Two bad decisions and a phoney argument.

Two bad decisions by our government were reported in yesterday's papers.

The one that hit the front pages was that parliament has approved, with a huge majority, the government's plan to build a third runway at London Airport. The Conservatives were whipped to vote in favour but Labour MPs were given a free vote.  Happily the Liberal Democrats voted against.

I believe this is a bad decision for three reasons:

1. Because of its polluting and global warming effects we should be aiming to cut down on air travel rather than encouraging more of it.  The argument that an expanded ariport is necessary for business doesn't hold up.  Only 10% of the passengers who travel through LAP (as we called it when I lived and worked under the flight path) are on business, 70% are simply tourists.                                          So we comfortably-off cling to our right to trash the planet for our enjoyment whilst taking the view that it's advisable  to leave potential migrants looking for a better life to drown in the Mediterranean, because rescuing them might encourage more to try..
2. It's yet another huge infrastructure project for London.  Regional diversification is flavour of the moment.  If we must have more ariport capacity then let it be in the Midlands, the North, Scotland or Wales. (Actually I've read somewhere that the best southern site would be the Pas de Calais, which would enable  high-speed rail links to Paris and Brussels as well as London)
3. The current projected cost is £14.3bn.  According to Nils Pratley  this is almost bound to be over-run  and in the end the taxpayer will be asked to fork out to subsidise the foreign owners of LAP (Ferrovial and Qatar Investment Authority)

Reports of the second bad decision were tucked away on the inside pages: the government has abandoned plans for a tidal (electricity-generating ) power lagoon in Swansea.

 By comparison to the LAP expansion this was to cost a mere £1.3bn, would have generated much needed employment and growth in Wales, and is just the sort of renewable power-generation technology in which the UK ought to be investing.

In fact it baffles me that, given the amount of shore  we have relative to our size, we aren't world leaders in tidal power.  The argument against power generated by the wind and sun is that the wind doesn't always blow and the sun doesn't always shine.  But the tides go in and out, not once but twice, a day- indeed four times in the Solent. And that's every day.

The phoney argument was advanced over the weekend, when  there was much in the media about the Defence Secretary's demands for a vast increase in military spending. The reason given, quite shamelessly  in the reports I heard and read, was not that we should be better defended (against whom?) by all this extra outlay, but that this would increase British influence.

So we're are called upon the spend another £20bn or so a year just so our politicians and generals can strut around the world feeling important.

The easiest way to retrieve and then perhaps even  increase Britain's influence is to remain in the EU and play a co-operative and constructive role with our partners rather than, as in the past , standing on the sidelines complaining and demanding opt-outs.

Post Script (added 30th June)

This article by Simon Jenkins in yesterday's Guardian:

 https://www.theguardian.com/commentisfree/2018/jun/28/britain-global-military-power-armed-forces-defence-spending

gives further and better particulars about the pointlessness of Britain's attempts to remain a so-called "tier one" military  power.

Brexit +2

It's just two years to the day since a good half of the nation woke up to the horrifying fact that we had voted to leave the European Union.  I say "a good half" because although 37% of those entitled to vote opted for "Leave" and only 34% voted to "Remain," that left  some 28% who didn't bother to vote so were presumably satisfied with the way things were, the 16 and 17 year-olds, thought to be overwhelmingly in favour of remaining,(and most affected by the decision) were not allowed to vote, and neither were the even more immediately affected 3 million citizens of other EU countries resident in this country

Yet, two years later our government is still blethering on, daily more shrilly, that they must implement this minority position as "the will of the people"

And, in spite of the fact that every piece of evidence so far has demonstrated that the promises made by the "Leave" campaign are hollow, that the process is not going to be simple, will make us poorer and the best bargain we can get is the one we already have, public opinion has as yet only marginally shifted..

The mysteries are why, in one of the world's most sophisticated democracies, are the major political parties persisting with a course which  they know to be folly, and why has there not been a major shift in public opinion as a result of the overwhelming evidence that this is folly.

To deal with the major parties first, it is clear that they are both putting party beofre country.

