My London based Legal Consultancy now  has access to an innovative market-leading personal injury (PI) market exit strategy which will be of interest to many law firms providing personal injury services.

Consultant Lawyer Solutions, which trades under the online brand consula.co.uk, provides a range of legal, business and other services to law firms, start-ups and business generally. I am now focusing the business on current market opportunities arising out of the impending Jackson reforms implementation.

In a move targeting the majority of Personal Injury Firms in England and Wales, consula.co.uk has now launched its personal injury exit strategy solution. It is specifically designed for personal injury law firms who are either likely to experience financial difficulty, or are looking to exit the market but wish to retain the maximum WiP on their book of cases.

This new exit strategy will help firms  exit the market in an ordered, structured way avoiding a fire-sale of their book of work. The solution also delivers a significantly better financial return than other providers.

Now that Jackson is about to take effect, there is increasing turmoil in the legal market, more so in the Personal Injury Market. The market in England and Wales currently has in excess of 3,000 providers likely to be directly affected. In fact, a considerable proportion of firms that provide personal injury are already being affected by the changing market, resulting in a wave of exit-strategies by various providers. The majority of those existing schemes, however, barely provide a 40% return on WiP, which will concern many of those looking to exit the market.

This new solution is able to deliver up to a 90% return on WiP and may help those firms in financial difficulty avoid insolvency, which is a great incentive to the profession during these turbulent times.

The process involves a firm transferring their entire book of work to a panel of firms through a unique process that allows law firms to withdraw sensibly from the personal injury market under a managed process. The service is likely to be of interest to law firms facing pending insolvency, cash flow difficulties and re-structures. It is also likely to interest firms wishing to exit the market voluntarily due to retirement or those who simply wish withdraw from this highly competitive market.

More details about the process are available on Consula’s website here.

Posted by: martincallan | November 9, 2012

New Legal & Business Consultancy Launches in London

A new legal and business consultancy, Consultant Lawyer Solutions (www.consula.co.uk) has launched in London targeting start-up businesses with a range of support, strategic and legal services.

Launched in November 2012, Consula is a new consultant lawyer solution for law firms, business and start-ups. Providing a range of legal and business services, such as locum lawyer provision for a short period, in-house legal officer or legal director (non-executive) to handle specific disputes or projects, and tailored start-up packages for on-going legal support, Consula is seeking to capitalise on the otherwise contradictory economic data coming from the UK.

Consula’s London-based consultants are among the very best – experienced lawyers who combine strong commercial strategy and delivery skills with positive and engaging personalities. They provide the support business needs, whether its project management consultancy on the ground for an extended period, locum cover for law firms, help through a critical phase of work or simply strategic advice. This combination of services, intended to cover changes in the legal marketplace (such as ABS, the Jackson reforms and the opening up of competition between the professions) offers a unique range of services based on a unique professional background in an ever increasingly competative marketplace where law firms continue to merge or close.

What sets Consula apart from other lawyer consultants is that Consula is building a strong reputation – not only for meeting demanding delivery challenges and getting good results, but for being enjoyable to work with. By focusing on client’s needs first, Consula are helping to deliver a range of solutions in a new and innovative way that is cost-effective and rewarding. In fact, they already have an impressive client portfolio, ranging from small start-ups to a global leader in legal information and data management.

By helping their clients formulate their business, legal and functional strategies, Consula seeks to ensure those plans are innovative, realistic and practical to implement. Consula also understands that the world does not stand still once a strategy is defined, so in addition to providing hands on resource to support delivery, they maintain a strategic perspective – to continually sense check the priorities and maintain strategic alignment, adding flexibility and market-reaction to long-term solutions.

Consula can provide support at any stage of business, from inception, formation/start-up through to formulation of strategy for established businesses to ensure the realisation of benefits.  Definitely worth a look!

Posted by: martincallan | July 22, 2012

Building an audience through social networking

Most people have heard of facebook, twitter, linkedin and the dozens of other social networking sites that have popped up over the past decade. As more and more people move towards online, and more particularly, online through Andriod based mobile devices, the scope for social networking seems to have no limit. Millions of people across the world post comments, pictures, stories billions of times a day.

This phenomena gives people connectivity in ways like never before, instantly connecting the population of the planet. The basic principle underlying this is, of course, advertising to mass audiences, but more particularly, targeted advertising. When we sign up to the various social networking sites we hand over lots of personal information (at least, we do if we are honest). This information is used by the service providers to sell targeted advertising and to generate revenues.

So what about the rest of us? Are we just commodities to be sold en mass to advertisers, or can we ourselves seek to benefit from building an audience?  There is scope beyond advertising. For example, the Times of India reported that “Potential candidates for the soon-to-be-held student union elections have begun preparing their bio data encompassing their latest updates on popular social networking sites — Facebook and Twitter — along with press cuttings to show their involvement in protests and demonstrations”.

The social benefits of giving everyone connectivity are pretty obvious as well as profitable. Indeed, free Internet access is helping to drive increasing audiences. For example, The Hindu Business Line reported that “Sistema Shyam TeleServices (SSTL), which operates under MTS brand, on Thursday announced a new internet plan to provide free access to three social networking sites, including Facebook”, and this is happening all over the place to make it easier for people to connect (or to become commodities depending on how you look at it!!).

