Renewing Trident

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The Doomsday Clock is an interesting idea. Created in 1947 by the Bulletin of Atomic Scientists it seeks to signify, in a clear and simple way, how close we likely are to nuclear conflict. Midnight stands in for High Noon. It started life at seven minutes to midnight but lost four minutes in two short years when the Soviet Union became a nuclear power. You then see oscillations over the next 65 years, centred around -9 minutes or so, as various geopolitical crises and ententes dial the minute hand back and forth. We’ve only ever got to 17 minutes away (Gorbachev’s work in 1991). Notwithstanding that the UK’s own defence budget only stretches to a small part of the global nuclear arsenal, how would renewing Trident affect that clock?

B. H. Liddell Hart, in his book Deterrent or Defence, argues that the Romans got it wrong, or at least not quite right. Their “If you wish for peace, prepare for war” should be replaced with “If you wish for peace, understand war”. In a nuclear age, where you simply don’t have the luxury of learning from your mistakes, this seems wise. In both the EU and Trident debates, however, we seem to be ignoring the signs that the cold war world – nuclear superpower versus nuclear superpower – is returning or has returned. That’s not to say that new challenges such as the rise of Islamist terrorism don’t also require new approaches. But it seems increasingly wrong to say that the world has shifted away from potential inter-superpower nuclear confrontation. So to the argument that Trident is a weapon of the cold war, the response must surely be: yes, exactly.

Russian aggression in the Ukraine – an attempt to change international borders through force; the state-sponsored assassination of an individual on British soil using nuclear poison; the repeated need to scramble RAF jets to escort Russian bombers away from UK airspace or areas of interest; Putin’s 40 new inter-continental ballistic missiles… all point to the idea that something like the cold war is still with us. And arguments of the line that the US would always protect us and other NATO members miss the point. A folding of the UK’s nuclear capability together, god forbid, with a Brexit completely undermine what Churchill called his double-barrelled strategy – negotiation from a position of strength. Putin is already steadily stealing inches if not miles and he would only be emboldened by a withdrawal or downgrading of the UK’s nuclear capability. It’s worth re-emphasising the significance of nuclear weapons in the theatre of war and the prospects for peace:

“In the field of astronomy, the concepts of Ptolemy, long predominant, postulated a central Earth around which other bodies, including the Sun, revolved. Within this structure of analysis the task of accounting for observed facts required more and more convoluted explanatory hypotheses. Copernicus however espoused a different idea of great simplifying and clarifying power: that the Earth revolved around the Sun. Once this was grasped, much that had seemed perplexing or enormously complex now fell into place. A good deal of commentary about nuclear weapons – some of it from distinguished figures – long remained of Ptolemaic character. It is important to grasp the nuclear equivalent of the Copernican perception.

The sudden and enormous leap in destructiveness brought by the advent of nuclear weapons was of a different order from that caused by, say, gunpowder or aircraft. It is not enough to view it as merely the ghastly intensification of the human horror of war. It did something fundamental at a colder level of analysis. It carried the potential of warfare past a boundary at which many previous concepts and categories of appraisal – both military and political – ceased to apply, or even to have meaning.” Thinking About Nuclear Weapons, Michael Quinlan

It seems improbable, then, that we could characterise ourselves as operating from a position of strength if our main negotiating partner wields the military equivalent of the Copernican Revolution alone. As Churchill put it: “I do not hold that we should rearm in order to fight. I hold that we should rearm in order to parley.”

All of this assumes acceptance that deterrence in the form of mutually assured destruction is effective and is a sensible strategy. For balance, it’s worth acknowledging that we can’t provide empirical evidence that nuclear deterrence works. That’s the problem with nuclear war, you can’t collect the data and learn from your mistakes. Though I recognise that some will continue to believe that a unilateralist, pacifist approach is the right one, it’s very difficult to reconcile this with Putin’s antics even in the face of a relatively unified deterrent. To draw on the lessons of the most recent world war, imagining a pacifist approach to a Hitler armed with nuclear weapons seems absurd.

So, despite the expense – and £41 billion does indeed buy a lot of schools and hospitals – we should recognise that to continue operating in the upper part of Maslow’s hierarchy of needs there’s quite a big, ongoing maintenance cost for the base, for security. As Michael Quinlan puts it, though “There is a wry irony about the costs of nuclear weapons. For what they can uniquely provide in contribution to preventing major war they are cheap, not expensive.”

