That's why they're the underdog

There's no easier way to find out why a company isn't the leader in its marketplace than buying its products. Today I got an e-mail from Sony, advising me that its Connect on-line music service will be phased out over the next few months. What they're really announcing is that they are dropping their proprietory music compression format, ATRAC, after discovering that nobody else wanted to use it.

They promise to help me to convert my existing music library to MP3 format. Thanks for nothing, guys -- I would have done it that way myself if I'd had half a brain, because Sony has not only previous but current form here. Everyone remembers the VHS-Betamax battle in the 1980s, when Sony was forced to concede defeat despite having the superior product. The company now seems to be facing a similar fate not only with ATRAC, but also with its Blu-ray high definition disc product. There's not much to be said for being a lone wolf in a fast-changing market. Apple is almost the only company that's managed to pull that off in the consumer electronics field, and even that's been a close-run thing at times.

Then there's pay-TV. I have a healthy antipathy for the Murdoch empire, as anyone who has been following this blog will have realised. So I was happy to sign up with "ON Digital" when I returned to London in the late 1990s. Sadly, ON Digital was managed by morons (and their set-top box was pants); it became ITV Digital (no improvement) and then, last year, was bought by Sir Branson and rebranded as Virgin Media.

And it's still not very good. The new management promptly picked a fight with Sky that led to the removal of several of Sky's channels from the service -- though there was, of course, no corresponding reduction in price. The quality of the service remains patchy at best -- channels are regularly "Not available at this time" (we're talking BBC1 here, not something obscure) and the much-touted video-on-demand service has never worked for me at all.

To fix this last problem, I gave them a call last week to see if I could get a new set-top box, as the current one dates back to the ITV Digital days. After a short bout of menu-hopping I got through to a live person, who asked me some security questions, but then said she couldn't help with my actual problem. She offered to pass me on to their faults department. There was a bit of canned music, then an automated voice came on -- and started asking me more security questions. I ploughed on until I was asked for....the last four digits of the number of the bank account that I used to pay my bills!! Has any of their clients ever been able to answer that question at the first time of asking? I gave up at that point and am currently building up my strength to have another go. If I don't get a satisfactory response, I may yet have to sell my soul to Murdoch.

And then there's my lifetime support of Leyton Orient...no, let's not go there.

Daily Mail lowers the bar even further

Even by the Daily Mail's standards, the front page layout for August 23 is singularly loathsome. The headline highlights the fact that over 500,000 foreigners arrived in the UK last year, while almost 200,000 Brits emigrated. The immigrants are tastefully illustrated through a picture of a group of swarthy men milling about. A closer look at the caption shows that these are supposedly Bosnian men waiting to try to get asylum in the UK, though how the Mail knows this, or whether the men actually succeeded in their asylum quest, is not disclosed. In other words, they may not actually be among the offending 500,000.

On the right hand side is a picture to portray the leavers: surprise surprise, it's a perfect nuclear family who reportedly left the UK in 2004 to move to Bordeaux. Oddly, their family name is Dannreuther, which suggests that at some stage they or their forebears were on the other side of the ledger!

Even the Mail's most blinkered readers know that while some immigrants may be asylum seekers, the roll-call also includes Roman Abramovich, Bill Bryson, Terry Gilliam, all the hard-working East Europeans who are keeping the economy moving, and a lot of young French men and women looking for a more congenial place to make money. And while some of the emigrants may be picture-perfect middle class families, a lot of them are seniors looking for a bit of sunshine in their old age, and some are tattooed chavs who just want somewhere warmer to eat their fish and chips.

The Britsh have always claimed the right to move around the world. I myself have lived and worked in two countries outside the UK: Barbados and Canada. I would have been appalled if there had been some snivelling fascist at the Toronto Star or the Barbados Advocate that wanted to deny me the opportunity, but I'm happy to say that there wasn't.

Is there a silver lining to this? Oddly, yes. I haven't read all of the Mail readers' comments on this story, but to my surprise and pleasure, the first two took issue with the Mail's spin on the statistics, and strongly defended liberal migration policies. Maybe this is just the on-line readership, but it's something.

Return of the lynch mob

The reaction to the judicial decision that Learco Chindamo, the murderer of Philp Lawrence, can not be deported to Italy when he completes his jail sentence is quite appalling. Lawrence's widow says she is "devastated" by the decision, though she says she has tried to forgive Chindamo. However, the reaction of the media is a lot less balanced. Predictably, the Sun and the Hate Mail have called for the repeal of the Human Rights Act. The Telegraph hasn't expressed a strong opinion of its own, but the readers' comments on its report of the subject are bloodcurdling (and surprisingly poorly written -- isn't the Telegraph a posh people's paper any more?). Even the Guardian is struggling, with an opinion columnist saying that decisions like this make it hard to defend the Human Rights Act.

The politicians are even worse. We can ignore David Cameron's kneejerk reaction -- and maybe he will be too busy re-checking his list of NHS hospitals "under threat" to say any more on the matter. But it's depressing to see Jack Straw, the Minister formerly masquerading as a leftie, expressing his disgust at the decision, while a junior Home Office minister says that Chindamo has "forfeited his human rights".

