Saturday, 10 June 2017

The newly dreadful state of the Union



Last Thursday's election was a shock. It was appalling for the Tories, extraordinarily encouraging for Labour and something of a "meh" for the Liberal Democrats and the Greens. And it was dreadful for nationalist parties. UKIP was completely wiped out, ending up with no seats at Westminster and a hugely reduced share of the poll. The SNP lost seats, and even Plaid Cymru did less well than it had hoped. Nationalism, it seems, is dying down. Well, in the UK, anyway.

Faced with a disastrous result, any half-decent party leader would step down. To his credit, Paul Nuttall, the UKIP leader, did exactly that. But not Theresa May. Dear me, no. In the last two days, we have discovered the lengths to which Mrs. May will go to retain her hold on power.

The Tories' desperate reach for power

Lacking an absolute majority, the Tories had no choice but to try to form some kind of alliance with another party. Their previous coalition partners, the Liberal Democrats - fingers still badly burned from last time - refused to play: "No pact, no deal, no coalition", they said as the results rolled in. The only other mainland parties with sufficient seats to be able to give the Tories the absolute majority they need to force through the Queen's Speech, and by extension the repeal of the 1972 European Communities Act that is necessary to enact Brexit, are the Labour Party and the SNP, both of which have previously ruled out doing any deal with the Tories.

But there was a way out. Northern Ireland's Democratic Unionist Party (DUP) announced that it would be willing to discuss some kind of arrangement to keep the Conservative Party in power at Westminster. So the Tories hurriedly remembered their Unionist roots. On Friday morning, in her announcement that she would be forming a new Government, Theresa May used an unusual name for the Conservative party (my emphasis):
Only the Conservative and Unionist party has the legitimacy and ability to provide that certainty by commanding a majority in the House of Commons.
This is in fact the party's full name, though it has rarely been used since the Ulster Unionists separated from it in 1974.

Becoming once again the party of Union would be no bad thing, electorally: the majority of people in all four countries still support the Union, though support is diminishing, particularly in Scotland and Northern Ireland. One of the most extraordinary features of the Tory party's support for a hard Brexit is the risk that it poses to the Union. It is hard to see how Conservatives can claim to be Unionist while pursuing a course of action that threatens to tear the Union apart.

But the Northern Irish Unionist party on which Theresa May now depends for power is not the Tories’ former ally, the Ulster Unionists. No, Mrs. May seeks to ally herself with the hardline Democratic Unionist Party (DUP), a fundamentalist Protestant group with links to paramilitary organisations.

This is a marriage of convenience forged in hell. And it potentially puts at risk the security of the United Kingdom.

The polarisation of Northern Ireland

The Northern Ireland government collapsed in January 2017 amid allegations of corruption against the DUP and its leader, Arlene Foster. In the ensuing election, the DUP and the hardline Republican party Sinn Fein ended neck and neck, with the other parties trailing badly. Negotiations to form a new power-sharing government failed in March 2017 when Sinn Fein refused to nominate a Deputy First Minister. Gerry Adams, Sinn Fein President, claimed that the DUP was obstructing progress on key legislation:
“The DUP’s approach thus far has been to engage in a minimalist way on all of the key issues, including legacy issues, an Irish Language Act, a Bill of Rights, and marriage equality,” Adams said. 
He added: “They have been reinforced in this by the British government’s stance. This is unacceptable and a matter of grave concern.”
Despite Adams' criticisms, Sinn Fein and the DUP agreed to extend negotiations until the 29th June. If no power-sharing government can be formed by then, Northern Ireland will be ruled directly from Westminster. The deadline is drawing close, and as yet there is no agreement.

And into this inflammatory situation, Theresa May tossed an entire box of lit matches. In last week’s General Election, both the Ulster Unionists and the SDLP were wiped out. The DUP is now the largest party in Northern Ireland, and the second largest is Sinn Fein.

The increasing popularity of hardline sectarian parties in Northern Ireland at the expense of more moderate parties has gone largely unnoticed and unreported by an astonishingly negligent British press. In the last decade or so, Northern Irish affairs have seldom made the front page of any British newspaper. But the present situation in Northern Ireland deserves much more attention than it is getting. It should worry anyone who remembers the Troubles.

Exactly why opinion is polarising like this is unclear. But a considerable factor must surely be uncertainty over the future of Northern Ireland in the light of the UK's imminent departure from the EU. The fact is that the hard Brexit favoured by the Brexiteers in Theresa May’s team is a considerable threat to peace in Northern Ireland.

Brexit and the border question

An open border between Ireland and Northern Ireland is a prerequisite of the Good Friday Agreement under which peace has been maintained in Northern Ireland for nearly twenty years. It is also one of the very few things on which all parties have hitherto agreed.

But now the British government no longer agrees. It wants to leave not only the single market, but the existing EU customs union. This would mean ending free movement of goods, services and people between the Republic of Ireland and Northern Ireland. Admittedly, the aim is to create a new agreement which would allow free movement of goods, services and people across the border: but as Ireland will remain a member of the EU, such an agreement would require ratification by the entire EU, which may not be achievable within the two-year time limit. To make matters worse, the British government has repeatedly threatened to leave the EU with no deal at all if the EU won’t accede to its demands. This would slam the border shut overnight.

The UK Government's white paper suggests that the pre-EU Common Travel Area between Northern Ireland and Ireland could be restored, and customs checks would not have to be imposed. This, I’m afraid, is a pipe dream. Ireland is bound by EU treaties. It cannot do a bilateral trade deal with the UK. Nor would it be reasonable to expect Ireland not to police the EU’s external border with the UK. The UK can hardly expect cooperation from the EU over Calais if it insists that another border with the EU must remain open.

Some have called for Northern Ireland to have some kind of “special” status which would allow it the rights and privileges of an EU member after the UK has left the EU. But with a hard Brexit, this would probably mean imposing a customs border and movement controls between Northern Ireland and the rest of the UK. Such a “half in, half out” arrangement would inevitably diminish trade with the UK, and increase the likelihood of future reunification of Ireland. Unsurprisingly, therefore, it is fiercely opposed by the Unionist parties.

The EU seems to have appreciated how important it is to resolve the question of the Northern Ireland border early in the Brexit negotiations:
The Union has consistently supported the goal of peace and reconciliation enshrined in the Good Friday Agreement in all its parts, and continuing to support and protect the achievements, benefits and commitments of the Peace Process will remain of paramount importance. In view of the unique circumstances on the island of Ireland, flexible and imaginative solutions will be required, including with the aim of avoiding a hard border, while respecting the integrity of the Union legal order. In this context, the Union should also recognise existing bilateral agreements and arrangements between the United Kingdom and Ireland which are compatible with EU law.
In stark contrast, the UK government's statements as yet fall a long way short of giving Northern Ireland the priority it needs. I am frankly appalled that the lunatics running this asylum have thought so little about the consequences for Northern Ireland of a hard Brexit, or worse, a "no deal". Sadly, however, this is characteristic of British attitudes to Northern Ireland. When it is quiet, it is ignored. Only when there is trouble does anyone care.

Trading peace for power

From Mrs. May's point of view, a "confidence and supply" arrangement, or even a full coalition, with the DUP is simply a pragmatic power-sharing deal such as David Cameron did with the Liberal Democrats. But this is Northern Ireland. Normal rules don't apply.

The Good Friday Agreement signed in 1998 brought a formal end to hostilities. Ever since, there has been an uneasy peace in Northern Ireland.  Sectarian violence is rare now, but there are still occasional murders. And the two main parties still have links to paramilitary organisations, not all of which have laid down their weapons. Arlene Foster, the leader of the DUP, has recently been criticised for meeting the head of the paramilitary Ulster Defence Association (UDA) leader only two days after the UDA was implicated in a sectarian murder.