The famous are able to command large audiences off the back of their high media exposure. Actors, singers, politicians, authors and the such generate audiences with little effort on their part, but can an audience be built through social networking? Lots of people, including me, are seeking to build up an audience. Lady Gaga got hundreds of thousands of twitter followers off the back of high profile media exposure, but what can the rest of us do? Well, there is scope to build an audience, but there’s a catch (of course).

Sign up to Facebook or twitter or linkedin and after handing over lots of personal information so that advertising can be targeted to your interests you want to start building your audience. The problem is that these providers limit what you can do. Twitter has following limits. Facebook imposes a very strict system wherein you can be banned from friending people for a week. Indeed, there is something of a mixed-message approach going on. Remember, when you are logged in to your profile, there are dozens of messages prompting you to friend more people, to follow more people, to invite more people to join your particular network. How many people have actually looked at the terms and conditions that come with these social networking sites? Twitter’s terms and conditions, for example, state that:

“You retain your rights to any Content you submit, post or display on or through the Services. By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).

Tip This license is you authorizing us to make your Tweets available to the rest of the world and to let others do the same.

You agree that this license includes the right for Twitter to provide, promote, and improve the Services and to make Content submitted to or through the Services available to other companies, organizations or individuals who partner with Twitter for the syndication, broadcast, distribution or publication of such Content on other media and services, subject to our terms and conditions for such Content use.

Tip Twitter has an evolving set of rules for how ecosystem partners can interact with your Content. These rules exist to enable an open ecosystem with your rights in mind. But what’s yours is yours – you own your Content (and your photos are part of that Content).

Such additional uses by Twitter, or other companies, organizations or individuals who partner with Twitter, may be made with no compensation paid to you with respect to the Content that you submit, post, transmit or otherwise make available through the Services.

We may modify or adapt your Content in order to transmit, display or distribute it over computer networks and in various media and/or make changes to your Content as are necessary to conform and adapt that Content to any requirements or limitations of any networks, devices, services or media.

You are responsible for your use of the Services, for any Content you provide, and for any consequences thereof, including the use of your Content by other users and our third party partners. You understand that your Content may be syndicated, broadcast, distributed, or published by our partners and if you do not have the right to submit Content for such use, it may subject you to liability. Twitter will not be responsible or liable for any use of your Content by Twitter in accordance with these Terms. You represent and warrant that you have all the rights, power and authority necessary to grant the rights granted herein to any Content that you submit.”

Now, assuming that you understand what all that means (since that is the basis of your “rights” on twitter), there are a number of restrictions. For example, Twitter’s terms incorporate “the Twitter Rules”:

“Please review the Twitter Rules (which are part of these Terms) to better understand what is prohibited on the Service. We reserve the right at all times (but will not have an obligation) to remove or refuse to distribute any Content on the Services, to suspend or terminate users, and to reclaim usernames without liability to you. We also reserve the right to access, read, preserve, and disclose any information as we reasonably believe is necessary to (i) satisfy any applicable law, regulation, legal process or governmental request, (ii) enforce the Terms, including investigation of potential violations hereof, (iii) detect, prevent, or otherwise address fraud, security or technical issues, (iv) respond to user support requests, or (v) protect the rights, property or safety of Twitter, its users and the public.”

So, in other words, having “contracted” with Twitter for their service and having received what appear to be reasonable rights to use the service, the restrictions that limit you are not contained in the terms, but in a separate document which is referred to in the terms. This is not uncommon and is a method that has developed under the law of contract, but other than providing access to terms and the rules, Twitter does not provide any “key features” information to highlight important parts of the terms and rules – which most people don’t read anyway.
Twitter’s “Rules” are in themselves fairly straightforward and do state that “these limitations comply with legal requirements and make Twitter a better experience for all” (although that seems like a very subjective argument!). The Rules seek to prevent impersonation (and yet how many accounts have we all seen which are indeed impersonations), trademarked user names can be reclaimed, personal information (such as bank details) are meant to be protected, no threatening of violence will be tolerated, no unlawful use of the service (which is not defined) and no misuse of official twitter badges. Ok, sounds comprehensive, but in reality, monitoring and enforcing these limitation is far from straightforward and in many cases will be retrospective.

In addition to limitations which “protect”, there are other limitations to avoid “spam and abuse” which include serial accounts for disruptive or abusive purposes, username squatting (creating accounts for the purpose of preventing others from using those account names), not using Twitter.com’s address book contact import to send repeat, mass invitations, no buying or selling Twitter usernames (despite there being several other sites that actually provide this service), no publishing or linking to malicious content intended to damage or disrupt another user’s browser or computer or to compromise a user’s privacy (this is very broad indeed and could be interpreted to cover almost everything),  but the next one “Spamming” is where the biggest limitation appears to exist:

“not use the Twitter service for the purpose of spamming anyone. What constitutes “spamming” will evolve as we respond to new tricks and tactics by spammers. Some of the factors that we take into account when determining what conduct is considered to be spamming are:
If you have followed a large amount of users in a short amount of time;
If you have followed and unfollowed people in a short time period, particularly by automated means (aggressive follower churn);
If you repeatedly follow and unfollow people, whether to build followers or to garner more attention for your profile;
If you have a small number of followers compared to the amount of people you are following;
If your updates consist mainly of links, and not personal updates;
If you post misleading links;
If a large number of people are blocking you;
The number of spam complaints that have been filed against you;
If you post duplicate content over multiple accounts or multiple duplicate updates on one account;
If you post multiple unrelated updates to a topic using #;
If you post multiple unrelated updates to a trending or popular topic;
If you send large numbers of duplicate @replies or mentions;
If you send large numbers of unsolicited @replies or mentions in an attempt to spam a service or link;
If you add a large number of unrelated users to lists in an attempt to spam a service or link;
If you repeatedly post other users’ Tweets as your own;
If you have attempted to “sell” followers, particularly through tactics considered aggressive following or follower churn;
Creating or purchasing accounts in order to gain followers;
Using or promoting third-party sites that claim to get you more followers (such as follower trains, sites promising “more followers fast,” or any other site that offers to automatically add followers to your account);
If you create false or misleading Points of Interest;
If you create Points of Interest to namesquat or spam.”

Wow! This pretty much covers any action by any user at any time on twitter. But hang on, they, like facebook, encourage you to follow more people and grow your “network”, every time you log into your account. So, with such heavy restrictions on the “rights” you were granted in the contract, combined with a relentless campaign to encourage you to follow more people and invite people, how can anyone be expected to build an audience within the terms of the contract? Twitter provides some guidance about follow limits. Now, as I understand it, this is guidance, it does not form part of the contract which does not contain the phrase “follow limit” which is also not present in the Rules which are part of the contract. You see, the thing is, a contract can import terms which are expressly referred to (such as the Rules) but beyond that, anything else is not necessarily part of the contract – but I don’t think it has any real practical weight anyway, since Twitter can basically do whatever it wants whenever it wants with any user it wishes because of its rights under the contract and the limitations placed on your rights, which are neither properly defined or properly policed and enforced.

So, the “guidance” cannot form part of the contract, but it doesn’t really seem to matter. The follow limit guidance says:

“Why you can’t follow anyone:

You’ve probably hit a follow limit. Twitter has imposed reasonable limits to help prevent system strain and limit abuse. If you hit a technical limit, you’ll see an error message when you try to follow. Remember that you cannot follow a user who is blocking you. We do not limit the number of people who can follow you.
Twitter’s technical follow limits:
Every account can follow 2,000 users total. Once you’ve followed 2,000 users, there are limits to the number of additional users you can follow. This number is different for each account and is based on your ratio of followers to following; this ratio is not published. Follow limits cannot be lifted by Twitter and everyone is subject to limits, even high profile and API accounts.
Every Twitter account is technically unable to follow more than 1,000 users per day, in addition to the account-based limits above. Please note that this is just a technical limit to prevent egregious abuse from spam accounts.
Accounts are also prohibited from aggressively following other users. Our Follow Limits and Best Practices Page has more information on Twitter’s following rules.
What to do if you’ve hit a follow limit:

If you’ve reached the account-based follow limit (2,000 users), you’ll need to wait until you yourself have more followers before you can follow additional users. Follow limits are system-wide; Support cannot remove or adjust your follow limits.

To follow one or two additional users, unfollow a few accounts you’re currently following. Please note, however, that regularly following and unfollowing many accounts is a violation of the Twitter Rules and can result in account suspension.”

To my mind the important bit is “Every Twitter account is technically unable to follow more than 1,000 users per day, in addition to the account-based limits above. Please note that this is just a technical limit to prevent egregious abuse from spam accounts.” I read this to mean that I can follow 1,000 people every day because Twitter allows me to reach that limit and this is important because I am not a robot or spambot nor to I post misleading links or am trying to get people’s personal information. I want to build an audience. However, the “guidance” also states that “regularly following and unfollowing many accounts is a violation of the Twitter Rules and can result in account suspension” – look back at the “spam” section of the Rules.

Now, what is “regular” and what is “many”. Remember, twitter actively encourages users to grow their network and to follow people. It also has many many thousands of users who have as many followers as they are following (many of which are several hundred thousand, or millions) – so what is “many”. I can’t see 1,000 as being “many” if 1,000 represents 0.0000000001% of the number of users. What is “regular”, every day? Every hour? Twitter encourages regular use and supports third party apps which promote regular use via computers and hand held devices. To my mind, as long as I am not a robot, am not trying to steal people’s personal data or impersonating someone else or using a trademark, I can follow 1,000 people every day to build my audience – but ultimately its up to Twitter whether or not to allow me to use their service.

If you want more twitter followers then you may want to have a look at a method that I believe is within the Terms and the Rules and that can generate up to 1,000 followers a day: twitter.4ourthplinth.co.uk

Posted by: martincallan | November 28, 2011

Consultation to begin on scrapping some health & safety rules

The UK government is launching a consultation on the abolition of “large numbers” of health and safety rules following an independent review and in line with Conservative indications over the last few years.

The UK government says it wants to have removed the first regulations from the statute book within a few months. Following the Lofstedt review, a new “challenge panel” is also being created for businesses unhappy with health and safety rulings made against them paving the way for a new landscape of “common sense” rules and practices.