There's no doubt that the murder of Philip Lawrence was an awful crime, and by all accounts Chindamo was a nasty piece of work at the time. But he was only 15, he's served his sentence, and his probable release next year reflects expert opinion that he is a reformed character. If he was unequivocally British, that would more or less be the end of it, aside from the fact that the gutter press would no doubt track him down and put his life at risk. But Chindamo happens to have been born in Italy, moving here only when he was five years old. He has no remaining connections with Italy and doesn't speak the language, so deporting him there would certainly be an unusual punishment, if not a cruel one.

One of the key reasons we have a justice system is to ensure that the victims of crimes are not the arbiters of punishment. I feel sorry for Mrs Lawrence, but if I feel "devastated" about anything, it's the cavalier disregard that the media and politicians show for this cardinal principle whenever it suits them.

I'll pay when I'm dead

I almost feel sorry for John Redwood. His much-touted report on improving Britain's competitiveness runs well over 200 pages, but the only headline in the papers, all across the spectrum of opinion, concerns his proposal to abolish inheritance tax. This actually merits one six line paragraph in the report, around 180 pages in! How did this get to be so important? Only 6% of estates currently pay inheritance tax, and I surely can't be the only person who'd rather pay taxes after I'm gone than pay them now.

In any case, people hoping to get their hands on their parents' dough completely tax-free are likely to be disappointed. What Redwood and his colleagues are suggesting is that capital gains tax should be reformed and then applied to inheritances. This is exactly the system that operates in Canada: death triggers a "deemed disposition" of assets, resulting in the calculation of capital gains which are then subject to tax at the regular rate. Having gone through the execution of the wills of both of my wife's parents, I can attest that this emphatically does not mean that the estate is passed on tax-free.

Redwood's idea makes sense (I can't believe I just wrote that!) to the extent that it represents a more efficient way of dealing with the taxation of estates. Why have a separate and unpopular inheritance tax when you can get the same results through capital gains tax? However, this positive aspect is offset, or maybe even completely outweighed, by his proposal that the value of principal residences should be exempt from all taxation upon death.

This exemption (which also exists in Canada) changes Redwood's proposal from a sensible piece of tax simplification into a blatant sop to the property-obsessed middle classes. It could well have an undesirable effect on the property market: if I can pass on my home without tax, I'm all the more likely to remain overhoused in an unnecessarily large house until I croak, rather than downscaling in my dotage as people always used to do. This can only worsen the existing shortage of larger family homes, and help to push up their prices further.

There's a lot to think about in the Redwood report. Abolishing inheritance tax is neither the best nor the worst idea in it -- and it's certainly not the most important.

Not-so-mighty Redwood

I see that John Redwood, an arch-Thatcherite from the right of the Tory party, is proposing that the party adopts a programme of business deregulation as part of its platform for the next election. One of his proposals is to abolish most regulation of the mortgage market, on the grounds that it's the lender who is bearing the risk.

I suppose it's too much to expect a Tory dinosaur to be up to speed on the derivatives market, but perhaps someone should take the time to explain the current crisis in the US sub-prime mortgage market to Mr Redwood. The problems there have been caused not just by irresponsible (and unregulated) lending, but also by the practice of packaging the mortgages up into CLOs and selling them on to all manner of end investors. As a result, nobody can really be sure who is bearing the risk -- not even John Redwood.

Get the truck out of here!

I've been doing a lot of long-distance driving recently, at least by my standards. It's quite clear that the style of motorway driving in the UK has changed for the worse -- the European-style discipline that used to see most drivers move back to the inside lane after overtaking has largely given way to a more American-style practice of avoiding the inside lane at all costs, as if it was riddled with landmines. As a result it can often be almost impossible to avoid passing people on the inside, as they chug along 20 miles below the limit in heavy traffic in the middle lane, while leaving the inside lane completely clear.

I'm not sure whether this problem can be solved, especially with the ludicrous Clarkson known to boast that he never uses the inside lane. However, I do think something can and should be done about the needless congestion caused by trucks. Most of these vehicles are now fitted with regulators to stop them exceeding about 56 mph. However, this doesn't seem to deter their drivers from trying to pass other trucks if they are moving at even a slightly slower speed, which inevitably seems to result in two lanes being blocked as the trucks move side-by-side up a hill. In the worst example I saw of this recently, I and dozens of other drivers were stuck behind two trucks for almost ten miles on a two-lane stretch of the A1 before one of them finally managed to get ahead of the other.

The solution is clearly to ban trucks from leaving the inside lane, at least on two-lane motorways. The truckers might not like it, but a precedent already exists: such a ban already exists in the Netherlands. It would cost next to nothing to implement and would surely make a big dent in traffic congestion -- especially if it was also applied to caravans!

Sweating the assets

I used to think that failing to maintain things was a public sector problem. Everywhere I have lived, Government offices have been tackier than the glass-and-marble palaces of the private sector. Even newer public buildings seem to get ragged around the edges in next to no time. And compare your local NHS hospital with the nearest BUPA clinic.

