9 May 2013 by Pelle Neroth
In the local elections in England on 2 May, they achieved nearly a quarter of the vote, If they achieved anything like that figure on the much higher turnout of the general election in 2015 it would obviously revolutionise British politics. Michael Heseltine dismissed it as a mid term protest vote. The old Tory bruiser said protesters used to exercise their protest vote through the LibDems but, as the party was now in government, UKIP became the beneficiary instead. The Tories are obviously running scared, just as anti elitist parties across Europe are taking heart
The main theme that resonated with voters was mass immigration, not euroscepticism, which came a bit further down the list. In a sense, though,the issues are conjoined, in that EU member states are obliged to let any EU citizen come and settle in their country with a minimum of bureaucratic hassle. Half a million Poles took the chance to come to England. A large number of Romanians may be on their way. Southern England now has a population density higher than the Netherlands.
The Ukippers' fortunes have waxed and waned in my time in Brussels are clearly waxing again. One early casualty of the system was their MEP Robert Kilroy Silk, the daytme television personality, who seemed to set out to prove that daytime television was a good training ground for demagoguery. A number of fresh faced Ukippers got embroiled in scandals involving expenses. It may be that everyone is at it, only continentals finesse it better.
A satirical magazine associated with UKIP called the Sprout was the most read and also the most hated publication in the European parliament. It saw itself as the Private Eye of Brussels. It did not, you may surmise, did get any grants from the European commission. It was a forum where British MEPs from all parties backstabbed each other and exposed the system in anonymous contributions. Now defunct, it was a welcome break from the incessant political correctness of Bruusels, and sometimes scored real hits, but I don't know if its humour travelled well.
In the same way, party leader Nigel Farage, the saloon bar former City trader with colourful socks and sharply amusing banter, is one of the big draws for UKIP. He is the kind of Englishman Europeans simply don't understand. There they are, these earnest German system builders, inviting ridicule with their legislation. Farage operates in the traditions of no nonsense English popular liberty, suspicious of waffly ideals.
He thinks the European parliament should operate like the House of Commons. At least his idea of how the House of Commons should operate. The overwhelming dominance of the English language in the EU institutions since the mid nineties has helped his cause. To command the lingua franca of Europe is a huge advantage in arguments and confrontations.
It is difficult to muster devastating put downs in English if your first language is not English. Like Helmut Kohl with Margaret Thatcher, I suspect some German MEPs seek solace in cream cakes.
-------------------------
Pelle Neroth -- EU correspondent
The Games celebrated Brunel, but Europe has the railway industry
2 August 2012 by Pelle Neroth
One person who played an important role in all this was surely Lord Weinstock, who died 10 years ago this week.
Now a bit forgotten, he was Britain's top industrialist for decades, the top figure in the UK electronics industry until 1996. Born into a Jewish family in 1924, Arnold Weinstock started out working as an estate agent, then got a job with Radio and Allied which manufactured televisions and radios. This company merged with the General Electric Company (GEC) in 1963, and Weinstock soon became GEC's managing director. A series of further mergers were carried out with Associated Electrical Industries and English Electric, which incorporated some of the classic names of British engineering such as Hawthorns, Marconi, Metropolitan Vickers, and Ruston and Hornsby.
Good years
Mergers don't always work but this large holding pen of British engineering worked well. Profits were achieved by careful cost control and a number of rationalisations. Weinstock played steady-as-she goes. While unpopular with some for staying away from innovative sectors, he closely looked at financial reports and the company's large cash pile saw it through recessions. He had no time for synergies, and allowed companies to run themselves.
Pedantry was legendary. He could phone relatively lowly staff late at night if he discovered an anomaly in the accounts. While other aspects of British manufacturing fell into decline, GEC's profits increased fivefold between 1970 and 1977, and by 1984 GEC was Britain's third largest private company. He bought the remnants of the British shipbuilding industry. Following further takeovers of British engineering names such as Plessey, in the late 1980s, he launched a number of international joint ventures to make GEC less targetable for hostile takeovers.
There were three joint ventures. A telecoms equipment venture in which Siemens had a 40% stake, a joint venture with the French company Alsthom for power engineering and locomotives. And a deal with America's General Electric for consumer goods.