The DUP originally opposed the Good Friday Agreement, and remains lukewarm about it. But as long as the Good Friday Agreement remains in force, both the DUP and Sinn Fein are bound by it. Neither can unilaterally depart from its terms.

And nor can the British Government. Written into the Good Friday Agreement is a clause requiring the British government (and, eventually, the Irish government) to exercise strict impartiality in all its dealings with the people of Northern Ireland:
 (v) affirm that whatever choice is freely exercised by a majority of the people of Northern Ireland, the power of the sovereign government with jurisdiction there shall be exercised with rigorous impartiality on behalf of all the people in the diversity of their identities and traditions and shall be founded on the principles of full respect for, and equality of, civil, political, social and cultural rights, of freedom from discrimination for all citizens, and of parity of esteem and of just and equal treatment for the identity, ethos, and aspirations of both communities;
If a British government enters directly into some sort of power-sharing deal with a sectarian party, it can no longer be considered impartial. Since the survival of Theresa May's government now depends entirely on doing some kind of deal with the DUP, the Good Friday Agreement will inevitably be breached.

I suspect the sin is more one of omission than commission. As Leighton Andrews explains, the current British government seldom exercises its responsibilities under the Good Friday Agreement. Theresa May simply doesn’t understand how it works. But in Northern Ireland, ignorance can cost lives. Mrs. May's hold on power may be bought at a very high price.

Given the criticisms Sinn Fein has already levelled at the DUP and the British Government, there seems little doubt that Sinn Fein would see such a deal as a breach of faith and possibly of law. Return to direct rule - with all the risks that entails for peace - now looks extremely likely. No power-sharing government could surely be formed while the DUP is propping up a Conservative government at Westminster.

It is all too clear why the DUP was so quick to offer to discuss a deal. It does not like the power sharing arrangements in the Good Friday Agreement and would much rather be running this show by itself. Mrs. May offered the DUP a golden opportunity to seize power by means of patronage.

But the sheer naivety of Theresa May beggars belief. She has, at a stroke, undermined her party's commitment to hard Brexit and her own insistence that "no deal" must be an option: the DUP is never going to agree to anything that would interfere with the Northern Irish borders, either with the Republic of Ireland or with the UK. More importantly, she has unilaterally ripped up the principles upon which power-sharing in Northern Ireland is based, and vastly increased political tensions in the province, already rising because of the uncertainty caused by Brexit.

I hope to God that the Tory backbenchers force May to resign, before this unholy alliance does lasting damage to the Union they claim to support.

Image from Politics Home, with thanks. 

Updated on 11th June to reflect news that Downing Street had prematurely released news of a deal when no agreement had in fact been reached. What a bunch of incompetents. 



Tuesday, 30 May 2017

A beautiful death


My mother, Joy Cooke, died last Wednesday, 24th May, at the age of eighty-seven. It was a peaceful end. Beautiful, in a way.

Mum had been ill for a long time. She had vascular dementia, triggered by an accidental morphine overdose after an orthopaedic operation in 2013. She also had COPD, brought on by a lifetime of smoking. For the first year of her slide into the oblivion of dementia, she was cared for by my father. But in August 2014, after she became doubly incontinent and both physically and mentally frail, he had to admit that her care was too much for him. She went into a nursing home that specialised in the care of those with dementia. There she remained until her death.

I wasn't there when she died. But I had been to see her earlier that day, along with my father and my youngest brother, Tim. She was very weak: though she reached out to each of us in turn to hold our hands, her grip was feeble. Sadly, she who had smiled so much during the last four years had lost her ability to smile.....Her head would fall to one side and her eyelids droop, then she would force her head up, open her eyes and reach for one of us again. It was as if she needed to know we were there.

I told her the names of those who were present, and added that my eldest brother, Simon, would be along later.

My father and I stayed for about half an hour, then I took him home, leaving Tim with my mother. Simon and his wife arrived about mid-afternoon and spent some time with my father before setting out for Mum's nursing home.

Mum passed away just after Simon and his wife arrived. It was as if she was waiting for them. Perhaps she had heard what I said.

There was no pain, no distress. She did not need the high dose of morphine prescribed for her to relieve the crisis of death. She just....stopped breathing. Death came quietly, and she went with him willingly.

This surely is how life should end, without fear or pain. When Death comes as a dearly beloved and long-awaited friend, it is beautiful, not just for the dying but for the living. For death brings hope, and the freedom to grieve.

Dementia is the cruellest of illnesses. It destroys the personality. The woman in the nursing home was not my mother. This strange new "Mum" was sweet, gentle, lovely.....she said little, but smiled at everyone. She was utterly charming, but not much like the clever, energetic, opinionated woman that I knew. It was as if my mother had died and been replaced by someone else, someone who did not know who I was, but who nevertheless greeted me with a huge smile and clung to my hand. I could not grieve for the mother I had lost, because there was this new, needy "Mum", whom I had to get to know.

For four years, my family has not really talked about our memories of Mum. How could we talk of the past, when she was still present but but tragically transformed? How could we grieve for her passing, when this strange new person was living in that nursing home? We were in limbo. Frozen. Numb.

Her death has sprung this trap of grief. Death came, not with a scythe but with a mithril sword, clearing the webs of horror in which we have been suspended, freeing our sleeping beauty from her prison. Now we are free to remember, and to grieve. The day after Mum's death, we talked for hours, sharing our memories of her. Death truly is a beautiful thing.

Strangely, we grieve now for two people - for the woman who died four years ago, and for the creature who replaced her. Dementia ends in a double bereavement, and a double grief.

And it also ends with dislocation. Even when Death comes as a friend, he leaves a trail of chaos. We had been waiting for four years for my mother's death, and yet when Death came, we were completely unprepared. It was as if, after years of appeals, we had been released from prison. Suddenly, we are free - but now what will we do?

Of course, there are things to do. A funeral to arrange. People to inform. Personal effects to dispose of. My mother was one of the most ecologically-friendly people that ever walked this earth, so the funeral is complicated, though organising a green burial now is considerably easier than it would have been thirty years ago when she first told me that was what she wanted. Green burials are fairly common now, but back then, no-one had ever heard of such a thing. "What do you mean, you want to be buried under a tree, with no coffin and no headstone?" Well, she will have a coffin, because they do biodegradable ones these days. But there will be no headstone, and her grave eventually will be marked only by the trees and plants around it. As was her wish, gardener that she was, her body will become compost.

But when all the organising is done, and we have laid her to rest in her quiet green grave, what then? Four years of winter is gone, and Spring returns, and with it, sorrow.
All suddenly the wind comes soft,
And Spring is here again;
And the hawthorn quickens with buds of green
And my heart with buds of pain.
My heart all Winter lay so numb,
The earth so dead and frore,
That I never thought the Spring would come,
Or my heart wake any more. 
But Winter's broken and earth has woken
And the small birds cry again,
And the hawthorn hedge puts forth its buds,
And my heart puts forth its pain.
Life goes on, and so must we. And my forthright mother would not have it otherwise. "Go and dig the garden", she would say. Sow some seeds. Make new friends. Create something beautiful. Bring joy to someone's life.

As she did, during her lifetime. Mum brought joy to many people. To the old people at the Melvin Hall Day Centre in Penge that she ran for many years; to those who walked in the beautiful gardens she created; to her friends and family; and at the last, to the staff and residents of her nursing home. She truly lived up to her name. Joy, to the world.

Rest in peace, Mum.

Related reading: 

Broken windows, broken lives
Reflections on death and immortality

Image at the head of this post is part of the garden that my mother created in Minster, Isle of Sheppey, photographed by me. The poem is by Rupert Brooke. 

