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PAC criticises Treasury over Queen's finances

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28th Jan 2014
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The Parliamentary Accounts Committee (PAC) criticised the Treasury’s financial management after revealing that the Queen’s Household ran up a deficit in 2012-13.

In its report on the Sovereign Grant this week, the committee identified several areas where the Royal Household and Treasury “failed” in their financial management and planning.

“The Queen has not been served well by the Household and by the Treasury, which is responsible for effective scrutiny of the Household’s financial planning and management,” said committee chair Margaret Hodge.

“We believe that The Treasury has a duty to be actively involved in reviewing the Household’s financial planning and management – and it has failed to do so.”

The report looked into the administration of the first year of the new Sovereign Grant arrangement, which replaced the old civil list in April 2012.

By collecting a system of different payments with one grant that is overseen by the Treasury and vetted by the National Audit Office, the sovereign grant had strengthened accountability, according to the report. But the increased scrutiny made life somewhat more challenging for the Queen's finance director, Sir Alan Reid, the former KPMG partner who now has the title of Keeper of the Private Purse and treasurer to the Queen.

The grant was worth £31m in 2012-13 and pays for the Queen’s programme of official duties and covers staff costs, palace maintenance and travel costs. The grant was supplemented by £11.6m of income, but the gross income of £42.6m was exceeded by expenditures of £44.9 m.

This meant Sir Alan had to draw down £2.3m from its £3.3m reserve fund, leaving a “historically low” £1m balance, the MPs found.

Planning and managing budgets for the longer term should be top of the Household’s list of priorities, according to the PAC, which questioned Sir Alan extensively last October about his cost controls, spending priorities and handling of the reserves.

The Royal Household’s reserves stood at a high of £35m in 2001, but  under a 10-year freeze on the civil list this was intended to be spent by the end of 2010.

“The reserve was not really meant to be there,” the accountant told MPs.

“Longer term, we would like to build up a modest reserve, but as long as we have a property backlog, we do not anticipate building up a reserve of more than about 5% of the annual level of the grant,” he said.

This proved to be another area that drew criticism from the MPs.

In March 2012, around 40% of the royal estate was deemed below acceptable condition. That situation is likely to be worse, Hodge said, due to a growing maintenance backlog.

Her solution was for the Royal Household to generate more income and reduce costs to “do more with less” - a demand that will be familiar to many finance managers.

Sir Alan Reid had told the MPs the Royal Household had cut its net costs by 16% since 2007-8,  11% of which was done by increasing income and 5% by reducing expenditure.

But Hodge said it could do more to cut costs.

The PAC made three recommendations for the Household and Treasury to step up to the mark in its eyes in handling finances more efficiently:

  • It should ensure “sufficient commercial expertise”was in place to make the most of opportunities for both increasing income and reducing costs
  • It should speed up its property maintenance plan and produce an overall estimate of the cost of repairs needed to bring the estate back to target condition
  • It should rebuild sufficient reserves to cover unforeseen contingencies.

When questioned by the PAC, Reid said last year’s increased spending was partly due to the Queen’s diamond jubilee.

He defended the handling of accounts, pointing to savings that included three years of staff pay control and increased income generation by 54% in five years has allowed them to function.

Treasury officer of accounts Paula Diggle also answered some of the MPs’ criticisms, explaining that she and the Royal Household discussed the budget before the year started and reviewed progress against management accounts several times during the course of the year.

“The agreed changes to the budget have been switching allocations such as using savings on the travel budget to enable more spending on property maintenance,” she wrote to the committee.

“They are so modest because the relationship I operate with the household is one of no surprises, so that business may proceed efficiently. Among the areas we have also debated, often more than once, are the cost of the Royal Family’s visits programme, numbers of staff, plans for repairs and renovations, reserves policy and so on.”

Replies (78)

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Replying to Ruddles:
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By chatman
06th Feb 2014 10:41

Scraping the barrel of monarchism

<a href="mailto:[email protected]">[email protected]</a> wrote:
I assume you are wanting to get rid of every person in the country whose forefathers come from a foreign land?

