Bob Diamond - wilfully blind too?

Guess who said this: "Culture is difficult to define...But for me the evidence of culture is how people behave when no-one is watching". If you have followed the news this week (30/6/2012) you may guess it's Bob Diamond - the current CEO of Barclays and, importantly, former CEO of Barclays Capital - the highly successful investment arm of Barclays Bank.

Barclays have this week just come clean over an attempt by employees of Barclays Capital to illegally manipulate LIBOR (London Interbank Offered Rate), which is the interest rate at which banks lend to each other and that gives an indication of the financial strength they think each other has. Barclays aren't the only bank involved but the motivation for doing this is that the lower LIBOR is the more confidence the market in general has in them - so basically this action hid the weakness of the banks from shareholders and the financial markets and affected the products that you and I (normal customers) owned. It is criminal behaviour.

Many are calling for Bob Diamond's head. He was in charge at the time. His argument is that he had no knowledge about it and (do you recognise this argument from somewhere) it was the actions of some isolated rogue employees and it was more a failure of the control systems within his organisation, for which he apologises. He will appear before the Treasury committee this week to argue that he can't be blamed for it but I have a feeling that won't wash.

I have written here about the 'wilful blindness' (if there is knowledge that you could have had and should have had but chose not to have, you are still responsible) that allowed the Murdochs to encourage but not know about the criminal practices in their organisation and here about the unspoken culture that can be created in an organisation caused simply by senior managers putting pressure on their subordinates to 'deliver'.

When I was working in management consultancy I was told a story by a company that made refrigeration equipment for supermarkets. He alleged that during a negotiation with a supermarket buyer who was trying to force down the price he had warned the buyer that trying to meet their price would require the use of apprentice tradesmen and risk the equipment not being safe. The buyer said without a pause that with the money he was saving on it the supermarket could afford some compensation payments should the equipment collapse. I don't believe that buyer was told by his supermarket superiors to think in such a callous way, but I do believe a culture had been created that encouraged this type of thinking.

So, I predict that when this LIBOR issue is properly investigated we might hear the following story:

Bob Diamond presides over a meeting, sends an email, or has a conversation at the water cooler with his immediate subordinate. During this conversation he digs deep into the performance of that person's department and demands that they improve. This is actually good management, keeping your employees on their toes, and can produce good returns for shareholders.

It is then likely that the senior manager Diamond talks to has cascaded these instructions and this pressure down to their subordinates and through the organisation delivering above expectations is rewarded with bonuses, and underdelivering punished by either no bonus or at worst unemployment.

Now let's travel down to the other end of the organisation chart. You are young, ambitious, and know that untold riches are on offer if you can deliver the best results. So you do what you can to achieve that. At Barclays Capital, the organisation which perpetrated the manipulation of LIBOR, the employees are extremely clever (I've taken the assessment test they all sit and it's extremely hard!). At first, they may achieve this performance using legal means.

And so, up come the results to Diamond and he's able to report to the CEO and Chairman of Barclays (John Varley and Marcus Agius at the time) fantastic results. These are reported to the City. The problem is that if you report, say, a 10% growth in profits, you have to beat that the next year. Diamond would have told his subordinates that, and that would have been cascaded down.

At some point this is impossible to do legally. At some point those junior employees, under pressure to deliver, were having to find clever ways of doing so (hence LIBOR manipulation). Possibly, their managers knew how they were doing it, but as the results were reported up the chain, those it was being reported to were less and less interested in the how and more interested in the what. Eventually it gets to Diamond who has no interest at all in how it is being done. He may possibly have even said that to his subordinates if they tried to tell him.

So, it is possible Bob Diamond had no knowledge of what is going on. But it is also possible that he created and encouraged the culture in which people behaved criminally when  no one was watching and then was wilfully blind to how the results that led to his enormous bonuses were being achieved.

At some point (and given his resources it will probably go this far) a very high court in the land may have to decide whether that means he is as guilty as the 'rogue' employees he blames. What do you think?

In Praise of George Galloway

Never has Voltaire's quoted view that "I disapprove of what you say, but I will defend to the death your right to say it" been so apt as when I think about George Galloway. Galloway's  success is a great advert for our liberal democracy - and ironically a comment on those regimes which he is alleged to support...someone with his views on the established government in those countries would be dead long ago. Instead, the man has once again turned our election system on its head by winning the recent Bradford West by-election.

To be fair, this win is not as significant as his astonishing victory in the 2005 general election in Bethnal Green and Bow by virtue of the fact that this isn't a general election - so voters aren't thinking about who they want to be prime minister when they vote and the main politcal parties aren't dominating the airwaves. But, winning a constituency is still winning a constituency, and to do so he had to win more votes than all the others (known as a simple plurality) despite not having any sort of party machine behind him.

That said, Imran Hussain, the hapless Labour candidate beaten by a massive voting swing in that constituency, will also have felt that he didn't have any sort of effective party machine behind him. To try and win a by-election in a constituency that has a heavily muslim electorate just by putting a Muslim candidate in front of them, talking about your opposition to the cuts and hoping for the best was imbeclic and underestimated what Galloway was capable of and how well planned his campaign was.

Firstly, he mobilised people who wouldn't normally vote. He used social media to talk to the young in the area and involved them in spreading his word. He used Urdu speakers to talk to those who spoke mainly urdu and hijab wearing Muslim women to talk to Muslim women. All they had to remember was "Galloway number two" (his position on the ballot)

Secondly, he chose an issue that would actually affect voting behaviour. He did talk about the unemployment and the effect of the cuts, but vitally he could use the Afghanistan and Iraq wars to distinguish himself from the Labour candidate - given that they were "Labour" wars. Galloway knew that an issue was only important if the potential voter had an opinion about it (they did), they could distinguish the competing parties' positions on it (they could) and it was something they cared enough about to change their vote (it was). Classic basic A-level politics theory.

Thirdly, Galloway used a "judo" move, in that he took on what was supposed to be his main opponents' strength - that he was a Muslim, and turned it on him. Galloway claimed that "God knows who is a Muslim" and put it about that Hussain had alcohol issues whilst Galloway didn't touch the stuff (should this be found to be a lie then this result might end up being challenged in court but since it hasn't yet I doubt it will be).

Galloway's message didn't just get through to Muslims by the way, he also won in mainly white wards, so it seems that the Bradford West electorate just wanted him to be an MP again. 

So, this week George Galloway took his seat in the House of Commons again. He sits in the back row as far away from the mainstream parties as he can. The people of Bradford West are represented by one of the most colourful, controversial and divisive figures in politics. I say "represented" but given he congratulated the people of 'Blackburn' on the night of his victory and when last an MP only went to 8% of Commons sittings I'm not sure they will actually be 'represented' as you and I might call it - but an MP he is.

Despite his views on just about everything being almost entirely different from mine, George Galloway's victory brought a smile to my face. That's what growing up in a liberal democracy does to you!

Philanthropy debate...what actually is charity?

The debate over the Government's plans to reduce the amount of tax relief someone can get down to £50,000 a year or 25% of income is raging because so-called philanthropists are arguing that it will reduce the amount of charity donations they will give. I have a question - if they will only give to charity if they are given tax relief are they really a philanthropist?

Let's just take a step back and look at what tax is actually for. The idea is that it pays towards those items that society needs to make it work - such as the state education system, the NHS, national defence, policing etc. Without enough money to fund them these areas would suffer and society would suffer. If you like, you are 'donating' money anonymously for the public good. We don't get a plaque in our honour, nor a dinner to celebrate our generosity, or our picture in the paper, we just have to trust that we might be living in a more socially just society.

Should someone earning a large amount of money decide that instead of paying into this vital pool of money through their income tax they should be able to choose where it goes themselves? A definition of philanthropy is "he effort or inclination to increase the well-being of humankind, as by charitable aid or donations". 


In the Independent today, Mark Steel writes a coruscating critique of the current uproar (click here for this)
and puts it beautifully - "rather than funding the NHS through compulsory taxation, we get millionaires to wander round a ward and give a few pounds if they see a patient they think deserves curing."

