Financial and business news and articles
No comments yet.
Lord Ashcroft’s place in the sun
about 5 months ago - No comments
Why I’ve gone from porn to politics | Anna Arrowsmith
about 5 months ago - No comments
I started making pornography for women because there was a need. And now I want to do something about the need for more female MPs
I’m Anna Arrowsmith, the Liberal Democrat PPC for Gravesend or, as many will know me, Anna Span, the UK’s first female porn director. Take your pick.
Since news of my selection broke on Thursday, many people have asked me why I want to be an MP. The answer is: for exactly the same reason I decided to start making pornography for women more than 12 years ago. Someone had to do it and it didn’t look like anyone else was going to – at least not with the drive, enthusiasm and determination that I could offer. The unfortunate truth is that there are far too few female MPs in this country compared to the rest of the world.
Did you know that Rwanda has the highest number of female MPs of all countries at 53%? Imagine living in a country with a female majority! Well, here I am again thinking that another male-dominated field needs challenging.
Back in 1998 I was in the final year of my degree, studying film at Central St Martin’s College of Art & Design. I had decided to write my dissertation on what fundamental changes would need to be made to mainstream pornography in order for it to be enjoyed by women. I called it Towards a New Pornography, intending it to sound like a manifesto, more for my own amusement than anything else. Then came lesson one in the British psyche. Even the so-called experimental filmmaker lecturers at this outstanding college were actually conservative with a small ‘c’.
My adverts for performers to appear in my graduation film were defaced and torn down by members of staff and my final film was refused a public airing “for fear of upsetting people’s grandparents”, according to the head of the department. All this for a film where the sex was actually simulated due to lead actor issues.
Twelve years later I have won many awards, including Indie Porn Pioneer at the international Feminist Porn Awards in Toronto and best director for two years in the UK.
I have fought long and hard for women’s right to sexual expression and consumption, as well as for freedom of speech. I have long since felt vindicated about my choices back at college and know my pro-sex feminist argument is based on sound principles and logic.
So why don’t I stay in my industry and continue to reap the rewards of my efforts? Because I am the type of person who needs a challenge. I achieved much in my last career and now I want to broaden my campaign to other pressing issues such as why this or previous governments don’t think they have a responsibility to give young people something productive and engaging to do with their spare time. I lived on a council estate in Bermondsey and saw first hand why the kids were taking drugs, fighting and committing crimes.
They are simply bored. I want to campaign to give young people in Gravesham the help they deserve.
To do this I have to fight yet another old man’s club – only this time without the dirty raincoats. Some won’t like it; they’ll assume that my selection means the world is going to hell. I’ve been here before; last time I changed my industry for ever.
That, among other issues, is why I am making the transition from porn to Parliament.
Watch this space; I’ve got a lot of – for want of a better word – balls.
Westminster wives
about 5 months ago - No comments
She swears, she drinks, she has extramarital flings… The modern MP’s wife is unrecognisable from the simpering cheerleader of the past. So what has changed? And what impact will the other halves have on this year’s election?
When Alicia Collinson’s husband, Damian Green, was first elected as a Conservative MP in 1997, she was provided with a small pamphlet produced by the Parliamentary Christian Wives Fellowship. It was called “Two for the Price of One” and the title was printed across the cover in precisely the same shade of green as the leather benches inside the House of Commons chamber. The eight-page leaflet contained all manner of helpful tips and guidance on how to be a politician’s wife in a breezy style that seemed to have come straight from the 1950s.
“If you look good, you feel good,” the authors stated cheerily, before going on to advise that: “For wives, it is a great help to have a very good relationship with your local garage as you are bound to break down when your dearly beloved is on a parliamentary trip to China and you may need rescuing.”
But it was one sentence in particular that enraged Alicia Collinson. “It’s this one,” she says, pushing the pamphlet across the coffee table and jabbing at the relevant page. “They say: ‘Try to ensure the absent parent speaks each week on the phone to each child personally if possible.’” Collinson snorts with indignation. “That really got my goat. It’s full of things like that, assuming you can do things while your husband’s in parliament. Well, no, you can’t if you’re working, too. There was this assumption that you were just part of the package.”
Times have changed dramatically for the political wife. In previous decades an MP’s wife was expected to be little more than a photogenic adjunct to her husband, someone who could be relied upon to judge cake-baking contests at the village fete and smile prettily in public. Most of the time this charming little creature would be careful not to speak out of turn or proffer any political opinion that might risk embarrassing her husband or his party. Her role, like that of Clementine Churchill or Clarissa Eden before her, was to raise children, run a household and provide constant support to her overworked and sporadically bad-tempered spouse.
On the rare occasion that a wife did speak out, it resulted in a horrified outcry. Margot, the wife of former prime minister Herbert Asquith, was blamed for her husband’s political downfall after she publicly accused her stepson of being drunk. (He had, in fact, been shell-shocked during the First World War.) Now, however, Margot Asquith’s indelicate comment would barely merit a raised eyebrow. In modern politics, it is quite normal for the wife of the chancellor to scream the “c” word in reference to her husband’s treacherous colleagues, as Maggie Darling was reported to have done in Andrew Rawnsley’s recent book about the fall of New Labour. Over the past few months a worrying number of political wives (and it is, on the whole, still largely wives rather than husbands) have crawled out of the woodwork to admit to all sorts of brazen peccadilloes, including binge drinking, promiscuity and the odd extramarital affair.
Sally Bercow, the wife of the Commons speaker, gave an extraordinary interview last December in which she admitted to a debauched past, drinking more than two bottles of wine a day and engaging in a string of one-night stands. “I would end up sometimes at a bar and someone would send a drink over, and I’d think: ‘Why not?’ and we’d go home together,” she said. “I liked the excitement of not knowing how a night was going to end.”
Unlike the quietly spoken, loyal wife of parliamentary legend, Mrs Bercow appeared to be wholly unconcerned as to whether she might be diminishing her husband’s professional kudos. Her political opinions, too, are unashamedly opposed to her spouse’s: whereas John Bercow was a Tory MP before becoming speaker, Sally Bercow is standing as a Labour councillor in Pimlico, central London.