Assume what you want. We are merely asking you why we should leave our own country, and questioning why you think a bunch of Germans constitute our heritage.

<a href="mailto:[email protected]">[email protected]</a> wrote:
Is that not racism?

Since you ask, no it is not. Racism is discrimination on the basis of race. Germans are not a different race to us.

<a href="mailto:[email protected]">[email protected]</a> wrote:
I think it’s you both woke up and realised that we are here. This is the 21st century, this is how it is, get on with it.

Not sure how this is supposed to contribute to your argument, but feel free to enlighten us.

<a href="mailto:[email protected]">[email protected]</a> wrote:
Without the Monarchy you would have far less tourism

This claim has been completely refuted earlier on in the thread. You really need to read the thread if you want to make meaningful comments.

<a href="mailto:[email protected]">[email protected]</a> wrote:
the Monarchy and it costs us £31 million. In comparison, France spend £90 million on their president.

The monarchy costs us £202.4m per annum, 112 times as much as the Irish presidency. How's that for a comparison?

<a href="mailto:[email protected]">[email protected]</a> wrote:
How many people travel the globe to visit him??

How many travel (the globe?) to visit our family of royal parasites? None that we know of.

So, still no unrefuted reasons to support the monarchy. Assuming you would not cling to a belief which you cannot support, may I offer you my congratulations on your conversion to republicanism.

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By ShirleyM
06th Feb 2014 10:22

Garbage

We are not against foreigners. We are against monarchy, and personally, I am against all hereditary titles. I would rather recognise merit in an individual, not his/her forebears.

So you think tourism would stop if we didn't have a Queen? Absolute garbage! It would probably increase, as those few tourists who are interested in monarchy could view the whole of Buckingham Palace for the whole of the year, etc.

EDIT: cost? We have the most expensive royal family in the whole world. There is a lot of expenditure NOT included in the £31M. There are so many royals, and the number increases all the time. Who cares what France spends on their president? The important part is that they can get rid of him, and appoint a new one if they want to!  He doesn't have a passport to the presidency for life, as do our Monarchy? When we get a new King/Queen who is bone idle, spouts off about things they know nothing about, and starts mixing it with politicians and foreign dignitaries, what do we do then? Pay them to stay at home?

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By User deleted
06th Feb 2014 11:07

Racism - nationality or ethnic or national origins ...

@chatman - '.. Racism is discrimination on the basis of race. Germans are not a different race to us ..'

Under the Race Relations Act, it is unlawful for a person to discriminate on racial grounds against another person. The Act defines racial grounds as including race, colour, nationality or ethnic or national origins.

So it would seem as though '.. nationality or ethnic or national origins ..' are valid criteria

 

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Replying to lionofludesch:
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By chatman
06th Feb 2014 11:39

Racsim cannot exclude consideration of race

JC wrote:
@chatman - '.. Racism is discrimination on the basis of race. Germans are not a different race to us ..'

Under the Race Relations Act, it is unlawful for a person to discriminate on racial grounds against another person. The Act defines racial grounds as including race, colour, nationality or ethnic or national origins.

So it would seem as though '.. nationality or ethnic or national origins ..' are valid criteria

Legal definitions are not dictionary definitions, we are talking about the English language here, and I could not find a dictionary definition that excludes race, so no national origin is not a valid criteria in this context, unless you are considering prosecuting me.

In any case, if this is the best that can be done to divert attention from the fact that no argument on this thread in favour of the monarchy has withstood examination, I am not impressed.

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By User deleted
06th Feb 2014 12:35

Just googled a couple of topics ...

'race' and 'benefits of monarchy'

Here are the results

http://dictionary.cambridge.org/dictionary/british/race_2 -

'.. a group of people who share the same language, history, characteristics, etc.: The British are an island race ..' - but frankly it's all semantics to score points. The acid test is to put up a defence of '.. we are talking about the English language here ...' if prosecuted and see whether it is accepted

http://www.monarchist.org.uk/constitutional-monarchy.html -

something to get your teeth into - especially the para. commencing '.. More frequently however, monarchical institutions have played crucial roles in thwarting coups d'etat efforts ..'