If you look at it that way - this debate takes on a whole new meaning. The governing coalition - who are trying to deal with a crushing public debt, are trying to find ways to increase tax revenue. So, and this is a cynical example I know - if the Treasury are receiving less revenue because, for instance, a 'philanthropist' has made a massive donation to a top university that his children might not have the academic ability to get into - then the public surely have a right to question whether that should attract tax relief. 

Then think about the fact that 'philanthropists' donate to the arts - claiming that the government are cutting funding. But the government are cutting funding because they have to due to the deficit, which is partly caused by tax revenue falling which is partly caused by many people not paying their far share.

So, how about this ...you can be called a philanthropist if you donate to charity....after you have paid your fair share of tax. If you demand tax relief before you will donate to charity, then society is possibly not receiving a net gain. 

So how about a compromise...how about you get tax relief on £50,000 a year or 25% of your income? Oh, wait a minute...that's the new policy.

Michael Wilshaw, Michael Gove and inadequate teachers - who will win?

I won't lie. I'm delighted that Michael Wilshaw has been appointed Chief Inspector of Ofsted and I'm delighted that Education Secretary Michael Gove is going to have a real go at raising teaching standards, particularly helping schools challenge inadequate teachers, as detailed in this article.

Those who believe in the comprehensive state school system should also be delighted. Because at some point the catch 22 situation needs to be broken.  If you want everyone to feel comfortable sending their children to state schools then there are issues that need to be dealt with in those state schools. Michael Wilshaw has proved he can do it at Mossbourne Academy, and if, through the inspection system he can spread the magic dust he evidently has across the state school system then we will really be onto something.With the help of Gove, he might well do.

That said, there will be some people who will be afraid. Very afraid. Wilshaw has had enough of inadequate teachers. Not just that, he says he has had enough of teachers who are what he calls "coasting along" - doing what they have to do to stay in their jobs but no more - more of those in my next article.

But I want to talk about the inadequate teachers. Nothing has angered and frustrated me more during my teaching careers than teaching alongside plainly inadequate teachers. It is believed that they cost each child they teach a full grade for every year they teach them. The danger is more long term than that though. If you get an inadequate science teacher in Year 9 (in many state schools science teachers teach all three sciences to the same class) a child may lose their love of science. They may choose not to take triple science for GCSE and may drop their idea of going into a medical career. Inadequate teachers can really make that much difference to a child's life.

But it's not just the children. Inadequate teachers make their close colleagues' lives hard too. If you teach A-level there will, on many occasions, be just two of you teaching it. You can either split up the units students are taking or you can try and teach them together, splitting up the content. Whichever way you do it, the students will not learn anything in the lessons with the inadequate teacher. This means you are given a choice. You can teach the content the inadequate teacher can't/won't teach, or you can leave the students to fail.

Think about what that choice means. If you leave the students to fail the units they are taking with the inadequate teacher you are effectively leaving them to..say.. miss out on university, massively lessening their life chances. As a professional are you really able to do that? It's really hard.

So, to teach the content the inadequate teachers can't/won't teach you need to either teach a lot more in the timetabled lessons you have or you need to teach extra lessons after school or in holiday times. You will need to also do extra marking of work and past papers. It's absolutely exchausting, incredibly stressful, and not something that can be kept up for a long time.

So, inadequate teachers can destroy the life chances of their students and the working lives of their colleagues. Yet, as Chris Woodhead, the controversial former Chief Schools Inspector said in 1999, there are about 17,000 inadequate teachers in the UK. Less than 20 have been struck off by the general teaching council. So, why the gap?

Well, it's actually quite complicated. When you try to deal with an inadequate teacher you are, first of all, telling a human being they are at risk of losing their job, their lifeblood, the source of food on their childrens' table. It is an extraordinarily sensitive issue and cannot and should not be rushed. You need to be prepared for accusations of bullying, and possibly discrimination.

Secondly, you are dealing with the teaching unions. Their job is to protect the interests of their members, and they must treat those members equally. Given the power of the teaching unions - in particular the amount of teachers they represent - you need to work WITH them. The teaching unions will appear to support inadequate teachers. In fact this is not true - like any good defence lawyer they make sure that should you be trying to rid your school of an inadequate teacher you go through the proper process.

The proper process involves 'competency' procedures - where you inform the teacher you are concerned about their teaching and you make an effort to support them. Many inadequate teachers may have training needs and they deserve to be trained and given every chance to improve. The onus should be on the school to prove this has happened. Some might well improve. But some have no intention of improving, or some can't. Some will simply not put in the work to improve. They are the ones who are most likely to bleat that they are being 'bullied'. The unions' argument is that as long as the school can prove they followed the correct procedure they will not stand in the way. But too often schools don't do that. Because they are afraid of what it does to 'collegiality' and 'morale'. Not dealing with inadequate teachers is more of a cultural problem than a legal one.

Yet I argue the most damage to 'collegiality' and 'morale' is done to those teachers doing a good job who are either having to carry their inadequate colleagues or watch them fail their students.

What Michael Gove and Michael Wilshaw will hopefully do is make the task of improving/removing inadequate teachers easier - and if that means using legislation then so be it. An example is that a teacher can only be officially observed for three hours a year. Three hours a year! If you ask most Heads of Department about that they will tell you that even the worst teacher in their department can put a show on for three hours in a year. They will then go back to ruining their students life chances and there is little we can do about it.

If I were the teaching unions - I would work with Wilshaw and Gove on this - AND be seen to be doing so. By all means protect teachers against actual bullying and actual unfair treatment - but those union chiefs who understand the big picture should realise that inadequate teachers hurt their own unions' reputation almost as much as they hurt their students.

Because let's just remember who the education system is being run for. The students. Right.......?

Strike one to the Unions?

Both sides of the fence when it comes to Wednesday's proposed strike action by almost 2 million public sector employees are relying on the public not to understand the quite complex nuance of their positions. Both sides of the fence are using misinformation to get the public onboard (Ed Balls on Andrew Marr this morning using a teaching assistant on £15,000 as an example for instance when the fact is that those on £15,000 and under aren't affected by the changes) . Trouble is, as with many political issues, both sides are right. And both are wrong. To understand this you have to understand the role and responsibility  of unions and the role and responsibility of government, and how they are clashing so seriously.

First, I think it's important to explain why the strike is taking place. Please imagine yourself in the situation of a teacher. Central to your financial planning over the years you have worked has been the safety of your pension entitlement.

• You are being told that you will have to wait until you are 68 (currently 60 for teachers) to take that pension. 
• You are being told you must contribute 50% more each month into your pension than you were already contributing (9% of salary instead of 6%). 
• You are being told that your pension payments will rise by inflation calculated under the far more anaemic CPI measurement instead of the RPI measurement (bear in mind the government, when it loans out money, expects payments back to it to go up by RPI). 
• You are being told that instead of being calculated as a percentage of your final salary (likely to be pretty high) it will be calculated over a career average salary (so much lower). 
• Furthermore, if you are a teacher in a private school you are being told that you are being removed from the teachers' pension scheme altogether, even though you were trained by the public sector and in a normal career ay switch from one to another.

So, just to clarify, striking workers are being told they will have to pay more to receive less and work longer to receive it. A triple whammy if there ever was one.

Now let's look at the government's position:

• The national debt - which is how much we owe to our creditors, is approaching one trillion pounds. That's 1 followed by 12 zeros, or £1,000,000,000,000. Just to cut this down - it is about £15,000 for every man woman and child in Britain, and about £35,000 per employed person in Britain. We ARE going to have to pay this back at some point. 
• The budget deficit - this is the difference between what the government receives in tax revenue and how much they are spending each year. This year it is projected to be somewhere in the region of £168 billion pounds. That's 168 followed by 9 zeroes, or £168,000,000,000. This amount is added to the national debt every year as the shortfall has to be made up by borrowing. 
• This means that we as a country are paying debt INTEREST (the money it costs just to service the debt - not even pay it back) of £130 million pounds A DAY.  That's about £50 billion a year in interest payments. This is about £2,000 a year for each UK household just on interest payments. That's more than the entire education budget for the UK being just the cost of the debt we have.