The employment minister said the moves would “root out needless bureaucracy”. The government says there are currently about 200 health and safety regulations, but this will be reduced by more than half over the next three years. It is a standing policy of the Coalition that no new regulations would be created unless existing ones were abolished – the so called “one in one out” approach. One wonders whether the mass cull in Health and Safety Regulations is a ruse to enable the government to bring in a whole range of new regulations under the “one in one out” process.

The review was carried out by Prof Ragnar E Lofstedt, director of the Centre for Risk Management at King’s College London. Prof Lofstedt made a number of recommendations to ensure that in future employers are not held responsible for damages in cases where they have done everything possible to manage risks. Currently, employer liability, whether it is vicarious, or by way of corporate liability or strict statutory liability, does not make sufficient provision for firms who could not have done anything more to manage risk.

Prof Lofstedt also says self-employed people, whose work poses no risk to others, should be exempt from health and safety rules altogether, although on this point, it does seem a little more contentious particularly in how to define those “who pose no risk to others”.

Employment Minister Chris Grayling said the government was accepting Prof Lofstedt’s recommendations and hoped to “put common sense back at the heart of health and safety” He went on “Our reforms will root out needless bureaucracy and be a significant boost to the million self employed people who will be moved out of health and safety regulation altogether. We will also ensure our reforms put an emphasis on personal responsibility. It cannot be right that employers are responsible for damages when they have done all they can to manage the risk. Fundamentally, we will ensure the health and safety system is fit for purpose through streamlining the maze of regulations and ensuring consistency across the board.”

Health and Safety has been at the forefront of ridicule and attack over the past few years, not least because of the absurdities that seem to have arisen, particularly in local authorities, but it seems that Prof Lofstedt may have finally found a route to tame the beast.

UK Chancellor George Osborne is due to unveil a new government scheme to underwrite up to £40bn of loans to small businesses when he delivers his autumn statement on the economy on Tuesday 29th September 2011.

The “credit easing” scheme is intended to prevent the British economy falling back into recession and looks like the first major growth programme of the Coalition.

The plan sees the government underwrite banks’ borrowing, allowing them to borrow more cheaply which is not dissimilar to the old European Social Fund underwritten by insurance.

This saving should then be passed on to the firms through lower interest rates, but whether firms will meet lender’s stringent lending criteria remains to be seen.

The BBC reported that a Treasury source described the scheme, which is also  thought to be similar to the Labour government’s credit guarantee scheme of 2008, as a “game changer”.

Its aim is specifically to help small and medium enterprises (SMEs) who have been complaining about the lack of credit, in a backdrop of rising insolvencies and unemployment and low growth and consumer spending.

The new shceme would mean that a firm currently taking out a £5m loan at a typical interest rate of 5% would instead be able to borrow at 4%, saving £50,000 a year in interest payments, assuming that they met the lending criteria in the first place.

Ministers hope the scheme will be in operation by the start of the new year, and it is envisaged it will run for the next two years, bringing a significant glimmer of hope to the economy overall particularly following growing criticism of a focus on cuts and a lack of genuine targeted plans for growth.

In addition, a second smaller scheme will see the establishment of an investment fund with private sector investors, such as pensions funds, to provide a source of loans for larger firms which is not bank-related. This provides investors with a less risky route to invest in the short term and may generate substantial interest from investors who are weary of market turbulence and huge losses seen over the last two years.

In a joint letter to Mr Osborne, shadow chancellor Ed Balls and shadow business secretary Chuka Umunna warned that the credit easing alone would not be enough to revive economic growth. Bear in mind that for months Ed Balls has been criticising every cut, opposing every policy aimed at growth and job creation and has yet to provide any credible policy, whilst retaining the reputation, along with Ed Milliband, as being part of the team of the last government who contributed significantly to the budget defecit.

“At the current rate, over 1,200 people a day are entering unemployment,” said the letter.

“Businesses are going bankrupt at a faster rate than a year ago – despite your expressed wish for a private sector-led recovery. Access to credit will not in itself restore the confidence of business to invest. The country urgently needs a plan for growth and jobs.”

Mr Osborne is also due to announce a cap on rises for regulated rail fares, such as peak fares and season tickets, to help ease the pressure on consumers.

A planned rise of 8.2% – RPI inflation of 5.2% +3% – will be restricted to 6.2% (RPI +1%), with the cap also covering bus and tube fares in London.

The Association of Train Operating Companies described the plan as a “positive move” for passengers. “Train companies are ready to work hard to ensure that a Government decision on fares is able to be implemented in time for the New Year,” said a spokesman.

Whilst the news is certainly very welcome, the government continues to make huge cuts but also continues to pump hundreds of billions more into propping up the banks, bailing out the EU directly or indirectly through the IMF and supporting international development. It seems that the government is now reflecting on the worsening economic situation and is finally looking to make a major investment as the centre-piece of a series of growth focused policies.

Whether or not the banks will actually lend the money remains to be seen, but it looks like the move will at least help to ease fears both of consumers and of business, but it will be years before any indication of whether the programme has been successful or not will be seen.

Posted by: martincallan | November 26, 2011

Cutting Legal Aid will cut justice for all (ILEX Press relase)

The Institute of Legal Executives (ILEX) has welcomed comments, made during an eight hour debate in the House of Lords, that confirm our view that the Legal Aid, Sentencing and Punishment of Offenders Bill undermines the vital constitutional principals of England and Wales.