The Conservative Party is now dominated by a small gang of extremists led by Michael Gove and Jacob Rees Mogg.  They seem determined to turn the country into a low wage, low regulation economy in which their rich hedge-fund friends and backers will  be able to flourish at the expense of the rest of us., along with a hankering for the social and political milieu of the 1950s.  I do not include Boris Johnson in this group.  Remember he allegedly agonised as to which side to back  and came down on the "Leave" side only at the very last moment.  Clearly, given that the small and elderly grass-roots membership of the Conservative Party are thought to have have this "future to the back"  bias,  and they elect the Tory leader, his motivation is his own personal advancement.

Sadly Mrs May, who fully appreciates that what is best for the country is to remain in the EU (that is how she campaigned and voted) is too weak and frightened to stand up to these mavericks and has feebly decided that appeasing them is the best way of saving her premiership and the Conservative Party.

The problem of the Labour Party is less easy to understand.  It could be argued that, by not taking a firm position,  the leadership is playing a "long game" - stand back, watch the government  a mess of things (of which there is plenty of evidence so far) and move in for the kill at the opportune moment.  Unfortunately, time is running out, and it will take time and firm and unambiguous campaigning to shift public opinion sufficiently to make abandoning Brexit politically acceptable.

Sadly we Liberal Democrats, who have waved and continue to wave the banner for not just remaining in but full and enthusiastic co-operation with the EU, are so tarnished by our inept  handling of membership of the 2010 - 2015 Coalition that we have, I believe only temporarily, lost our credibility, and the well-deserving Greens are slow to gain any.

Now to the  mystifying problem of why public opinion isn't changing  significantly. I should have thought by now that, in the face of all the evidence, there would have been a shift of the size say, two thirds in favour of remaining against one third still for leave which would make a change of mind by our MPs in favour of abandoning Brexit politically acceptable.

I think the reasons are:

• the majority of people are not adsorbing the evidence.  I hope this is not a patronising view.  Most people have lives to live, jobs to master, mortgages to pay, debts to manage, families to being up, holidays to plan, sports teams to support, and are not as absorbed as we anoraks by the Today Programme, Guardian and Financial Times reports, IFS, Treasury and Bank of England pronouncements;
• the media, especially the foreign-owned Sun and Telegraph, with the Express, have an enthusiastic bias against the EU, and as "us" versus  "them"  approach probably helps to sell papers;
• obeying "the will of the people" is a simple and straightforward, though I believe, misleading , message;
• anti-EU sentiment has been honed by forty years of both major parties blaming Europe for any policy that they felt was unpopular or inconvenient;
• there has been failure by the Remainers to recognise and promise to rectify the issues which polling evidence shows motivated many of the Leave voters.  These are spelled in a perceptive letter in Saturday's Guardian: from a Susan Hunter, namely: "pensions, taxation, monetary policy, social care, health and welfare,  education and training.. .These are the areas that are failing the working class, which by design benefit the already wealthy."
• the lack of a unified Remain movement. with an identifiable and attractive leader.

On that last point, if there is one of the  889 posts now on this blog that I'd like to go viral, it is this one calling on David Lammy as the ideal person to take on the role.

 It hasn't and he hasn't yet,. but there's still time

Global (in)Justice

Last Saturday I attended in York the AGM of Global Justice Now (GJN), fancy new title of the World Development Movement (WDM) of which I've been a member and supporter since its inception in the 1960s.

One of the speakers in  the "workshop" sessions which followed the meeting was Jason Hickel, author of "The Divide".  Thankfully he kept his "Powerpoint" presentation down to one slide, which made the information it gave all the more telling.

Here's a summary:

 Annually the "Rich North" transfers  around $130bn  to the "Poor South" in Aid.(of which the UK's contribution is around $30bn).

Annually the "Rich North" sucks out of the"Poor South" as follows:

• $60bn in patent licenses as a result of TRIPs;
• $200bn in interest payments;
• $480bn in repatriated profits (a greater amount that FDI);
• $875 in trade mis-invoicing (GFI);
• $875 in transfer pricing;
• $700 in lost export revenues (through WTO rules):
• 571bn through climate change (CVM);
• $2.5trn  in "unequal exchanges."