However, I may be forced to change my interpretation of this phenomenon. Driving around this morning, I found myself listening to a vaguely nauseating discussion on rat infestations. There was a homeowner from Luton, a member of Luton town council, a representative of (privately-owned) Thames Water, and a pest control expert. The homeowner complained that nobody was fixing the rat infestation problems in her area, and the councillor and Thames Water guy took turns blaming each other for that. The latter was happy to hide behind the fact that the local authority had the ultimate responsibility for pest control, and kept saying that rats didn't actually live in the sewers.

Then the pest control guy stepped in, and said that there had been a big increase in the rat population over the past ten years. His group had done some research and found that one of the main causes was...privatisation of the water companies. Apparently when these companies were publicly-owned, they placed rat bait in "hot spots" in the sewers twice a year as a matter of course. Thames Water's approach is only to place bait when an actual rat problem is identified, and then only after a householder has complained to the local authority and the latter has notified Thames Water.

It's hard to believe that the public health authorities have had much input into Thames Water's "maintenance" practices. Anyone who's ever had a rat problem will know that prevention is better and easier than cure. That, of course, goes for maintenance generally: if Thames Water takes the same approach to the upkeep of its vehicles, I'm going to be giving them a wide berth in future.

Moving on to BAA -- not much of a leap, if recent stories are anything to go by -- it's starting to become clear that the main way that Ferrovial, the new owners, plan to make money from the company is by cutting back on operating expenses in general and maintenance in particular. Heathrow has always been a bit of a pit, with even the relatively new Terminal 4 fraying badly -- you don't want to be a non-UK passport holder trying to get through immigration there at peak time. (A couple of years ago I came in from Amsterdam with an Aussie colleague. Seeing the size of the line, I left him to fend for himself and headed for the office. I took the train to Paddington, then the tube to Moorgate, waited for a coffee at Starbucks and went to the office. I called hin as soon as I got to my desk -- and he was still in the immigration queue!)

This way of making money is called "sweating the asset", and it's a favoured approach in all privatisations. Fans of involving the the private sector in the provision of public services see it as an essential part of the more "efficient" private approach. Within reason it may well be, but BAA is not the first private owner, and won't be the last, to take it to an unwarranted extreme. (Amazingly, BAA is also asking that the performance criteria built into its contract be suspended when Terminal 5 opens next year. In effect it's saying in advance that it doesn't think it can manage the job).

I now think that what encourages lack of maintenance is not public ownership but monopoly. Thames Water and BAA face no real competition so they feel they can scrimp on things like service and maintenance, at least until somebody squeals. It ought to be easy to fix this at BAA -- take away the monopoly, which seems increasingly likely to happen. It's harder to see an easy way of setting it right at Thames Water.

I haven't flown through Heathrow in over a year but I have to do so next month. I'm really looking forward to it -- wonder if I'll see any rats.

Foot and mouth: leasons learned?

My first reaction to the news that the latest UK foot and mouth disease outbreak may have begun in a lab making vaccines was: why do we even have a lab making foot and mouth vaccine here? Farmers and the rural bureaucracy have always been fiercely opposed to the use of vaccines in controlling the disease. That's why hundreds of thousands of healthy animals were thrown onto monstrous funeral pyres during the last outbreak, in 2001.

But I may be wrong. Politicians are always fond of saying that "lessons will be learned" when things go awry. Usually they're not, but it does seem as if the handling of this latest outbreak is a lot smarter than it was in 2001 (and there's been no bogus emotional gurning from Tony Blair, either). The movement restrictions have been imposed much faster, and the burning of animals in open fields has given way to a more private incineration. Perhaps most important, it now seems that there is a greater likelihood that vaccines will be employed if, God forbid, the current outbreak becomes much larger.

Foot and mouth is not a killer disease for mature animals, but it debilitates them badly and drastically reduces their production of milk and meat. It's endemic in many parts of the world (such as South America), and vaccines are widely used there to control its spread. Nobody objects to eating meat from these herds, and it is freely imported into the UK. For domestic herds, however, it seems there has always been a presumption that meat from vaccinated animals should not enter the human food chain. This has led directly to the use of incineration as a method of controlling foot and mouth: if you can't inoculate your animals and you can't move them around because of fears of spreading the disease, it's better to slaughter them so they don't eat all of your feed.

The images of burning animals from the last outbreak, combined with the growing realisation that vaccination is an acceptable course of action, seem to have convinced public opinion that mass incineration simply cannot be permitted this time. Some farmers may object, but frankly their spotty track record in controlling the disease does not give them the right to dictate how it should be controlled.

One last thought: during the 2001 outbreak, Tony Blair was eventually compelled to bring in the Army to manage the fight against the disease. Gordon Brown (and the rest of us) should be hoping that the rapid response to the current outbreak will ensure he doesn't need to do the same. Given the ongoing commitment of troops to Iraq and Afghanistan, it's not clear how the Army would be able to respond.

The dyslexia of Herman Hesse

Sunday's Times Culture section had a review of a new CD by.....Stefan Wolpe.