Have we done enough to prevent the next banking crisis?

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The financial crisis of 2008, the run up to which is now starring on the big screen in Michael Lewis’s The Big Short, highlighted just how dependent we all are on a functioning financial and banking system. Though our economy seems to be recovering from the longest and deepest downturn since the Great Depression, how confident can we be that the necessary changes have been made to the way banks operate? Have we ensured that, when the good times roll anew and the “this time is different” mantra begins to resurface, it doesn’t happen all over again?

This BBC piece provides a good summary of what has changed in the banking world since the crisis. Firstly, there have been reforms to the way in which bonuses are paid – restrictions on the cash element, less immediate access and claw back policies. The fact remains, however, that many bankers enjoy entrepreneurial-grade rewards without the corresponding risks that entrepreneurs face, namely failure, financial loss or bankruptcy. If you knew that taking a risk might secure a reward in the millions yet, if it didn’t come off, you’d still take home a six-figure base salary, it’s difficult to understand how stretching the payment terms of your bonus is really going to cramp your style. Especially if you’re employed by an operation that’s ‘too big to fail’.

Next, the bank levy idea – a 0.088% charge on balance sheets to ensure that the banks contribute something to the havoc they created. Helpful, but that has no effect on the modus operandi of the banks and therefore does nothing to prevent a future crisis.

The Banking Reform Act of 2013, arising from Sir John Vickers’ Independent Commission on Banking, offers more hope. The key part of the Act calls for the ring-fencing of investment banking and retail banking divisions, creating separate legal entities. Losses in one division would not drag down the other. In theory this answers the criticism at the heart of the ‘too big to fail’ idea, that failure of the risk-taking investment banks was shielded by the need to keep retail operations going. Perhaps. But the fact is that the individuals brought in to lead the failing banks post-crisis were all investment bankers. Here’s Alex Brummer, from his book, Bad Banks:

“For many, the problems with investment bankers went beyond their perceived lack of policy skill. Investment banking involves a very particular mindset. It requires people with a gambling edge, prepared to take high risks for potentially high rewards. This in turn creates an aggressively buccaneering culture. The risk-taking, trading nature of investment banking is very different from the steady skills required in retail banks, which take in deposits from customers and make cautious loans after a careful assessment of the risks. The two can sit uncomfortably side by side.”

So despite a theoretical ring-fence, the culture that permeates the large banks post-crisis is unlikely to be skewed toward the staid, stable world of retail banking. And even if a legal ring-fence exists, a key attribute of a bank – the confidence of its customers – is likely to be severely tested if the investment banking division is shown to be acting irresponsibly. Again. This effect is compounded by the extraordinary complexity and opaqueness of modern banking and its products, to the point where it is questionable whether even senior banking management really understand their full product range and the deep details of the balance sheet.  For that reason, I think a formal separation – into different companies – of investment banking and retail banking businesses is warranted.

Then finally we have the overhaul of the regulatory system and the replacement of the Financial Services Authority with three new regulators, the Financial Policy Committee, the Prudential Regulation Authority and the Financial Conduct Authority. The problem, as Joris Luyendijk describes below, is that the new regulators are still reliant on information fed from the still highly complex banks they seek to watch over:

“Perhaps the most terrifying interview of all the 200 I recorded was with a senior regulator. Ultimately, he explained, regulators – the government agencies that ensure the financial sector is safe and compliant – rely on self-declaration; what is presented by a bank’s internal management. The trouble, he said with a calm smile, is that a bank’s internal management often doesn’t know what’s going on because banks today are so vast and complex. He did not think he had ever been deliberately lied to, although he acknowledged that, obviously, he couldn’t know for sure. “The real threat is not a bank’s management hiding things from us, it’s the management not knowing themselves what the risks are.” – How the Banks Ignored the Lessons of the Crash by Joris Luyendijk.