I do not actually understand all of the negatives, and suspect they may be exaggerated.  I hope soon to generate the energy to read the book.  But the message that the way capitalism and trade are organised enables the rich world to take far more from the poor word than we give back with our paltry amount of aid is clear..

Or to out it another way, international trade works very well for international conglomerates, their directors and shareholders, and less well for people of poorer countries.  There needs to be a change, and GJN is one of the campaigning organisations working towards one.

All power to our elbow.

You can obtain more information and join the campaign via: http://www.globaljustice.org.uk/  

We may even bribe you with a free copy of the book

Key:

TRIPs: Agreement on Trade-Related Aspects of Intellectual Property Rights
FDI:  Foreign Direct Investment
GFI:  Global Financial Inequality
WTO: World Trade organisation
CVM:  Climate Vulnerability Monitor

Could David Lammy lead "Stop Brexit"?

Three welcome initiatives to put a stop to Brexit have emerged this week.

That billionaire George Soros,and other wealthy individuals are about to launch and finance  campaign. There's to be  a "Left against Brexit" tour to promote the left wing case for a pro-EU position.  The "tour" wil involve trade union leaders and the Green Party MP Caroline Lucas.  On this morning's news we hear of  16 London MPs who have written  to Jeremy Corbyn emphasising the damage Brexit will do to London and calling  for Labour to support a second referendum.

As far as I know there is, as yet, no co-ordination between these groups, and any others that might be hiding in the political undergrowth

In addition to co-ordination, what will add strength and momentum (oops, do Corbynistas have a monopoly on this term?) is a suitable identifiable leader.

The Soros campaign in particular  is bound to be tainted as yet another patronising attempt by successful elites to tell the disgruntled "left behind" what's good for them. We need someone not just backed by informed opinion and money,  but also with popular appeal.  

Sadly front runners so far, such as Tony Blair, Ken Clark, even David Miliband and Nick Clegg, are seen as "yesterdays' men."

So my nomination, based on his passionate attack on the Tory front bench re the the treatment of  Windrush migrants, and his masterful put-down of Jacob Rees-Mogg on Radio 4's Any Questions (19th May) goes to David Lammy, MP

Mr Lammy's humble origins and minority background added  to the credibility of his enthusiasm for remaining in the EU will greatly enhance his appeal to many of those who voted for Brexit as a protest against a system which they feel  is not working well for them.

I've no idea how to attempt to create a groundswell of support on social media to persuade Mr Lammy to take on this roll.

Please would someone who does know take up the challenge and "save"  Britain from self-inflicted harm?.

Bad News Barely Burried

 It was back in September 2001,  the time of the devastating terrorist attack on the World Trade Center in New York, that Jo Moore, a young advisor to our then Labour government recommended to her boss that this was " a good time to bury bad news."  She was eventually forced to resign.

In due course I'm sure the same fate will fall on our Prime Minister Theresa May, though probably not just yet, since her rivals need her to stay in office so that she and not they take the blame for the Brexit shambles.

Last weekend, then much of the UK (and, apparently, considerable  chunks of the rest of the world) were fully absorbed in the minutiae of the  royal wedding, Mrs May chose to announce the appointment of a further 13  members of the House of Lords.

Question 1.  Why does the House of Lords need a further 13 members?  It already has over 800 members, each receiving £300 a day (tax free, I think) for signing in - they don't actually have to say anything, or even remain to sit and listen.

Question 2.  In October 2017 the  Lord Speaker's Committee  recommended that for every one new member in, two should have left, by dying or retiring from active participation, so that the membership is gradually reduced to 600, which will then be regarded as a ceiling.  Which 26 former members have left to make way for the new 13?

Question 3. The same Lord Speaker's Committee recommended that: "Political appointments should be shared between the parties in line with the result of the previous general election."   Given that in the last election Labour and the Tories were neck and neck, how does Mrs May justify nine new Tories but only three new Labour peers. And how can she possibly justify another one for the DUP, the party of the late  Ian Paisley, the epitome of neanderthal  intransigence?