My mother spent many years developing and running services for the elderly. Her legacy sadly died before her, with the closure of Melvin Hall Day Centre in August 2016. But the need for services for the elderly is greater than ever. In her memory, therefore, we have set up a site where those who wish may make a donation to Age UK. The link is here: https://mydonate.bt.com/fundraisers/joycooke

Below is my mother's obituary notice, written by my eldest brother, Simon Cooke.










Monday, 15 May 2017

Squaring the circle on immigration

It had to happen. Amber Rudd, the Home Secretary, has refused to commit to a net migration target. Facing a barrage of complaints from the hospitality industry about potential staff shortages post-Brexit, Rudd appears to be softening the government's line. She told BBC Radio 5Live's Pienaar's Politics:
"My personal view is we need to continue to bring immigration down. I want to make sure that we do it in a way that supports businesses.”
So what way might that be, then? After all, her boss is on record as saying she thinks net migration should fall to the tens of thousands. Currently, it is in the hundreds of thousands: according to the latest ONS statistics, net migration for 2016 was 273,000 (net inflow), of which 164,000 was from outside the EU. Even if immigration from the EU stopped completely after Brexit, it would not be enough to bring net migration down to levels Theresa May considers "sustainable". The UK would also have to impose much more draconian restrictions on non-EU immigration. How this can be in any way supportive to business is difficult to imagine. No wonder Ms. Rudd doesn't want to have a definite net migration target.

But in the Sun, Ms. Rudd's interview with Pienaar's Politics comes across entirely differently:
THE HOME SECRETARY yesterday vowed to “push” big chains like Pret a Manger to hire more Brits – and kick their addiction to EU staff. Amid a fresh row over immigration targets, Amber Rudd said it was up to business to “look after people who are otherwise unemployed”.
And instead of quoting Ms. Rudd's business-friendly rhetoric, the Sun highlighted this comment:
“I did hear that Pret a Manger had come out and said it’s absolutely essential for us to have European workers because if we don’t we’re going to have to make more of an effort to recruit in the UK. Well, good. I’d quite like them to make more of an effort to recruit in the UK. So we will push them as well to do more in the UK.”
Oh yes, very friendly to business. Pret a Manger has already said it will try to recruit more British people. So Ms. Rudd's response is to say "we will push you to do even more". Riiight.

But I am wondering where the queues of British people waiting to work in Pret a Manger are. I haven't seen any, have you?

It is not just service industries like Pret that are under pressure to "hire British". The Sun says that manufacturers, too, need to "wean themselves off" cheap foreign labour. But where are the hordes of unemployed British that are being denied jobs?

The truth is that they don't exist. The latest Labour Force Survey shows that in the year ended February 2017, the total number of people in work rose by 312,000. Nearly three-quarters of adults aged 16-64 are in work: that is the highest proportion since 1971. Unemployment is the lowest it has been since 2004, and lower than at any time during the 1980s and 1990s:


In short, the UK does not have armies of unemployed and inactive people crowded out of jobs by high immigration. Despite net migration in the hundreds of thousands, British people are not struggling to find work.

Ah, but what about young people? Surely unemployment is higher among the young?

Well, it is - sort of. The unemployment rate among 18-24 year olds is currently 10.8%, which is about double the adult unemployment rate. Among 16-17 year olds it is much higher, over 25%.

But these percentages are deceptive. A large proportion of 16-24 year olds are economically inactive, mainly due to being at school, college or university. So although the percentage of unemployed is high, the actual numbers out of work are low. The Labour Force Survey says that in the three months to end April 2017, the number of 16-24 year olds describing themselves as "unemployed" was less than 600,000, and of those, nearly a third were students looking for part-time work. Nor do most young people remain unemployed for long. According to this Parliamentary briefing paper, at the end of February 2017 only 81,000 16-24 year olds had been out of work for more than 12 months, and the numbers are falling fast: a year before, the number of young people out of work for more than 12 months was 31,000 higher. Clearly, immigration is not stopping young people from finding work, either.

The fact is that British employment has been so successful in the last few years that now there are insufficient unemployed British people to fill the vacancies that would be left if net migration were reduced to the tens of thousands. And it would not be skilled jobs that went unfilled. Principally, it would be unskilled jobs in the hospitality, care and agricultural sectors.

The trouble is, many middle-aged and elderly voters are convinced that unemployment is still up at 1980s levels. After all, we had a recession, didn't we - and when they were young, recessions meant high unemployment. The 1980s recession was especially brutal and long-lasting: in 1985, youth unemployment was still 20%. And everyone keeps telling us that the 2008-9 recession was even worse. So there must be lots of unemployed young people. Or maybe under-employed young people, doing a few hours of casual work but desperately in need of a proper job. Stands to reason, dunnit?

The statistics tell a different story. The Labour Force Survey shows that even under-employment is no longer the problem that it was: full-time employment is rising fast. These days, the problem is low wages, not lack of jobs.

But people don't believe the statistics. Even though in the Labour Force Survey, those surveyed self-report their employment status, there is a widespread belief that the Government is fiddling the figures. Many people believe unemployment is much higher than reported. So they demand that firms should stop importing labour and employ British people. Amber Rudd's "hire British" resonates with them.

However, UKIP's policy of zero net migration resonates too, if only because it reminds older voters of their youth. Paul Nuttall clings to a romantic notion that EU migrant agricultural workers will be replaced by students picking fruit in their holidays, as he did when he was a student. I have news for you, Mr. Nuttall. These days, most students already work, not only in their holidays but during term time as well. So where is this army of student fruit pickers going to come from, pray?

UKIP's version of "back to the future", unrealistic though it is, puts Amber Rudd under pressure. She must somehow square the circle of being hardline on migration, thus attracting UKIP voters, while appeasing Tory-voting businessmen and women who fear that they will have to pay significantly higher wages once the flow of cheap labour from overseas is stemmed. Hence her confusing rhetoric, and her discomfort at being asked for hard figures. She is playing a spin game.

And it is a dangerous game, too. Of course, many people would welcome higher wages. But the other side of higher wages is higher prices. We have become accustomed to cheap food, cheap consumer goods, cheap entertainment, cheap care. So when the middle-aged and old can no longer afford to replace their cars every three years, because manufacturers have weaned themselves off their diet of cheap labour; when they have to cut down on their meals out because pubs and restaurants have put up prices in response to the higher wages demanded by their British staff; when buying fresh fruit and vegetables takes up more and more of the weekly food budget; when the cost of Granny's care home shoots through the roof.....then it will not be the 1980s that they remember. It will be the 1970s.

I wonder whom they will blame?