Then, in January, it emerged that Iris Robinson, the wife of the Northern Irish first minister, had an affair with a 19-year-old when she was 58. The ensuing barrage of “Mrs Robinson”-themed newspaper headlines forced Peter Robinson to stand down temporarily. Although both the Robinson and Bercow sagas are extreme examples, there is a growing trend for parliamentary spouses to emerge from the shadows.
Samantha Cameron, wife of the Conservative leader, is creative director at Smythson, the luxury stationery firm. Ed Miliband’s partner, Justine Thornton, is a senior environmental lawyer. Sarah Brown, wife of the prime minister, enjoyed a successful career in public relations before taking up permanent residence in No 10. Shadow chancellor George Osborne’s wife, Frances, is a bestselling biographer, and Sandra Howard, wife of former Conservative leader Michael Howard, has written three novels.
“I think the role has changed a bit,” says Mrs Howard, whose latest novel, A Matter of Loyalty, was published last year. “Three decades ago there were more wives who didn’t have their own career. Cherie Blair did us a really good service by continuing to work as a barrister while her husband was the prime minister because no one could ever complain about a spouse working again.”
“It’s a shift that mirrors what has happened in society,” agrees Alicia Collinson, author of Politics for Partners: How to Live with a Politician and a barrister specialising in family law. She deliberately chose not to take her husband’s surname. “I got very criticised in the press when Damian first became involved in politics because I was a barrister and had my own job, but now the constituency isn’t fussed about it… I used to know one MP who talked about his wife being ‘the hostage’ in the constituency.” Collinson takes a sip of her tea. “He’s now married to someone else.”
Not only are political wives no longer quite held hostage in the shires, they are seen as potential vote-winners. The impact of Michelle Obama, who has expanded the role of political wife and is seen as a crucial asset to her husband’s success, is beginning to make itself felt in the UK. Whereas in the past an MP’s spouse was occasionally wheeled out by central office for a pre-election photo opportunity, the modern political wife has a far more complex role. She must juggle the demands of career and family while developing a public persona that is sufficiently straightforward to be inoffensive and yet interesting enough to intrigue the electorate. Her clothes will be scrutinised and her past raked over. She is expected to have an opinion and yet to keep it to herself. And when her husband films a YouTube broadcast from his bespoke Notting Hill kitchen, she must appear in the background amid the cereal boxes and Blu-Tacked toddlers’ paintings, busy and yet in control: the perfect appeal to the Mumsnet generation.
Perhaps it is unsurprising that some political wives, like Sally Bercow or Iris Robinson, chafe against the restrictions imposed upon them. Others, like Miriam González Durántez, wife of the Liberal Democrat leader Nick Clegg, take a more relaxed approach. González, who heads up the trade department of the international law firm DLA Piper, says that a political wife can be “supportive without being submissive… I am sufficiently confident to understand I can have a proper career, and I also understand I happen to be married to Nick and people will want legitimately to have a look into who he is as a person – and provided that they respect our children I’m happy for anybody to have a look. What you see is what you get.”
When we meet in a boardroom at her company headquarters in London, González seeps unapologetic glamour. She has film-star looks and hair that appears expensively blow-dried. Today she is wearing a grey silk shift dress, a chunky gold necklace and fashionable high-heeled ankle boots. It would be difficult to imagine anyone less like the pink-cheeked, floral-swathed MP’s wife of popular imagination.
González embodies the new breed of “Sam Cams”, the independent career women and mothers who happen to be married to politicians but who are determined not to be defined by their spouses and who share the running of the household as equally as possible. The Cleggs have three sons under the age of eight: their father takes them to school every morning and their mother puts them to bed at night.
“Nick’s well known with the neighbours for going to do a very early interview and coming back to go to school before going to Westminster,” says González. Do the children understand what their father does? “Partly. My five-year-old thinks he’s the captain of the Liberal Democrats. My eight-year-old is quite perceptive and understands some of it – he advises on plans to capture Osama bin Laden.”
Westminster hours, however, remain extremely inconvenient for MPs with young children (even since Labour’s landslide victory in 1997, when 120 of the new MPs were women, many of whom were appalled by the unsociable working hours and pitifully outdated office equipment). “It isn’t friendly for families,” says González. “I remember, for example, being very, very shocked – and let’s put this into context: it must be a Westminster village reaction – but I remember Nick saying at some point: ‘I’m a father before being a politician’, and some colleagues were actually thinking: ‘What a weird thing to say.’ I was thinking: ‘Surely that is a perfectly normal thing to say?’ I think it’s incredibly unuseful that Westminster tends to vote at 10 in the evening rather than at four in the afternoon, like you would do in any other kind of job. There’s a lot of evening engagements and media engagements, and that takes a toll on the family.”
It is perhaps partly for this reason that some wives still choose to stay quietly behind the scenes, determinedly ignoring the onward march of equal opportunities. For every Miriam González there is a “Surrendered Wife” like Norma Major, who stood smiling and faithful beside her husband without uttering a single controversial word in public throughout his premiership and who remained loyal to him even after it emerged that he’d had an affair with Edwina Currie. Pauline Prescott, who stood by husband John despite a dalliance with his secretary, calls herself one of a “dying breed” in her autobiography, and is dismissive of “women’s libbers”.
Sandra Howard, who did not publish her first book until her husband had stood down as leader, says the old-style political wife works on the principle that “anything you can do to help, you do. If allowing the person you love to do what they want to do means a little bit of not thinking about what you want to do, it’s almost a non-question.”
The Surrendered Wife must bite her tongue when asked for her opinion, lest she run the risk of embarrassing her husband. “I remember being told that a political spouse will never win the seat for their partner, but they can sure as hell lose it,” says Howard.
When the expenses scandal broke last year, it emerged that almost 80 MPs employed either their wives or girlfriends as parliamentary assistants, secretaries or case workers. (Political husbands are still very much the exception to the rule: Caroline Flint, the Labour MP for Don Valley, employs her husband Phil Cole to run her constituency office, while Margaret Beckett’s spouse, Leo, has been her parliamentary assistant for years.) At the time, there was an outcry at the thought of family members cashing in courtesy of the taxpayer, and the rules governing the employment of spouses and family members are currently under review. The constituency wives, many of whom had worked extremely hard for their MP husbands, felt they had been unfairly scapegoated. Alicia Collinson recalls a trip to the local garden centre with her husband at the height of the expenses scandal to buy some plants. “A man driving his car wound down his window and shouted out: ‘I hope you’ve got a receipt for that,’ and then drove off thinking he was very clever. We’ve never claimed for gardening. It was just ignorant.