Of course, Mrs May is not interested in reason or logic.

 In the past few weeks the House of Lords has defeated no less than 15 measures in the government's Brexit Bill.  So Mrs May shamelessly uses her outdated prerogative powers in a desperate attempt to reduce the likelihood of  future defeats. Power rather than principle is, as always, the Tories' guiding light.

Given the absorption of the media in Meghan Markle's wedding dress, the well behaved bridesmaids and pageboys, Mrs  Doria Ragland's dignified demeanour, and the splendid  (though long) sermon by Bishop Michael Curry, these issues have escaped serious comment.

Way back in the 1950s, when I began the academic study of  British politics, the lecturer on the British constitution was a Mr Chekanovski (I may have spelt that wrongly - it's a long time ago).  When discussion the all-important "conventions of the constitution"   he laid great stress on "The British sense of fair play."

I wonder what he would say now.

The myth of students "burdened with debt."

The idea that since university tuition fees were raised to £9 000 a year students emerge "burdened with   debt" was effectively and vigorously demolished on BBC 1's "Question Time" a couple of weeks ago.  Please watch it on

 https://www.bbc.co.uk/iplayer/episode/b0b20m6b/question-time-2018-03052018#

 for the full effect.

If you haven't time, 22 minutes in a Martin Lewis, the financial guru who founded monesavingexpert.com explains that,  however much is  borrowed, you pay 9% of extra tax on anything you earn over the threshold for 30 years.

Lewis  then spells out the figures for what what this actually means in practice.

At present the earnings threshold is £25 000 a year, so below that the former student pays nothing back.  If earnings rise to, say  £30 000 (nicely above both median and average earnings) you pay 9% on that extra
£5 000.

 Namely all of £450  a year.

That doesn't vary whether the amount borrowed £27 000, £50 000, £90 000 or whatever.  And if you it isn't paid off  in 30 years the "debt" it is scrapped.

Lewis calls it a "graduate contributor system."  Professor Sandford of Bath University half a century ago  (see previous post) suggested something similar and called it a "graduate tax."   Pity Liberal Democrats in government didn't catch on to that.



Lewis stops there, but if you break  that £450 a year down further it's £8.65 a week, or

• two cheap or one good bottle of wine, or

• three flat whites or 

• two portions of avocado on sour-dough toast or

•  three pints of real ale.

Examples may very depending on where you live, your definition of a good bottle of wine, or you buy your pints in a Wetherspoons or a gastro pub.

So  much much for all the fuss about students being burdened by debt.

Some columnists argue that the present system discriminates against the poorest students, since they are the ones who are forced to borrow, while the children of the rich are financed by mum and dad.  I suspect that wealthy parents with accountants encourage their offspring to borrow as much as possible on this excellent deal, promising that they will save parental  largess for the deposit on their children's first mansion.

It might be thought that an additional 9% on  earnings above the threshold, on top of the 20% standard rate of income tax, making a total of 29%, is a bit steep. However my generation, which received our higher education for free, paid a standard rate of around 33% for most of our working lives,.

So these millennials are still getting a very good deal.

This is not to argue that I am in favour  of all  the system as it it stands.

Charging interest at 9%* on the loan is iniquitous when bank base  rate is a minuscule 0.5%.  And the £9 000 a year fees are being squandered on de luxe en suite accommodation blocks for students and ginormous salaries for vice-chancellors rather than improving the employment conditions of academics and the amount of academic contact time for students.

The "graduate contrition system " is based on the argument that graduates who benefit from a substantial income premium  during their working lives should contribute a bit extra for the benefit their higher education has given them. There is also a legitimate argument that higher education, whilst not exactly a human  right, is a perk of affluent societies and should be available free for those who want it.

It is these these terms  that the discussion should be conducted: not on the false argument that today's youth are being unfairly burdened with unjustifiable debt by a generation that enjoyed these advantages for free.

*  This figure is incorrect.  A friend has pointed out to me that the formula for interest on the loan,is RPI plus 3%, which, of 2018, comes to about 6%, which makes the "graduate contribution scheme" an even better bargain.