These moves also seemed to work out for Lord Weinstock. GEC Alsthom became a powerhouse in train manufacture, making the coaches and engines for both Eurostar and high speed lines in Korea. The joint venture also won the prestigious tender to build the Amtrak railway linking the Boston, New York and Washington corridor.
Decline
On this positive trend, Weinstock retired in 1996. But then it all went wrong. His successor, Lord Simpson, a Scottish accountant and former British Leyland executive, thought GEC was too diversified so he divested the company of its defence electronics division and sold off the shares in GEC Alsthom to concentrate on telecoms services under the new name Marconi telecommunications.
It was the beginning of the Blair era and, as one admiring newspaper profile put it: "Quite simply Simpson wants to transform the company he inherited from Arnold Weinstock, the epitome of old-style British engineering excellence, into a youthful creative firm at the cutting edge of the new knowledge-based or weightless economy that Tony Blair wants to promote." Simpson told another paper, the Financial Times, "GEC had become a slow moving, eurocentric joint venture. We had to change the way the company was operating. We had to look to high growth sectors." Simpson got rid of the old board and a what was described as a"new, dynamic, globally oriented team" was brought in.
Using the huge cash pile from all the various sell offs, Lord Simpson bought two American telecoms companies in order to take advantage of the dot com mania that had overcome American and global investors.. At first it went well. Share prices tripled between 1999 - 2000. But they soon fell back again as investors everywhere concluded that telecoms shares were overpriced. In Marconi's case the fall was particularly drastic. The company's market value fell from £35bn to £150m. People said that Marconi had invested in the companies the Americans themselves had rejected.
Thousands of people lost their jobs. The company hobbled along until 2005 when BT, one of GECs' biggest customers, cut Marconi out of a contract to renew its network, giving the orders to non-British firms instead. Shortly afterward most of what remained of Marconi was bought by Sweden's Ericsson, the tiny rest renamed Telent. It was a disaster for Weinstock's legacy, but not the only one.
Alsthom
What of the rail equipment and power engineering division that Lord Simpson sold off and ended up as the French-dominated Alstom? While Weinstock had allowed considerable local autonomy to the various divisions, reports in the local Midlands press suggested resentment when French management took over.
In 2003, Alstom (as Alsthom had been renamed) closed down the trainmaking division in Birmingham, leaving only some engineering services in the UK, while keeping it going in France. Alstom itself was in trouble in 2003-2004 - but was prevented from being taken over by Siemens when France blocked the takeover bid in contravention of the EU rules. Alstom was then rescued by a dubious state aid injection by Nicholas Sarkozy, then French finance minister. State subsidies are supposed to be illegal under EU law.
Instead of forcing the Siemens deal, the commission greenlighted the French subsidy provided made some compromises were made. Still, Alstom was not broken up, and the German chancellor Gerhard Schroeder was left fuming. Adding to German irritations was the fact that the takeover of the mainly German pharma giant Aventis by French pharma company Sanofi-Synthelabo had just gone through.
The issue eventually went away and the French might argue their dodgy cash injection has been good for Alstom, which is growing again, with 85,000 employees and profits of 462 million euros last year. Britain, meanwhile, has no domestic train maker left on its soil - just a subsidiary of the Canadian owned Bombardier in Derby, and even that is failing.
Romney and Britain
A consequence of all this is that you have Mitt Romney, the Republican US presidential candidate, writing in his book about America's future, No Apology, that Britain is a small island country with small houses and, with a few exceptions, "doesn't make things that people in the rest of the world want to buy". I am surprised this snarky aside in his book did not get more attention in the British press this week after his publicised remarks questioning whether Britain was really capable of organising the Olympics.
Romney exaggerates but there is a grain of truth. The prejudiced view of the average educated European is that Britain barely has any industry any more, and that the alternative gamble, financial services, has no future.
What are the lessons of the debacle of GEC? It was a spectacular management failure to chase the "tulip mania" of the 1990s dotcom boom, but, in much else, Lord Simpson's actions were all in accordance of the official philosophy of the time supported by Labour. Manufacturing was dead, the future was in services. Debt financing was good, the more deregulation the better.