Related reading:

Intergenerational unfairness
Austerity and the rise of populism
Grieving for a lost empire
A dent in the surface of time


Tuesday, 9 May 2017

Intergenerational unfairness


This thread on Twitter has attracted a lot of attention. It goes some way towards explaining why older people are generally in favour of Brexit, and why Theresa May's "strong and stable" mantra particularly appeals to the baby boomer generation. For those who aren't on Twitter, I've paraphrased part of the thread here.
I have been thinking about the "strong and stable" mantra, in the context of my mum, who thinks Theresa May is great. Mum is a product of post war Social democracy (born 1947). She got 6 good O levels despite failing the 11+, and went into the civil service. She got into a mess due to creating me with my irresponsible dad, but then met my stepfather, whom she is still with.
In material terms, since the early 80s my mum and my stepfather have had no money worries. They've had stability from their 40s to their 70s. And they also had stability in their earlier lives through full employment, the NHS, workplace/union rights, public sector employment, education. Although they were children in the first Austerity era (late 40s/early 50s), it was their parents who'd born the brunt of that. They had the stability of post-war social democracy. Then, from 1979 onwards, they got the income from the shares. They got the wealth from property price rises. They got the dividends of Thatcherism, and they also got the pensions from post-war social democracy.
So they've had a lot of stability. Stability was their era. If you appeal to them with "Stability" they recognise themselves. And because they did well out of the upswing of Thatcherism after the rockiness of the inflation years and the disruption and "discontent" of 1978-9, they also identify with "strong". They voted for Thatcher, and she put a stop to disruption and discontent.
To them, stability came under Thatcher because she was strong, and they see May, their contemporary, reflecting it back at them. They see "strong and stable" as values they associate with their own characters. They don't see themselves as being stable because of post-war social democracy. They don't see healthcare, education, housing, rights. They see themselves as having the right qualities, the right approach to life. Their stability comes from "working hard and saving", even though they've had more holidays than anyone I've ever met and were well into the bank of his mum and dad (civil service pension). And also, as gleeful Brexiteers, they don't see any of the stability or material comfort as having come from 45 years of EEC/EU membership. 
May's mantra of "Strong and Stable" resonates and reinforces how they see themselves. So they say things like, "I'm sure we'll get a good deal because Theresa May is strong" and "we can trade with Australia". Mum thinks Theresa May is "really good because I think she'll get us a good deal". This is just faith. Faith that being 'strong' works: faith that being 'strong' will restore Britain to what it was when they did well out of it. Being Strong will make you Stable.
It's delusional nonsense. It's the politics of Affect. But it's a structure of feeling. It ignores history, it locks on to characteristics. Also, of course, it's difficult to counter it by giving your parents a little lecture on the Post War settlement and the neoliberal rupture.
They see the struggles, failures & penury of their children as failures of New Labour. Borrowing money, switching jobs. They had stability because they were strong. We have instability because we are weak. We are flighty, we get into debt, we can't keep a job. Weak.
I say to them, what about my child? What about my 13 year old? She won't have what you had. Is that "strong and stable", Mum? Your granddaughter having to pay private health insurance when she might not even be able to get a job?
I see their "strong and stable", and I raise them "you have voted to make your grandchildren's lives unstable and precarious". I want to make them feel guilty for what they have done.
But when I talk to my mum and I say "you know your grandchildren almost certainly won't get a state pension" she says "I know".
They don't care. 
I've highlighted the comment that particularly attracted my attention. For to my mind, this is where the author's perception failed him (or her). You can't make people feel guilty about something they don't think is anything to do with them. And the baby boomer generation don't see their wealth and their entitlements as in any way connected with the materially poorer future faced by their children and their grandchildren.

Believe me, I have tried. I have spent endless hours explaining that NI contributions are not payments into a savings pot to be drawn on in retirement. I have spent almost as many hours trying to get across to older homeowners that the current value of their property has nothing to do with their hard work and everything to do with the insane rise in property prices since the 1960s. I have shown how the NI fund faces bankruptcy by 2020 unless either the state pension age rises significantly - for current generations, not just for the young - or NI contributions rise astronomically. I have patiently explained to those living on the income from savings that raising interest rates beyond what the economy can afford will make everyone, including them, poorer in the future. I have pointed out that the returns of the 1980s were anomalous and will never return. And I have commented that retaining the triple lock on state pensions, thus continually raising pensions above both earnings and inflation, will progressively immiserate the children and the unborn of today.

All my attempts failed. They did not want to know. When I said that today's pensions are paid by today's workers, and that tomorrow's pensions will be paid by tomorrow's workers (the children and unborn of today), I was shouted down. "WE PAID IN: YOU PAY OUT", they shrieked. Even those who did understand that current contributions pay current pensions, and that the wealth of the old is mirrored by the debt of the young, refused to accept any responsibility for the uncertain future faced by the young. They think they are entitled to their property wealth, their pensions and their benefits, and they are damned if they are going to relinquish any of them without a fight.

It's not that they don't care about the young. They do. After all, they have children and grandchildren. So they want their state pensions so that they can provide free childcare for their grandchildren, thus enabling their daughters to go out to work. They want the state to pay for their social care so that they can pass their property and pension wealth on to their children. They even want the triple lock to continue so that their children and grandchildren will in due course have higher state pensions.

They seem unable to see that the money they want to drain from the state to subsidise their own children must come from taxing other people's children, many of whom will be materially poorer than theirs. Or if they do see, they don't care. They don't see the cost of their demands as any of their concern. They have worked hard and paid in all their lives. Now it is time for them to reap their just rewards.

The real problem is that they do not understand the "social contract", on which our welfare system is based - and which forms the foundation of our entire social economy. The "baby boomers" have been systematically led to believe that their security in old age comes from their own efforts, not from ensuring that future generations have a bright future. That is the legacy of the "cult of the individual" which was the moral underpinning of Thatcher's revolution. The baby boomer generation bought former council houses, participated in the sell-off of state assets, contributed to defined benefit pensions, paid tax, NI and SERPS. They believe that through their own hard work and saving, they have provided for their own old age and acquired assets to pass on to future generations. Their property, pensions and benefits are simply the capital they have built up. They are entitled to them - in full.

So the reason it is so hard to shift their sense of entitlement, even though they know that future generations will not have such generous pensions and benefits, and may never own their own homes, is that they believe they have paid. Any attempt to cut their pensions and benefits, or reduce their returns from saving, or force them to draw on their wealth to pay for care, is thus seen as robbery.

But that's not how the social contract works. This is how the Government's report on intergenerational fairness describes it:
The welfare state has long been underpinned by an implicit social contract between generations. The provision of benefits and public services to the current pensioner population is funded by the taxes of the current working-age population. In turn they expect to receive similar benefits and services when they retire, and so on. 
The sad truth is that the baby boomers have not paid for their pensions and benefits. This chart - from research carried out in 2004, and cited in the Government's recent report on intergenerational fairness - shows that everyone born before 1971 will contribute less in tax over their lifetimes than they receive from the state, once things like free education and the NHS are taken into account: 


We should not be fooled by the percentages here. The oldest generation have paid in considerably less than they receive, but in money terms they both paid and received much less than those born since the war. Financially speaking, the people who have taken the most and paid the least are my own generation, those born 1956-61.

Of course, this research is out of date. The Government's report calls for further research to be undertaken, to determine what the situation is now. But it seems unlikely that the balance between tax and receipts has improved. It is more likely to have deteriorated, since people are living longer, state pensions and benefits have risen and the cost of the NHS is rocketing.

But as the Government's report explains, the contributions shortfall is not the only problem:
The UK economy has become skewed. Rapid and sustained rises in house prices have concentrated wealth in the hands of those who own property. Far too many young people cannot afford homeownership and instead have to pay costly private rent. Life expectancy has risen faster than anticipated at a time when the large baby boomer cohort, born between 1945 and 1965, are reaching retirement. As the taxes of working people support the retired, the ageing population places strain on those in work. Pensioners have been protected from public spending cuts that have largely been felt by younger groups. Pensioner poverty has been drastically reduced and average pensioner household incomes now exceed those of non-pensioners after housing costs. The millennial generation, born between 1981 and 2000, faces being the first in modern times to be financially worse off than its predecessors.
This chart (from the same report) shows just how skewed against younger people the housing market has become:


And this pair of charts shows all too clearly who, above all, bears the cost of the UK's disastrously distorted housing market:
Children do. After housing costs, 30% of children are in relative low income - compared to 15% of pensioners and 20% of working age adults. The report expresses concern about millenials, but the generation beyond looks in even worse shape.