Capitalism works. In contrast to the failed experiments of communism, it seems to be, to borrow from Churchill, the worst way to run an economy… except for all the others. But a key part of capitalism is failure and the idea that with great reward comes great risk. Pre-crisis banks were structured in a way that didn’t reflect this basic tenet, both at an individual and institutional level. And though, as I’m sure is abundantly clear, I’m not a banking analyst I don’t get the sense that the reforms to the banking system are robust enough. Not robust enough for a few decades’ time when memories of the 2008 crisis are starting to fade and a new generation of bankers who, only vaguely aware of what happened then, decide that the latest boom means it’s different this time and game the system.

It’s been said that part of the scariness of the financial crisis was that the whole world of the City and Wall Street are just too difficult to comprehend for anyone who can’t devote all their time to it. I’ve spent a LOT of time studying equities but I stay away from the banks for the simple reason that I don’t understand them. I don’t feel bad about this. But I have a lot of sympathy for the idea that the complexity of financial institutions and the terminology used to describe them and their products be simplified to make the City more accessible. There is a sea of books on the financial crisis and its aftermath but if I had to pick just four they’d be Too Big To Fail by Andrew Ross Sorkin, The Big Short by Michael Lewis, Robert Peston’s How Do We Fix This Mess and Bad Banks by Alex Brummer. Joris Luyendijk’s How the Banks Ignored the Lessons of the Crash is an excellent long read. I haven’t seen it yet but I thought the impressive Timothy Geithner had an excellent crisis so his Stress Test is on my reading list. And if you want a relatively easy way to keep a weather eye on US and global business and finance, watch CNBC’s US Squawk Box. It’s very good on US politics too.

ISIS and radicalisation: are counter-narratives getting through?

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As the frequency of atrocities committed by ISIS both in the Levant and around the world increases, for me one question continues to dominate. Why doesn’t the saturation news coverage of these events dissuade the not insignificant numbers – hundreds – of British Muslims from travelling or attempting to travel to Syria to join ISIS? Why aren’t these events, collectively, the equivalent of the Communist Party of Great Britain’s Hungarian Uprising moment (where a third left the movement due to Soviet tactics) for some British Muslims and their attitude to ISIS? How are ISIS able to successfully radicalise so many and what further measures can we take to stop them?

Jessica Stern, from her excellent book Terror in the Name of God, sets the scene:

“We learn… how leaders exploit feelings of alienation and humiliation to create holy warriors; and how demographic shifts, selective reading of history, and territorial disputes are used to justify holy wars…. We learn, through the terrorists’ stories, that the benefits they receive are partly spiritual, partly emotional, and partly material.”

Given that many of the British Muslims who have joined or sought to join ISIS are well-educated and with good language skills it is difficult to believe that news of ISIS’s medieval modus operandi hasn’t got through. This suggests, I think, that there is a sufficient sense of historical grievance that the tactics seem justified to those susceptible to radicalisation. Jessica Stern’s ‘selective reading of history’ chimes with this recent piece by Akil N Awan and A. Warren Dockter in History Today magazine: ISIS and the Abuse of History.

The Sykes-Picot agreement of 1916 and the Iraq War both feature in ISIS propaganda, but the Crusades are perhaps the bedrock of perceived historical injustice. It helps that we in the West seem to have conceded almost entirely that they were an unjustified act of aggression on our part. But there seems to be a reasonable counter-narrative that, while it might not completely reverse a potential jihadi’s sense of historical righteousness, at least gets across that there is another side to the story. Here’s Jonathan Riley-Smith:

“We are today subjected to a religio-politico hostility, erupting in acts of extreme violence, and a war of words in the course of which the Crusades feature prominently. We cannot hope to understand the circumstances in which we find ourselves unless we are prepared to face up to the fact that modern Western public opinion, Arab Nationalism, and Pan-Islamism all share perceptions of crusading that have more to do with nineteenth century European imperialism than with actuality. The Crusades themselves were deeply embedded in popular Catholic ideas and devotional life. They were not thoughtless explosions of barbarism. The theory of force that underlay them was relatively sophisticated and was considered to be theologically justifiable by a society that felt itself to be threatened. It is hard now to conceive of the intensity of the attachment felt for the holy places of Jerusalem, the concern aroused by heresy and physical assaults on the church, and the fear Westerners had of Muslim invaders, who reached central France in the eighth century and Vienna in the sixteenth and again in the seventeenth. The men and women who took the cross seem mostly to have been pious and well-intentioned.” The Crusades, Christianity, and Islam – Jonathan Riley-Smith.