“The climate has changed. The respect that parliamentarians were held in is no more… the level of contempt one experiences is quite extraordinary. It’s been very unpleasant. A lot of spouses have been very upset.”
Another wife, who has run her husband’s constituency office for the last 17 years, says: “I got very badly bruised by the whole thing. People don’t realise how hard we work or the hours we put in. We’re the ones who are there at seven in the morning or 11 at night when the phone goes.”
It is perhaps these wives – the uncomplaining troopers who keep their husbands’ schedules organised and their stationery cupboards stocked with Post-it notes – who provide the bridge between the surrendered spouses of the past and the sleekly independent career women of modern times.
But although the increasing number of MPs’ wives pursuing their own careers has been heralded as some sort of feminist breakthrough, much of the media coverage of these women remains distinctly sexist. There is a lingering sense, in spite of the enormous strides made by women such as Cherie Booth and Miriam González, that a political wife’s role is to gaze adoringly at her husband as he makes a keynote speech or to be photographed walking along the Brighton seafront during party conference season, appearing well dressed but not too glamorous in case she is accused of being out of touch with the common man (or woman).
So it is that Sarah Brown – doubtless influenced by the intimate confessions of her Michelle Obama about the president’s bad morning breath – has twice taken to the podium to introduce her husband to the Labour party conference. In 2008 she smiled ingratiatingly and called him “my hero”. Last year she exclusively revealed that Gordon was “not a saint – he’s messy, he’s noisy, he gets up at a terrible hour”.
Mrs Brown, who gave up a career in PR, has carved out a niche as an electoral accessory whose job it is to show Gordon in a warmer, more modern light. One minute Mrs Brown will be in a TV studio, eyes welling up as she listens to her husband unburden his soul to Piers Morgan, the next she will be opening London Fashion Week wearing an Erdem dress and updating her Twitter account (1,118,558 followers and counting, including Paris Hilton and Naomi Campbell).
Sarah Brown has provided us with a whole new category of political spouse: a wife who knows how to exploit modern media in order to promote herself and her husband as a successful brand. She is known to have used her sartorial influence to overhaul her husband’s wardrobe and her PR savvy to insist that the couple went on holiday in Southwold, Suffolk last year in an effort to prove their fondness for England. In fact, so successful has she been in modelling herself as cheerleader-in-chief that one member of the prime minister’s inner circle is said to have dubbed her “Mrs Goebbels”.
As the general election approaches, the leaders’ wives in particular will have a prominent role to play in wooing the voters. Already there have been snide comments emanating from government sources that Samantha Cameron does less charity work than her counterpart in No 10. And at the recent Tory spring conference it felt as though far more attention was paid to the cut of Mrs Cameron’s silk ruffled blouse than to what her husband had to say about fixing “broken Britain”.
“I think the trouble with politicians is they have a fixed image in the media which doesn’t involve their personality,” says Alicia Collinson. “So having another side to both David Cameron and Gordon Brown and allowing their wives to convey something that isn’t just the stiff upper lip of a politician can be helpful for the electorate in the run-up to an election. They can see what a politician is like from every angle.”
But reactions to Sarah Brown’s celebrity among the other political wives are mixed. Some find her acting the part of adoring spouse on the national stage a touch retrograde. Miriam González says she’d always go to see Nick deliver a major speech and would expect him to do the same, but adds that: “I wouldn’t ask him to come to the podium to kiss me afterwards, and that is not what I’d do in reverse.” Others, like Alicia Collinson, believe that having a loyal wife in the public eye “suggests that the politician has at least got good taste”.
And perhaps in the end it is not a wholly irrational reason to vote for a particular MP. They might lie about tax rises, cheat on their expenses and have terrible breath in the morning, but at least they have the love of a good woman who knows how to make friends with Paris Hilton on Twitter.
More money makes society miserable, warns report
about 5 months ago - No comments
Economics experts argue that Britain’s thirst for status symbols harms our well-being
The national belt-tightening expected to follow next month’s budget could prove to be of more benefit to the nation’s sense of well-being than if wealth levels were to soar, according to a new study.
Complex economic formulas developed by two professors of economics, Curtis Eaton and Mukesh Eswaran, and published in the current edition of the Economic Journal, suggest that greater affluence can seriously damage a nation’s health. Based on their mathematical modelling, the economists advance the theory that once a country reaches a reasonable standard of living there is little further benefit to be had from increasing the wealth of its population. Indeed, it could make people feel worse off.
They believe their work shows that, as a nation becomes wealthier, consumption shifts increasingly to buying status symbols with no intrinsic value – such as lavish jewellery, designer clothes and luxury cars. But they warn: “These goods represent a ‘zero-sum game’ for society: they satisfy the owners, making them appear wealthy, but everyone else is left feeling worse off.”
Their work owes much to the economist Thorstein Veblen, who in 1899 coined the term “conspicuous consumption” in his book The Theory of the Leisure Class. Veblen argued that people seek status through conspicuous consumption, which derives its value not from the intrinsic worth of what is consumed but from the fact that it permits people to attempt to set themselves apart from others. As the economy grows, people increasingly choose status symbols or “Veblen goods” over other goods.
“Those with above-average wealth consume Veblen goods with a positive impact on their happiness,” the authors write. “But those with below-average wealth simply cannot afford these goods, so they have a negative impact on their happiness. This is known as ‘Veblen competition’. As average wealth rises, people grow richer but not happier.”
The pair believe their research helps to explain why empirical studies show that levels of happiness and feelings of community in affluent countries have stagnated, despite growth in real incomes.
There is another downside. As people yearn for more status symbols they have less time or inclination for helping others. This, the authors argue, damages “community and trust”, which are vital to an economy because they ensure the smooth running of society. They conclude: “Conspicuous consumption can have an impact not only on people’s well-being but also on the growth prospects of the economy.” The theory may go some way to explaining the public backlash against the louche lifestyles of the UK’s footballers, bankers and politicians.