The comments were made by Lord Pannick as the bill was discussed at the House of Lords on Monday, 21 November 2011. Lord Pannick said to the House: “It (the bill) does not recognise that access to justice is a vital constitutional principle. I will be putting forward an amendment that states the Lord Chancellor must secure, within the resources made available, that individuals have access to legal services that effectively meet their needs.”

He continued: “The removal of legal aid will inevitably result in many hopeless claims being pursued by litigants in person because they will not have had objective legal advice.”

Lord Elystan-Morgan was even more forthright: “Unless a Government of the future pass a one-clause Bill to abolish legal aid completely, the contents of this Bill and the proposals surrounding them must constitute the most savage and most deadly attack upon the institution of legal aid in the 62 years of its existence”

Chief Executive of ILEX, Diane Burleigh, says: “The Bill contains clauses that allow for significant or total reductions in legal aid for civil issues which we believe will have a significant, negative impact on some of the most vulnerable members of society.

“The reforms will decimate the capacity of legal aid practitioners, Law Centres and Citizens Advice Bureau to assist the most vulnerable people with serious everyday problems such as debt, employment, housing, immigration, clinical negligence and most private law family cases.”

ILEX sent a briefing to peers ahead of the Second Reading containing ILEX’s main concerns:

-The Bill will actually incur further cost, not save the public purse money. The best value for money legal aid will be cut (early advice can save the public purse up to £10 for every £1 invested).
-It will cost more in bureaucracy; and leaves vulnerable people with no access to free, independent and quality legal advice.
-The Bill’s proposals to restrict access to legal aid will mean that only the poorest will be eligible for legal aid and that many others, will be denied access to justice.
-At a stroke, legal aid will no longer be available for housing, debt, clinical negligence, employment and welfare benefits cases including most private family cases.
-The bill is based on serious misconceptions. Legal aid lawyers are not ‘fat cats’. The average legal aid lawyer earns £25,000 a year, less than the average salary among teachers and social workers.
-A high proportion of claimants will be worse off if they pursue a claim, losing up to 25% of their damages. For extremely serious injuries, this has implications for the NHS, with additional costs being incurred to care for the claimant.
-The double blow of restrictions on access to legal aid and making Conditional Fee Agreements (CFAs) more difficult to use will have a huge impact on some of the most vulnerable sections of our society, making it much more difficult for ordinary people to seek redress.

Diane Burleigh adds: “While we agree the legal aid system should be reformed to ensure high-quality legal aid services at an affordable cost to the taxpayer. We welcome the support the Bill gives to mediation cases, we cannot endorse a plan that effectively moth balls the only route many have to the basic human right of access to justice.

“Recently ILEX received a Royal Charter in recognition of its contribution to legal services provision and the greater public interest. We will continue to ensure that a fair society is an open society, in which every individual is free to succeed. Fair access to justice through legal advice can help the most vulnerable to be treated fairly and enhance social mobility.”

Posted by: martincallan | November 21, 2011

Sorting debt ‘harder than envisaged’ PM Cameron tells CBI

Getting UK Government debt under control is proving harder than anyone envisaged, the prime minister has told the CBI conference, although it is not an unexpected revelation with the Autumn Statement due shortly and David Cameron hinted at some solutions that appear to be included in the chancellor’s Statement on 29 November.

Cameron said there would be a “massive credit-easing scheme” to help small and medium-sized businesses borrow money. This is interesting – remember, the financial crisis began back in 2007 and there have been several bail-outs to banks, resulting in huge government debt and the sovereign debt crises which has resulted in government spending cuts which in turn have led to near zero growth.

The chancellor will unveil measures to deal with youth unemployment and to create links between infrastructure projects and enterprise schemes. The government also plans measures to simplify employment law. It remains to be seen whether the private sector led recovery can actually deliver given the problems elsewhere in the world and with unemployment rising steadily towards 10%.

Elsewhere in his speech to the CBI, Mr Cameron said that the crisis in the eurozone was having a “chilling effect” on the UK’s economy, and that the stream of negative news about Europe was affecting confidence – this is very true, but confidence seems to be lacking in almost every quarter. But its ok, remember, the banks have all been bailed out (several times over), which is why governments are in debt, so that’s ok then! Isn’t it?

The government’s strategy is to pay down debt and focus on growth, Cameron said. Growth needs investment. Investors have no confidence. Governments have no money. So who is going to put the necessary funds in place to deliver the level of growth that is actually required? The CBI’s annual conference, this year being held at a hotel in London’s West End, has made boosting UK exports its centrepiece topic. The CBI wants Britain to match the EU average of one in four small-to-medium-sized enterprises exporting by 2020 – a great and achievable goal, with the right levels of investment and growth in the market places to enable these new businesses to stand any chance.

The prime minister criticised people calling for growth to be stimulated by additional spending funded by borrowing. He stressed that the country was “recovering from a debt crisis, not a traditional recession. People who argue that traditional fiscal stimulus, extra spending funded by even more borrowing, is the right answer are not just wrong but dangerously wrong.”  So, if Government won’t borrow to invest in growth, banks won’t lend to SMEs and investors are so spooked that the endless stock market volatility shows no signs of calming, then where exactly is the money coming from to provide the investment needed – and more importantly, where is the growth in markets that the new SMEs need to flourish going to come from and be funded by.

