To France, to France!

Apparently, should Ms Royal win the presidential elections, the French can look forward to a €1,500 minimum wage - and unemployment benefits of up to 90% of previous salary.

Not bad, eh?

Especially considering that, should Mr Brown tragically become Prime Minister in UK all we can expect here in Britain is more taxes and misery.

Of course, Ms Royal's Socialist policies are so completely non-sense that it won't take long for the Country to self-destroy, but, hey, so long as it lasts, I can live with a €1,500 minimum wage to stack Primtemps shelves in Cannes... that would be more than what I used to earn as a PhD Technical Director in Italy about 10 years ago!

Vive la France!

Red Tape Galore

Apparently "If stacked up, the total amount of legislation passed since the start of the EU would be nearly as tall as Nelson’s column." (source: Open Europe bulletin: 19 February 2007).

Having read that, I was somehow overwhelmed by a sudden sense of impotent rage: how could one possibly deal with such a staggering amount of regulation is honestly beyond my comprehension.

But that's beside the point - what really enrages me is the reflection that:

1. it is virtually impossible that ALL of that legislation is about matters that are relevant and, in some meaningful sense, "useful" - in other words, I expect a large part, possibly the majority, of it all to be about irrelevant or otherwise trivial matters.


2. all that paper was produced at great expense by incredibly well-paid obscure bureacrats who were busy just creating work for other well-fed bureacrats (thus achieving Keynes' vision of "50% of the population digging holes and the other 50% filling them");


3. hence, the waste of money that could have otherwise been put to some productive use must be staggering and, almost certainly, still ongoing - if anything, at accelerated speed.

Not to mention, the amount of wasted effort that that red tape causes to EU businesses, estimated, by the EU commissioner Gunter Verheugen himself, at more than €600bn a year.

Is it possible that nothing, ever, can be done about this?
How long will we stand such abuse by faceless, unelected, unaccountable paper-pushers who have no interest whatsoever in giving EU businesses, men and women, half a chance to compete against the rest of the world?

Flashing it

Apparently, in the "Television Without Frontiers" directive currently undergoing negotiations there is a "requirement to flash a warning on the screen every 20 minutes whenever product placement is used in programmes."

Quite apart from the absurdity of the obligation, I can already figure your average family, slouched on the coach and having a competition, following the flashing on screen of a "Product Placement Warning," as to who will be the first to actually spot the product.

Was it that can of Coke? the box of Trojan condoms apparently left lying on the floor? the lady's underwear from M&S?
and, come to think of it, should I flash a warning here too?

I have also little doubt that our ever resourceful Eurocrats will already have defined in excruciating detail the size, colour, frequency, font, pitch, positioning, and about other 20 parameters for the warning's placement.

The most amusing bit, as all the non-bureacrats amongst you will have spotted, is that, it will achieve exactly the opposite effect than intended: rather than warn a supposedly dozed and half-witted consumer to beware the evil forces of consumerism are at work, it will, in fact, attract attention to the "placed product" and away from the dramatic tension (if any) of the movie.

Who needs plots and drama and creative tension any more?

I am just about wondering whether there will be a business opportunity in creating a clandestine market of "non-spoiled" movies here... I can already see those cinephiles, wearing dark glasses, fake beards and upturned collars approaching you on street corners offering you "a good one, mate"

Online downloads, anyone?

Bums on seats

That at least seem to be the latest education policy trend from the UK Government.

I will explain, if I may.

Apparently, there is now a new regulation (yep, another one - not one day of rest for our Whitehall valiant guardians of our children's welfare) that essentially forbids parents to take children away from school for, say, a holiday, outside school half-term breaks.

Now, that would be something to applaud were it applied with some grain of common sense: after all you don't want children wandering around or, God forbid, catching flights for holidays abroad left and right (by the way, what's all this fuss about flying? are you all falling prey to Labour's misinformation propaganda machine? I would have expected my readers to be more clued up... but I digress!) leaving teachers to cope with an ever-varying classrom attendance.