It fits into a debate within economics about how to measure a nation’s true wealth. Many economists believe they need to focus more on measuring happiness. The belief that a focus on individual wealth creation can be divisive has spread around the worlds of politics, psychology and science. Clinical psychologist Oliver James has argued that there is an epidemic of “affluenza” throughout the developed world, with attempts “to keep up with the Joneses” triggering huge increases in depression and anxiety.
Last year a bestselling book by two epidemiologists, Richard Wilkinson and Kate Pickett, called The Spirit Level: Why More Equal Societies Almost Always Do Better, suggested that Britain and America were the countries with the widest gulfs between rich and poor in the developed world, and as a result had the most health and social problems.
Nevertheless, Eaton and Eswaran, from the universities of Calgary and British Columbia respectively, do not believe the developed world’s obsession with wealth shows any signs of abating. The pair predict that “it is likely that conspicuous consumption will become worse as time progresses”.
Catherine Bennett | Talk to us about politics, not your lovely home life
about 5 months ago - No comments
The Cameron and Brown personality parade misses the point that voters care about issues, not character
Recently, on a day when no cameras were looking and he was surrounded by political nonentities, mainly mothers, an off-duty David Cameron was amazingly haughty to a friend of mine. Maybe it was just an off-day. Or maybe, what with all the nation’s mums to think about over, a stressy Mr Cameron had important political things on his mind. What do mums feel about Lily Allen? Would they like him to drink Guinness or bitter? Enjoy gardening or football? Shopping-wise, which out of Primark and Marks & Spencer do mums think more appropriate for a national leader? Examined by Titchmarsh, he came out for the latter.
Lucky Gordon Brown: though pressed on his retail experience by an insistent Piers Morgan, he was never forced to admit to a supermarket preference. But the prime minister confessed, and a cutaway to smiling Sarah Brown confirmed that this was a positive anecdote, that he once accompanied his wife to a supermarket, but stayed in the car.
Admittedly, it’s unlikely she would have stood up and added that they were not, at the time, on speaking terms. We just have to take Brown’s uxoriousness on trust, like his grumpiness-denial and a claim that he once drank “half-a-dozen” pints a night. Are there any witnesses to this excess? The more political parties urge us to go out and vote on the basis of their leader’s characters, the more, if they want to avoid complicity, broadcasters might want to think about testing these auto-eulogies for accuracy.
Does Cameron really play darts? Does Brown, yet more implausibly, never throw anything more substantial than newspapers, and “wake up in the morning thinking what I can do to help people looking for jobs”? Stringent investigation of these claims could provide fabulous light entertainment. Although, inexplicably, waterboarding has yet to feature on daytime television, Jeremy Kyle routinely uses a lie detector to expose disingenuousness, even though all that is generally at stake, for survivors, is not a position at the helm of government, but a chance to “save your relationship”. Once Brown and Cameron were wired up they could even be asked a few supplementaries, about banking regulation, or the size of coming cuts.
Last week, invoking the more urgent electoral issue of himself, Brown gave voters a few tips for personality assessment. “It is for other people to judge,” he said, “but I believe that character is not about telling people what they want to hear but about telling them what they need to know.” And another hint, to help the public succeed where generations of divorcees have failed: “For better or for worse, with me what you see is what you get.” But like a Cretan, who thinks it worth adding, “just ask my wife” to the line “all Cretans are liars”, Brown accepts that the public might, occasionally, feel the need for corroboration.
Over to Sarah Brown. “What you see is what you get with him,” she said, in response to the bullying stories. A comment which only confirms, like an earlier line, “I know he wakes up every morning thinking…”, that here is a couple so close that their “mirroring” has reached the exemplary, automatic stage.
Even so, it’s worth noting Mrs Brown was not speaking under oath. Here is a loyal spouse who stands to be evicted, if she is disbelieved, then rehoused in Kirkcaldy; albeit with support from Naomi Campbell. Nor, perhaps, should the cautious voter believe in Samantha Cameron’s purported diffidence about Number 10, on the basis that she is already a rich baronet’s daughter and a big name in the world of handbags. She still wants to win enough to deploy her children and, in tonight’s profile of Cameron by Trevor McDonald, to throw down this gauntlet about her own Mr Wonderful: “He’s always been incredibly strong, and kind, and supportive.” How do we know this is true? Because the rules of all-political Mr and Mrs now require that candidates provide character references for the wives, as well as themselves.
Dave guarantees, in Samantha, “an amazing woman, a working mum, a very successful career woman” – so a leetle bit more modern, maybe, than Gordon’s “beautiful, elegant, compassionate, dignified” Sarah. Whom he proposed to on a beach. And loves ever so, Piers: it “just grows and grows”. Will he be sure to tell us if it stops? “I’m an open book as far as people are concerned,” Brown says. “Anything they want to know, I’m happy.” Actually, politics aside, it’s hard to think of anything he’s left out. Most of us probably know more about Sarah Brown’s proposal of marriage than we do about our own mother’s.
Presumably, given there has never been disclosure on this level, that the media did not demand it and that no one in their right mind would volunteer such intimacies, Brown and Cameron’s advisers believe that a public hardened by tales of Prescottian bulimia and Mrs Blair’s neglected Dutch cap will respond only to enhanced levels of authenticity stimulus. Heath’s yacht, Mrs Thatcher’s larder and Kinnock’s Welsh idyll have given way to a televised account of his baby’s final moments by Brown, a father who thereby enters an almost obscene contest for public sympathy with his rival, another bereaved father.
On each side, the strategy looks as risky as it is undignified. Their particular brands of insincerity – agonising awkwardness in Brown’s case, supreme smarm in Cameron’s, phony WAG stuff from both – could easily be the strongest impressions created by protracted exposure. More important, this belief in the electoral power of character may be misplaced.
Evidently Brown and his manipulators have evidence, or instincts, that tell them the contrary, but there are doubts about the significance of leaders’ characters in elections, even in an age when it is common to argue that presidential politics and a celebrity-obsessed media have increased their impact. And it is not, anyway, as if charismatic politicians are new. Winston Churchill was a celebrity, and he was rejected. So was Neil Kinnock, even though he was more appealing than John Major. Look at Berlusconi’s behaviour, and you could even argue that voters don’t pay as much attention to character as they should.
Concluding a 2002 study, Leaders’ Personalities and the Outcomes of Democratic Elections, the psephologist Prof Anthony King said the conventional political wisdom on character is wrong. Research, he wrote, “indicates that relatively few voters are swayed by candidates’ personal characteristics”. So Brown musn’t worry about being snubbed by Match of the Day.