The truth is that as long as younger generations remain "weak and flighty", highly indebted, insecure and poor, older generations' view of themselves as "strong and stable" must be a delusion. Strength and stability can only come from ensuring that future generations have prospects that are even better than those we had. By looking after themselves at the expense of future generations, older generations are undermining their own stability. And as if that were not bad enough, now they have shafted the young people on which their future depends. The economic fallout from Brexit will hurt young people far more than it will the property-owning, pension-reliant old.

The irresponsibility of older generations threatens not only the future of younger generations, but their own prosperity. Entrenching intergenerational unfairness, as the old seek to do, is folly.

Related reading:

Raising interest rates is not that simple, Lord Hague
The foolishness of the old - Pieria

Saturday, 29 April 2017

Illiberal Britain



"Why have you changed your avatar?" asked a friend of mine.

Why indeed. Ever since I joined Twitter in 2010, my avatar has always been a picture of me, and my Twitter name has always been my own name. I've never wanted - or needed - to be anonymous.

So why now?

The image on my avatar is the Anarchist Cat. Here is what Wikipedia has to say about it:
The black cat, also called the "wild cat" or "sabot-cat", usually with an arched back and with claws and teeth bared, is closely associated with anarchism, especially with anarcho-syndicalism. It was designed by Ralph Chaplin, who was a prominent figure in the Industrial Workers of the World (IWW). As its aggressive stance suggests, the cat is meant to suggest such ideas as wildcat strike actionssabotage, and radical unionism.
A while ago, I added triple parentheses around my name in solidarity with the online Jewish community. Anti-Semitic elements on social media use triple parentheses to identify accounts they think are Jewish so that they can be targeted for hate attacks. I am not Jewish, but I have been the target of anti-Semitic abuse by people who (weirdly) decided I must be Jewish because I opposed their particular brand of racism. I know, first hand, how horrible it can be. So I added the triple parentheses to my own name in solidarity with the real Jews who suffer such hate attacks both online and in the real world.

And now I have added an image to my avatar in solidarity with another group. The people who are all too often called "traitors" for voting to Remain in the EU, and "saboteurs" for trying to overturn or water down the decision of 37% of the British population to leave the EU.

In the EU referendum last June, I voted to Remain - a traitorous act, according to some.  But after the vote, it quickly became apparent to me that only the hardest of hard Brexits would satisfy those who blame the EU, free trade and immigration for all their woes. I wrote about the need for a "nuclear Brexit" in the Financial Times last July. This was my conclusion:
It grieves me to say it, but the UK must now exit completely from the EU. Any form of mitigation simply dilutes the sovereignty for which the UK people voted. I know that cutting the ties completely is the most economically damaging approach, but in the end politics trumps economics. The UK’s democracy at home, and its standing abroad, are already seriously compromised. Attempting to evade or water down the decision of the people will only give a platform to the unpleasant face of nationalism, the hate-filled racism that is already beginning to show its face. For the sake of democracy and freedom, “nuclear Brexit” is the only remaining option.
But far from democracy and freedom being saved by the prospect of "nuclear Brexit", they seem to be under greater threat than ever. Headlines like these are markers along the path to an illiberal Britain:


I do not agree with those who are trying to overturn the decision of the British people on 23rd June, 2017. I think that flawed though the referendum was, it was sufficiently definitive for the result to stand. But I defend completely their democratic right to oppose that decision and to try to get it reversed. And I am appalled by the violent rhetoric used against them. So just as I added triple parentheses to my name in solidarity with Jews who are the target of violent anti-Semitic abuse, so now I add the Sabot Cat to my avatar in solidarity with Remainers who are the target of violent rhetoric and outright threats.

And I have changed my mind about "nuclear Brexit". A very hard Brexit is exactly what the illiberal, authoritarian elements in British society want. I think a very hard Brexit is still inevitable, simply because no government will have the guts to disappoint those who voted to end freedom of movement. But if we continue down the present path, it won't just be the end of Britain's membership of the EU - it will be the end of Britain as a tolerant, liberal society.

This YouGov poll reported in the Independent shows what Leave voters want to see restored in post-Brexit Britain:


Hanging criminals and beating children. The core beliefs of illiberal Britain.

Nor is the illiberalism of Leave voters limited to hanging and flogging. This is the election manifesto from a Scottish UKIP wannabe councillor:


She seems to want to restore the Britain of a bygone age, when women with children didn't work, discussing sex was taboo, schools offered a very limited curriculum, and there was not much in the way of retirement provision or benefits for pensioners. Oh, and Britain had the death penalty, of course. In some places criminals were even executed by guillotine.

Her views are pretty extreme: few Leave voters that I have encountered would support raising the pension age to 70, eliminating free bus passes and helping the old to die. But lots of the Leave voters I have talked to seem keen on sending young people to work in the fields instead of going to university: young "snowflakes" need to find out what "real work" is, apparently, rather than drifting around Europe pretending to study. I have also seen significant support among Leave voters for ending tax credits, slashing benefits for sick and disabled, and stopping all support of families with children. And I have encountered a lot of opposition to free nursery care, extended maternity leave and paternity leave.

I suspect much of this arises from the fact that Leave voters are in general older people who are angry that younger people have benefits that they did not have.  But there also seems to be a genuinely reactionary and intolerant undercurrent.

YouGov calls this undercurrent "authoritarian populism", and says it is characterised by three core beliefs:
  • cynicism over human rights
  •  anti-immigration
  • favouring a strong emphasis on defence as part of wider foreign policy.
In Britain these three characteristics together frame an anti-EU position.

Authoritarian populist views are more common among older voters, with the hardest views among those over 60:


Authoritarian populist views are also negatively associated with educational attainment:


So, to sum up, older and less educated people are more likely to have illiberal views than younger and more highly educated people. The trouble is, there are a lot of them, and they vote. YouGov says 48% of British voters hold authoritarian populist views to a greater or lesser extent. Liberal-left voters remain the largest single group in Britain, but they are outgunned by the combined authoritarian-populist forces.

But why must we listen to such reactionary voices? Why should we give up so much of what we have achieved, simply to appease the angry, intolerant old?

The Britain that I love is an open, tolerant, liberal society that welcomes foreigners, promotes equality and is generous towards the less fortunate. If working to preserve those values makes me a "traitor" and a "saboteur", then that is what I shall be. And when the death penalty for treason is restored, I shall walk to the guillotine with pride.

Related reading:

Anti-nationalism

Tuesday, 25 April 2017

The Libor witch hunt



Since I wrote my post about the Bank of England's alleged manipulation of Libor before and during the financial crisis, something of a witch hunt seems to have developed. Certain people with axes to grind have jumped on the bandwagon set in motion by the BBC's Andy Verity and are aggressively promoting their view that the Bank of England's behaviour was fraudulent. Their argument is that the Bank of England has no business attempting to influence market rates, that those at the Bank who did this should be brought to justice just as traders who rigged Libor have been, and that businesses, households and public sector bodies that lost money when the Bank of England "talked down" Libor should be compensated.

This is arrant nonsense. Influencing market rates is what central banks do. It is called monetary policy, and it is the means by which they control inflation. If central banks could not legally influence market rates, monetary policy as we know it would be impossible.

To explain this, let's look at how monetary policy worked before the financial crisis. Prior to the era of QE and excess reserves, the principal tool that the Bank of England used to control inflation was the cost of funding for banks. If inflation expectations started to rise, the Bank of England would increase the cost of funding for banks, forcing them to raise the interest rates on loans and thus dampening consumer and business appetite for credit. When credit appetite is dampened, spending into the economy slows and inflation starts to fall. Conversely, if inflation expectations appeared to be drifting below target, the Bank of England would cut the cost of funding for banks, enabling them to cut interest rates on lending and thus stimulating demand for credit. Increased demand for credit would lead to higher spending in the economy, pushing inflation back up towards target. This is of course a much simplified explanation, and leaves out the considerable role of asset markets in interest rate management, but it will do for my purposes here.