Single market
But there was also a failure to enforce the European single market - essentially a British idea - a failure to support the commission in its enforcement battle against France over Alstom. The commission was stuffed with pro Brits at the time, yet France was allowed to exploit the single market for its benefit while not opening up its own. This uneven playing field has been of immense benefit to the French. EDF uses its protected home market to generate huge cash piles to buy up the electricity business in the UK market, which in contrast to the French one is completely open.
Britain should have been tougher about forcing France to play by the single market rules. Nabbing the Olympics for London at the Olympic committee meeting in Singapore seven years ago over the favourite, Paris, was a great diplomatic victory for Blair. But the battle for Britain's prosperity takes place every day of the week in Brussels, and the Brits have to make sure they are winning those battles too.
-------------------------
Pelle Neroth -- EU correspondent
EU agrees to set up cyber crime centre
20 June 2012 by Pelle Neroth
Another example: Two years ago cyber thieves stole 30 million euros' worth of carbon allowances from the European carbon trading exchange, forcing trading to cease for some days on order of the European Commission. A third recent incident: the social and business networking website LinkedIn had six million user passwords leaked online after users were targeted by fake emails asking them to confirm their login details in a so called "phishing attack" by hackers.
Cyber crime is a broad church, including denial of service attacks, attacks on critical infrastructures (like the Stuxnet worm), botnets which marshal thousands of innocent owners' computers to do cyber criminals' work, malware, online frauds, and child pornography picture trading. It is a costly problem - £27bn a year just in the UK, according to a 2011 Home Office study and it is growing threat as more and more services like taxes and benefits payments migrate online.
It is also under reported. A lot of scams affect millions of individuals but only small sums per individual, so many feel it's not worth going to the police about. And companies have their own reasons. Their incentives are misaligned. They are unwilling to disclose problems for fear of losing customers as their reputations would take a hit for being insecure. Many do short term fixes on their systems and price fraud into their business model. And keep very quiet about breaches.
Law enforcement agencies are arguably understaffed, though the situation is getting better. Europol, the EU policing agency, has just 7 out of 457 staff dealing with cybercrime from its shiny new offices in the Hague, according to a Commission-funded report. CEPOL, the UK based European police college, does not have cybercrime experts among its 42 staff.
Law enforcement agencies are put off by jurisdictional failures from covering crimes of an essentially global and dispersed nature. Communicating by instant messenger or through bulletin boards websites, malware writers, malware distributors, and credit card abusers are all different people who may never meet and are located in different countries. Clear up rates are low.
A dozen EU countries have separately adopted national cybercrime strategies, among them the UK. The cybercrime unit will be an important part of the new National Crime Agency launching next year, according to the UK's "Mr Cyber", cabinet office minister Francis Maude. But cybercrime is one of those areas crying out for international coordination and several initiatives are afoot. NATO is developing its own strategy, and has its own cyber warfare centre in Tallinn, Estonia. The EU itself at the end of May agreed to set up a cybercrime centre (ECCC) at Europol, consisting of 55 persons that will help coordinate national efforts. The European Commission will also be proposing new legislation in the third quarter of 2012 making notification of security breaches compulsory for companies in the energy, transport, banking and financial sectors. The requirement to report could worsen the reputational damage to companies that have experienced security breaches. So rather than do that they will spend more on security to lower their vulnerability, officials say. Telecoms and internet firms are already subject to reporting obligations.
You have to ask whether the ECCC is an effective solution, though. According to the Commission's own estimates, 8 trillion dollars a year changes hands through e-commerce. The Commission-funded feasibility study* proposes a three million euro budget for the ECCC for its first year of operation. That is not a lot when you look at the science prizes of up to one billion the EU is handing out for basic research projects - or compared to the $57bn budget for the US Department of Homeland Security.
* http://tinyurl.com/cp9hjl7
-------------------------
Pelle Neroth -- EU correspondent
EU tightens electronic privacy rules
17 May 2011 by Pelle Neroth
On May 26, the new European Privacy directive will come into force. It concerns the use of internet cookies, the bits of software installed on PCs by websites that wish to target advertising or remember user preferences.
The new rules will say that the user's explicit consent will be needed if website want to store a cookie on an individual's device. Under the old rules website operators only needed to tell users they were using cookies and offer them the right to opt put if they wanted to. In many cases, this information was buried away in obscure corners of their websites, in the small print. Under the new rules business could only use cookies if the PC user was specifically asked.
