Criminal Irresponsibility

Interviewed on the Today Programme today, Transport Secretary Chris Grayling sought to defend the government’s decision to push through parliamentary approval for Heathrow expansion without waiting for the Climate Change Committee to report later this week on the UK’s progress on meeting CO2 emission targets. His reasoning was that

  • By 2050 aircraft would be much more efficient, thus generating much less CO2.
  • CO2 emissions by aircraft were an international responsibility and don’t affect UK targets.

Both arguments demonstrate the government’s criminal irresponsibility in this area. Basic physics demonstrates that, after more than one hundred years of development of aviation, the scope for further efficiency savings is vanishingly small. Don’t take my word for it – refer to the late Professor David MacKay’s book Sustainable Energy – without the hot air which he generously published as a free book which you can download here. The proof you need is in Part 111, section C

The argument that aviation’s CO2 emissions are none of the government’s business is simply risible.

Global warming and its consequences, including both the need and the potential for social revolution, is the subject of a discussion paper being researched and drafted by the Communist University in South London. Go to https://communistuniversity.wordpress.com/ to follow progress or, even better, to register your willingness to participate.

Advertisements

The Big Four: enough is enough

Financial crises are endemic to capitalism, but the misbehavior of banks and bankers contributed significantly to the 2007-8 financial crash and the period of austerity that still continues. The big accountancy firms also, however, contributed to the 2007-8 crash with their failure as auditors to see it coming. Like the banks, they too have not been asked to contribute to the cost of clearing up the mess they helped create. That fell on the shoulders of working people, while the Big Four accountancy firms, KPMG, Ernst & Young, Deloitte & Touche and PriceWaterhouseCoopers have gone from strength to strength, tightening their monopoly of large company audits, and using this statutorily privileged position to leverage their consultancy services to the businesses they audit and then to government departments and public services, including the NHS. Now with the collapse of Carillion shortly after being given a clean bill of health by its auditor, KPMG, and with PriceWaterhouseCoopers benefitting from the collapse by being appointed manager of the liquidation, it’s time to say enough is enough.

In the best traditions of a Carry On film, the Big Four are advising governments on tax reforms while, as the Panama Papers revealed, they are advising their multinational clients on how to avoid taxes. According to Australian taxation expert George Rozvany, they are “the masterminds of multinational tax avoidance and the architects of tax schemes that cost governments and their taxpayers an estimated $1 trillion a year”. To make things worse, these huge firms don’t even publish their own accounts. They operate as partnerships and are exempt from having to do this. Absurd!

Once the solution might have been better regulation, but, as Professor Prem Sikka of Sheffield University has pointed out, their regulator, the Financial Reporting Council (FRC), has been colonized by the Big Four and, while it is facing a “root and branch” review, don’t hold your breath. The professional accountancy bodies such as the Institute of Chartered Accountants in England and Wales are dwarfed by the Big Four and don’t have resources or inclination to tangle with them. There was some hope that the EU’s European Audit Regulation and Directive, which took six years to agree, might have helped, but the Carillion collapse destroyed its credibility. The Markets and Competition Authority (the former Office of Fair Trading) is at last, apparently, showing some interest, but these days it’s a ‘one golf club player’ its single remedy for market failure being more competition.

We are beyond the point of more regulation. The remedy needed now is to give the entire audit function to the government’s auditor, the National Audit Office, providing them with the resources to start the job before the huge fees for statutory audit roll in and they become self-financing. Then the government and public services must stop employing the Big Four and other large accountancy and consultancy firms as advisers. They have already made a big enough mess of public services. Finally, the Big Four and other accountancy firms must be made to publish accounts with at least as much detail disclosed as we require of companies.

Too radical even for a Corbyn led Labour government? Perhaps, but this is what it will now take to cut out what has become a cancer at the heart of our government, public services and what remains of our industry.