The Bank of England's policy rate, known as the "bank rate" or "base rate", is the rate at which it will lend to banks against good collateral. But banks don't generally get their funding directly from the central bank - indeed approaching the central bank for funding carries a stigma, as the fate of Northern Rock showed all too clearly. Banks get their funding from each other, either directly or via money markets. Libor is the rate at which banks will lend to each other. Prior to the crisis, borrowing on the interbank market - unlike borrowing from the central bank - did not require collateral. So Libor was usually a few basis points above the policy rate, reflecting the higher risk that banks take when lending unsecured funds.

But it was important that Libor responded to changes in the policy rate. If it did not - or if it diverged wildly - monetary policy could not work. For example, suppose that the bank rate was 4% and Libor was 4.25%. To calm down rising inflation expectations, MPC raises bank rate to 4.5%. But what if the Libor panel banks submitted funding rates that collectively kept Libor at 4.25%? Clearly, if this happened, the increase in bank rate would have no effect on the cost of funds for banks. The Bank of England would have lost control of its main means of controlling inflation. It would be hardly surprising, therefore, if the Bank deliberately influenced the Libor submissions of panel banks to ensure that Libor remained closely coupled to the bank rate. After all, the Bank is responsible to the Government for ensuring that inflation remains under control. So monetary policy must work. Central banks influence market rates to make sure that it does. There is nothing fraudulent about this, no-one needs to be jailed for it and no-one deserves compensation for it. The witch hunters are barking up the wrong tree.  

This is bad enough. But there is a much worse scenario - and unlike my previous example, this one actually happened. Suppose that the bank rate is at 5%, but due to a market panic, Libor suddenly shoots up, to 25% or more? If the Bank of England took no action to bring down that rate, it would be negligent. Interbank funding rates at those levels are a heart attack for banks. Lending into the economy would come to a sudden stop, and the interest rates on variable rate loans linked to Libor would head for the moon, with disastrous consequences for businesses and households. Central banks are responsible for protecting the economy from major shocks like the failure of Lehman Brothers. They do so by influencing the behaviour of financial markets, including the path of key market rates. So of course the Bank of England capped the exponential rise of Libor after the failure of Lehman. It had no choice but to do so. I am frankly appalled at the witch hunters' claim that doing so was fraudulent. Verity, fortunately, has stopped short of making such a ridiculous accusation.

Since the financial crisis, the excess reserves created by QE have partly emasculated the bank rate as principal policy tool, and the interbank market is much reduced as market participants now prefer to lend against collateral. Now, repo rates are probably of more concern to the Bank of England than Libor. But perhaps, at some point in the future, excess reserves will have drained away sufficiently for monetary policy once again to be effectively transmitted via bank funding costs, and market participants will feel secure enough to lend unsecured. When that happens, Libor will return to prominence - and central banks will try to influence it. That is their job.

The Bank of England was in no way wrong to influence the path of Libor, or of any other market rate, in the pursuit of monetary policy objectives. Where it went wrong was in failing to be open and transparent about targeting Libor as a secondary policy rate. Lying to Parliament about the conduct of monetary policy is never justifiable. And nor is allowing others to lose their jobs and/or be jailed for acting on the Bank's instructions.

We need to distinguish clearly between manipulation of Libor by commercial banks and traders to flatter their own positions, and manipulation of Libor by commercial banks guided by the Bank of England in order to meet monetary policy objectives. Until that distinction is made, we cannot know whether the likes of Tom Hayes are innocent or guilty. There may have been a miscarriage of justice - or there may not.

The Bank of England must come clean about the extent to which it manipulated Libor, and why. There is no shame in being honest: indeed failing to tell the truth risks fatally undermining its credibility. The public deserves to know that when central banks are doing their job properly, there is really no such thing as a market rate.

And the Libor witch hunters must back off. Their antics are not helpful.

Related reading:

Libor and the Bank

Image: "Salem witch hunt begins" from www.history.com

Tuesday, 11 April 2017

Libor and the Bank

Nearly five years ago, the former CEO of Barclays Bank, Bob Diamond, defended himself against accusations that on his watch, Barclays had deliberately falsified Libor submissions. To no avail: after widespread adverse press coverage, Diamond resigned.

Was this at the instigation of the Governor of the Bank of England and the head of the FSA? We will probably never know. But events yesterday make not only Diamond's resignation, but also the prosecution and jailing of traders and Libor submitters from Barclays and other banks, look distinctly odd.

The BBC's Andy Verity has revealed the existence of a recording which appears to indicate that the Bank of England and the Treasury pressured banks to "lowball" their Libor submissions during the financial crisis. According to Verity, the conversation, between a junior Libor submitter (who was subsequently jailed) and his manager, ran like this:
In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates. He tells him: "The bottom line is you're going to absolutely hate this... but we've had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower." 
Mr Johnson objects, saying that this would mean breaking the rules for setting Libor, which required him to put in rates based only on the cost of borrowing cash. Mr Johnson says: "So I'll push them below a realistic level of where I think I can get money?" His boss Mr Dearlove replies: "The fact of the matter is we've got the Bank of England, all sorts of people involved in the whole thing... I am as reluctant as you are... these guys have just turned around and said just do it."
This is not the first time that Barclays has issued material purporting to show that the Bank of England was influencing Libor rates. Diamond's submission to the Treasury Select Committee included this file note recording a phone call between Diamond and Paul Tucker, then Deputy Governor of the Bank of England:
Note the last sentence. At the time, this passed largely unremarked - but in the recording reported by the BBC, Mark Dearlove makes a similar comment. Someone very senior in the Treasury seems to have instigated the Bank of England's request for Libor lowballing. The identity of this individual has not been revealed, though the Telegraph thinks it knows.

Libor manipulation is now a criminal offence - when it is done by banks or traders to boost their own profits. So the growing evidence that the Bank of England was manipulating Libor rates during the financial crisis at the behest of the Treasury raises some very serious questions.

Firstly, why would the Bank and the Treasury have wanted to manipulate Libor? It seems highly unlikely that this "lowballing" request, made during the worst financial crisis since the 1930s, would have had anything to do with flattering bank profits. So what might it have been about?

Well, at this time banks were dropping like ninepins. Several Libor panel banks, including RBS and HBOS, were already shut out of markets: their Libor submissions in no way reflected the real cost of market funding for them (which was effectively infinite). And market rates were heading for the moon, as suspicious market participants looked for the next domino to fall. It seems entirely reasonable to me that the Bank of England, prompted by a worried Treasury, would have tried to lower Libor to something more sensible than panicky banks would charge to lend to other banks they feared could collapse at any second.

Secondly, the note from Tucker shows that Barclays's Libor submissions were among the highest at that time. Normally, high funding costs indicate that the market thinks the bank is a poor risk: for example, Northern Rock's funding costs rose dramatically in the months before its collapse. So Barclays submitting higher Libors than other banks could have signalled to the market that it was next in line for a bailout.

We now know that Barclays was indeed in trouble at that time. To avoid the same fate as RBS, it went cap in hand to Qatar. The Serious Fraud Office is now investigating the shady equity-for-loan deal Barclays did with the Qataris. According to the Independent's Ben Chu, the SFO's findings are due in about a month. If the SFO decides that the deal was fraudulent, criminal prosecutions will follow. The timing is exquisite....

Did the Bank of England - or the Treasury - know Barclays was in trouble? Or did they merely suspect it was? Either way, did they pressure Barclays to reduce Libor submissions in order to ward off a market attack on a bank perceived as vulnerable, thus buying time for Barclays to find additional funds to beef up its dwindling equity?