 

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Replying to Ruddles:
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By chatman
06th Feb 2014 13:20

Monarchies do not defend democracy

I note that the same reference also defines race as referring to people with similar physical characteristics.

JC wrote:
The acid test is to put up a defence of '.. we are talking about the English language here ...' if prosecuted and see whether it is accepted

Well it would be the acid test if, as I have already said, you were going to prosecute me, but that is an entirely different context exactly because it really is the English language and not the law we are talking about, but I agree this digression into the legal use of the word racism does seem to be semantics to score points. It does nothing to further the cause of the monarchists.

JC wrote:
More frequently however, monarchical institutions have played crucial roles in thwarting coups d'etat efforts
..'

I reject that claim. First of all, it could be argued that monarchs have no interest in changing the status quo which allows them their privileges. Secondly, there are three examples given by this monarchist web site: Grenada, Spain and Thailand. I don't know anything about Thailand, but

Grenada was invaded by the US. It is hard to see how any monarchy had any effect on that, andThe Spanish King owed his position of power to the brutal military dictator Franco, who had overthrown the republican government (with the support of the monarchist UK). According to Der Spiegel http://www.wsws.org/en/articles/2012/02/king-f14.html King Juan Carlos was rather regretful about how things had turned out after the military relinquished power and was sympathetic to the aims of the coup plotters, but feared that a return to military dictatorship would return Spain to the international isolation it had suffered under Franco. His opposition , therefore, had nothing to do with his being a monarch, and everything to do with him seeing what side his bread was buttered. Anyone with non-military power would have opposed the coup (and did) as he had done.

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By ShirleyM
06th Feb 2014 12:44

The opposition to Monarchy

Here is the opposite view, that a democracy is not best served by a Monarchy:

http://www.republic.org.uk/

EDIT: I particularly agree with this comment: 

What our members say...

I believe in human rights, not birth rights. An instution that confers power and privilege based on the family they were born into has no place in a just and equal society.

Jenny Kemp

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By mbdx7ja2
06th Feb 2014 12:55

The cost arguments here are quite funny

I presume that the comparisons for overseas presidents (France and Ireland appear popular) include the costs still being paid for all the former presidents in the form of pensions, security etc.?  After all, this country is still forking out £millions in security costs for Tony as a former PM despite the fact he is a multi-millionaire with a pension the rest of us can only dream about.

It's all very well saying you can vote them out (apart from the fact that politics is a pretty rigged playing field), but you have to pay for them for the rest of their lives in any event.

And as for arguments pro/con - I think the best one is simply that those against are guilty of abject hatred against other human beings.  I presume, as you all truly despise all inherited wealth and privilege that the republicans on here have made wills leaving every single penny of their estate either to charity or the government?  If not, you're just hypocrites...

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Replying to Jack the Lad:
By ShirleyM
06th Feb 2014 13:20

Eh?

mbdx7ja2 wrote:

I presume that the comparisons for overseas presidents (France and Ireland appear popular) include the costs still being paid for all the former presidents in the form of pensions, security etc.?  After all, this country is still forking out £millions in security costs for Tony as a former PM despite the fact he is a multi-millionaire with a pension the rest of us can only dream about.

It's all very well saying you can vote them out (apart from the fact that politics is a pretty rigged playing field), but you have to pay for them for the rest of their lives in any event.

And as for arguments pro/con - I think the best one is simply that those against are guilty of abject hatred against other human beings.  I presume, as you all truly despise all inherited wealth and privilege that the republicans on here have made wills leaving every single penny of their estate either to charity or the government?  If not, you're just hypocrites...

There's nothing like adding 2 + 2, and getting 5,000! You make an awful lot of incorrect assumptions. Tony Blair will eventually die, and his pension & security will die with him. We won't be supporting his heir, and his heir won't automatically get to be PM!

Our current Queen has been an exceptional person. The next one (whoever they may be) will not be. She has set the bar very high, and anyone following will be a big disappointment. I think she will be the last Monarch.