Or, as Thomas Asbridge puts it (The Crusades): “A charged and vexatious question remains: did the Muslim world provoke the crusades, or were these Latin holy wars acts of aggression? This fundamental enquiry requires an assessment of the overall threat posed to the Christian West by Islam in the eleventh century.”

My guess is that a total acceptance of ISIS’s crusader narrative is a necessary but insufficient condition for radicalisation. Interpretation of the Koran is also important, but is it the principal issue? Asbridge, again: “In an attempt to define the role of warfare within Islam, Muslim scholars turned to the Koran and the hadith, the traditions or sayings associated with Muhammad. These texts provided numerous examples of the Prophet advocating ‘struggle in the path of God’.” Perhaps, but a radical interpretation of the Koran doesn’t seem a strong enough case on its own. A genuine sense of grievance, though, an eye for a historic eye? This seems more likely as the primary mover.

To counter this effect, though, we don’t need a revised history of the Crusades to triumph. We simply need to restore a sense that there is a credible historical debate on the issue. Against that background, signing up to commit atrocities to ‘right’ historic wrongs becomes more difficult, however you interpret the Koran. The material is out there, as Jonathan Riley-Smith’s and Thomas Asbridge’s books and documentaries, for example, demonstrate. But I’m not sure we’re getting any traction at all within key parts of the British Muslim community, principally those who are easily radicalised. If so we need to work out how we can reach those in the community who apparently seem sure that the history of Islam and Christianity justifies holy war.

The EU: now is the time for unity

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‘Compelling economic arguments are made for the UK’s membership of the European Union, not least the importance of the Single Market in which we do almost half our trade. But equally compelling are the strategic, security and diplomatic interests served by UK membership, interests that would be seriously jeopardised were we to leave the EU.’ Sir David Manning, ambassador to Washington 2003-7.

‘It has been argued that British Diplomacy boxes above our weight. Surely, departure from the EU would deprive us of the major ring in which to box?’ Lord Wright, Head of the Diplomatic Service 1986-91.

These two quotes, taken from David Charter’s excellent book Europe: In or Out get to the heart of why we should stay in the EU. Since the end of the Second World War we have slowly but surely been lulled into a false sense that the prospect of a major war on the Continent has all but disappeared. But as the crisis over the Ukraine is demonstrating, the original purpose of the Union – the avoidance of war – should not be forgotten. Beyond the Ukraine, can we be confident that the former Soviet satellite states of Estonia, Latvia and Lithuania, all EU members, won’t be next? And do we really want to be marginalised in such circumstances? Russia spends 4% of its GDP on defence and has approximately 3 million troops. We spend 1.7-1.8% of GDP and can call on 240,000 soldiers – an order of magnitude less. Soft power we have, though. For now.

In preparing this first piece on the EU, I drew mainly on two books that I think work well together. The first, the aforementioned Europe: In or Out by David Charter, and Roger Bootle’s The Trouble with Europe. The latter book, though not limited to finance, does a good job of explaining the economic challenges within the Eurozone, in particular how the adoption of the Euro prior to a concerted fiscal and political integration has led to the loss of the currency devaluation pressure relief valve for the peripheral nations. ‘Currencies and states belong together’ as the book puts it. Is the recent high level of unemployment in countries such as Spain and Greece at least partly down to the constraints of the Euro? Is the Euro a modern-day form of gold standard? To go back to the security argument, it is also fair to say that structurally poor economics can also lead to war, given that peace and prosperity are not unconnected.

One idea to overcome this structural problem is to split the Euro into a northern and southern zone. This would allow the southern Euro to find a level at which its members could remain competitive. The reduction in economies of scale argument against is countered by numerous examples of small but prosperous states such as Qatar, Luxembourg, Singapore and Norway. Singapore took off when it left the Malaysian Foundation in 1965. It seems right that there needs to be a greater degree of political and fiscal similarity than currently exists across all EU member states in order to share a currency.

