have made budgetary provision to meet the repayment in full.

‘We can now focus on the very positive role the current 2007-13 European Structural Funds programme can play in the Highlands and Islands, building on the Government’s economic recovery programme to help Scotland emerge stronger from the current downturn’.

The Buteman’s owners, Johnston Press, to announce massive write downs

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The Johnston Press, owners of The Scotsman and The Buteman among other titles, wrote off £109 million in its 2008 first half results.

In its 2008 second half results, to be revealed this week, it is expected to announce write downs of hundreds of millions.

Its advertising revenues, down by 30% in the last quarter of 2008 and by 40% in the first two months of 2009, are expected to be be down by 20% overall. Turnover is likely to be down by 12% to around £535 million and pre-tax profit down by over 30% to £93 million.

The company is thought to have a debt burden of around £450 million.

900 jobs have been shed to date and, with new CEO John Fry engaging in a deep cost cutting exercise to pull the situation back, more job losses now look inevitable.

Sign The Independent’s Veterans Campaign Petition

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VC Johnson Beharry BRITISH CROWN COPYRIGHTThe Independent is running a petition campaigning for all necessary treatment for our armed forces veterans. Of course they face problems in getting the best medical and surgical facilities to deal with injuries the rest of us cannot bear to think about. But there are unseen and enduring injuries to the mind.

Men and women in the armed services experience things beyond imagining. They are working – fighting – at and beyond the limit of what humanity can give and take. In the pressure of the moment they cannot stop to think.

But inevitably, when it’s all over – between tours of duty, during hospitalisation and when they leave the service – the assimilation process begins. But the material they have to confront is not digestible. There will be images, memories, questions, guilt and above all there will be alienation from the everyday world.

The things that concern the rest of us, that make us worried, angry, tearful, proud, elated and happy must seem utterly out of scale with what veterans of conflict have dealt with. Life around them afterwards must seem like looking through the wrong end of a telescope – small, far away, unimportant and lacking the adrenaline of the ultimate challenge. The change is abrupt and many cannot adjust.

Injuries may, to a degree, be put aside. Knowledge, though, once with you is with you for life. And the sort of knowledge veterans have is almost biblical in its impact. It is, profoundly, the knowledge of good and evil. We cannot know or imagine what it is but we can imagine its impact.

And we need to. Our veterans get virtually no help with the Post Traumatic Stress Disorder (PTSD) from which very many suffer and which does not always make itself known for up to two years after leaving the service. They get no help with the depressions that regularly lead to suicide. And they get no help with the anger and with the very different value-set that can lead them to commit murder and other crimes.

This is an issue not much discussed. But we require these young people, in their service, to set aside the values and the moral and behavioural codes that govern normal life. They have to use force, they have to kill and, don’t let’s be naive, they have to torture.

Do we really think they can leave the service one day, walk into our world never to return and leave behind them everything they have lived with and by through these experiences – just like that?

For as long as we choose to send people to do for us what we cannot and would not do for ourselves, we are responsible for them for the rest of their lives. This is what we mean when we talk about ‘the military covenant’.

But the government which acts in our name is neither exercising that responsibility not absorbing its moral imperative.

We have The Argylls – The Argyll and Sutherland Highlanders, or 5 Scots as they are now known, whose service in Iraq and Afghanistan brings this close to home. But it is a moral issue of individual responsibility.  In Meditation XVII, the poet John Donne wrote: ‘Any man’s death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee’.

Sign The Independent’s campaign petition online and at the same site, donate, if you wish, directly to veterans.

The photograph above is protected by British Crown Copyright. It shows Johnson Beharry, holder of the Victoria Cross, in front of a mural of the Victoria Cross at the Ministry Of Defence Main Building on 18th March 2005.

He was awarded the VC  for valour in Iraq for incidents in May and June 2004, when he twice rescued fellow servicemen from ambushes, sustaining serious head injuries in the latter engagement. His investment with the Victoria Cross – the first award in over 20 years – was on 27th April 2005.

Lance Coporal Beharry has very recently spoken out on behalf of traumatised troops.