I am not guilty of abject hatred against other human beings!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Your offensive comments, and name calling, are a very good sign that you don't have a genuine argument to put forward, so you have to make one up. :)

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Replying to Tax Dragon:
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By mbdx7ja2
10th Feb 2014 13:00

@ Shirely 6 Feb 13:20

ShirleyM wrote:

There's nothing like adding 2 + 2, and getting 5,000! You make an awful lot of incorrect assumptions. Tony Blair will eventually die, and his pension & security will die with him. We won't be supporting his heir, and his heir won't automatically get to be PM!

I think you are confused - Tony Blair's heir to the position of PM was Gordon Brown, and his was David Cameron, and his will be....ad nauseam.  His biological heir may not get to be PM - but somebody always does so he very certainly has an heir!  My argument was about cost of the position, and the apparent incorrect assumption in the thread that Presidents are cheap.  We will certainly be paying for all of these former statesmen, until they die.  

ShirleyM wrote:

I am not guilty of abject hatred against other human beings!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Your offensive comments, and name calling, are a very good sign that you don't have a genuine argument to put forward, so you have to make one up. :)

Typical ad hom attack - you don't like my comments, so attack me.  "Offensive comments...name calling..."  I don't think my post really stepped up to the level of vitriol displayed by others - in fact - where do I "name call" at all?  

I note you do not address my point on your legacy - or do you only disapprove of inherited wealth for those who are not related to you? (which I do not see how it is a "made-up" argument - it is entirely and directly applicable to the discussion at hand and the comments made by several people which are mostly along the lines of "I disapprove of all inherited wealth").

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Replying to Jack the Lad:
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By chatman
10th Feb 2014 18:19

Unilateral Declaration of Socialism

mbdx7ja2 wrote:
those against are guilty of abject hatred against other human beings

Isn't that ad hominem?

mbdx7ja2 wrote:
I presume, as you all truly despise all inherited wealth and privilege that the republicans on here have made wills leaving every single penny of their estate either to charity or the government?  If not, you're just hypocrites...

That would be a sort of unilateral declaration of Socialism, which you can't do. I would be quite happy to give my heirs nothing if I knew knew that a few of their peers were not going to be born owning all the property, and the rest of the wealth. Unfortunately, I know that most of the wealth, including all the of the country is already going to be owned by other people when they are born, so there is not a level playing field to start with. If there was, I would be quite happy to donate everything to charity or the government. I would definitely vote for 100% inheritance tax.

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By listerramjet
07th Feb 2014 14:07

topic?

The PAC report referred to the cost of running the properties.  Talk of constitutional change is hardly relevant.  But as we live in a democracy with centuries of tradition, then the proper route for constitutional change is parliament. Debate on a blog (even the one-sided, blinkered debate that seems prevalent here) does not pass the democratic test.

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By User deleted
07th Feb 2014 15:14

No debate - simply a soap-box ...

@listerramjet - you are probably quite right. Also one would guess that a great many members are rather ambivalent, which does open the door to those with strong views. We see it time and again on this forum where overbearing views tend to silence everyone else and kill reasonable debate - after all everyones opinion is valid, although one may not agree

Postings are used as a weapon rather than an exchange of views and of course there is always the nuclear option if things are not going ones way - just put up a number of rude posts until the entire thread is pulled by Admin - job done!

It is fairly easy to spot those involved because when their 'chosen subject' comes up there is a never ending stream of almost instant replies to anyone making a comment - along with the mutual admiration society of reciprocal 'thanks'

Under these circumstances is it any wonder that no-one really wants to get involved or engage in this type of debate irrespective of their views because in the past things have ended in tears with accusations flying in every direction - for instance what happened to the likes of firstTab or even the Welsh chap? (Can’t remember his moniker - dragon?); both of whom were targeted in the past.

All quite disappointing because contributors just leave or end up being banned because of the weight of opinion - which is really everyone’s loss of diversity in people’s opinions

Fully expect this post to be ‘flamed’, but that’s life and will simply demonstrate what I am talking about!
 