The Coalition government has decided to try and get the budget deficit down to zero by 2015 - although it may now take until 2017 - and that deficit reduction plan has been endorsed by the markets to the extent that the UK now can borrow money at a cheaper interest rate than it has for the last 50 years whilst the likes of Greece and Spain are near default and having to impose drastic austerity measures the likes of which would make even the most committed of deficit hawks shudder. BUT the price of doing this is that many parts of the economy are having tocontribute to deficit reduction - and the pension proposals above are how teachers and other public sector workers are being asked to do that.

The government asked Lord John Hutton (a former Labour secretary of state for work and pensions) to look into the cost of pensions after the independent Office for budgetary responsibility (OBR) suggested the gap between public sector pension contributions and payments would double over the next four years to £9bn. Many of the government proposals you see above are drawn from the report that Lord Hutton produced.

Spokespeople for the teachers' unions make the following points.

1) The teachers' pension scheme at the moment pays for itself - in that under an agreement made with the previous government it is affordable and viable in the long term.

2) The changes mean, for instance, that on a modest teachers' pension of £10,000 an annum a teacher would lose abot £50,000 over the next 20 years

3) The public sector workers didn't cause the financial crisis, so why should they have to pay for it?

The government has come back with the following points:

1) They dispute these figures and argue that at some point unless these changes take place the teachers pension scheme will not be affordable. After all - when the pension age was created life expectancy was only 18 months past it - now it is around 20 years past it, and getting higher - and something's got to give.

2) The government argue that whilst they accept this will affect many key workers badly, it is correcting the gap between public sector pensions and private sector pensions where the taxpayer is funding too high of a percentage of a liability that is growing.

3) That the financial crisis was caused by the debts built up by the previous government.

The Unions' point 3 is related to the oft-repeated conceit that the debt was caused by 'the bankers'. Whilst there is little doubt the RECESSION was triggered by problems with the financial services, it came after a sustained period of growth during which a responsible government should have built up a budget SURPLUS - but as we know we went into the recession with a massive structural budget deficit (meaning it cannot be explained purely by the economic cycle of growth and recession). The spending that came after that - some of which was very neccessary - worsened the debt to where we are now. Many of those who will be marching in the rallies on Wednesday are in their jobs funded by the unsustainable debt the previous government took on. I have pointed out in many previous articles that this spending was partly neccessary, but models of voting behaviour suggest that a Labour government might increase the size of the public sector to deliberately raise the number of workers naturally inclined to vote for them. Fact is that if you take on an unsustainable mortgage to buy a house you can't afford, at some point you may have to sell that house and trade down. Do we blame the bank for making us do that or accept that we have to take responsibility for taking on those debts? This is the reality the country faces.

Furthermore, let's say it is all about bankers. What do we do then? If we taxed all the bank bonuses paid ou in the UK last year at 100% (in which case they wouldn't be paid so it's a moot point) that would bring in about £8bn. That leaves £160bn to find from raising tax revenue or cutting spending. Any solutions?

Then there is tax avoidance. Conservative estimates say this is about £20bn - the "Tax Justice network" say it is about £70bn. Let's use that figure then. That leaves £90bn to find just to get rid of the deficit and we haven't even started paying back the debt!

A question that has been in my head this weekend as I played with my young children is - what am I going to tell them if we don't deal with the debt now and in 30 years time the UK's debt is £2 trillion, IMF bailouts are required and massive austerity measures are in place? That even though I benefitted from the prosperity of the boom years, when the bust came and the finger pointed at me I shook my head and said "not my fault"?

The changes DO affect teachers in a serious way, and given the government is a monopsony employer (it has dominant market power) the unions are doing what they are set up to do, which is representing what they feel to be the best interests of their members. The trouble is that trades unions represent sectional interests - the interests of their members, however hard they try to argue they represent a cause (i.e. their action is in the vest interests of the education of this country's young people).

Those interests may clash with what is in the best interests of the country. If you believe that everybody has to contribute their bit to bring down the debt then one could argue the teachers should take their medicine and get on with it. Should you believe that they shouldn't be asked to pay to help reduce the debt then one can argue that they should all be out on the streets striking.

Freedom of Association is one of the most important freedoms we have in our liberal democracy. Members of unions have a right to strike  as long as they have been balloted correctly - which they have - regardless of the anaemic turnout for those ballots. We should celebrate the fact that we can have these debates and workers can take these actions (within reason). In many countries, unions are banned. You'll know those countries - they are where the people are denied most if not all other freedoms.

I have a feeling the government may relent on the removal of the TPS from private school teachers and possibly the change from RPI to CPI. Possibly they'll make the additional pension contributions more progressive (e.g. only for those on much higher wages). But as I've said before, the raising of the retirement age should have happened a long time ago, and we can't really be protesting about the advances in medicine and life expectancy can we? Any changes in the teachers' favour will be seen (rightly) as vindication for Wednesday's industrial action. Or maybe they won't change anything, and we are on the cusp of a series of general strikes.

The polls at the weekend show the public are split on this. Whether they will be by next weekend remains to be seen.

Would the riots have happened if there was such a thing as society?

As some of you will know, I was in the Question Time audience last week for the special recording of the programme to discuss the London riots. I wasn't able to make a comment as so many people put their hands up (although I did get to ask my 5th choice question on whether there are any circumstances in which vigilante behaviour is acceptable - my answer to which is absolutely not, but it is understandable when the police seem unable or unwilling to do their job).

But the most important conversation I had in terms of my own ability to make sense of what had happened was with a man who had grown up in Liverpool and had been 18 during the Toxteth riots in 1981. He made an interesting point to me. "The whole focus of government policies since 1979 - and I include Labour governments as well as Conservative governments in this - has been to disentangle people from each other, to divide us, to give us no reason to feel part of society and our community, to make us literally climb over each other to 'win', with there being no reason not to act in our own self-interest. This country was rebuilt after the 2nd World War by making us want to work together, live together, even BE together. Then it all changed, and these riots are the results of whatever 'society' we are left with."

He couldn't have put it better - which is why I wrote down on a piece of paper everything he said. As I've said in a previous article (click here), nothing should be left off the table in our attempts to solve the root causes of these riots. But ultimately we may well need to have a fundamental reassessment of how we are governed and the macro-incentives (i.e. the reasons our economy gives for people to act in a certain way) that influence our behaviour.

I have written before on my blog about the extreme poverty that some children in this country are brought up in. I have written this month about a boy in my old school whose brother thought that the prison he was in for six months gave him a better life than at home. At the same time I have written about a hedge fund managing director who decided to buy a harrier jet with his spare money. Look at MTV and the "entertainment channels" and you can see programmes like "cribs" or reality shows featuring the children of the extremely rich. Get the Financial Times on Saturday and you get a magazine called "How to spend it" free with it. We genuinely need to think about whether it is OK and acceptable that there are such massive inequalities in our society, and in particular how they came about.

Some people, for instance, have got rich by lending money to people they knew couldn't pay it back. Some people have got rich by packaging up those loans that were never going to be paid back and selling it to other people. Some people stay rich by avoiding tax to such a massive extent that they pay a lower rate of tax than their cleaner. People have complained over the last few weeks over the rioters' just being happy to take from society without giving to it. Well, they aren't the only ones.

Another question people were asking was why the rioters were causing so much damage to their own community. They were smashing in and looting the shops on their own high street. They were setting fire to shops and home on their own streets. We need to consider why the rioters might feel in fact that they don't actually have a community.

Of course, the politicians don't set the greatest of examples. One of the reasons that they might find it so difficult to argue that it can be no excuse in court to say that the only reason someone looted a shop was because 'everyone else was doing it' is because that was the exact excuse so many MPs made during the expenses scandal. The fact is that wherever young people look today they can find examples of people taking from society as much as they can whilst seemingly giving much less.

There were many attempts to interview some of the youths taking part. Lines like "we're showing the rich that we can do what we want" suggested that the speaker felt that this country had allowed the rich to be an example to the them. Then there was "we're getting our taxes back". Now, leaving aside the possibility that most of those involved in the riots were not taxpayers, the inability to understand the purpose of taxes in terms of building society is also telling.  Is that because the 'society' that is being built and maintained by those taxes doesn't seem to include the speaker of those words?