Further comment (added Friday 18th May)

The "cast-away" on this morning's "Desert Island Discs" was the successful businessman and philanthropist Sir Peter Lampl.  He perpetuated the "burden" myth by claiming that university students left with a debt of about £50 000 so urged potential students to opt for apprentices and so get paid while they trained.  I agree there's a lot to be said for apprenticeships, but his use of the £50 000  debt myth makes the comparison unfair.

Apparently Lampl's family moved to Batley (my neighbouring town) to live in his grandfather's house when Peter was a child.  He claimed it was terrible.  When asked if he meant the house, he replied, "No, Batley."  Clearly not a reliable source

Citizen's Inheritance: actully a good idea.

The Resolution foundation's proposal for a grant of £1 000 to every UK citizen when he or she reaches the age of 25 has received something of a panning on the Guardian's letters page but I think it is a good idea

 I first came across it during a "refresher week" for teachers of economics at Bath University in the late 1960s.  There a Professor Cedric Sandford argued for what he called a "state dowry" of £500 for all children when they reached  the age of 18.

 Although using the "dowry" for the  deposit for a house was mentioned  this wasn't them seen as crucial.  Back then houses were still affordable, even for those who married in their twenties,  and it was perfectly respectable for even professionals to live in council houses, which hadn’t yet been flogged off.  Council house tenancies were secure in those days, and could even be inherited, I think.

Sanford's main aim was to ease what he saw as one of the greatest  causes of inequality,  lack of capital for the majority of the population. 

The "dowry" could be used to finance further education, an apprenticeship,  set up a business, yes, pay the deposit a house, but also enable a “gap-year "style tour of the world, or whatever else took the youngster's fancy.  Sandford suggested no restrictions.  His point was, as far as I can remember, that the children of the comfortable off had these choices, the vast majority didn't, and the "dowry" would equalise opportunities

The Resolution Foundation's proposal is meaner (Sandford's £500 would be worth more like £20 000 today rather than the RF's £10 000), received later, (at 25 rather than 18) and hedged around with restrictions (to be used only for education, starting a business, housing, or towards a pension).  

How sadly both our generosity and our trust in the young has deteriorated over the years.

Nevertheless the RF's proposal has brought this hitherto obscure measure into the mainstream of thought.  Let's hope that not another half-century passes before it is put into practice.

As it happens, I've had the opportunity to put the "dowry" concept into practice for my only two young relatives, a great nephew and great niece.  The girl was born into the Child Trust Fund  era, which Labour set up to encourage tax-free savings for children and their parents with a "starter" of £250, and which Tory George Osborne abolished for new entrants in 2010 (they really aren't keen on equality). The boy  was too old for a Child Trust Find so I set up a Junior ISA for him, and I've contributed to these so that both will have a nice little nest-egg when they reach 18. 

 Given that the Daily Telegraph tells us that it costs over £200 000 to bring up a child in the UK (which seems a lot: maybe it incudes private school fees for well-heeled Telegraph readers)  my contributions have been minuscule compared with those of their parents, so I neither expect nor deserve any plaudits.  There are no restrictions on the way thy spend their nest-egg so it will be interesting to see whether they use it wisely, as Sandford predicted most would, or fritter it away on clothes, driving lessons and cars.

I agree with the RF proposal that part of the cost of their scheme should be funded by requiring pensioners who do paid work beyond retirement age to pay National Insurance Contributions: indeed I'd go further and remove the "cap" for all ages so that those on enormous salaries pay the same percentage as those on  average earnings.  Similarly I agree with their proposal that Personal Care, if required, should be paid for and again would remove the cap of "up to a quarter of property wealth."

Finally, another good idea very similar to one which the Liberal Party proposed in the 1960s: that inheritance tax should be levied not on the bequeather's estate  but on the recipients, and on a sliding scale, so that those who received small bequests would pay little or no tax, and large bequests would be hit harder.  The RF proposes that this should apply to all "lifetime gifts"

Sadly our political classes are so pre-occupied with Brexit that I suspect  these, and other constructive ideas to tackle our real problems, will be placed on the back-burner and quietly  forgotten.