This raises further questions about Barclays' behaviour. If Barclays was the source of the new recording, why wasn't it released five years ago along with the Tucker file note? Why has Barclays been sitting on this evidence? Why did Bob Diamond take the fall for Libor manipulation that appears to have been instigated by public officials?

But if the source was one of the participants, not Barclays itself, why did that person sit on the recording for five years? One of the people in that conversation was jailed. This evidence could have exonerated him, and others.

I think we need to know why this evidence was withheld for so long, and by whom. And we also need to know why it has now been revealed. Please don't tell me the old team had hidden it in a vault and the new team have only just found it. I don't believe it.

There are serious questions for the Bank of England, too. Why did Paul Tucker deny knowing anything about lowballing, despite the existence of the file note implicating him? His involvement in this matter destroyed his chances of becoming Governor. Why did he sacrifice his career at the Bank? Who was he protecting - and why?

I have previously asked why the FSA went ahead with fines and censure for Barclays and, subsequently, other banks when it appears they were acting at the behest of the Bank of England. The FSA must have seen the evidence Barclays presented to the Treasury Select Committee, though it may not have been aware of the recording. It therefore knew the Bank of England was possibly implicated. Hanging Barclays out to dry for an offence possibly committed at the behest of the Bank of England and the Treasury is hardly presenting a united front. Was the FSA distracting attention from its own failures by shafting other public institutions?

There is another matter, too. Back in 2012, Joseph Cotterill reported that the Bank of England was also suspected of Libor manipulation prior to the financial crisis, between 2005-2007. This is an entirely different - and potentially much more serious - matter than attempting to cap Libor to prevent bank meltdown in the financial crisis. It suggests that the Bank may have been treating Libor as a shadow policy rate. There is some justification for this: if the main monetary policy rate and Libor become significantly decoupled, monetary policy loses traction. So it may be that the Bank leaned on panel banks to adjust their Libor submissions if Libor appeared to be becoming unanchored from the policy rate. But if this is what the Bank was doing, it didn't tell anyone.

The Bank of England may or may not have had good reasons for manipulating Libor. But its officials had no reason whatsoever to conceal the Bank's actions. Lying to Parliament is totally unjustifiable - as is allowing people to be prosecuted, and serve jail time, for offences they may not have committed. The real disgrace is the web of lies that seems to have been woven by both Barclays and the Bank of England.

We may never get to the bottom of this sorry mess. But we should give it a damn good try. Five years ago, I called for an independent judicial enquiry into the role of public institutions in Libor manipulation . I repeat that call now. Let those who really made the Libor decisions, both before and during the financial crisis, be brought to account.

Related reading:

Libor rigging and double standards
So whose fault is it, then?





Tuesday, 4 April 2017

A dangerous Eden


I have been going to the gym. Seriously. For about a couple of months now. I'm doing weight training for the first time in my life, and cardio exercises, including - wonder of wonders - short bursts of running. I'm even paying for a personal trainer. It's a shocking extravagance, but I'm likely to find any excuse under the sun not to do my workouts unless I have someone telling me what to do and shouting at me if I don't do it. As one of my school reports said, "Frances does not enjoy physical exertion". Truer words were never spoken. Sporty, I am not.

So why am I doing this? It is all because of my family. Specifically, my father. He has serious heart problems, vascular deterioration in his brain and Type II diabetes. And I am a lot like him. 

Ok, so he is 83. But he was a lot more active in his 50s than I have become. Since I reduced my singing teaching and took up writing, I have become largely sedentary. Even gardening has gone, killed by a brutal combination of severe hay fever and asthma. And although I enjoy walking, I don't do it nearly enough. It is too easy to hop into the car even for short trips, and longer ones are a rare indulgence in a life dominated by work. 

I looked at my father - now slim, after drastically changing his diet when he was diagnosed with Type II diabetes. And I looked at me. And I did not like what I saw. I decided that if I wished to avoid heart problems and diabetes, I had to slim down and get fit. So I went to the gym. 

I am far from alone. In a recent panel discussion on the future of work, I asked the audience how many of them went to the gym. A forest of hands went up. It appeared that nearly everyone in the room, young and old, visited a gym. Slimming down and getting fit is fashionable among London office workers. 

But back in the nineteenth century, there was no such thing as a gym. Nor would people have visited gyms even if they existed. Even if they could afford them, they did not need them. For the vast majority of people, work itself involved physical exertion. It did not matter whether you were an agricultural labourer, a scullery maid, a cook or one of the thousands of people who worked in factories and mines up and down the land. Work was hard. 

There was a lot of it, too. People then worked longer hours than we do now: working days of 10-12 hours were typical. Most people started work when they were children, and continued to work well into old age. The state pension introduced in 1908 set the retirement age at 70 for both men and women. Prior to that, elderly people who could not support themselves were forced into workhouses - where they were, of course, required to work. 

Even for people doing desk jobs, such as Dickens' Bob Cratchett, work was physically harder than it is now. Offices were neither centrally heated nor air conditioned, and there was no concept of "ergonomic design". And Victorian ledgers were no light weight: any clerk lugging those around would have been doing the equivalent of modern weight training. Not to mention dragging in buckets of coal and logs to feed the open fire. 

Transport to work also involved what we would now regard as hard work. Most people would have walked to work, often some distance. Even richer people regarded walking long distances as normal: in Jane Austen's Pride and Prejudice, Elizabeth Bennet and her aunt and uncle decide to walk round the Pemberley park on discovering that it is "only 10 miles round". Admittedly, 10 miles proved too much for her aunt: but when Elizabeth marries Darcy, her aunt observes that a pony and trap would be the very thing in which to tour the park. Riding in an unsprung carriage (or pony trap) might have saved her feet, but it would have used every muscle in her body. Among richer people, horse riding was a common means of transport: but that too involves using muscles that many of us today don't know exist. 

In one episode of the BBC's "Victorian Slum" - a well-constructed "living history" programme showing what life was like in the Victorian slums of East London - the historian on the programme, watching young men struggle to lift heavy sacks of meal, observed that Victorian men were fitter and tougher than today's young men. Although their nutrition was far worse than ours today, and there was next to no healthcare, they were used to lifting heavy weights and performing physically demanding manual tasks. 

So for our forebears, gyms would have been superfluous. It was the daily grind of living that kept them fit. When they stopped work, they rested. And because there was much work, and little rest, they longed for a world in which there was much rest and little work. Freedom from toil has been the goal of mankind for millenia. 

We are hardwired to use our ingenuity to find easier ways of doing things. Our prehistoric ancestors directed their efforts towards making hunting and gathering more efficient: so they invented weapons with which they could kill much larger prey (and could therefore afford to hunt less often), and they invented ways of improving the productivity of plants, so that they need not forage so widely. Eventually, of course, they learned to keep the plants and the prey close to them, so that they could tap them whenever they wanted rather than having to find them. Of course, farming did not eliminate either food scarcity or hard work: but it made them more controllable, especially as humans devised ever more imaginative ways of preserving food.

Now, we create labour-saving devices that reduce the amount of physical effort required to keep a home clean, clothes washed and dinner cooked. We invent machines that eliminate the need for humans to exert themselves physically to produce food. We develop faster and more efficient ways of moving people and goods around. We speak of the "changing nature of work", as if it were something new: but in reality, the nature of work has been changing for generations, as machines have progressively replaced human muscles. Our worry now is that machines will replace not just our muscles, but our brains. 