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By carnmores
07th Feb 2014 16:24

Fox hunting

BRING IT BACK   i spend as much time as i can in  countryside and tho i have and will never hunt i feel other poeple have the right too.

 

did i say Chatman has issues well so does Shirley M......

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By ShirleyM
07th Feb 2014 18:40

Most of the comments are close to the original topic

The PAC report referred to the cost of running the properties.  Talk of constitutional change is hardly relevant.  But as we live in a democracy with centuries of tradition, then the proper route for constitutional change is parliament. Debate on a blog (even the one-sided, blinkered debate that seems prevalent here) does not pass the democratic test.

Some threads go way off topic, but that's life on AWeb.

How is this debate one-sided? We have debate from monarchists, and anti-monarchists, haven't we? Listening to other peoples opinions, then either agreeing, or disagreeing, is what debate is about.  I haven't heard anything that changes my opinion, as yet, but I am open to persuasion.

None of us are in a position where we can make changes, but that shouldn't stop us from discussing the good and the bad of a situation.

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By carnmores
08th Feb 2014 14:57

nothing wrong with a lively discussion

we are all different

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Replying to bernard michael:
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By chatman
10th Feb 2014 09:28

Different

carnmores wrote:
we are all different

I'm not.

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By ShirleyM
10th Feb 2014 10:20

Vive la difference, chatman

We are all unique. :)

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By ShirleyM
10th Feb 2014 14:04

@mbd ... Get your facts right!

Tony Blair - Gordon Brown, David Cameron, and all the PM's put together are not heirs in the same sense as the heir to the Crown, but if you want to view them as heirs (ie. they inherited the position), then please yourself. I don't mind either way!

I attacked you? Maybe I got a little upset when you accused me of 'abject hatred against other human beings'. I do think my comments to you were mild in comparison. Maybe you got the wrong end of the stick? I object to the monarchist system. I don't hate the Queen, in fact, there isn't a single person in the whole world that I hate, but I do feel abject sympathy for some.

If you check the posts above you will see that I never said I was against inherited wealth, so I put that comment down to a simple mistake on your part.

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By listerramjet
10th Feb 2014 15:00
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By User deleted
11th Feb 2014 08:33

Heir ...

@ShirleyM - Surely in the context of the post

'.. Tony Blair's heir to the position of PM was Gordon Brown, and his was David Cameron, and his will be....ad nauseam.  His biological heir may not get to be PM - but somebody always does so he very certainly has an heir! ..'

Heir was specifically defined in terms of position rather than lineage - so am confused about the 1st para in your post - @mbd ... Get your facts right!

@chatman - '.. there is not a level playing field to start with ..'

Not sure this argument really holds water

Going back over the generations there must have been a level playing field at one time where the ancestors of today’s wealthy had nothing. One generation subsequently made the money (luck, judgement or business acumen) and have passed it down since then

Are you not proposing to do exactly the same - make some money and pass it down to your heirs? So don't really understand the difference between the two situations - Other than one is historic and the other refers to today
 

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Replying to james642:
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By chatman
11th Feb 2014 10:44

Hypocrisy, ad hominem and digression

JC wrote:
@chatman - '.. there is not a level playing field to start with ..'

Not sure this argument really holds water

Going back over the generations there must have been a level playing field at one time where the ancestors of today’s wealthy had nothing. One generation subsequently made the money (luck, judgement or business acumen) and have passed it down since then

Are you not proposing to do exactly the same - make some money and pass it down to your heirs? So don't really understand the difference between the two situations - Other than one is historic and the other refers to today

I don't actually see how your argument relates to mine JC. Could you clarify?

Having said that, it may be irrelevant because this argument is (now) about whether I, and others, are hypocrites, and (putting aside the ad hominem nature of this argument) it has occurred to me that of course I am a hypocrite. For example, I often argue that we should be loving, sharing, forgiving etc, but there are times when I have not been loving, sharing, caring etc. I have not given away all my possessions to those in need, even though I think we should all be equal, so of course I am a hypocrite. But that does not mean that I am wrong to say that we should be loving, sharing and forgiving.