If the Eurozone could be restored to health with ideas such as the north/south Euro split, we should remember that the UK is the EU’s top destination for Foreign Direct Investment (FDI), securing 20% of new projects. We are seen as the gateway to the Single Market. Our car industry – now mostly foreign owned – accounts for 10% of our exports and factories are big, long-term commitments. Can we be confident that car industry FDI decisions wouldn’t be tipped at the margin if we left the EU? It’s already difficult enough to convince foreign boards of directors. As the National Institute of Economic and Social Research (NIESR) estimated in 2000, a breakdown in EU trade relations could mean a drop of approximately 33% in manufacturing FDI and 10% in services. Businesses need stability.

It is probably wrong, however, to scaremonger too much about the long-term loss of jobs that our departure from the EU might cause. A figure of 3 million jobs is often cited but though this represents the employment related to EU trade, it is wrong to think that most of these jobs would disappear. Britain could likely negotiate a fairly wide-ranging Free Trade Agreement were we to leave.

Two important groups want us to stay in the EU: the City and the US. It’s important to the City from both the perspective of the Square Mile as a financial centre and the increased level of UK trade and business. And it’s important to the US mainly in terms of Britain’s soft power within the EU. As Joe Biden put it: “We believe that the United Kingdom is stronger as a result of its membership. And we believe the EU is stronger with the UK’s involvement. That’s our view.”

UK businesses are also generally in favour of EU membership, but are increasingly demanding a renegotiated position. This leads us to David Cameron’s Bloomberg speech, which indicated five main elements to the negotiations: competitiveness; flexibility; a transfer of powers back to member states; a bigger role for national parliaments and fairness.

One of the commonly used examples of an EU drag on the UK is the Common Agricultural Policy. It is perhaps not seen as quite such a problem by the farmers themselves, however. As Paul Kendall, President of National Farmers Union said “British Farmers are, by and large, more favourable to the European Union than the generality of the British Public.” The key issue is equality of treatment – a similar subsidy for all to make competition fair.

In conclusion, though there are good arguments on both sides, I think Mr Putin’s recent escapades show that the original idea of ‘a United States of Europe’ to offer peace and security should be front and centre of our thoughts. Though EU membership does not affect our position within Nato, the idea of a heavyweight state departing the EU and taking with it its significant soft power and influence seems wrong given the challenges posed by both Russia and Isil. We should think of the negatives of EU membership as part of our defence budget.

The Citizen’s Income: an entrepreneurial platform as well as a benefit?

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The rise of the Green Party as we head towards the May general election has resurrected the idea of a Citizen’s Income, a universal income paid to all British citizens regardless of means or employment status. The idea is an old one, and has an impressive list of advocates.  Putting aside the net cost for one moment, the idea has obvious advantages from a welfare state perspective. Every one of us has the permanent guarantee of a certain basic level of income. Looked at purely from a benefit perspective the argument is likely to split along the traditional divide. If there is a genuine opportunity, however, to promote use of the income as an entrepreneurial platform, a universal seed investment mechanism that gets even just a small percentage of new ventures or endeavours off the ground, then we can perhaps get a broader consensus on its worth.

Before looking at the income as an entrepreneurial platform, a recap of the benefits and likely net costs. The appropriate amount provided by a Citizen’s Income is clearly debatable, but let’s use the numbers proposed by the Citizen’s Income Trust. This suggests £56.25 per week for those under 24, £71 per week for 25-64 year olds and £142.70 for those 65 and over. So, a provision around the current level of jobseeker’s allowance for the 25-64 year old group and an amount between the current and future flat-rate pension for the over 65s. These seem sensible numbers. Add it all up and you get a total annual bill of around £276 billion.

The central idea of the Citizen’s Income is that it replaces a host of existing benefits and payments, including: the state pension, personal allowances (income tax), national insurance, working tax credits and child benefit. The long list totals around £272 billion, so on this measure, assuming the numbers are roughly right, the idea appears around cost neutral. It’s not quite as simple as that, however, because some poor families could be worse off if they received only the Citizen’s Income. This question is partly answered by the Citizen’s Trust here ‘A Citizen’s Income: The poor will not necessarily be worse off’ but let’s allow for the fact that it’s not necessarily perfectly cost neutral. The numbers suggest, however, that implementation of the idea would not be prohibitively expensive.