The problem with all this is that I don't know an answer to it. Those who are ideologically rigid will have had their say already, but as I have said before, the answers will come from all angles. I know what I would like to do with our education system, but that's for another article.

What I do know is this: Something has to be done to make everyone in the UK feel part of each other's country. Something has to be done to change "us and them" into "we".

The fact is, we had 18 years of Conservative Party Policy followed by 10 years of New Labour,  followed by a financial crisis that has effectively made the tide go out to reveal the population of our country separated from each other in so many ways.

Those of us who study politics will know, as did the Liverpudlian whose thoughts I began this post with, that after the second world war we rebuilt Britain together, based upon a 'social democratic consensus' that helped a country still riven with class differences, to see itself as a society and community that worked together. 

Given we lack the money to solve this problem , we are really going to need to use our brains, because we could do with that consensus again. 

Punish them? Yes. But if we don't listen to them we punish ourselves.

 There has got to be a process over the next few weeks of getting those who have looted, burned and destroyed our cities to talk. They need to explain to us not only why they thought they could act in the way that they did but, more importantly, why they thought they should act in the way that they did. The long-term solution to what I would call the greatest sociological crisis this country has seen in many years lies in making everyone feel like society and community has something to offer them. Because they don't at the moment.

My personal feeling is that these riots have been gestating for years, and I would like to run through how. Regular readers of my writings will attest that I am no bleeding heart liberal and I am also no foaming-mouthed conservative either. The reality is though that we need to look at ideas from all parts of the ideological spectrum. At the moment, too many people I am seeing in the media, on social networks and just talking to are closing their ears and singing "la-la-la" as loud as they can when certain arguments are aired. I think this is dangerous.

Parenting

It was one of the most haunting conversations of my life. I was in the internal suspension room at my old school and a by was telling me about his brother's release from Feltham Young Offenders' institute. I asked him what it had been like and he said "seriously Sir, my brother loved it." "Loved it?" I asked. "Get this right, it was the first time in his life that he didn't have to worry about where the next meal was coming from and there was always stuff to do. It was so much better than home." This made me really rather sad. What is our society coming to when life is better in prison than at home for some of it's members? If you think about the conspicuous consumption of those who have come into large amounts of money (by whatever means) you can see why people are insisting that we have two options to solve this problem - punish those who riot or try to find a way to share the proceeds of society more equally.

That said, there is little doubt that some of the behaviour we have seen has been caused by some outrageously lax parenting. I've seen it myself - the parents who treated my old school as a state babysitter, the parents who told me when I called to talk about their child's behaviour that "it's not my fault you can't control my kid." Police and politicians asked on monday for parents to contact their children if they were on the streets and ask or order them to come home. At what point was that going to work? The rioters may have been kids but if we are going to solve this problem we need to look at the conditions in which they are brought up, and the skills of their parents.

For instance, many students in Years 10 and 11 (15 and 16 year olds) at my old school had baby brothers and sisters. We need to look at the effect this has on them - their mother's time and attention is neccessarily taken up with a tiny baby and so the young people look outside the home for attention and a "family life" (read 'gangs').

Education system

Of the many things said to me on the day I told my old school (a state school) I was leaving to join my current school (a private school), the one that stuck most in my memory was this from an assistant head. "I can't believe you are taking your skills away from young people who need them and giving them to people who don't need them." In one sense, this was hyperbole, because all young people need a teacher's skills, albiet in different ways. But in another sense she had a point about the students at my old school. They need teachers, not just to teach them academic subjects, but to help them engage with life.

An amusing article I read once described a conversation a new teacher had with an old mate. "He asked me what this PSHCE was and I went through it in detail, how it teaches about sexual health, drugs, alcohol, relationships, citizenship skills and all that. There was a pause.....and then he said 'Oh, right, so it's basically doing what parents should do'."

The education system needs to be looked into, because every single person involved in the riots has been through it at some point in their lives. Yes, some of them may have truanted. Some will have left at 16. But even if schools haven't caused the problems, they can be involved in the solution.

We need to look at making sure the education system inculcates the right values and behaviours to ensure young people can get on in society. It also needs to be offering them opportunities to learn subjects that help them get a career and feel there is some hope in the future. We need to look at other education systems around the world. Let's start with Germany, for many reasons, but not least this one:

Britain's Gini coefficient (a measure of equality that puts an entirely unequal society at 1 and an entirely equal one at 0) is 0.36, France’s 0.32 and Germany’s 0.28. Germany's economy has recovered very strongly from the recession, but they also have an education system based upon matching their young people to appropriate educational pathways, and the result is higher equality.

Rights without responsibility

This is where something has, in my opinion, gone rather wrong in society. Somehow or other our young people are very cognisant of their 'rights' but far less accepting of their 'responsibility'. I still recall with a shake of the head what Ramzi Mohammed (one of the failed 21/7/2005 London bombers) shouted as he cowered behind a door as the police tried to break in..."I have rights! I have rights!"...this from a man who had attempted to murder hundreds of people.

It is the ultimate expression of a perfectly honourable attempt in the late 1990s to ensure that everyone was aware of their rights to make sure that they didn't accept ill-treatment and got what they were entitled to. New Labour made it very clear at the time that these rights - enshrined in the 1998 Human Rights Act - were to be given in return for citizens being responsible too. But it led to a distortion of the 'rights-culture' into what we have now.

As a teacher, I have heard many times that the school has "no right to have my kid in detention" from parents, perhaps in response to a detention for not doing homework or something nasty said to someone else. The problem is that those same parents never quite understood that not only did the school have a right to discipline their child, but it was our responsibility to do so, for their own good.

An interesting extension of this has been seen in the term "respect". Young people these days are constantly on the look out for respect. Interestingly, they feel they have a right to respect and they have no responsibility to earn that respect. I was listening to an interview with  a girl the other day saying something I have heard quite a few times along the lines of "they are disrespecting me so I'm gonna disrespect them. When they respect me I'll respect them." Trouble is, it is never clear what this 'respect' entails, and it may appear to some that 'disrespect' actually means 'trying to stop me committing crime'.

I prefer to look at it another way. As a society we should find out what would make young people feel they are being "respected" and try to offer it. Maybe it's feeling listened to. Maybe it's feeling cared about. It might actually be something we can do. But when we do it, we must insist on reciprocal responsibility.

Relations with the police

The middle class tend to look at relations with the police like they do immigration. Because they don't feel the negative side of it they think it isn't a problem for others. Immigration has been only good for me - I get cheap food from around the world and cheap cleaners and builders etc and a wonderful diversity of pupils to teach in school. But many people have seen themselves marginalised in society in favour of immigrants in terms of both jobs and housing, and we middle class intelligensia seem to brush those feelings aside as racism instead of empathising with the genuine frustration some people feel. It's the same with relations with the police. We in the middle class - not experiencing the constant hassle from the police that many in society do, never subject to constant stop and search and constant suspicion in the course of what the police will regard as just doing their job - just brush aside these claims with an "if you're doing nothing wrong you've got nothing to worry about." Well, as I talked about in point 4 of a previous article (click here), some people in society do nothing wrong and still have to worry. We need constant dialogue and understanding between the police (who are supposed, after all, to have a 'monopoly on power') and the policed. Some, of course, see the police as an impediment to them committing crimes, and hide that behind complaints of brutality and bias, but that is a very small minority.The police have made so many positive strides since the horrors of the 80s and the institutional racism laid bare by the McPherson report in the 90s in terms of their engagement with communities. But they are not there yet, and the alleged refusal to communicate with the family of Mark Duggan after he was shot dead shows that.