“Far more important,” King writes, “are voters’ long-standing party loyalties, their views on issues, and their judgments of how well or badly presidents and parties have performed – or will perform – in office.” Ah. Maybe, given the economic tumult Mr Brown has just prophesied, it is a bit early to give up on football. Any port in a storm.
Lehman’s advisers were guard dogs that didn’t bark
about 5 months ago - No comments
By their silence, the failed bank’s lawyers and accountants gave highly questionable practices a sheen of respectability
It’s good to know we still lead the world in something. “Business services” is often cited as one of Britain’s proudest export industries, and last week’s postmortem on the collapse of Lehman Brothers from the US “examiner” brought some formidable examples of its recent triumphs.
“Magic circle” City law firm Linklaters gave the thumbs-up to “Repo 105″, the complex manoeuvre that allowed the ailing Lehman to book short-term loans from other banks as “sales”, effectively disguising billions of dollars of assets, sometimes conveniently just as the end of a quarter approached. Herbert McDade, the man known inside the bank as its “balance sheet tsar”, described the instruments in an email as “another drug we’re on”.
(And, having opined that “Repo 105″ was legal, at least under UK law, Linklaters is advising PWC on the Lehman administration.)
Auditor Ernst and Young is even more firmly in the examiner’s sights. He says it was “professionally negligent” in passing the Repo 105 arrangements, which will be music to the ears of the many creditors and shareholders itching to take class-action cases against anyone they might be able to blame for the firm’s catastrophic bankruptcy.
The examiner also reports that senior Lehman banker Matthew Lee sounded the alarm about “accounting improprieties” in the summer of 2008, referring specifically to $50bn of repo arrangements, but Ernst and Young “took virtually no action to investigate”.
Of course, Linklaters and Ernst and Young will say they were only following the rules, but auditors and lawyers are professionals and they gave Lehman’s highly questionable practices a sheen of respectability.
Lehman’s chief Dick Fuld could not have spun this web of self-delusion without having a team of advisers on his side. After Enron’s collapse led to the annihilation of its auditor Arthur Andersen, the industry was meant to have been transformed. It’s about time lawyers and accountants were subject to the same searching scrutiny as ratings agencies, regulators and the banks themselves.
Conservative defector condemns party’s ‘vile letter’ and hostility towards Europe
about 5 months ago - No comments
MEP Edward McMillan-Scott accuses Tories of euro-scepticism and ‘double standards’ for expelling him while only suspending Lord Archer
The former leader of the Tories in Europe launches a scathing attack on David Cameron’s Conservatives today, accusing them of “visceral euroscepticism”, “twisted” thinking and bullying tactics that forced him out of the party.
Edward McMillan-Scott, who defected to the Liberal Democrats on Friday, has also accused the Tories of “extraordinary double standards” for expelling him permanently, having only suspended Lord Archer, who was sentenced to four years in prison for perjury in 2001.
Writing in today’s Observer, McMillan-Scott, who remains a vice-president of the European parliament, says the Tories unleashed a “campaign of vilification” against him after he claimed that Michal Kaminski, the Polish MEP who now leads their centre-right group in the EU, had an antisemitic, homophobic and racist track record.
A strong pro-European and member of the Tory party for 43 years, McMillan-Scott gives voice to years of frustration at the party’s hostile attitudes to the EU under present and past leaders, including William Hague.
In his outspoken attack on the party over its handling of his expulsion, McMillan-Scott says he has been smeared by Tory press officers who have tried to claim he is the one who holds antisemitic views.
He adds that they have distorted facts about his defection and claims that the party produced no documents to support its case when he appealed against expulsion. “I am not bitter, but they are twisted. It is not a nice party now,” he writes.
He accuses Cameron of tolerating eurosceptics who depart from the party line while persecuting him, a pro-European, for daring to express sincerely held doubts about the leadership credentials of a controversial fellow MEP.
“David Cameron shields his europhobes,” he writes. “No murmur was made when last weekend Lord Tebbit in effect encouraged Conservatives to vote Ukip in the general election against the Speaker, John Bercow. The dog whistle is really at a lower pitch: that Ukip supporters know that there is a real home for them, back in the Conservative party.”
Last night, speaking from the Liberal Democrat spring conference in Birmingham, McMillan-Scott said the party had shown “massive double standards” by expelling him while suspending Jeffrey Archer for five years.
When the Liberal Democrat leader, Nick Clegg, mentioned McMillan-Scott’s name at a rally on Friday night there was a huge roar from activists. Yesterday he was seated in the front row for a question-and-answer session, so Clegg could welcome him.
The row over McMillan-Scott blew up last year when he stood as vice-president of the European parliament against Kaminski, who was Hague’s choice. Following McMillan-Scott’s stand, Timothy Kirkhope, leader of the Conservative MEPs, withdrew the party whip.
On 15 September, without any prior notification, McMillan-Scott was expelled from the Conservative party after 25 years as an MEP, four years as leader of the MEPs and three years on the party’s board.
• Hague is also likely to come under fire if he declines an invitation to appear this Thursday before a parliamentary committee investigating the granting of a peerage to Lord Ashcroft .
The three Tory members of the public administration committee – David Burrowes, Ian Liddell-Grainger and Charles Walker – have already said that they will not attend the one-off meeting, at which confidential Cabinet Office records relating to the decision to grant Ashcroft a peerage in 2000 will be discussed.
But the event is now in danger of running into farce. Ashcroft, a “non-dom” who does not pay UK tax on his overseas earnings, is unlikely to appear in person and Hague, too, looks doubtful.
Recovery yields Alistair Darling a £12bn budget windfall
about 5 months ago - No comments
Chancellor will cite state investment in jobs as key to lower-than-expected unemployment
Alistair Darling will claim next week that government action to protect jobs has saved around £12bn, as Labour uses the pre-election budget to spell out key economic dividing lines with the Tories.
In what is expected to be the most political budget in decades, the chancellor will cite government investment in jobs programmes as a major reason why unemployment has turned out to be dramatically lower than economists predicted. Last year’s budget anticipated that the level of unemployment, based on National Audit Office assessments of independent forecasts, would be 2.09 million people in the fourth quarter of 2009 and 2.44 million in the fourth quarter of 2010. By December’s pre-budget report (PBR), however, the government had revised the forecasts to 1.72 million for 2009 and 1.91 million for 2010, saying that this would save up to £10bn over five years from lower unemployment benefits alone.