However, one would also expect that the policy were applied with some degree of common sense: in other words, if the child is achieving top grades, shows no signs of falling behind and is prepared to do some extra work before and after the week's absence in order to catch up with the others, well, maybe some allowance may be made.

After all, isn't that what we all deal with either as managers or as staff? So it would be good to somehow responsibilise the kids early on: "If you want to take a week off, well, you may, but be prepared to work harder to compensate for that."

Well, not if you are dealing with our schools' headmasters: 'no' means 'no', and there are no derogations to the rule - no matter how sensible preparations one makes, how much planning effort the child puts into it: take your kid away for a week, and that will be regarded as "unauthorised absence."

(The amusing bit here - that seems however to completely escape to our erstwhile bureacrats - is that they even have a form to let you apply for extra holidays. You can certainly fill it in and submit, they'll just refuse it. Isn't that sublime?)

What the consequences may be, I do not know. Terrible, I suppose, and unerring: probably Social Services (that bright example of efficiency, competence and, above all, never missing a day at work) will be called in, the child may be put up for adoption, most likely parents will face fines, possibly jail sentences.

I don't know - I will find out when we come back from snowboarding :-)

Blame it on the customers

From the OpenEurope newsletter:
"Commission officials have blamed the results of a recent poll, which found that most people in the eurozone want a return to their old national currencies, on people getting "mixed up." (Telegraph, 30 January)"

Don't you love the Eurocrats?
It reminds me of when a notoriously corrupt Italian politician (Bettino Craxi, for those who remember him) commented on the unfavourable outcome of a referendum, stating that "48% voted No, the others got the wrong answer."

In Italy, for example, it is a well-known, everyday occurence, that the introduction of the Euro caused a massive retail price increase - roughly, most retailers, big and small, changed their prices equating 1,000 Liras to Eur 1, ie, twice the official change (Eur 1 to 1,936 Liras).

In Germany, they gave up a strong, stable DM to get a weak, unreliable currency, sharing debt default risks with the like of the Italians and the Greeks.

The Spaniards who, very much like the Italians, used to regularly devalue their currency to keep their exports competitive on the world market, lost a nice tool.

The French, well, as per the usual (CAP anyone?) got the best deal - but still they complain, because, well, because they're French!

However, 7 years on, the so much vaunted advantages of the currency union seem to have reduced to just not having to exchange currencies when going on holiday abroad in Europe: hardly something that keeps people worrying awake at night.

The growth in inter-country trade has failed to materialise, far from becoming an economic super-power on the world stage, Europe is becoming more and more irrelevant, and Eurozone countries are less and less attractive to foreign investors (FDI is in sharp decline -see the recent UK Treasury report, here).

The costs, however, especially in bureacracy and administrative costs have been huge: little surprise that people are complaining that they haven't seen any "bang for their bucks" (more like a 'pop').

But, hey, what does the European Commision say about people complaining? that they are "mixed up"

I love this - I am almost looking forward to one of my clients complaining about being overcharged for shoddy work, delivered late and over budget: rather than groping for some lame excuse, I'll just tell him: "It's not me, mate: it's you. You are mixed up!"

A tale of de-regulation and madness

As I mentioned elsewhere, bureaucrats do not belong to public sector only, but lurk and thrive in organisations big and small of all types.

Granted, large corporations have a much greater share of them: and, these days, you don't get much bigger than a former telecom state monopoly - so here's a tale of bureacracy madness from Italy, where the love for the 'carta bollata' (that could liberally translated into 'legalised paperwork' - not even sure there's an English equivalent: comments sought and welcome!) has joined forces with the Italian newfound disregard for customer service.

It so happens that my dad used to have a broadband (ADSL) service with the former state monopoly incumbent (Telecom Italia): if not a great service (try and get hold of a 'customer care representative' - let alone get anything sorted) it did provide what it was supposed to, a fast(ish) connection to the 'Net.

Being from a generation that went through the war, I can hardly blame him for being thrifty and, having resigned himself to my living in sunny England, he also had signed up with Tele2 to take advantage of lower international call rates.