Restrictions on the police

The Met Police have admitted today that they gave strict orders to those on the street to "stand and observe" rather than go on the offensive against the rioters. This was because of the risk of legal challenge to their actions in the light of the ongoing court cases related to the policing of the G20 protests and the student fees protests. I have written about this (read here) and pointed out that the rioters will have guessed that this might happen and will have taken full advantage of it. By yesterday, there seemed to be a public consensus that the police should be allowed to do their job properly. Through the media the plans to use plastic bullets was aired and water cannons discussed and given that there wasn't the usual backlash to these ideas they would have probably gone through with it should there have been serious disturbances in London. BUT we need to have a debate about how it came to this. The police effectively admitted that the constant legal challenges to their actions have made them fear doing their job and the result was looting, arson and violence. Have we, in our attempt to be a liberal society, gone too far? Have we now got the police force we deserve? The vigilante groups set up yesterday and out in force all over London certainly think so.

What they see as acceptable in society

Many of the youths involved in the rioting see a society that has excluded them from 'having'. They see footballers exhibiting vast wealth and even minor celebrities flaunting their possessions. They will also have been told by some of the ringleaders that looting is OK because the rich are looters too. Tax avoidance is seen by many as stealing from society. Causing a financial crisis then rewarding yourself with 'a bonus in order to retain talent in a global employment marketplace' is also seen as looting as well. Too many people, in the eyes of the marginalised in society, have taken from us without giving. Now it's their turn. There was an interesting stand-off in Clapham where a group of residents blocked off their road to be confronted by a group of youths shouting   "you are rich, we are poor" and "we rule London tonight, not you." Others, talking to the press said that "we're going to show the rich that we can do what we want, just like they can". This, to most people, seems like a shallow excuse, but in their minds, they may believe that our current society rewards those who take what they can - but only legalises some of the methods.

"The cuts"

Ken Livingstone was called an "opportunist" for saying on Newsnight that "if you are making massive cuts, there's always the potential for this sort of revolt against that".  He talked about the social divisions created by the government's austerity drive and also the effect of the cuts in police that are taking place - pointing out that he raised the number of police by 7,000 in his time as mayor. No doubt this is electioneering by Livingstone, and, as is always required by those on the left wing, it ignores the £1 trillion of debt this government inherited from Labour but to call it 'opportunistic' is, welll, 'opportunistic' too. Because Ken is right, we do have to look at the effect of the cuts as part of looking at the causes and solutions to the current crisis in our society. From Sure Start to other children's services through to youth clubs and the like, we need to be careful what is being done away with, because the effects will be in the long run. It seems to me that the government is happy to attack the entitlements of those who don't or can't vote (the young) whilst leaving along the entitlements of those who do (the old) even though many of the older recipients of bus passes and fuel benefit are very wealthy and don't need it. I would like to see, as part of whatever inquiry arises from these riots, a closer scrutiny as to who is being affected negatively by the austerity drive. I believe in the reasons for the austerity drive, but that doesn't mean I neccessarily agree with how it is being done.


Lack of opportunities

And here lies the nub of this crisis. Many of the rioters just didn't care. So what if they got arrested? So what if they got sent to prison? Arrest and prison are a badge of courage where they come from. It doesn't make a difference to them anyway. We might say - "if you go to prison you'll find problems getting a job". To which they might legimately answer "well I didn't have any chance of getting a job before this so what difference will going to prison make?"

No, we need to get together as a society and work out how to make all young people feel they have opportunities to be successful in life. But we need to make sure their targets are actually attainable and realistic. Through help with parenting, education, sensitive policing, ensuring they learn the importance of the responsibilities of a citizen as well as the rights we can see that there are benefits from being part of a community, from being part of society.

Or we can just hang-em and flog-em.

I think I know what is more likely to work.

Rioters benefit from the "Simon Harwood problem"

I once took some students to see "Question Time" being recorded. During a conversation on knife crime and how to stop it the panel were wittering on about youth clubs and the like when one of my students put his hand up. David Dimbleby pointed to him and the boy - who lives on a troubled estate in West London - said "people commit crimes because they think they can get away with it. If you make laws and enforce them properly so no-one can get away with a crime they'll stop". It was the end of the debate on that issue because no-one could argue with him.

If you look at the pictures on the TV and in the newspapers you will see gangs of youths rampaging through the streets of London looting shops, setting cars and buildings alight and attacking the police. Someone watching from another country would stare in wonderment at what looks like a lawless society in which police are powerless to intervene when crimes are being committed. They would be wrong, the police DO have the power, but are scared to use it. At an institutional level they are scared of accusations of over-reaction, racism and brutality, but it's much more important at an individual level, in which the "Simon Harwood problem" seems to have taken over the mindset of many of the extremely brave men and women who are our only legitimate form of protection against these thugs.

For those of you who are wondering who Simon Harwood is, he is the police officer who has been charged with the manslaughter of Ian Tomlinson during the G20 protests. Tomlinson was attempting to get home from his work when he was struck from behind by PC Harwood, an action which allegedly led directly to his death. Video of PC Harwood's behaviour during the hours leading up to that action show a man not entirely in control of himself, getting involved in a variety of scuffles with protesters when his actual job was to stay with his vehicle. The inquest which returned a verdict of unlawful killing on PC Harwood has led to him being personally charged with manslaughter.

But let's take a step back. On that day in April 2009 we saw a phenomenon we are now used to. The majority of people came to protest but a violent minority came to riot. Being a police officer on those occasions is very difficult as first you have to distinguish between protester and rioter and then you have to deal with the rioters, many of whom are intent on violence and have hidden their identity. PC Harwood got it horribly wrong with Ian Tomlinson, but in the course of his duty that day it is quite understandable that he, as a human being, had become increasingly wound up as the day went on. He went far too far and was stripped of his duties.

Now, imagine you are a police officer on the lines these past few nights (and probably the next few nights). You are under extreme stress and provocation. You know that you are confronting young men intent on violence who are hiding their identity. You know that you are not allowed to hide your identity and that the moment you actually take action to stop this rioting there will be people there who will film you and report you and question you and in some cases charge you. You have a family and a mortgage and a life which all could be ended by what you do and how you act.

You can stand, riot shield up, protecting yourself, possibly cordoning off vital areas, but resulting in you being screamed at for "not doing anything to stop the rioters". Or you can advance on the rioters, arrest them, basically do what you have to do, in which case you may feel there is a chance you could yourself be hauled before the courts, personally tried and convicted.

The Times says this morning that "today's rioters appear both cynically aware of police wariness and adept at exploiting it". Which goes back to the story at the start of this piece, and what my student said - ""people commit crimes because they think they can get away with it. If you make laws and enforce them properly so no-one can get away with a crime they'll stop."

These boys think they can get away with it. Yes, some of it is a reaction to poverty. Some of it is saying "well, people have got rich by taking from society and giving nothing back so this is our way of doing it." Some of it is a reaction to issues with the way the police do their job.

But when the police feel they can't do their job, and quite a few experienced policemen have suggested that is going through their heads right now, you get what we are seeing.

And by the way, those who bemoan the paucity of met police intelligence about London's youth gangs should ponder this - there are 60 (SIXTY) met police officers working right now on the phone hacking case.

Priorities, London. Priorities.

We must learn from these riots

We could call the riots that have swept London this weekend either common criminality or the anguished roar of the politically dispossessed and economically disenfranchised. The truth is probably in the middle, but we should take every chance we can to learn from what happened and why in order to make sure they don't continue.

But first some pertinent stories and statistics:

1) Being a policeman is a hard job. One told me about being screamed at outside a tube station on July 21st 2005 (the day there was a failed suicide bomb attempt - a fortnight after a "successful" one). "Why aren't you stopping them?" he was asked "you should do everything in your power to stop them." Yet when they do make attempts to stop 'them' they are often accused of racism or brutality. "I feel like I can't win" said this particular police officer, "because I'm damned if I don't stop crime and damned if I try and stop it."

2) Being a 15 year old boy in London is also a hard job. A lovely young man at my old school who is now at university told me of the time he was stopped and searched by police three times in one day. It was cold, so he had his hoodie up and he was walking fast. He wondered if he was guilty of looking like he was about to commit a crime or of being a 15 year old black boy in London.

3) On average every year the armed police units get called out about 10,000 times. They only actually reach their destinations about 2,000 times as normally on their journey it is found they are not needed. They draw their guns on average about 100 times a year and on average around 10 bullets are fired. If you are an armed police officer and you shoot your gun you are immediately placed on what might be termed an "honourable suspension" and you will never be allowed to be an armed police officer again. You are trained NOT to fire your gun, and you know that to shoot it will be the end of that particular career.