Since then, the Observer has established that Darling’s officials have cut the forecasts still further. The latest projections for unemployment are for it to hit 1.72 million in the final quarter of this year and 1.75 million in the fourth quarter of 2011 – a further 200,000 lower than in the PBR plans, potentially freeing up an extra £1bn-£2bn.
The work and pensions secretary, Yvette Cooper, said: “In the 80s and 90s unemployment continued to rise even after the recession ended, because the government failed to put the necessary support and training in place and keep it there as the economy returned to growth.” She claimed that the Conservatives would cut back investment in jobs programmes and “put the economy at risk, even though the clear evidence shows helping people back to work saves money for the future too”.
This week Cooper is expected to announce that the government will subsidise another 7,000 jobs for young people, bringing the total created under the Future Jobs Fund to 117,000. The funding will pay for work at the national minimum wage, targeted at under-25s and people living in unemployment hotspots.
Last night Treasury sources insisted that most of the windfall savings from lower-than-expected unemployment would be used to cut the deficit, rather than for pre-election giveaways.
Darling believes the budget could spark a sell-off in government markets unless he stands by his pledge to halve the deficit within four years. Ministers believe that they have a credible plan to put the public finances back in order, through targeted investment in the economy, which they say will speed progress towards sustained growth; the introduction of tax rises such as the 50p rate for top earners (from this April) and national insurance rises from next April; and efficiency savings across government. But Darling is not expected to spell out any more details of specific departmental spending cuts so close to polling day.
Can Katy Perry stop EMI going to America for a song?
about 5 months ago - No comments
Billions of pounds of debt, the internet and piracy are crippling one of Britain’s most iconic firms
It is a tale of sex, debt and rock’n'roll that is unlikely to have a happy ending. When Guy Hands, a City financier with a penchant for fast food and an insatiable appetite for deal-making, came up with a plan to buy EMI, Britain’s flagship music company, using billions of pounds of borrowed money, many wondered how he could possibly make a decent return on his investment. As it has turned out, he couldn’t.
This weekend EMI’s new chairman Charles Allen, the former ITV chief executive hired by Hands last week to run the music arm of the company, is battling to ensure its independence, assembling a rescue plan for the company that signed the Beatles and became synonymous with the golden age of British pop.
Sources close to the company say Allen, a former accountant whose eclectic musical tastes encompass Lily Allen and Edith Piaf, is “rolling up his sleeves” and working to ensure the company does not breach the terms of its bank loans, but there is no doubt EMI is in peril. “It is a very, very big moment,” according to Claire Enders, founder of media consultancy Enders Analysis. “The next two or three months are critical for the future of EMI.”
Allen’s predecessor, Elio Leoni-Sceti, left suddenly last week just as the final touches were being put on a rescue package, prompting fears over the company’s future. The business is effectively being propped up by its past, surviving on the revenues generated by artists signed during a 30-year period when British music dominated the world.
The list of talent on EMI’s books reads like a roll call of rock royalty: David Bowie, Queen, Lennon and McCartney, the Sex Pistols and Pink Floyd. As an incubator of home-grown musical talent, the company is without equal and its position as one of the “big four” global record labels is a source of national pride; it exists to make money but EMI also safeguards the country’s status as a place where music that matters is made.
If EMI disappears or falls into foreign hands, many music industry figures worry that future generations of British acts may find it more difficult to find a worldwide audience. Jazz Summers, who manages former Verve vocalist Richard Ashcroft, who is signed to EMI, said: “If you look at their track record, they have broken more British acts in America than anyone else, and the same is true in other countries.”
EMI is in crisis because it is burdened with what sources close to the company describe as a “ludicrous” amount of debt, racked up after it was bought in 2007 by Hands’s private equity company Terra Firma. EMI Music currently has three artists in the top 15 of the album chart for the first time this century, including Blur vocalist Damon Albarn’s Gorillaz, and it is on course to make a profit of £200m this year, but a staggering three quarters of that will go on interest payments.
Hands borrowed heavily to fund the deal, using money provided by Terra Firma’s investors, and EMI’s valuable back catalogue, as collateral, but even then some questioned whether he was right to pay the amount he did for a business that was struggling to come to terms with downloads and a dramatic decline in physical music sales. The industry has lost between 30% and 50% of its revenues in the last five years, but the irony is that EMI is currently outperforming its peers, which include Sony BMG and Warner Music.
It had the biggest-selling album of 2008, Coldplay’s Viva La Vida, and reissued the Beatles digitally remastered back catalogue last year. Acts including Lily Allen and Katy Perry are selling well, but the way the company is structured means it cannot trade its way out of trouble.
Before the credit crunch, loans could be refinanced cheaply, but now EMI is struggling to meet its debt repayments in the wake of the severe economic downturn. It has been forced to cut costs dramatically, laying off close to 20% of its workforce. The company is now worth £450m, around a tenth of what Hands paid for it. Some big acts, including Radiohead, have already left, muttering that the money men simply didn’t understand the music business.
Last week one of EMI’s biggest-selling groups, Pink Floyd, won a court action preventing the company from making tracks from their 1970s album Dark Side of the Moon available to download individually. That was widely portrayed as a victory for artistic integrity – the group want their masterpiece to be consumed from start to finish, as they originally intended – but it also illustrates the challenges the music industry faces in an era of huge upheaval, when illegal downloading is costing it dear and making money from talent discovered and developed at huge cost is more difficult than ever.
If Allen cannot persuade Terra Firma’s investors to stump up another £120m, EMI will be in breach of its loan terms, and its main creditor – US bank Citigroup – could seize control of the company. If it does so, Citigroup is likely to sell it to Warner Music, an American rival which was outbid by Hands for EMI three years ago. The situation is complicated by Terra Firma’s decision to sue Citigroup in New York, accusing it of forcing EMI towards administration so it can take possession of the company and make a profit from a quick sale, allegations that the bank denies.
Hands is a larger-than-life tax exile, a hero in the Square Mile whose reputation has been badly tarnished by the EMI debacle. He now concedes he overpaid for EMI, but his miscalculation means he could be about to hand a much-loved cultural institution into the keeping of the Americans.