What I would argue therefore, is that the fact of my hypocrisy is entirely unrelated to the correctness or otherwise of my argument.

There are those who would argue that I should not respond to such ad hominem attacks, as it merely encourages those who make them, but what can I say? I enjoy the debate. Bring it on. At least now I will stop denying being a hypocrite.

Got to go out now, so apologies for any typos.

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By ShirleyM
11th Feb 2014 09:10

Explanation needed?

I thought it was clear from my post, but maybe not for everyone, JC.

Incorrect fact: that I have abject hatred for other human beings (which I have refuted more than once). Why would mbd say such a thing, if not to offend?

Incorrect fact: that I despise inherited wealth. Again, why would mbd say such a thing, except maybe to inflame the discussion? Nobody has said they despise anything, or not to my recall anyway, but I am sure you will let me know if I am wrong.

With regard to PM's being heirs, or not heirs, I thought I explained it quite clearly when I said it didn't matter to me either way, as I thought we were discussing monarchy. However, for the sake of clarity, JC (I know you like things to be spelled out in detail), I do not consider an elected person (a PM)with a time limited 'reign' to be the same, or even similar, to an unelected heir to the throne with a lifetime 'reign', and automatic handover to his/her heirs, ad infinitum. for ever and ever. Amen!

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By User deleted
11th Feb 2014 12:22

Explanation provided …

@ShirleyM - '.. @mbd ... Get your facts right! ..' - I made no comment about anything other than the 1st para in your posting (referring to heirs), so thank you for expanding upon two other areas of '.. Incorrect fact ..' that were not referred to

On the topic of heirs – @mbdx7ja2 – specifically identified the context of heir in their post (generic) – i.e. a line of succession in which one PM followed (was heir to) another; in the same way as if we had an elected monarchy then one would be heir to another (but not in lineage)

@chatman – not concerned with anything about hypocrisy and concentrating on ‘.. the correctness or otherwise of my argument ..’

With reference to ‘..I don't actually see how your argument relates to mine JC. Could you clarify? ..’ – herewith clarification

'.. there is not a level playing field to start with ..' referred to following comment in ‘.. Unilateral Declaration of Socialism ..’

‘.. I would be quite happy to give my heirs nothing if I knew knew that a few of their peers were not going to be born owning all the property, and the rest of the wealth. Unfortunately, I know that most of the wealth, including all the of the country is already going to be owned by other people when they are born, so there is not a level playing field to start with ..’

This is why your argument does not hold water – refer to previous post

‘.. Going back over the generations there must have been a level playing field at one time where the ancestors of today’s wealthy had nothing. One generation subsequently made the money (luck, judgement or business acumen) and have passed it down since then

Are you not proposing to do exactly the same - make some money and pass it down to your heirs? So don't really understand the difference between the two situations - Other than one is historic and the other refers to today ..’

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By ShirleyM
11th Feb 2014 13:13

JC

I guess discussion of the monarchy is now totally out of the window, and you now want us to discuss nuances, and possible interpretations, of every word that has been written in it.

I am sure most people will understand exactly what I was trying to say, whether they agree with me, or not. However, please feel free to interpret my words however you wish .... but keep it clean.  ;)

ps. the last bit is a joke ... I don't expect you to make dirty comments.

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By chatman
11th Feb 2014 17:40

@JC

I'm sorry JC, I am sure I am being really stupid here but I am just not getting it. I accept that there was probably a level playing field to start with but we are talking about me, so we have to start from now, when I exist. I don't believe that it is relevant to go further back than that.

Note, though, that I have accepted that I am a hypocrite, and that I always will be unless I give away everything except what I need to survive to those who have less than me.

EDIT: Just realised that "the correctness of my argument" may have been taken to mean the correctness of my argument about my hypocrisy. In fact I was referring to the correctness of my argument about monarchy. Does that help?

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By carnmores
17th Feb 2014 17:17

not much but its fun

not so different after all :-)

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