4) During recessions it is like the tide going out and revealing us as a society. Some of us saddled with unpayable debt, some of us with no form of income, some of us homeless, and some of us so rich that we actually can't find ways to spend our money.

Social unrest is created by many things. Take Tottenham for instance. In Tottenham here are more than 50 people for each unfilled job, and 10% more people claiming Jobseeker's Allowance this year than last. Last week Mark Duggan, about which we know very little, was shot by a police officer. The family wanted answers as to how it happened, but, partly due to it being the subject of an Independent Police Complaints Commission inquiry, they were not getting any. So they marched to the police station in Tottenham peacefully on Saturday afternoon demanding "justice" for the killing of Mr Duggan. What this "justice" actually involved, I'm not sure.

But what we do know is since then we have had rioting, looting and the attacking of police officers in Tottenham, Enfield, Walthamstow, Edmonton and Brixton. It seems to have been organised over the internet, and people have been coming in from quite a distance to get involved. Shops up and down highstreets, from chain stores to independent newsagents, have been ransacked and looted by mobs of youths, and there has even been the almost ridiculous sounding scene of about 100 people in a retail park in North London emerging holding boxes of trainers and loading them into cars.Today (Monday 8th August) we have looting and quite a lot of setting fire to things in Lewisham, Peckham and Hackney.

So, again I ask - common criminality or the anguished roar of the politically dispossessed and economically disenfranchised? I believe it is both, and we must do something about both in order for it to stop.

For democracy's sake Charlie Gilmour's appeal must be successful

I've got to give Charlie Gilmour credit - it takes a lot for me to consider a grave miscarriage of justice to be justified, but he gave it a good go. That doesn't change the reality that his disproportionate sentence of 16 months for his behaviour last December during the Tuition fees protest has serious implications for our supposedly pluralist democracy. The result of his appeal will tell us a lot about the type of country we live in now.

From the outset he was a complete and utter PR disaster for the tuition fee protest movement. I have said (click here and click here) that there are legitimate arguments for an against the imposition of tuition fees, but at it's most basic, the issue is whether or not taxpayers' money should be used to fund the university education of (if New Labour's target is reached) 50% of the school leaving population.

If you wanted to paint a picture of why that shouldn't happen, I imagine you might create the image of Charlie Gilmour. Adopted son of Pink Floyd's David Gilmour, he is the scion of a multi-million pound fortune. The two Saville Row suits he received as a reward for getting into Cambridge (click here for proof!) would go a long way towards paying for a year's tuition there under the proposed fee plan. Not the best poster boy when you are asking someone on minimum wage to fund university education (let's not forget that everyone pays tax, not just the rich, and it is the poor who can't avoid it).

Gilmour, allegedly under the influence of a cocktail of drugs, spent the day swinging on the Union Jack hanging from the Cenotaph (insisting he wasn't aware of the significance of the Cenotaph), attempting to start a fire outside the Supreme Court, allegedly throwing a rubbish bin at the Royal Convoy taking the Prince of Wales and the Duchess of Cornwall to the Royal Variety Performance as well as reading poetry to the police and shouting political slogans such as “you broke the moral law, we are going to break all the laws”, "storm Parliament", and, simply, "arson". He was also part of a mob who smashed windows at Top Shop in Oxford street as staff cowered inside.

16 months in prison. You can get less for sexual assault, GBH and many other crimes where people actually get hurt. What's more, Gilmour pleaded guilty from the start. No waste of court time trying to prove the case against him, just the matter of sentencing. 16 months in prison.

I don't know where to start. Apparently it is a legitimate practice for sentencing to be "exemplary" - to discourage others from acting in the same manner. Actually, it may discourage others from acting in the same manner - in that it may discourage others from protesting when they feel they are being wronged.

Let's go back to the apparent "problem" with Charlie Gilmour. He is rich. Whatever happens he will be OK because his parents have a lot of money. So, some people argued that he had no business being on that march. In that case, about 90% of the people on that march had no business being there either. In fact 90% of people on any march have no business being there.

For instance, almost all of those on the march against the Iraq War in 2003 were not actually going to be "affected" by the war. They weren't going to die, they weren't going to go throught what the Iraqi people have gone through in the last 8 years, yet there they were, arguing against a government policy they didn't agree with. Tony Blair, PM at the time - said on that day that being able to protest is a "natural part of our democratic process".

The protesters on that day were there not just in support of themselves but for those who might be students in the future. The word, I believe, is "solidarity". As Barbara Ellen points out in an excellent article on this in the Guardian (click here) "effective protest relies on disinterested participants like Charlie. Society needs, has always needed, people at marches, who don't really have a "reason" to be there, who aren't directly affected by the issues. This is not only to swell numbers, but to demonstrate that different groups will not be left stranded and isolated to fight lonely, desperate battles and that many feel, to borrow a tainted phrase, "all in this together".

Let's move on now to the concept of an "exemplary" sentence. Why prison? Surely that is a missed opportunity to use a far more effective example. Gilmour's crimes were against the community. Although he wasn't charged for what he did at the Cenotaph (as it wasn't a crime) his behaviour - even in the words of Barbara Ellen "was like watching a baboon shit on the faces of the war dead." He did attempt arson and his behaviour around the royal convoy did cause considerable distress to those within it, whether or not he threw the dustbin. So why not community service? Why not ask him, for instance, to use his considerable academic gifts to educate children about the meaning of the Cenotaph? Why not ask him to clear up after the next protest/riot (and there will be one) so he really understands the consequences of the destruction he was part of causing?

Why not find a way to ensure that the young, many of whom have been written off as apathetic but who are just finding their political voice,  learn from Charlie Gilmour's fate something more than that if you show up to protest about something you believe in you run the risk of 'exemplary' justice being done to you, whatever that means.

When we teach the functions of pressure groups in AS politics, we talk about their value as a "pressure" valve, releasing tension and allowing people to "let off steam" about their cause or sectional interest. A pluralist democracy allows power to spread amongst different groups in society. If young people feel powerless, they need to be able to associate with each other as they have done over tuition fees, and make themselves heard. Suddenly, we have our young people politically active, and we need to encourage that.

Yes, Charlie Gilmour went too far. He admitted that and he should have been punished.

But 16 months in jail? For democracy's sake this should be reconsidered.
 

If Ed Miliband keeps going he may get the biggest scalp - David Cameron

Ed Miliband is onto something. He knows it too. He's chipping away at a fault line in David Cameron's defences which could turn into a massive earthquake if Cameron has to answer one question on oath - "was the retention of Andy Coulson in Downing Street after the election the condition on which you got the support of News International's papers?" I'm not one for hyperbole, but if it's true, then he will be truly compromised and may have to resign.

Miliband has had an excellent fortnight. He has gone from a laughing stock to the central pillar around whom the country's horror at the behaviour of the News of the World has been built. He tells of the day he decided to come out against them and it says a lot about the power News International thought they had.  He talked in Saturday's Guardian about receiving a phone call from News International to ask what his response will be to the allegations about hacking into Milly Dowler's phone, went into Parliament and demanded an investigation and the resignation of Rebekah Brooks, and received another phone call from News International to warn him that "now he was making it personal against them they would make it personal against him." To his credit, he hasn't backed off since and he is reaping the political dividends rightfully.

Another person who has grown massively in stature throughout this process is the Labour MP Tom Watson. Once one of Gordon Brown's main attack dogs, he has already been named "Committeman of the Year" by the House of Commons for his persistent attempts to get action on phone hacking as a member of the Culture, Media and Sport select committee. He talked on radio the other day about being called rude names by Sun reporters two weeks ago, and being insulted about his weight (which he wasn't bothered by). Then, he alleges, he was told by the Sun journalist that they were sitting on stories about him and if he didn't "back off" they would print them. Thankfully, Watson either has enormous backbone or knows that they have nothing on him because he hasn't backed off one bit.