The implications for our use of the web could be important. The good bit is that individual computer users will be in greater charge of their privacy. On the other hand, it could mean users clicking through an endless series of windows asking to accept an endless series of cookies, disrupting the surfing experience.
And there is another snag. Most people, when asked "do you want to accept this cookie?" will understandably say no. Advertisers will then lack access to people's surfing habits, which is a good thing of course from the point of view of privacy.
But many free websites depend on the cash that these adverts generate. When adverts cannot be targeted to users depending on their habits, these free websites will be deprived of a course of useful, perhaps essential, income.
In other privacy related developments, the EU will be looking at privacy breaches in the massively fast growing area of smart tags. They will take a closer look at how tags could infringe citizens' privacy by establishing tests before they are allowed to be put on the market.
A third new EU activity concerns locational data about mobile phone users, which will be subject to strict privacy protections. The proposal, currently being worked out, will not please companies like Apple and Google, which collect huge amounts of locational data from mobile phone surfers.
The companies say the information is held anonymously and is deleted after a short time. But it is an area where massive profits could be envisaged. The companies could potentially use the data to publish location-specific advertising to the user's smartphone, depending on where he is located.
The mobile phone advertising market is expected to be worth billions of euros over the next few years, and location based mobile advertising stands out for its lucrative potential.
More details will be published on this blog where they need to be fleshed out, but the EU - or rather commissioner Viviane Reding, who shows the populist touch - hopes that all this activity puts the bureaucracy at the global forefront in the important field of privacy protection.
-------------------------
Pelle Neroth -- EU correspondent
Cloud looms on European horizon
24 February 2011 by Pelle Neroth
Then, in the 2000s, many individuals had experience with Google Documents, or the ever growing storage capacities offered by Yahoo or Google mail. But this is really minor. In the future, big companies could be running their operations entirely in cyberspace, linked to the user via an internet connection, storing amounts of data to be manipulated with online applications in ways that earlier generations could only dream about. The advantages are numerous. Small companies will be especially favoured, according to Cloud optimists.
There are thousands of servers out there with spare computer power, and their computing power can be bought to do company IT work, as much or as little as you need, run on virtual machines created at a moment's notice in data centres around the world. So there is no need to invest in expensive IT structure up front; so start ups, especially starts ups in developing countries, could have a huge barrier to business entry removed.
The difficulty of working with different versions of documents whereby people email working versions to each other will disappear: everyone works on the same document, stored online centrally, so it is no problem wherever you are. The processing power of these spare computers - whether they belong to Google, Amazon, or gaming companies with spare capacity during developed world sleeping hours - can crunch numbers that even hospital IT departments cannot cope with: so more and better radiology diagnoses could take place; better computer aided engineering is another future possibility.
Enthusiasts claim it will flatten the world, and only talent, and ideas, will matter. You could run a company from a laptop.
The British government has talked of creating a G Cloud, the G standing for Government, doing away with the profusion of IT departments and proprietary software, storing all its documents online, so that en employee of the cabinet office will be able to stroll over to the Department of Work and Pensions and access his documents from any terminal there; and it is going hand in hand with the government's push for citizens to do everything online, from filing for VAT, to applying for pensions and benefits. (You can already do your tax return, but you will be able to do so much more.)
And the European Commission is proposing a strategy this spring that will enhance interoperability between different E-Government services in member states. Visit a doctor in Spain and he will be able to read your medical records from the NHS online.
While Microsoft calls the Cloud the potential "Billion Dollar Computer" at every businessman's fingertips, Neelie Kroes, the EU digital agenda commissioner, has pledged that Europe build the world's most advanced system of government services through the internet.
Microsoft, in a recent seminar in Brussels, added that European businesses, facing few venture capital sources, could benefit to a greater extent from the scalable buy-only-what you need services that the cloud offers. Could Albania become the next IT hub? Why not?
But, along with all these upsides, there are downsides too. Integrity of data, privacy, and reliability of service. If your data is stored on servers in hostile countries, who is to say it won't be decrypted, or be vulnerable to cyber spies, whether the health information of millions of Europeans or the latest top secret piece of automotive engineering? Continuity of service is a life or death matter for institutions like hospitals.