On the face of it, not borrowing more seems rather sensible. In fact, ideally the UK should have its eye on establishing a  multi trillion pounds Sovereign Wealth Fund that would generate lots of revenue to the treasury to pay for public services and help keep taxes low, to make the economy competitive.  Unfortunately, turning £7tn of national debt into a £7tn asset will take some time.

Unsurprisingly, Labour leader Ed Miliband said the measures announced were inadequate (but then again, he always says that doesn’t he) “David Cameron’s speech shows he is out of touch with economic reality and does not understand the scale of the economic crisis facing the country,” he said.

“These measures are too little, too late from the man who was responsible for choking off growth in the British economy when he came to power.” Typically, however, Mr Milliband was unable to provide any suitable alternative policy.

Mr Cameron also told the conference: “Everyone agrees now that in the past Britain’s economy had become lopsided: too dependent on debt, on consumption, on financial services. If we are to build a new model of growth, we need to give a massive boost to enterprise, entrepreneurship and business creation. Put simply Britain must become one of the best places to do business on the planet.” Again, this is a fantastic goal, but to achieve it without government borrowing, without banks lending to SMEs and without investors investing begs the question where will the necessary funding come from to achieve this goal. One eagerly awaits the Chancellor’s statement on the 29th, but with so little room and rumours of £50bn in capital spending (less than 10% of the money used to bail out the banks) it doesn’t appear that there is the financial clout to properly back up the desired objectives.

David Cameron and the Deputy Prime Minister Nick Clegg, who is also at the conference, have also unveiled a government initiative on housing: a £400m fund to boost housebuilding. They promised to break the “current cycle in which lenders won’t lend, builders can’t build and buyers can’t buy”. Again, £400 million is just a tiny fraction compared to the £400 billion used to bail out the banks again just a few months earlier.

As long as at the heart of the strategy is endless bailing out of the banks and mere fractions thrown into initiatives, and as long as the sovereign debt crisis continues to plague the doomed Euro, and as long as the US debt spirals beyond any realistic prospect of it be paid back, then it is difficult to see how this could work effectively. Without investment there can be no growth – without investors, governments or banks providing the sums needed to invest in growth there can be no growth – ergo, there is no growth. Let see the figures on the 29th though before any rash judgment is made!

 

Posted by: martincallan | November 21, 2011

Annual Christmas Tradition: the crackdown on fake shopping sites

In excess of 2,000 online e-store websites selling fake or non-existent goods have been shut down by the police, so far this year. Goods purportedly from GHD, Ugg, Tiffany and Nike had been sold by the sites, said the Metropolitan Police E-Crime Unit who said shoppers had been tempted by low prices. They warned that the goods supplied were counterfeit, adding that many sites had taken payment and then not despatched any products in return – which is bad news for credit card companies who will have to refund consumers under section 75 of the Consumer Credit Act.

The Metropolitan Police E-Crime Unit said many of the sites had been simply set up by cyber thieves to harvest credit card and banking details. This means that apart from swindling consumers and credit card companies for the goods themselves, there is a high risk that data is being collected for identity theft or additional fraud.

Precautions Police officers worked with domain registrars to identify the rogue traders and then used Nominet’s powers to seize and shut down the offending domains, but it is as yet unclear how many unsuspecting consumers would have visited or undertaken a transaction on such sites, or how many other sites are still out there.

Detective Inspector Paul Hoare from the E-Crime Unit said many gangs registered sites in bulk solely to dupe customers. He said the campaign to close the criminal sites would continue in the run-up to Christmas. “I would urge customers to take all precautions to ensure they buy from legitimate sites only,” he said. DI Hoare said consumers should check a website’s credentials to ensure it was approved and reputable. He said they should also consider using a credit card for payments over £100 and perhaps reserve one card for online shopping. DI Hoare said shoppers should also be wary of unsolicited offers that arrive via email. The E-Crime Unit took similar action in 2010 when it shut down about 1,800 sites.

Credit card companies are insured because they have a legal duty under section 75 of the Consumer Credit Act to refund a consumer who has been duped using a credit card. There is no similar protection for debit cards, however.  As the number of websites grow, the  complexity of the web presents many opportunities for criminal gangs to dupe unsuspecting consumers, so it is important to ensure that you know who you are using before you hand over sensitive information.

As the effects of the Great Recession (2007-2010) continue to reverberate around the Global Economy, it is becoming increasingly clear that a social struggle is taken place – between Capitalism on the one side and Democracy on the other.

 

In theUS, the hope the brought Obama to power faded away when Congress derailed healthcare reform and hijacked the debt ceiling issue, forcing Obama to accept a reality contrary to that upon which he was democratically elected. InEurope, the seemingly endless debt-crisis has seen governments toppled and fiscal policy imposed on people, contrary to that upon which those elected took office.

 

This pattern of democratic authority being undermined by economic sanctions takes place on the back of continuing bailouts to the banks (who continue to give themselves excessive bonuses). The reason why most governments are in so much debt is because they bailed out the banks – the banks that caused the Great Recession, and who have caused the Sovereign Debt crisis.

 

So whilst the banks horde money and fail to lend, governments are pressured through the money and bond markets to impose harsh cuts on their people – which no-one voted for and which most people resent.