From the benefits side, it’s worth mentioning that because everyone receives the income, the stigma of ‘Benefits Street’ is much reduced. As I’m sure some will point out, it’s still true to say that those in employment and paying taxes are the ones footing the bill, but there’s a certain Spirit of ’45 element to everyone getting the same. The other big advantage is the simple nature of the system. Simple to administer and much less vulnerable to fraudulent claims because it doesn’t rely on means-test judgements.

So from a cost-neutral(ish), elegantly simple, stigma-free challenge to the existing benefits systems, how might we use a Citizen’s Income to think big. I think the clue to the opportunity lies in the rightful fuss around unpaid internships. Too many jobs with an impressive career trajectory – for both status and pay – increasingly start with unpaid internships. This is fine if you are independently wealthy or if you’re from a family who is willingly to support you in the early years. But they are effectively closed professions for the great majority of people who don’t fit that category. They simply can’t survive a prolonged period without pay. Notwithstanding that it seems right to continue to pressure both corporations and professions to end this practice, a Citizen’s Income would help to overcome the problem directly.

The big prize, however, is expanding the concept of unpaid internships to entrepreneurial activities and start-ups. If we can find ways to encourage enough of those not currently working to use the opportunity of a basic, guaranteed income to take risks, to invest their time in activities and ventures with possibly no immediate big pay-offs, then we can genuinely regard the Citizen’s Income as an engine of entrepreneurial activity, new venture, and therefore job, creation.

This is easily said, and it would need Britain’s heavyweight serial entrepreneurs to help develop a plan to ensure that not everyone used the income to make Countdown or Richard and Judy their specialist subject. But if just 5-10% of those currently out of work, those who would otherwise be pressured through the current benefits system into a likely low-pay job that they’d rarely escape, used the opportunity to start businesses or ventures that need a reasonable runway then we could genuinely look at the Citizen’s Income as something much more than a cost-neutral overhaul of the benefits system.

The key facet of the Citizen’s Income in this regard is that there is no benefits trap. You get the same money whether you work or not. Suddenly you have both a survival-mode income and the prospect that anything that a new venture brings in goes straight to you. You don’t lose anything by being successful. And you only have to look at the examples of JK Rowling and Oasis to get an idea of what a basic income can produce. I think Noel Gallagher has said that his best work was done when he was on the dole.

To re-emphasise, simply providing everyone with a Citizen’s Income would not be enough to spark an entrepreneurial renaissance. We need ideas for how to complement this income platform with a new venture support system and it’s got to pass the scrutiny of serial entrepreneurs. It would need a majority of them to agree: yes, I can genuinely see enough people getting off their arses and starting enough successful ventures that it wouldn’t just be cost neutral but a genuine engine of job and wealth creation. I’ll leave thoughts on this for future blogs. I think it could work though.

State Education

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‘State education has never commanded the same loyalty or sense of affection from the British public as the NHS…High-quality comprehensive education was never presented to the people as a democratic ideal; indeed, it was never presented in any coherent form at all.’ Melissa Benn, School Wars

‘Not everything that counts can be counted, and not everything that can be counted counts.’ Albert Einstein

The NHS endures its fair share of slings and arrows but I think it’s right to say that lots of us have an affection for it, what it stands for and the myriad times it has helped us or our family. We get upset if we think it’s being messed with. Look on Twitter. Some people, even those who don’t work there, have ‘Save the NHS’ avatars. The first quote, from Melissa Benn’s School Wars, is right though. The same doesn’t seem to apply to our state education system. I don’t see variants of ‘Save our NES’ nearly so much.

My contribution to the education debate is to ask whether we, collectively, have possibly got just a little bit too carried away with the things that can be counted, principally academic performance, at the expense of that which is more difficult to quantify. And is our obsession with academic performance a barrier to us embracing state education in the way that we do our health service.

Something strange seems to happen to us, especially as parents, when we consider education. In a mass participation event such as a marathon, few of us expect to be troubling Mo or Paula at the finish line. Despite prolonged, gruelling training we almost universally accept that we are simply there to complete the course and to match or exceed a particular time that we have in mind, sometimes a former personal best. I’ve never run a marathon but I think that’s right. Those who do take marathons on – lots of people – don’t seem to need to expect to win to feel motivated to undertake a huge challenge and do it to the best of their ability. With education we seem to expect, living vicariously through our children perhaps, to win.