So the commission is thinking of stitching together a strategy that will boost the trust EU members have for each other, so that at least this union of 500 million and many data centres can safely share capacity, even if it doesn't rely on the rest of the world.
ENISA, the European Information Security Agency, recently urged national governments and EU institutions to consider the possibility of setting up a 'European Governmental Cloud'. This would be a virtual space where consistent rules could be applied to legislation and security across countries.
The Canadians, after all, have had their spats with their close American allies about Canadian data stored on US servers, showing, perhaps, that the US takes a very strong sovereignty based approach to data.
On the other hand, the recent UK debate about the European Court of Human Rights has highlighted British scepticism about international judicial institutions. The US as a single jurisdiction under common laws will benefit when the Cloud takes off. Will Europeans put aside their differences, and learn to trust each other - can they trust each other? - when taking advantage of a technology that could revolutionise the way we run business?
-------------------------
Pelle Neroth -- EU correspondent
Cloud looms on European horizon
Then, in the 2000s, many individuals had experience with Google Documents, or the ever growing storage capacities offered by Yahoo or Google mail. But this is really minor. In the future, big companies could be running their operations entirely in cyberspace, linked to the user via an internet connection, storing amounts of data to be manipulated with online applications in ways that earlier generations could only dream about. The advantages are numerous. Small companies will be especially favoured, according to Cloud optimists.
There are thousands of servers out there with spare computer power, and their computing power can be bought to do company IT work, as much or as little as you need, run on virtual machines created at a moment's notice in data centres around the world. So there is no need to invest in expensive IT structure up front; so start ups, especially starts ups in developing countries, could have a huge barrier to business entry removed.
The difficulty of working with different versions of documents whereby people email working versions to each other will disappear: everyone works on the same document, stored online centrally, so it is no problem wherever you are. The processing power of these spare computers - whether they belong to Google, Amazon, or gaming companies with spare capacity during developed world sleeping hours - can crunch numbers that even hospital IT departments cannot cope with: so more and better radiology diagnoses could take place; better computer aided engineering is another future possibility.
Enthusiasts claim it will flatten the world, and only talent, and ideas, will matter. You could run a company from a laptop.
The British government has talked of creating a G Cloud, the G standing for Government, doing away with the profusion of IT departments and proprietary software, storing all its documents online, so that en employee of the cabinet office will be able to stroll over to the Department of Work and Pensions and access his documents from any terminal there; and it is going hand in hand with the government's push for citizens to do everything online, from filing for VAT, to applying for pensions and benefits. (You can already do your tax return, but you will be able to do so much more.)
And the European Commission is proposing a strategy this spring that will enhance interoperability between different E-Government services in member states. Visit a doctor in Spain and he will be able to read your medical records from the NHS online.
While Microsoft calls the Cloud the potential "Billion Dollar Computer" at every businessman's fingertips, Neelie Kroes, the EU digital agenda commissioner, has pledged that Europe build the world's most advanced system of government services through the internet.
Microsoft, in a recent seminar in Brussels, added that European businesses, facing few venture capital sources, could benefit to a greater extent from the scalable buy-only-what you need services that the cloud offers. Could Albania become the next IT hub? Why not?
But, along with all these upsides, there are downsides too. Integrity of data, privacy, and reliability of service. If your data is stored on servers in hostile countries, who is to say it won't be decrypted, or be vulnerable to cyber spies, whether the health information of millions of Europeans or the latest top secret piece of automotive engineering? Continuity of service is a life or death matter for institutions like hospitals.
So the commission is thinking of stitching together a strategy that will boost the trust EU members have for each other, so that at least this union of 500 million and many data centres can safely share capacity, even if it doesn't rely on the rest of the world.
ENISA, the European Information Security Agency, recently urged national governments and EU institutions to consider the possibility of setting up a 'European Governmental Cloud'. This would be a virtual space where consistent rules could be applied to legislation and security across countries.
The Canadians, after all, have had their spats with their close American allies about Canadian data stored on US servers, showing, perhaps, that the US takes a very strong sovereignty based approach to data.