Back to Miliband though. At the same time as wanting to know about the past he is focussing on the future too. He produced an excellent speech back in June on "responsibility" - putting together bankers and welfare cheats and asking them to show more responsibility (worth a read here). This crisis has come along at a time when he has been able to expand that to all of those with any power. An A-level student of mine once wrote a global politics exam essay around the quote "with great power comes great responsibility", attributing it to Gandhi when it fact it was from Spiderman the movie (!). His sentiments were correct though, and Miliband has expanded his narrative to include politicians, media owners and anyone else who has a bit of power. Even if he has been "lucky" to have so effectively captured the zeitgeist, he may well have a narrative that can propel him and the Labour Party forward to 2015 when they will so need a compelling narrative in order to get back into government. If he can hang some compelling policies around this he really will be going in the right direction.

Connected to that is the question raised by both Ed Miliband and Nick Clegg about whether the type of media power prevalent in this country should ever be allowed. Rupert Murdoch owned newspapers totalling 40% of circulation in this country and a major broadcaster. Richard Desmond owns a few newspapers and a terrestrial channel. That is a large concentration of power and the dividends Murdoch in particular received for the power he held were huge. It has been shown that David Cameron met News International executives since he got into power as many times as all other newspapers put together. Is that right? Expect to see as part of this whole process a decision on the limit of media ownership allowed. This isn't an argument about private vs public or capitalism vs state, it's about government ensuring that democracy isn't affected by the proceeds of capitalism. The basic tenets of Conservatism argue that the role of the state is to ensure that the worst excesses of capitalism and private sector ownership are curbed (thereby ensuring, as Thomas Hobbes stated, we don't live a "nasty, brutish and short existence"). It assumes that man is born with "original sin" and needs to be guided. Turns out that News International needs to be guided, and in the absence of any sense of leadership on this from David Cameron and the Conservatives, Miliband has stepped into the breach.

Which leads us onto the question that David Cameron may one day have to answer. Was Rupert Murdoch's power so great that he could insist that a man clearly tainted by association with scandal had to remain at David Cameron's side, a direct contact for News International into the corridors of power? If so, and if Cameron didn't act responsibly and say that their support wasn't worth the risk, then he may have to take ultimate responsibility for that. Ultimate responsibility is what Sir Paul Stephenson has just taken by resigning from the Met Police for their links to Neil Wallis, links about which he says he didn't know. Cameron insists he didn't know either, yet he still took the risk and now may need to take responsibility for the outcome.

NOTW - Let's not throw the baby out with the bathwater.

It was illegal and many people would argue it should not be allowed. An office worker was paid to download private information about the spending habits of their organisation's employees onto a series of disks and hand them over to journalists who would scour through them and publish anything of interest. In that case, it was MP's abuse of expenses that were revealed. If we are not careful, the current witch hunt against the media could result in a the type of hurriedly and badly drafted law that would make it impossible to hold those in power to account. We have the right media laws, we just need to implement them properly.

In what has been a fascinating week for watchers of politics and the media, some other issues spring to mind in terms of what has happened with the closure of the 168 year-old News of the World (NOTW) worth a look for politics and economics students.

1) The Principal- Agent problem -  in very large organisations there is a divorce between ownership and control. Sometimes this can lead to  managers and employees of a company not to act as the owners might have wished. This is certainly the angle that Rupert Murdoch is taking during this crisis. Starting off by blaming the phone hacking on bad eggs within the company, the owners of News International have had to change their tone and verbiage as the realisation has grown that they aren't going to be able to bluff and obstruct their way out of this one. As I said in January (click here), I believe that the culture created by Andy Coulson encouraged journalists to do anything for a story. I would argue the same thing again for the culture created by Rebekah Brooks (then Wade), who was editor at the time when Milly Dowler's mobile phone message box was being hacked (and messages deleted to make room for more, making the police and her parents think she might be alive) by private investigators hired by NOTW journalists. She insists she didn't know about it and was on holiday at the time - but she didn't need to know about it - she was in charge, which is why we have the witch hunt that we do now. Worse for Rupert Murdoch is the involvement of his son, James - who has had nothing to do with the NOTW but may possibly be accused of obstructing justice during the investigation. At the moment, Brooks is taking the heat, as a human lightning rod for the Murdoch family (I wonder how much money persuaded her to do that). But I have heard quite a few times this weekend that there is a possibility James Murdoch could end up dragged into this to the extent he is fighting to stay out of jail. Rupert Murdoch will sacrifice ANYBODY to stop that happening, as we saw last week.

Going back to the Principal - agent problem - some News Corp shareholders have filed a suit in the USA arguing that News Corp management's failure six years ago to take sufficient action when the phone-hacking candal first broke demonstrated an "unwillingness by management to provide adult supervision". This large scale failure of governance was a failure of management and went against the owners' interests. Fact is that management seemed not to have been incentivised to investigate properly.

2) The power of the unions (and lack of power here) - Wither the NUJ? Whilst 200 journalists, many of whom had nothing to do with phonehacking, were stripped of their livelihoods in order to save the person who was editor when the worst of it happened - the NUJ were nowhere to be seen. Unions were set up for this reason, to protect the jobs and working conditions of their members, and this hasn't happened. At first, I was despairing - instead of going on strike against demographics, they should have been fighting against the exact example of capitalist destruction (particularly given it was done to protect a member of management). But then I did a bit of research and found that Donnacha Delong in the Guardian could explain it:

"Unfortunately, the NUJ remains locked out of News International due to a ridiculous loophole in the law on union recognition. While claims for applications for recognition can only be made by independent trade unions, they are blocked from doing so if there is pre-existing recognition of a non-independent "trade union". In the case of News International, that so-called trade union is the News International Staff Association (Nisa), which the Certification Office denied recognition as an independent trade union in 2001. Nisa remains what then NUJ general secretary, John Foster, then called "a company union, set up largely to keep independent unions out". Yet in the three-hour debate in the Commons on Wednesday, or on Thursday night's BBC Question Time, not one political figure mentioned this ridiculous situation."

Unions are absolutely vital for situations like this. I find it annoying when they dress up self-interest and avarice as being in the public interest and when they protect inadequate workers (particularly teachers) but in the case of journalism the unions would not only have caused a justifiable fuss about what happened to NOTW staff last week but in journalism the unions have a record of upholding standards and ethics - such as the time when members of the print unions refused to print a picture of Arthur Scargill making what looked like a nazi salute during the miners' strike and when journalists of the Express stopped working until the paper pulled a regular page called the "Daily Fatwa".

3) The chicken and egg question of just how powerful are newspaper proprietors - On Question Time last week Baroness Shirley Williams pointed out the need for two public inquiries: One to look into phone hacking and the other to look at the relationship between politicians and the media. Politicians have been lining up to admit that they have been too close to newspaper proprietors in the past and want to change now. Ed Miliband had a very good week in being one step ahead of David Cameron by disassociating himself with News International.

Cameron eventually spoke about it on Friday but the fact is that he is a personal friend of Rebekah Brooks, who lives in his consistuency. The other fact is that the major political parties have become terrified of Rupert Murdoch since he claimed to have won the election for the Tories in 1992 then his switches to Labour in 1997 and back to the Tories in 2010 were also influential. Not only have politicians felt this but journalists have done so too. Tom Watson, the Labour politician who has been at the forefront of the backlash against News International, has told of a stream of personal abuse being hurled at him by their journalists and a message being given to him that The Sun were holding back stuff they could print about him but would print it unless he backed off. If journalists feel they have that much power then we are not in a good position.

But actually there is possibly a chicken and egg situation here. People who have worked in communications in Downing Street have been telling on the radio and TV of how policies get sent back to departments unless they are tabloid friendly, and this is seen as a sign of how powerful the tabloids are. Murdoch has argued that he is merely reflecting public opinion. But does he? Or does he impose his opinions - or the opinions and preferred policies of his major advertisers (who are so important that they caused the closure of the papers) on the public, pretending that it reflects everyone's views?