If we are to move away from an obsession with academic performance, however, I think we need to do more than appeal to our collective conscience. I think the media does quite a good job of getting across the idea that society benefits from a more egalitarian approach to education. Many of the pushiest parents will probably agree with this concept. But it’s usually a different matter when it comes to OUR children.

Shortly after our first child was born – 10 years ago – I started thinking about his education. I considered ways to evaluate whether pushing for a private or selective school was wise. One idea was to compare the life outcomes, using Friends Reunited, for my year at the local comprehensive with the nearest high-performing (top 100) private school. No great surprise, a noticeable difference in the sort of occupations of the two groups. With my own school I had the advantage of remembering most of the people. My overall impression was of a happy bunch, good jobs and families. The same was true for the private school, but I would struggle to say that either group was happier than the other. Also, it wasn’t clear that the private school group were more useful members of society. Higher status careers for sure but does a City trader trump a nurse?

And when it comes to getting a ‘good job’ there is another side to the argument that everything hinges on exam results. Business, I’ve heard said, is all about relationships. And one of the (few) oft-cited arguments for non-selective state education is that it helps you mix with people from all walks of life. If we consider arguably the most famous businessperson in the UK at the moment, Lord Sugar, I don’t think I do him a disservice by saying that, at 16, he wasn’t faced with an agonising choice. Do I continue my studies and become a modern-day Edward Gibbon, chronicler of key periods of world history, or do I give it all up and knock out aerials from the back of a Transit on my way to a billion? Not everyone can be Lord Sugar, but we need people to be self-employed and to start small and medium businesses that generate employment. My point is that it’s not true to say that peak academic performance is a prerequisite for all ‘good jobs’ and that something that’s difficult to measure – the social effect of attending a non-selective school – may actually be beneficial for certain types of rewarding and enjoyable work.

With this in mind, there is a suspicion that successive politicians, from both sides of the political divide, have assumed that what’s best for all of us is a bit of what worked for (most of) them: a highly pressured academic environment. There’s no doubt that we still need people to fulfil roles requiring a high degree of academic training and discipline but I think we should question whether so many of us should be so desperate for our children to aspire to these roles. I’m not sure we can prove they make you happier.

I’m asking this not because I think academic performance doesn’t matter. It does, it matters a lot. But the insane pressure to raise academic standards at the expense of everything else seems to have created an education system where teachers aren’t trusted or respected to the degree they should be and where the school system has fragmented, endangering our ability to raise collective standards of attainment. As Peter Mortimore, author of Education Under Siege and someone with 50 years’ experience in education, points out:

‘In my view many of the problems [in education] have been predominantly caused by the direct actions of politicians across the political spectrum. They have fragmented – almost to destruction – what was once a national system.’

If we are to hope to create an education system that enjoys the status of the NHS, with the consequent increased respect for teachers and the likely broad-based educational benefits that go with that, we need, I think, to question whether we haven’t developed a distorted view of what’s best for our own children.

Energy Plan

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Energy and climate change will be one of the main themes of this blog. I considered starting with a piece arguing the reality of climate change but this seems to be increasingly accepted, with nearly nine out of ten Britons saying that climate change is real. Instead I’m going to begin with my first thoughts on a 1,000ish-word energy plan. Overwhelmed, I’m sure.

In general, I think media analysis of the various methods for meeting our energy requirements within a low-carbon framework is very good. There is a regular flow of articles discussing the regulatory, environmental and scientific/engineering merits or otherwise of options such as wind power, solar energy, nuclear and fracking. What I miss, and I’m quite prepared to concede that this is my fault, is the regular summary of how the various options might fit in an overall energy plan for the UK.

My intention is to write a series of posts that each consider one energy option, and I want to be able to detail the realistic contribution of that option within an overall energy plan. A concise outline that shows our energy requirements, our consumption.  The basis for my plan is the excellent book Sustainable Energy – Without The Hot Air by David MacKay, Regius Professor of Engineering at the University of Cambridge and former Chief Scientific Adviser to the Department of Energy and Climate Change.  As I discuss the relative merits of each energy option, I’ll update and reference this rolling energy plan. I’m keen to keep the document concise, so discussion of both energy consumption and supply will be necessarily simplified. My only hope is that the numbers, and the plan, are roughly right. Better to be roughly right than precisely wrong.