On the other hand, the recent UK debate about the European Court of Human Rights has highlighted British scepticism about international judicial institutions. The US as a single jurisdiction under common laws will benefit when the Cloud takes off. Will Europeans put aside their differences, and learn to trust each other - can they trust each other? - when taking advantage of a technology that could revolutionise the way we run business?
-------------------------
Pelle Neroth -- EU correspondent
Euro-style recycling a key to security of rare metals
12 February 2011 by Pelle Neroth
There has been a tremendous explosion in the development of rare metals in the last 15 years, underpinning technology and economic growth. They are critical towards making future sustainable technologies work. The trouble is that, with Asia's rise, demand has exceeded supply, at least in the short term.
Dr Mike Pitts, of the Royal Society of Chemistry, has therefore provided a list of the "World's Most Endangered Elements", covering the entire periodic table, much as you have lists of endangered plants or animals. The most endangered chemical element? Helium is the only material "we are definitely going to lose at some point in the future," he told the Commons Technology Committee two weeks ago. He added:
"You can't create or destroy elements, but the way we are managing most elements is really bad, and we are dispersing them in the environment in a way that makes them harder and harder to recover. We know on a grand scale what we are doing with carbon. We are starting to wake up to how badly we are managing the nitrogen or influencing the natural nitrogen cycle, the phosphorus cycle and other minerals."
Developing new mines is one solution: but there are few easily accessible seams these days. It takes five to 15 years to develop a new mine before it's ready to produce, and the problem with new technologies is that their lifecycle far outstrips the pace at which new resources can be discovered.
Energy is also very important. Mining uses a lot of it, and fossil fuel prices are on the rise, which could price some technologies out of the market. The areas of the UK economy that are vulnerable include power generation, aerospace and defence. The staple base material in the engine compressors is nickel. Rare metals are also used in almost every consumer product you can think of. They are also used in wind turbines and solar panels. If there were no liquid helium, it would be hard to use MRI scanners.
What can governments do to help protect 'materials security'? Well, Britain's Geological Survey is one of the best of its kind, second only to the US - they are needed to understand the origin, distribution and future sources of rare minerals. They need to be funded to ensure that a steady flow of talented scientists joins the geologist profession. Another is to set a natural resource strategy, as the Japanese have done: they had a four pronged strategy. Stockpiling, committing cash to exploration and resource development offshore, looking towards alternatives and recycling.
Experts recommend the latter two for Europe.
Spending money on research could lead to, for instance, new non scarce solutions like polymers - easy to make - replacing rare iridium in the screens of televisions and mobile phones. There is a long lead time on this development. But even better would be to focus on recycling, and Europe is making some progress.
A few years ago, Brussels passed the WEEE, the Waste electrical
and electronic equipment directive. Local authorities and, principally, manufacturers, were given the requirement to secure the recycling of material they put to market.
The difficulties inherent in recycling are not to be underestimated, but inasmuch in that anyone is doing it, Dutch are particularly proficient at fulfilling ever upwards ratcheting recycling targets: Philips designs consumer products with rare minerals recovery in mind. For instance, when Philips manufactures a coffee maker or a fridge, it's built in a modular way, and their on board chips containing rare metals are very easy to take apart and recover. Instead of the material just being crunched together, making it much harder to separate later.
Philips has now set up nine different so-called cradle-to-cradle design teams, and British designers and engineers have been making study visits. The rewards are there: there is as much gold in one tonne of old computers as there is in 17 tonnes of gold ore. The constraints of a new, even tougher WEEE directive update currently passing through the European parliament ought to act as an creative inspiration to British product designers, the Commons was told by a representative of the UK design profession.
Waste management and conservation of rare resources are hugely important, surprisingly interesting subjects, and one to which can profitably return. Several experts said that it was in the UK's essential interest to work with Europe, not just in taking up best practice - as with Philips - but in sharing recycling facilities better- as well as sharing information, through pooling of advisory groups of geological expertise.
Also, the UK could more successfully operate through the EU's combined clout when working could keep the mineral stream open from unstable sources.
Even Cameron puts his euroscepticism aside when environmental matters are discussed; it is the area for which there is greatest public support for concerted Euro-action. And even patriots would scarcely argue the UK is the clean man of Europe.
-------------------------
Pelle Neroth -- EU correspondent
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