At the end of last year Cadbury’s city shareholders agreed to sell the nation’s favourite chocolate company to Illinois-based Kraft. The prospect of another household name passing into foreign ownership, particularly a national champion in one of the few industries in which Britain still excels, is an unsettling one.
One senior music industry executive explained: “For British music, the fact that there was a very successful British company to sign for was hugely significant.” However, others say the temptation to indulge in flag-waving should be resisted. Enders said: “Britain is one of the places people come looking for talent and that won’t change. There are a lot of players in the market and advances paid to acts such as Florence and The Machine have gone up.”
If EMI does fall into the hands of an American rival, she added, it might ultimately safeguard its future. “It would be better for EMI to have less indebtedness. It will have much more firepower.”
EMI could survive. It is still lining up the sale of some prized assets. It was reported last month that the Abbey Road studios in London could be sold off. The company later insisted the studios should stay under its ownership and was working with “third parties” about funding a “revitalisation project”.
Raising the possibility that a part of the nation’s cultural heritage could be sold provides a graphic reminder of how the company’s huge debt is forcing it to make unpopular decisions.
It may not matter if British acts are no longer championed by a UK company as long as the country continues to produce talent and A&R men from overseas arrive here in search of the next Lily Allen or Amy Winehouse. “In the end the music business is the same as it ever was,” Enders said. “It’s about hits.”
Smile Though Your Heart is Breaking by Pauline Prescott | Book review
about 5 months ago - No comments
Pauline Prescott’s story is one of remaining plucky and loyal through good times and bad. A national treasure, says Rachel Cooke
It’s easy to sneer at Pauline Prescott, to take the mickey out of her fondness for such things as cutting the crusts off sandwiches, and plenty of people already have. They should be ashamed of themselves. The older I get, the more I admire women like her: kind, self-effacing, loyal, plucky, polite, always beautifully turned out. Her pleasure in simple things – a decent bun, the occasional illicit glass of hotel champagne – speaks to the deracinated Yorkshirewoman in me, who was brought up to believe that the very worst thing you can be is spoilt. Midway through her autobiography, Prescott refers to the “Beverley days out” she enjoys with her girlfriends. If you don’t know Beverley, the minster town that passes for posh in the East Riding, this phrase will be lost on you. But it wasn’t lost on me. The treat of Beverley! Faster than you can say “Dorneywood”, I was on the internet, looking for a hotel.
Dorneywood, traditionally the Chancellor’s grace and favour house, is where Pauline and her husband spent their weekends during the decade he was deputy prime minister. The original plan, on his elevation in 1997, was that he would get Chevening, the Foreign Secretary’s retreat. But Pauline took one look and thought: too big, much as she did when she first saw the couple’s rather grand castellated home in Hull (“All I could think was: how am I going to clean all this?”). This is Pauline all over: easier to get Cherie Blair to admit that Tony cocked up Iraq than to turn Pauline Prescott’s head. Of course, if it did happen to turn, not a hair would stir in the process. When she married her merchant seaman beau in 1961, in a satin dress from Nola Gowns of Chester, her day was ruined by, among other things, the fact that her “industrial-strength” hairspray melted the diamante on her tiara, spattering her back-combed hair with silver. In her book, Pauline pays dutiful lip service to her husband’s Labour values; when he first stood for parliament, she made him the biggest, reddest rosette you’ve ever seen. But you can tell that what she really believes in is the power of the can, be it hairspray or furniture polish.
Pauline Tilston was born in Chester in 1939, the daughter of a bricklayer and a cleaner. As she tells it in Smile Though Your Heart is Breaking, the family is poor but happy, and Pauline, a keen dancer, dreams only of becoming a television “topper”. Then, calamity. Her beloved father dies suddenly; her brother contracts TB and is exiled to a sanitorium; her mother suffers an industrial accident at a local laundry. It’s all a bit John Braine at this point. Life, however, picks up when Pauline, beautiful and by now a hairdresser, begins dating an American serviceman called Jim. She likes Jim so much she gives him her bronze tap-dancing medal as a keepsake. He is married but intends divorcing his wife, or so he claims. When he leaves for home, Pauline is certain that he will return and claim her.
You know what’s coming next. Poor old Pauline, who is only 16, discovers that she is pregnant. Jim does not return, and his girl is dispatched to St Bridget’s House of Mercy, a home for unwed mothers, where the nuns encourage her to scrub the floors because “this helps get the baby’s head into position”. Pauline’s mother insists she cannot keep her baby – there is no money – and, having resisted the idea of adoption for three long years, during which time her son, Paul, remains in state care, she signs the papers. By this time, Pauline is seeing John Prescott, whom she met at a bus stop (their first date was a trip to the cinema where her Uncle Wilf played the Wurlizter). Now, there is plenty to be said about Prescott and the way he carries on; when I interviewed him, he flung his legs over the arms of his chair and pointed his groin at me like a gun. But he comes out of this period faultlessly, often travelling with Pauline to visit Paul, and, unlike his mother, never making her feel in the slightest bit ashamed. Given the time, and their social class, is it any wonder that she married him?
John decrees that Pauline must stay in his constituency with their own two sons when he is in Westminster, so no exciting New Labour gossip in her book’s dull middle section. Yes, she discovers that her husband is bulimic – food keeps disappearing – but as her mother says: “It could have been worse, Pauline. John could have become an alcoholic, and that would have been much more expensive.” Flip through a few pages, however, and the story picks up. The tabloids find Paul, a Tory-voting military policeman, and they are joyfully reunited. Then John confesses to an affair with Tracey Temple, his diary secretary. I imagine that Pauline found telling her ghost writer about this extremely painful; certainly, she’s coy so far as the, er, ins and outs go. But you cheer when she describes her coping mechanism: her downstairs loo, which she is doing up, a project that cannot be derailed. Lipstick, mascara, a permanently boiling kettle: these things comprise Pauline’s armour, and it’s John, not her, who, some days later, must nervously inquire if their marriage is over. Even better, as she seems to know, these events, combined with her cherishable cameos in the television shows her husband has made since leaving government, have since turned our heroine into a bona fide national treasure. At Mr Chu’s of Hull, the Prescotts’ favourite restaurant, it’s now Pauline’s beautifully manicured hand that people secretly want to shake, and I don’t blame them. She’s great. A peach,and a trooper.