But progressively replacing human brawn with brain in the world of work is already creating an unexpected problem. Freedom from toil isn't all it is cracked up to be. Our bodies need physical exertion to remain healthy. Sedentary lifestyles shorten people's lives

So, do we kick out the machines and do the work ourselves? No. We go to the gym. In other words, we pay to do physical hard work for which in the past we would have been paid. Some of us (me) even pay a personal trainer to play the role of the employer that would have told us what to do and shouted at us if we didn't do it well enough. 

The burgeoning fitness industry is a fine example of how the changing nature of work sparks new, previously unimaginable types of job. Who, one hundred years ago, would have foreseen that entire factories full of machines would be created not to produce goods, but simply to enable people to stay healthy? Even the treadmill of nineteenth century prisons and workhouses served a useful purpose: it generated energy to power mills. But as far as I know, no-one has yet tried to harness the physical energy that thousands of people waste every day in gyms up and down the country. Mind you, it is surely not going to be long before someone realises that gyms could be self-sufficient in energy and possibly even provide electricity to the local community. Who needs wind or solar, when you have a spinning class? 

We also re-create the food scarcity that was the lot of our distant ancestors. Our instinct is to seek out foods that were previously scarce but are now abundant, such as sugar and fat, but we know that indulging our preference is dangerous to our health. So we follow diet plans of varying scientific credibility, and consult dieticians who advise us on what not to eat. We voluntarily restrict both the amount and the variety of food we eat: we may even pay extra for foods that are produced in a less efficient (but more "natural") way. To the people of the "Victorian slum", this would have seemed extraordinary. 

Indeed, it would seem extraordinary to people in developing countries today. What I describe above are first world problems. At the same time as we are artificially creating hard work and scarcity to preserve our lifespans, our cousins in Africa are doing real hard work and experiencing real scarcity, both of which shorten theirs. The changing nature of work has made our lives too easy, while theirs remain as hard as ever. 

But perhaps, in the distant future, even our African cousins will be relieved of the necessity of physical toil, and benefit from the abundance that efficient machine production can deliver. Then our problems will be their problems, and they too will voluntarily pay to work and to starve. 

Who would have thought that the Eden of which we have dreamed would be so dangerous for us?  

Related reading:


Image from Wikipedia.


Tuesday, 28 March 2017

Barnier and the Tantalus game


The EU has laid out its negotiating strategy for Brexit. Well, not officially yet, of course - the letter triggering Article 50 won't be delivered until tomorrow, 29th March. But as is its wont, it has made its intentions clear in the press.

In an op-ed in the FT, Michel Barnier, the EU's chief negotiator, has stated in no uncertain terms how he expects the negotiations to proceed. He identifies three crucial issues that must be resolved before there can be any discussion of future trading arrangements between the EU and UK:

  • the rights of EU citizens living and working in the UK
  • continuing funding for current beneficiaries of EU programmes
  • the border between the Republic of Ireland and Northern Ireland. 

The first of these responds to Theresa May's continued refusal to guarantee the rights of EU citizens currently living in the UK. Tellingly, Barnier makes no mention of UK citizens living in the EU. If May won't guarantee EU citizens' rights, he implies, the EU won't protect the thousands of UK pensioners living in Spain, France, Portugal and other sunny South European countries. It will be up to the governments of those countries to decide what happens to them. Nice.

The second is code for "we want our money". This is the contentious 60bn Euros the European Commission says the UK must pay when it leaves the EU. According to the FT, the bill is for "unpaid budget commitments, pension liabilities, loan guarantees and spending on UK-based projects". Unsurprisingly, hardline Brexiters object to this: UKIP's Suzanne Evans told a BBC Question Time audience that Britain "should not pay a penny" when it leaves the EU, and prominent Tory Leaver Iain Duncan Smith outlined a UK claim to a share of EU assets that he suggested would be more than enough to eliminate any UK liability.

It seems likely that the eventual bill will be significantly less than 60bn Euros, but well above zero. This is something of a problem for Brexiteers, who have already had to row back on their promise of an extra £350m per week for the NHS and are now faced with the likelihood that leaving the EU will actually cost the UK money. I'm not sure how they will explain this to the British people, but they will no doubt find someone to blame. Probably Theresa May.

The first two negotiating conditions set by Barnier should come as no surprise. But the third is new. The UK government has so far treated the question of the Northern Ireland border and the Good Friday Agreement as entirely a domestic matter. Barnier, it seems, disagrees. And he has a point. After all, it is the EU's border too, and reneging on the Good Friday Agreement would threaten the security of one of its remaining member states. If the UK can demand control of its borders, so can the EU.

Barnier makes it clear that trade is simply not on the table until the EU's priority issues are resolved:
If we cannot resolve these three significant uncertainties at an early stage, we run the risk of failure. Putting things in the right order maximises the chances of reaching an agreement. This means agreeing on the orderly withdrawal of the UK before negotiating any future trade deal. 
Note that although Barnier has specifically cited three issues, he has not limited the conditions to these three alone. The "orderly withdrawal of the UK" can mean whatever the EU wants it to mean.

Keeping trade off the table until everything else is agreed puts the UK into the same negotiating position as Greece. Before it can have the debt relief it so desperately needs, Greece must comply with all the conditions set by its creditors. And every time Greece seems to be getting close to meeting conditions for debt relief, the creditors set more conditions, or find reasons to claim conditions have not been met. Similarly, we can expect that every time the UK gets close to agreeing terms that would enable trade negotiations to start, further issues will be raised. This is the Tantalus game - and the EU is an expert player.

But why is the EU planning to play the Tantalus game? Well, it is all because of the attitude of the Brexit camp in the UK government. From the start, they have emphasised trade over everything else. They could hardly have made it clearer that for the UK, a new trade agreement is paramount. But the EU has much less need for a new trade agreement than the UK does.

The Brexiteers have repeatedly claimed that the EU will be so desperate for a trade deal that it will give the UK special terms amounting to single market benefits without the costs. "Just think about all those German cars!" they cry. But the evidence is that the UK has far more to lose from departure without a trade agreement than the EU does. And the EU's negotiating stance, as laid out in Barnier's op-ed, confirms that view.

There are overwhelming political reasons for the EU to be extremely unwilling to cut such a deal anyway. Giving a non-EU state the same access to EU markets as EU member states would strike a mortal blow to the EU political project. The Brexiteers cheerfully assume that for the EU, the economics of Brexit would trump the politics, even though their own Leave campaign was successful precisely because in the UK, politics trumped economics. But events in the last few years have demonstrated beyond any possible doubt that maintaining the EU project will be far more important for the EU negotiators than any amount of economic pain for the member states. Politically, allowing the UK to leave the EU with no trade deal is a much better outcome for the EU than giving the UK trade terms similar to those it enjoys now.

By overemphasising trade, discounting political imperatives and overstating the UK's position, the Brexiteers have played right into Barnier's hands. Hello, Tantalus.

Unfortunately, the UK cannot afford to play Tantalus.There was no end to his misery: but for the UK, there will be an end, and it is all too soon. Article 50's hard deadline means that the UK is negotiating with a gun to its head. It is more Tosca than Tantalus. Barnier (perhaps we should call him Scarpia?) spells this out:
The sooner we agree on these principles, the more time we will have to discuss our future partnership.
You only have two years, Theresa. If you wish to save the UK from the trade firing squad, just agree to our terms on everything else.

But the firing squad might proceed with the execution anyway. Even if the EU could agree the terms of a new trade agreement within two years - which is doubtful, since getting EU member states to agree is like herding cats - enacting it on the UK's exit may be impossible for legal reasons. The EU is hoist by its own Treaties.

Article 50 has not even been triggered yet, but the Brexit team has already managed to compromise the UK's negotiating position with its toxic combination of ignorance, arrogance and foolishness. This is a very bad start, Theresa.

Related reading:

Game theory in Brexitland