WRITTEN ON October 15th, 2008 BY Sir Bonar Neville-Kingdom GCMG KCVO AND STORED IN Foundation of Trust, Transformational Government, What do we want?
Sir Bonar Neville-Kingdom writes:
I see a report in the news media today to the effect that Jacqui Smith will press ahead with proposals to collect more details about people’s phone, email and web-browsing habits.
As we all know, the terrorist threat to Britain is growing. There are also measurable increases in other threats such as the taking of drugs and various forms of environmental delinquency.
The Independent newspaper says this
will be included as a way of combating terrorism in the Data Communications Bill, which is to be introduced in the Queen’s Speech in December. Ministers are known to be considering the creation of a single database holding all the information, which would include phone numbers dialled and addresses to which emails are sent but not details of phone conversations or the contents of emails.
I must say, as Technology Outreach Czar and Permanent Secretary at Large with cross-departmental responsibility for the “ring of soup” data sharing service that I think this is a splendid idea.
It will allow us to provide personalised services to every member of society. It will provide a clear picture of people’s entitlements and how they are discharging their responsibilities.
At the same time, without further investment, it will interdict the activities of terrorists and paedophiles, and stop people from taking drugs. It will restore the computational balance in society, and with it respect for the role of government.
If we can afford £2,000,000,000,000 merely to prop up a few banks so teenage scribblers get their bonuses I’m sure we can manage a far more modest £6-8,000,000,000 to create a safe society with decent pensions for the public servants who made it possible.
This is the physical location of the proposed “ring of soup”. The data will be sent around the installation in opposite directions on a series of wires, as it were. This enables us to “match” aspects of information, using a process called “data fusion”. This will tell us for example who is taking what sort of drugs.
4 Responses to “Great boost for “transformational” ring of data soup”
Wait! Don’t do it! What if the colliding beams of data were to create a data black hole, where all government data would be sucked in and mashed up, never to emerge!
What does Sir Bonar think of this blog here – suggesting there may be some “problems with the panopticon” (http://ntouk.com/?view=plink&id=400). Surely this level of sedition cannot be permitted to pass without comment? Floggings (public) are surely in order?
Could we fire Ministers around the ring in opposite directions and see what happens?
The thing about Sir Bonar is that he is a comforting link with the old world. The old world where, for example, hard to believe it now, a bank would limit its lending to the value of its deposits. No-one could be better company at the Chelsea Flower Show. Except, perhaps, his delightful wife, Euphorbia, that epitome of the English rose.
But we live in a new world now and, open-minded though he is, Sir Bonar evinces no sign that he recognises that fact. The paradigm has shifted.
We at the top of the Civil Service now see ourselves as investment managers mandated by our clients to earn the highest possible return on their portfolios. For decades it has been clear that trading is a mistake. Trading takes time, settlement goes wrong and incurs fees and there is always the outside chance that securities sold will subsequently go up and securities bought go down.
These unnecessary risks are avoided entirely by re-shaping the portfolio, not by buying and selling – “doing something”, as Sir Bonar quaintly calls it – but instead by writing a series of under-the-counter (UTC) contracts which can more efficiently nudge the portfolio into the optimal profile selected by scenario development.
This approach is now so obvious to portfolio managers that they might as well have imbibed it with their mother’s milk and it is only the antediluvian Sir Bonars, scripophilists to a man, who imagine that there are still safety deposit boxes with physical share certificates lodged in them in vaults all over London – or rather, under London.
That, and strip trading, also taken in with their mother’s milk. Take a look at an old-fashioned share. What does it comprise. Some capital value. A bit of income. Various flavours of risk associated with interest rate fluctuations, exchange rate differences, maybe a bit of market risk and a dollop of moral hazard. Each of these can be “stripped” out and managed separately. Not traded, like the US Treasury strips of yore, but managed, UTC.
Sir Bonar’s particular interest today, security, is no different. The security strip of our portfolio – the UK – can be managed by expert derivatives traders, young men and women trained, in the main, by the maths departments of our better universities, and armed with supercomputers.
Keeping the UK on the balance sheet holds back performance of the portfolio. High returns can only be earned by gearing up. What we have done is to take the security flows as a whole, discount them back to a net present security value (SV), parcel them up into easily understood units (“people”) and then write contracts on them. Simple financial engineering at its best, the balance sheet is liberated, the old, slow market involving conception, gestation, parturition, etc … is lubricated into a fast-moving modern, highly liquid network (not soup, by the way, whatever Sir Bonar thinks), turnover goes through the roof and our fees follow it.
These contracts need to be insured, naturally, and so a further network of Security Default Swaps (SDSs) has grown up to underwrite them and has itself become an even bigger market. The old problem of how to lay off risk in unwieldy great slabs has been solved elegantly with modern technology so that it is spread thinly and manageably throughout the world.
Limpidly clear to the average teenager of today, it is doubtful whether Sir Bonar will ever come to grips with the modern world of the security services. Never mind. He is still an agreeable, clubbable companion and, it must be said, a usefully avuncular front man, a latter-day Mr Pastry, inspiring, as he does, endless popularity and jovial confidence among the simple SVs of the modern world.