4) Competition policy -  this is a great example of the difficulty when dealing with mergers and acquisitions in this country. Politics gets involved. It got involved with Kraft's acquisition of Cadburys last year (when the withdrawal by Labour of a condition that tested whether a merger was "in the national interest" left them powerless to intervene when a crown jewel of British manufacturing was bought). It is getting involved now with News International's attempt to buy the remainder of BSkyB (they own 39.1% already). Labour and Lib Dem politicians are arguing that the government should pull the plug on that now. I have written before (click here and go about half-way down for this) about why News International wants to do this. Let's just say it would give them access to a massive amount of money. Given the link between money and power and the belief that Rupert Murdoch has quite enough for now you can see why politicians (and rival newspaper proprietors, who must be absolutely delighted with this latest turn of events) are so interested in derailing it.

However, the laws on this are pretty clear, and in a statement today News International pointed it out - "News Corporation continues to believe that, taking into account the only relevant legal test, its proposed acquisition will not lead to there being insufficient plurality in news provision in the UK." Given that Sky News only has about 7% of the TV news viewers, they might be right, although when added to the amount of newspapers owned by News Corp (a far greater proportion than in any other country), one can see what the problem might be. 

But opponents of the deal are bringing in the "fit and proper test", which OfCom can apply under the 1990 Broadcasting Act to make sure that owners of broadcasting companies meet ethical requirements. The problem there is that the Act does not make clear what "fit and proper" means, nor gives any guidance on the matter. News Corporation have not had any compliance issues before and should OfCom decide that what has happened is reason to reboke their licence to broadcast they will open up a pandora's box of legal problems for themselves as News Corp will argue that the decision has been politically influenced, in particular because until the law is tightened up and a proper definition of "fit and proper" is created then News Corp's lawyers will have a field day.

Today, News Corp announced they had dropped their commitment to make Sky News independent, which automatically triggered the Competition Commission investigation. This could have been done for a few reasons. One was to give the government breathing space to refer the bid instead of stopping it. The other could be as a pre-cursor to News Corp simply dropping their ownership of UK newspapers. Given they have been subsidising the Times for the past few years we may need to be careful what we wish for. 

5) Media laws - The Press Complaints Commission defines public interest as including but not confined to: detecting or exposing crime or serious impropriety; protecting public health and safety; preventing the public from being misled by an action or statement of an individual or organisation. It points out that there is a public interest in freedom of expression itself. If journalists rely on a public interest defence, editors must be able to demonstrate that they reasonably believed that publication, or journalistic activity undertaken with a view to publication, would be in the public interest. The problem with what the NOTW did was that there is certainly no public interest in deleting Milly Dowler's voicemail messages and, given Gordon Brown's determination never to use his children publicly, no public interest in an exclusive that his son had cystic fibrosis. Rio Ferdinand is at the moment arguing that his sexual pecadillos are also not in the public interest, even if they are interesting to the public.

The point is that undercover methods will always be needed if wrongdoers are to be held to account. You CAN pretend to be soemone else to gain access to private information. You CAN pay someone to download sensistive company data onto a disk. You CAN secretly record conversations. But ONLY if you can prove that the material is obtained in order to publish a story in the public interest. The Watergate scandal, the information on the sinking of the Belgrano during the Falklands war, MPs' expenses, the publication of diplomatic cables provided by Wikileaks - all were obtained illegally but led to stories that were in the public interest. My concern is that new media laws are created that stops this happening.

The history of politics is littered with examples of hurriedly drafted bad laws to respond to public and  political clamour. The laws may need to be clarified, but more importantly, they need to be implemented. There was not a proper police investigation here - partly because the case was passed to the anti-terrorism squad on the very day that the plot to blow up airplanes was discovered, but also allegedly due to the police being compromised by their relationship with the NOTW and possibly being intimidated by the way they operate.

That, I hope, is the change that ensues. What is certain is that much more is to come on this story.

Should public sector workers be going on strike against demographics?

There's going to be some strange scenes over the next few months if the leaders of the public sector unions have their way. You're going to see a lot of people take to the streets to complain about medical advancements and the skills of doctors.

Make no bones about it, the Coalition government want this battle to go ahead. Should there be a strike, David Cameron will get a different human shield than Nick Clegg - the unions. Because whilst there are plenty of issues for which strikes are appropriate, pensions reform isn't one of them.

Because it's not the government's fault that life expectancy has increased by 20 years since the pensionable age was set at 65 (60 for women). It's not the government's fault that at the time the default retirement age was set at 65 one person's pension was paid by 5 taxpayers and now it's less than 2 taxpayers. It's not the government's fault that the unfunded cost of servicing our public sector pension liabilities of £1.2 trillion is now running at about £45 billion a year — in effect a second, hidden deficit.

This was the problem facing Lord Hutton (a former Labour Pensions Minister) when he was asked by the Coalition government to lead a Pensions Review. Last week the chief secretary to the Treasury, Danny Alexander, took up most of Hutton’s proposals by announcing that the retirement age of public sector workers — other than those in the army and the emergency services — will rise from 60 to 66, and that state employees will on average have to pay 3.2% more in pension contributions.

However, this change will not be applied to workers on less than £15,000 a year, and those earning less than £18,000 will have their additional pension contributions capped at 1.5%, so the usual appeals to compassion cannot be easily made. 

What's more while no existing public sector employees will lose any accrued rights — that would be both illegal and immoral — final salary pensions will gradually be replaced by those based on career-average earnings; but the most valuable aspect of the traditional public sector pension — that it will be index-linked and guaranteed by the exchequer, no matter how high future inflation rates — will remain.

Historically, these gold-plated pension plans, along with shorter hours, longer holidays and greater job security,  have been compensation for the lower salary one could expect in public service compared to those of equivalent rank or skills in the private sector.

However, 13 years of Labour rule saw public sector pay increased to the extent that recent research by the Policy Exchange think tank, based on figures from the Office for National Statistics, shows there is now a significant premium in pay for taxpayer-funded workers, whether measured by both mean and median annual salaries, or by typical hourly wage rates.

When you add the value of an index-linked final salary pension, the employment market is further distorted. Last year the Public Sector Pensions Commission, after a nine-month investigation, concluded that “the true value of the [unfunded] ... public sector scheme ... is over 40% of salary”. In other words, in order to acquire the same benefits in retirement, a private sector employee would have to pay 40% of his salary in contributions (his employer certainly won’t).

It's important we look at this further. Britain has a workforce of around 30 million workers. Around 25 million of those work in the private sector with 5 million the public sector. The average private sector employee has a pension pot of around £30,000 which is enough to buy an annuity on retirement at 60 of £900 a year.

So when Mark Serwotka, the leader of the Public and Commercial Services Union (PCSU) tries to attract our sympathy by pointing at the average pension of £6,000 a year that his members earn, bear that £900 a year figure in mind. Also remember that to get £6,000 a year means a pension pot of around £200,000 a year on the open market. The taxpayer has to provide that pension pot.

The question is, if the PCSU members (and, I have to say sadly, the teachers union members), won't pay the full market cost of their pensions, why should the nation's workforce, most of whom will not be benefitting from it, do so instead?

As I said earlier, there are many issues that  public sector workers could strike about. Job losses is one thing. Working conditions may be another. Teachers could walk out in protest at proposed cuts in educational provision. But instead the first strike may be about pensions reform. This is a massive mistake, and Ed Balls, the shadow chancellor, is spot on by saying that the Coalition government would rub their hands with glee if the public sector workers went on strike for this reason, as they would be able to claim the unions are harming the economic recovery, not the Coalition's policies.

Serwotka has tried out the familiar routine of declaring it it immoral that their members should pay for the consequences of a crisis caused by the idiocies of overpaid bankers. But they could throw all the bankers into the sea and not solve the pensions crisis.

Private companies have long ago stopped final salary pensions for their employees, as they would make them bunkrupt. With pensions, the government can't get trapped into promising its employees more than it could possibly recoup from the taxpayers.

There are two ways to solve the pensions crisis. Stop people living longer by turning back medical advancements and possibly well targetted euthanasia. Or we can get real and cut down the gap between the contributions public sector workers make to their pensions and how much they receive in income from their pensions.

Which one makes sense? Even though it reduces my own income in retirement, I know the answer.