 

This cocktail of massive government borrowing to bail out banks, harsh cuts at a time of near zero growth (and banks not lending), rising unemployment and increasing social unrest across most Western countries is a telling tale of the reality: Capitalism is at war with Democracy – and so far, Democracy is losing.

 

In “Reasonable Disagreement: A Theory of Political Morality”, Christopher McMahon says “Political decision-making determines how political cooperation is to be organized. Questions of empirical fact are germane to organization of political cooperation, and as we have seen, they can admit of reasonable disagreement. This alone suffices to establish that political decisions can be, and probably often are, made in the face of reasonable disagreement. But when we think about disagreement in politics, we more often have in mind normative and evaluative questions, and in particular, moral questions. The parties to the disagreement disagree about the moral acceptability of the different ways that political cooperation might be organized, the moral acceptability of a particular tax policy, for example. It seems, if anything, more plausible that questions of political morality admit of reasonable disagreement than that empirical questions do.”

 

Whilst this provides some insight into political disagreement, it has become increasingly clear in Western “democracies” that there is in fact very little disagreement between the parties – in fact, if one watches parliamentary proceedings, one finds that there is in fact so much common ground it is difficult to distinguish between the parties. This phenomenon suggests that the old ideological differences between the left and the right have been replaced by differences which are more trite in nature. This further suggests that the battle by politicians for power is firmly entrenched in the centre-ground. No longer to questions about empirical fact dominate political debate, rather, it seems, differences are based on the tiniest obscurity, which are then artificially magnified by the politicians to give the impression that they are actually different from each other.

 

McMahon , when looking at the future of political morality said “When the conceptual-cum-social process alters the zone of reasonable disagreement, or the distribution of people within the zone, a force other than the force of the better argument has a role in changing people’s minds. This was a feature of the process that resulted in the emergence of liberal democracy in the West. Political and economic revolution contributed importantly to this development. The events comprising these revolutions were brought about by people acting in a way they regarded as justified by the available normative and evaluative concepts, and these actions forced other people, as properly functioning cooperators, to make accommodating changes. It is possible that the Westernization of political morality on a global scale could be brought about by similar processes of revolution inside non-Western polities. But if Westernization is occurring today, other mechanisms seem to be doing most of the work.”

 

Most Western politicians, it seems, are very much interested in what is in their own pockets than they are in either democracy or in the interests of the people they represent. This status quo, reflected in salaries, pensions, expenses, career-politicians and lobbyists appears to demonstrate clearly and unequivocally that the interests of Capitalism have dominance over the political elite, to the detriment of the electorate (who are supposed to hold the real power in Democracies). McMahon was right to foresee a revolution in Western Politics – a quite, subtle, invisible revolution of stocks, bonds, lobbyists and off-shore holdings.

 

Democracy is meant to be the power of the people exercised to deliver a political class, accountable to the electorate alone, who are disposed with a mandate to deliver upon a manifesto with which they sought election – the mandate to govern. A party would engage with its members, engage with the electorate and determine what policies would best deal with the problems of the day- and produce a manifesto outlining their vision for the electorate to accept or reject at the ballot box. Over the years, this has delivered a progressive liberalism, focused on social morality, equal opportunity, freedom of expression and belief and in many Western countries, entrenched civil rights. However, it has done so along side a largely un-evolved, unchanged, capitalistic and industrial economy where shareholders, rather than employees, determine whether or not the management have performed and delivered (and in many cases the management and shareholders turn out to be the same people).

 

Put simply, there is a perception that the electorate have choice, have equality, have power. The reality it seems, is that they have no genuine choice, no genuine equality and no genuine power. Put simply, the electorate are “consumers” rather than the electorate.

 

In “Pursuing Equal opportunities: The Theory and Practice of Egalitarian Justice”, Lesley A Jacobs says “ Equality of opportunity implies the establishment of conditions which favour [for the mass of mankind] the expansion . . . of both . . . the opportunity to assert themselves in the contests of the market-place, and to reap the reward of successful rivalry, [and] also qualities which, though no less admirable, do not find their perfection in a competitive struggle . . . Rightly interpreted, it means, not only that what are commonly regarded as the prizes of life should be open to all, but that none should be subjected to arbitrary penalties; not only hat exceptional men [sic] should be free to exercise their exceptional powers,

but that common men [sic] should be free to make the most of their common humanity.”

 

Great strives have been made since the abolition of slavery in the British Empire in the early 19th century to create a liberal, democratic Western civilisation where discrimination is not tolerated – well, almost all discrimination apart from the form of discrimination which has the greatest impact on a person’s life – financial discrimination. This is the paradox of liberal democracy – with one hand it hails the equality of the people, the authority of the electorate and the rule of law (supporting military action and sanctions in countries which are not deemed democratic or where there is dictatorial oppression)– with the other hand the political elite ingratiate themselves with powerful lobbyists who control most of the assets in the world (and therefore control most of the money that is derived off the back of those assets) to such a degree that it is not unreasonable to conclude that these powerful lobbyist exert a degree of control over governments and politicians which ought to ultimately belong to the electorate.

