Tuesday, 26 September 2023

Familiar challenges, new solutions?

This is a good summary of the economic performance and institutional challenges facing the UK: https://options2040.co.uk/economic-growth-and-the-productivity-puzzle-the-choices/

As someone who has been following the economic performance debate since the mid 1960s, it doesn't tell me much that is new, but that in a sense just reinforces the size of the challenge, particularly given the fiscal constraints.

Whilst the UK clearly needs a systematic industrial strategy rather than the ad hoc one we have at present, we need to learn from the policy mistakes of the past.

Tuesday, 12 September 2023

Short termism: the British disease

Short termism is a British disease.  It is driven by an over active stock market, now reinforced by the activities of hedge funds and private equity companies.  Short termism is not the only reason the UK has a chronic productivity problem. but it is certainly part of the picture.

I was struck by the following comment in the Financial Times yesterday about the success of Aldi and Lidl: 'Being private allows Aldi and Lidl to keep prying eyes at bay and not be held to ransom by shareholders if they do not meet their sales or profit forecasts.;

The chief executive of Aldi for the UK and Ireland said 'this is an absolutely tremendous strength of our business.  It means we can make very long-term decisions even when the road is bumpy.'

Solving or at least tackling the productivity problem may require structural change that is not politically feasible.


Thursday, 17 August 2023

My failed bid for membership of the new elite

I have been puzzling for some time whether I am a member of Matt Goodwin's new elite which is apparently calling the shots in the country although we have a Conservative Government.  I can't say I feel very powerful: after all, I was on the losing side of Brexit.   I drive a 08 registration car, often shop in Tesco and support two unfashionable football clubs (Charlton and Leamington).

One of the criteria for membership is an elite education at a Russell Group university.  I went to Leicester, Strathclyde and Exeter.  But I did teach at Warwick for over 40 years so I have given myself a score of 0.5 on that one.

The new elite, we are told, has shifted behind left-leaning parties.  I did join the Labour Party once Corbyn had gone so I suppose I score 1.0 there.

Apparently new elite members are descended from the professional and managerial classes.  I was the first person in my family to go to university.  My father was a carriage and wagon fitter and my mother was a hairdresser.  0.0

There is a new epistemic class which filters what is desirable or not in the national conversation.  I can't recall ever having much influence on anything, except possibly the wider use of biological controls as an alternative to chemical pesticides.  0.0

As for galleries, I am an active supporter of Compton Verney here in Warwickshire, but have no say on exhibitions policy.  0.0

The new elite live in enclaves in affluent or trendy districts in London or university towns.  Leamington Spa could count as a university town, but the really rich people here are associated with the Silicon Spa games industry. I bought my house when it was far less fashionable.   0.5

Likely to marry members of tthe elite graduate class.  My late wife was a graduate and taught in a CFE.  My current partner left school at 16 and worked her way up in the oil and gas industries to middle management.   0.5

So 2.5 out of 7.   I don't think I qualify.

Sunday, 30 July 2023

Rishi Sunak the motorists' friend

The Conservatives think that the ULEZ issue could badly damage Labour in London and are hoping that a more general appeal to motorists across the country will win them votes.  Given that there is evidence of voter concern about climate change and other green issues, they need to be careful.

Lord Hayward, a Tory peer and veteran pollster, said in The Times that the “politics of the motor car” would have an “impact on a lot of people’s voting intentions and it is going to be something the Tory party focuses on”.

Analysis by The Times shows that one in five of Labour’s London constituencies is a marginal seat — 13 out of 49. Of those, two are already in an Ulez zone and 11 will be by August. 

Potentially the most vulnerable Labour MP in London is Jon Cruddas, who holds the Dagenham & Rainham constituency with a mere majority of 293. He has been publicly critical of the expansion of Ulez, saying that it is not fair to do it during a cost of living crisis. Another marginal seat is Ilford North, which is the constituency of Wes Streeting, the shadow health secretary.'

An economist’s critique

Meanwhile, economics guru David Smith criticised ULEZ midweek in the paper.    Following Adam Smith, 'Good taxes should meet the conditions of fairness, certainty (people should know how much they must pay), convenience (taxes should be easy to pay) and efficiency (collection costs should not be too high relative to revenue).

The £12.50 daily charge for people driving cars within the zone, when it is expanded to all London boroughs in just over a month’s time, plainly fails the fairness test.

A Nissan Micra with a 1 litre engine, first registered in the early 2000s, will have to pay the charge, while a more recent 4.2 litre petrol Jaguar will not. An eight-year-old small diesel hatchback will pay it, while a newer massive diesel-guzzling SUV, the kind you often see on the school run, will not.

Not all older cars are driven by people on lower incomes, but the correlation is close. Unlike London’s congestion charge, which offers a 90 per cent reduction for residents within its zone, anybody moving their non-exempt car, perhaps to a parking place nearer their home, must pay it in full. Policing it requires a network of cameras, which has Big Brother implications, and the infrastructure has been costed in the hundreds of millions, calling into question its tax efficiency.

Nobody would argue with improving air quality in London but there are better ways. Tim Leunig, who as a Treasury adviser was instrumental in the introduction of Sunak’s furlough scheme, has suggested some, including requiring people to have compliant cars when they change their vehicles, that do not hit them immediately.'

I would suggest that people read my book Autos, Smog and Pollution Control but even a second hand copy now costs over £100!

Some quick points:

  1. ULEZ is aimed at ground level (substratopsheric) air pollution, not climate change.
  2. There is good evidence that air pollution from vehicles is impairing Londoners' health.  OK, the underground may be even more of a risk.
  3. ULEZ would benefit from a more generous scrappage scheme, but the Government has turned down a request for additional funds saying it is a devolved matter.
  4. In areas like Uxbridge transport into London is acceptable, but more needs to be done to improve  local links.



Friday, 21 July 2023

Some by-election takeaways

I have known John Curtice since he was a DPhil student at Nuffield and I don't pretend to have his knowledge of elections, not to mention many others.  But here are a few takeaways from last night:

  • By-elections are a poor guide to a general election over a year away.   The turnout in all three seats was below 50 per cent, suggesting a lot of Conservatives sat on their hands,
  • The Conservatives played the ULEZ card well in Uxbridge, but then the new MP put all the blame on the Mayor which suits Starmer.   No praise for Sunak.
  • Labour has never won the seat in this area even in 1997.   This is 'Mon Repos' territory, remember the Betjeman poem abour Ruislip Gardens tube?  It has changed, of course.
  • The economy may well recover by next autumn, but this happened in 1997 and the Conservative still lost.   As then, voters are concerned about the state of public services despite historically high levels of taxation.
  • The age of the new MP for Selby is not a disqualification, we need his generation in the Commons to tell us what a rough deal they have had.
  • Greg Hands tried to spin the results as a victory, the worst effort since the flagship boroughs (copyright Lord Baker).
  • Johnny Mercer may think he is an effective attack dog.  He digs a hole and keeps digging.
  • The Lib Dems are back in contention in the west country after being punished over Brexit and the coalition.
  • It looks as if the electorate are voting tactically to oust the Conservatives

Monday, 17 July 2023

Article on CBI free to view

My article on recent challenges at the CBI should be available free to view for a month: https://onlinelibrary.wiley.com/doi/epdf/10.1111/1467-923X.13295