However, being naturally suspicios of "offers too good to be true," he had steadfastly refused to take up repeated, insisting and, let's face it, mildly bullying Tele2's offers to sign up to additional plans and offers.

The Tele2 folks must have resented his stubborn attitude, so they decided, without consulting him, to upgrade his existing plan to a flat-rate offer that, on the face of it, was not so convenient to him.
However, wisely realising that it would have been more trouble to terminate it than pay the few extra monthly euros, my dad accepted this one as just the last in a string of little administrative abuses one has to endure if one lives in Italy.

That was probably his mistake, I would guess: emboldened by a seeming submissive attitude on the customer's part, the Tele2 bureacrats made the subsequent move, going straight to Telecom and claiming him as their customer and asking Telecom to transfer the line (for those of technically inclined mind, they 'unbundled' him).

This, mind you, without telling him, without gaining proper signed authorisation, without even bothering to actually connect him to their systems either.

Telecom Italia is obliged, by the Italian Communication Authority, to release a line to another competing telecom firm within a very limited timeframe (I gather it's 4-5 days) so they really can't trouble themselves with details such customer's authorisations (let alone his wishes) - they just hurl it over the wall to Tele2 and forget all about it.
Of course, both firms could put in place systems to ensure mistakes are minimised: but why bother when the Authority is clueless as to how to enforce good behaviour and customers are powerless to do anything about it.

To cut a long story short, in November he lost access to broadband (Telecom had dutifully terminated his subscription - to add insult to injury, he now owes them Eur150 for "early contract termination") and after a few weeks voice telephony was terminated too.

Tele2 in the meantime did NOT connect him to its own systems, nor bothered to return calls, faxes, letters, pigeons and drum signals - my dad would have happily travelled to their offices to sort the matter out: sadly, in true 21st Century enterprise fashion, they seem to have none: all one is left is calling their call centres ("Press 1 for existing customers, 2 for sales, 3 for billing enquiries, 4 for upgrading your services, 5 for technical support and 6 to repeat these options again" - sadly, if your number doesn't come up (they hardly have "press 11 if you are pissed off with us and want to talk to someone with a few neurons left") you are pretty much stuck.

Telecom Italia wasn't much help either: having released the line to Tele2, all they could provide as help was "we'll reconnect you as soon as Tele2 releases the line" - which, incidentally, they are not obliged to do (as they may be clueless, but are not incumbents - hence the Authority lets them off the hook).

Considering legal action in Italy is obviously out of the question: one might as well move house and take up a new telephone line in the new place - probably cheaper and certainly less exhausting.

So, two months on, here we are: no broadband, no telephone line, and no end in sight for a saga that is probably funny for those not involved, but sadly marks another victory for the bureacrats and, yet again, a defeat for common sense and decency.

The tale continues...

Can Government save R&D?

Apparently today our PM got all warm and fuzzy about Science and Technology - reportedly, the British Government is keen to have more of it. A lot, apparently.

There are reports that ASBOs (those are Anti-Social Behaviour Orders, for the non-British readers: essentially, the British Government response to hapless parenthood) were considered against youngsters wishing to go into media studies and refusing to take Maths. That was deemed excessive, for the time being anyway.

Then, they considered dumbing down Science and Maths curricula (dumbing down exams, apparenly, seems not to be enough to convince the hard-core dimwits to take up the subjects). That was ridiculed by quite a few, aging, scientists - they, clever guys as they are, spotted the flaw that had escaped our valiant Education Ministry bureacrats: you can dumb down exams and curricula, Nature however is a tough nut and won't quite bend to being dumbed down.
You can't quite solve a differential equation using only your ten fingers and a ruler - nor would you want someone designing a nuclear reactor who can't quite get the hang of Nyquist stability circles...