 

In “From Buildings and Loans to Bailouts: A history of the American Savings & Loans Industry 1831-1995”, David L Mason explores how British traditions of home finance helped to shape the US economy in the 19th Century, but it is the 1980s where his most compelling comments can be found “Although the failure of Empire S&L in 1984 led to the largest payout of insured deposits in the then-fifty-year history of the Federal Savings and Loan Insurance Corporation (FSLIC), the S&L had humble beginnings. Organized in 1973 as Town East Savings and Loan, the thrift operated out of a nondescript office located in a strip shopping center inMesquite,Texas, a suburb east ofDallas. Only $13 million in size, Town East served its 2,000 local depositors with traditional thrift products, including mortgages, car loans, and term certificates of deposits (CDs). As a state-chartered and federally insured institution, the thrift was under the oversight of both the Texas State Savings and Loan Department and the Federal Home Loan Bank Board (FHLBB), but like most small associations it attracted little regulatory attention. The one major difference between this and other traditional S&Ls was that Town East was a privately held stock corporation controlled by a handful of investors not mutually owned by its members. In March 1982, Spencer Blain, who was the president of First Federal Savings and Loan Association of Austin, came to Mesquite to become the majority owner of Town East S&L. Blain was a respected Texas thrift executive, and during his ten years in the industry had served as a director of the Federal Home Loan Bank in Little Rock, Arkansas, vice chairman of the executive committee of the Federal Home Loan Mortgage Corporation Advisory Board, and president of the politically powerful Texas Savings and Loan League. Blain was credited with making First Federal into a highly profitable S&L; and, although his departure was unexpected, many people assumed he left because he wanted to run his own association, something that was not possible at the mutually owned First Federal. By August 1982, Blain had acquired 67 percent of the stock of Town East and renamed it Empire S&LA.”

 

Now this does sound familiar doesn’t it? It seems to my mind that ever since Western civilisation moved away from traditional economics to the new miracle of monetarism that the seeds of its destruction were sown. TheUSis supposedly the richest country in the world – it is certainly, for now, the largest economy. Yet it has levels of poverty to rival any third world country. It has $16+ trillion of debt which it has to repay, which will approach $24tn within a few years. It spends the vast majority of its money on its military, and of course, more recently, on bailing out the banks. Its President, hailed as the most powerful man in the world, has so little power to deliver on the promises made to the electorate.

 

Instead, rather than the elected representatives having any real power, the large corporations, bankers and those who control the assets of the world hold the power – the power over governments – the power to lobby governments and in effect to force governments to their will rather than to the will of the people. This is a very dangerous development. If people believe they have electoral power, that they have rights and that they have equality, then when they see their elected representatives, time and again, election after election, become wealthier and socialising with the elitist Davos crowd, it is any wonder that there has been a stark rise in movements across the Western world, an uprising that continues to gather momentum in all these countries?

 

But what point is a right to protest if you have no ultimate power or control?

 

Andrew Crane, Dirk Matten and Jeremy Hoon in “Corporations and Citizenship” said “Despite the emergence of this variegated conception of citizenship, it is evident that the literature of citizenship has developed with little specific attention to the corporation. In many respects, corporations are something of a blind spot in a discourse that is still primarily oriented around individual citizens, governments and civil society. This, our analysis would suggest, is something of an oversight given the wide swathe of roles that corporations can inhabit in the realms of citizenship. Corporations can participate in societal governance, and they can provide citizenship entitlements. Corporations can also reflect, enable and inhibit the expression of citizenship identities, as well as export or erode existing notions of citizenship. Citizenship theory, however, has yet to identify and account for these roles. Moreover, while citizenship theorists have made in-roads towards understanding the role of the market in contemporary accounts of citizenship (e.g. Crouch 2003; Schneiderman 2004), there has been precious little attention to date on the rise in power and prominence of the corporation itself as an actor (as one of the few exceptions see Palacios 2004). And if corporations are allowed to enter the picture, the gist of the argument seems to be that they are a threat to existing notions of citizenship and their influence is conceptualized as incompatible with a rich enactment of status, rights and responsibilities of civic actors (e.g. Ikeda 2004). “

 

It seems that their warning has come to pass. For example, in theUK, since the Human Rights Act 1998 was passed, a significant number of cases have been brought by corporations. Corporations do not have any electoral power – they cannot vote – but they do pay tax. This appears to be paradoxical – either a corporation has the same rights as a person, in which case it ought to have an electoral dimension, or it does not, in which case it should not have “human rights”. This paradox is a reflection of the battle between Capitalism and Democracy – more specifically, how irrelevant Democracy actually is in the corporate world.

 

As we enter what I like to call the 5th Year of the Great Financial Crisis, with no resolution or end in sight, with increasing unemployment, decreasing growth, decreasing lending to small business and increasing financial discrimination, it seems that either Democracy or Capitalism will have to give way to the other. There are certainly more people and they are better connected (as evidenced by the Arab Spring), which suggests that as long as things continue as they are, then it is almost inevitable that a truly global movement, properly organised and with popular support will emerge to challenge Capitalism on a global scale. We have global companies – why not global political parties? There appears to be an appetite for it, there is sufficient communication capability and with the Arab spring fresh in people’s minds, a sense of capability. We will have to wait and see how things develop, but it seems that all the ingredients are there for Democracy to make a last stand.

Posted by: martincallan | October 31, 2011

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