Hugh Muir’s diary
A change is gonna come, Nick Griffin will tell the judge. There may be a long wait
• Six days to discover whether Nick Griffin’s tinkering with the British National party whites-only membership rule will satisfy the high court. We are no longer that nasty party everybody talks about, he will tell the learned judge. Now we welcome everybody. And that may suffice, but it may not – for two reasons. First, the tinkering changes things a bit, but it may not be enough to bring the party into line with the relevant legislation. And second, it will be hard to convince a judge that the party is a democratic vehicle, just like any other, when its people are issuing death threats. Two have been referred to the police in recent weeks. One by Dominic Carman, Griffin’s one-time biographer who is standing against him as a Liberal Democrat in Barking. He says his threat came from an “identifiable individual, a BNP supporter”. The other threat – a video posted on the web in the name of Wandsworth BNP – featured Equality and Human Rights Commission chief Trevor Phillips, the man the party loves to hate, and suggested he be “dealt with”. Both men have urged Nick to intervene and condemn the culprits. For “this is London in 2010, not Berlin in 1933″, says Carman. The response: silence.
• On the whole, supporters of the main parties won’t kill you. But in their way, some of them, even the mild-mannered ones, can be quite volatile. Take Phil Collins, the former speechwriter to Tony Blair, now a senior research fellow at the London School of Economics. Known to be quiet and thoughtful in everyday life, he is a bit of a tiger on the football pitch – and when Labour’s team, Demon Eyes, played against a side from the Royal Society of Arts and the 2020 Public Services Trust thinktank at the weekend, it seemed safe enough to have Phil in goal. But it wasn’t. He still managed “a clash of heads” with an opposing player. He was sent off.
• The death yesterday of Winston Churchill’s grandson and namesake recalls a bitter little story told by late Clement Freud. The then Liberal MP and foodie was on a parliamentary delegation to China where he was dismayed by the lavish attention paid to his MP colleague, Winston Jr. Why the pampering, asked Freud. “Ah, because his grandfather was a very famous man,” was the reply. “That’s the first time I’ve ever been out-grandfathered,” Freud said.
• The Belgians are seething following the verbal assault by Ukipian Nigel Farage on the EU president, Herman Van Rompuy (“a damp rag”), and on Belgium itself. “We don’t want to be rude, Mr Farage,” says a faux poster placed on the web. “But go fuck yourself.” And don’t think that this will be the last time the Ukip Euro chief (pictured) elects to throw a stink bomb at his EU colleagues. Yesterday, having likened Van Rompuy to a “low-grade bank clerk”, he apologised to bank clerks. Later the MEP was fined. What’s going on here? “We are in the business of opposing a hypocritical tyranny,” explained an email sent from Farage’s office to the journalist and author Walter Ellis. “Wearing its characteristic patronising smile, the EU-elite is crushing democracy – while pretending to promote it – and laying plans for global conquest.” The union is “threatening world peace,” it says, so “courtesy and restraint are not necessarily appropriate.” Time for a hero. His name is Farage. Nigel Farage.
• Finally, didn’t it say everything about the government’s woes that when the PM was asked to name his favourite biscuit, chaos followed. No answer for an hour, and then a desperate tweet. “Anything with a bit of chocolate,” Gordon said. But when Mumsnet asked the same question yesterday, this time of Douglas Alexander, the minister and election coordinator, he was ready for it. “Terrible admission, and not very patriotic, but my favourite are chocolate Leibniz – a slab of chocolate pretending to be a biscuit,” he said. “Prefer the dark chocolate ones to the milk ones – and, of course, I hope that they will soon embrace Fairtade.” A fine answer. Concise, confident. At last, they’ve got a grip.
Related articles
Harsh words from the BNP pot to the Ukip kettle. You are an embarrassment, pot said• Just how bad is Ukip's behaviour in the European parliament? Well, pretty bad, with Nigel Farage being fined €3,000 for likening Herman Van Rompuy to a damp rag and Lord Dartmouth silenced mid rant assailing the qualities of Baroness Ashton. Everyone's embarrassed, it would seem. Mon dieu. Even the BNP. "Before Mr...
Revealed: how the Cameroons plan to win the election. A matter of cheques and balances• Why all the fuss about Lord Ashcroft's money, asks David Cameron. Our accounts are healthy – the debts are down. It was useful once, but now we don't even need it. And there is some truth to that. For the beneficial effect of the Tory poll lead has been to attract many more donations from figures and companies ...
Next stop intrigue, disgrace and scandal. The vengeful Tory and the perils of plotting on trains• Let's give power to the people, Cameron says, and so a plan was hatched to trial a planning initiative in the very Conservative borough of Windsor and Maidenhead. Locals would make decisions. Councillors would rubber-stamp them. Yes we'll do it, said party types keen to suck up to Cameron's office. Oh...
They learn their trade in training camps. How to attack, how to fight. Beware these Tories• A problem for Labour now we know that a squad of Tory election candidates have been through intense indoctrination at the "Conservative madrasa" run by Donal Blaney's Young Britons' Foundation. They get to shoot guns, if that's their thing, and when the clips are empty, take instruction from leaders who jus...
The show won't go on. The actors have upped and left. But then that's showbiz• It would have been great, but libel trial aficionados will be disappointed that this year's star attraction at the high court theatre – Alex Mardas v the New York Times – has been cancelled. Mardas, aka Magic Alex, was the man at the Maharishi commune in 1968 who reported that the Holy Man had been getting rat...
He huffed, he puffed – and the Cameroonie blew his way to star billing with Evan and Nick•At first glance butter wouldn't melt, but as they claw their way to power, some say that anything goes for the new Tories. Enter Rishi Saha, head of new media for the Cameroonies. He is alerted to a debate at London's City University, held on Tuesday under the auspices of the Media Society and Media Trust. Th...
Let asylum seekers eat cake, or soup. Or pie. Just ensure they eat something• There will be no whitewash in the White House, said Tricky Dicky Nixon; and since then we have learned to take official denials at face value. So when ministers say – despite detailed claims to the contrary – that there are no women on hunger strike at the pleasure palace that is the Yarl's Wood detention centre (prop: L...