Running out of ideas, the Government resorted to the usual solution they choose when taxes can't be used (you can't quite tax a kid for being none too bright, now, can you?): throw money at the problem. A lot, apparently. "We've got to invest in science far more as a country." said yesterday Tony Blair, "The government is tripling investment in science - to recruit better science teachers - which is why we're offering all sorts of incentives for that to happen." (source: the BBC)

Currently, Britain's investment (private and, much smaller, public) is at around 1% of GDP - set, apparently, to increase to 2.5% by 2015. That does not compare well with the US's 3%, but, seeking consolation where one can, it is at least a lot better than the rest of Europe (Italy, close to my heart as it is, at somewhere around 0.2% is a dismally pathetic basket case).
Unfortunately, the way the Public Sector goes about funding R&D is a particularly perverse way: instead of rewarding ingenuity, success and efficiency, most grant funding mechanisms encourage waste and over-management.

A case in point, the R&D Grants - once called SMART awards.

I have personal, direct experience having being granted one in 2002 for the princely sum of £45,000 (it turned out as a lot less than that, but we'll come to that). Apart from the re-branding and having taken them away from the hapless, hopeless, pathetic SBS (see the Financial Times, here) it is my understanding that they remain essentially unchanged.

The fundamental flaw in such schemes is that, instead of saying "Ok, mate, here's a pot of cash, those are the expected results, now you go and make them last!" as any investor worth its salt does, public sector grants are based on "Costs incurred" - ie, you create a budget of all expected costs, the grant is awarded "in principle," you then go off and spend the money (usually as quickly as possible) and then claim for a refund based on costs incurred.

I am grossly over-simplifying here, but you get the general drift. Can you spot the flaw?

It gets even more amusing - generally speaking, these grants are awarded only to cover a fixed percentage of costs incurred (it used to be 75% for a Smart Feasibility Study, it is now 60% and down to 30% for a Development grant): the entepreneur, scientist, mad inventor is expected to fund the rest. Which is fine as far a company is concerned, much less so for your "inventor in a shed" kind.

In fact, one cannot even contribute "in kind," eg by not paying oneself a salary: remember, costs have to be "incurred" to count.

Unfortunately, whilst this would not matter in the "old" economy (where costs are mostly related to capital and equipment costs and less for staff) it does matter a lot for 90% of today's early stage ventures: typically developing a software product or online service, where more than 95% of the costs are staff-related, and a close-knit small team of individuals could go very far with very little.

With a bit of belt-tightening, one could safely assume that three committed, experienced professionals could go about 12 months about with £45,000 - probably more -and achieve a lot for it. A big bang for your bucks, as our friends across the pond would say.

Here's how it works instead if you do get a Grant: you get £30,000 from the Government (well, not upfront, but will eventually) put up another £20,000 from your bank account (or, more likely, from re-mortgaging the house), and go about spending it about as fast as you can.
Assume that around 20% are in general costs and associated capital and software costs (this is probably a lot more than actually needed in these days of cheap computing and open-source software) and pay the rest out as staff salaries.

Because of NI costs (12.9% - thanks, Mr. Brown) and PAYE charges (assuming a marginal personal tax rate of about 30%), the £40k work out at around £24,400 - because you had put up £20,000, this is a net income of £4,400, which added to the £10,000 of genuine costs incurred work out a total of roughly half the original grant value.

Development grants, because of the much lower percentage funded (30%) actually are even worse and are really only worth for organisations who have already funding means and plans in place for innovation.

It is also worth noting that, as Government grants must be accounted for as Revenues, if one is not so keen on surviving on £4,400 annual salary and decides to augment income by, for example, providing consulting and/or contracting, those will be additional and the company will incur also a tax bill on profits (well, assuming there are any, that is).

Rather obviously, the "fix" would be rather simple: Government Grants should be tax-exempt, payments should be staged, against pre-agreed, demonstrable results achieved, and not driven by costs incurred.

Ideally, staff salaries should be either taxed at a lower rate or, even better, be free of income tax - the way they work at present, it is like the Government takes away with the left hand what, inefficiently, gives with the right.

Unfortunately, the Treasury does not quite believe that "science will, in my judgement, today and for future generations, be as important as economic stability" (Tony Blair, again) - they only care about raking in as much money as they possibly can.