Current energy consumption in the UK

According to Sustainable Energy – Without The Hot Air, current energy consumption in the UK is around 125kWh per person per day. That’s total daily energy consumption divided by our population. We can split that number into three categories: transport, heating and electrical devices.

Transport: 40kWh per person per day. The three main elements of transport are cars, planes and freight. 40kWh is about one third of the 125kWh total. This is a reminder that the ‘use the car less and walk or ride more’ is an important message in the effort to lower our energy consumption and ease the pressure on climate change. Rethinking our transport habits has orders of magnitude more impact than worrying about mobile phone chargers or TVs on standby. There are significant potential savings here through the electrification of our transport system, with companies such as Tesla leading the way.

Heating: 40kWh per person per day. Another third of our 125kWh total. Improved home building regulations plus encouragement to insulate our existing homes together with smarter temperature control all offer hope of lowering this figure.

Electrical devices plus electrical conversion losses: 45kWh per person per day. The final third. Much of our existing power generation does not make electricity directly and the losses in the required conversion amount to over half this figure (around 27kWh per person per day). This would largely disappear if we used power sources that generated electricity directly, such as most renewable options.

So there we are, three simplified categories of consumption, each amounting to about a third of our 125kWh per person per day total. Before discussing how we service this requirement in a low carbon way, can we get this number down?

Future energy consumption in the UK, 2050

A key strategy in creating a low carbon economy is improving energy efficiency and simply using less through educational campaigns. Sustainable Energy: Without The Hot Air is optimistic that we can achieve a significant reduction in the 125kWh per person per day figure by 2050. It sees our transport requirement halving to 20kWh, our heating by 25% to 30kWh and the electrical device number, wholly through the avoidance of conversion losses, reducing from 45kWh to 18kWh. A total of 68kWh per person per day rather than the current 125. Quite a saving.

If you trace through the arguments for each of these reductions, they seem sound. They don’t ignore the extra demands arising from economic growth over the period. My own optimism is somewhat tempered, however, by a note in Mark Lynas’ book Nuclear 2.0, which reminds us that despite significant improvements in energy efficiency during the 20th Century, our energy consumption didn’t fall. We simply used more. I will set out what I think is both achievable and likely in my next blog within the energy and climate change theme.

Low carbon energy supply plan for 2050

With the 2050 energy consumption forecast established, my intention, as mentioned, is to write a series of posts on each of my preferred energy supply options. Within each post I will estimate a realistic contribution from that particular source, and update the energy plan. The plan assumes Britain should be entirely self-sufficient, so the contribution from the various domestic sources discussed has to match the total forecast consumption for 2050. I’m not completely set against some importing of our energy needs but, given the example of Saudi Arabia and oil, I want this to be at the margin. I want to avoid Britain being beholden to anyone for energy.

I will start with the greenest, renewable sources and attempt to maximise contribution from these. To keep things simple, I won’t discuss contributions from what I think are essentially fringe options. I’m not against the development of a broad portfolio of renewable sources but unless they can contribute significantly, I don’t plan to discuss them here. I start from the position of seeking to incorporate all renewable sources that can really do some heavy lifting.

Once I’ve published posts on both the potential efficiency savings and the greenest methods of meeting the 2050 energy forecast, I intend to always include a hyperlink to this concise energy plan within blog posts that discuss existing or new methods of meeting our energy requirements whilst averting climate change. All advocacy, or rejection, of efficiency improvements or energy supply options has to fit the plan.

The A&E crisis

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The recent apogee of the Accident and Emergency crisis saw up to 15 hospitals declare a significant or major incident. Before the crisis this winter there were a record number of patients attending A&E over the summer, with many failing the ‘95% within 4 hours’ treatment target. Amid the rightful outrage and consternation over this outcome, did government and the media miss an opportunity to push back just a little bit on those of us who aren’t frail, elderly or disabled yet who use the service when not truly in a state of accident and emergency? Put bluntly, are too many of us using A&E as an appointments-free GP surgery?

This article from the 5th December issue of the HSJ (Health Services Journal) ‘Solve the A&E puzzle for smarter patient care’ carries an important survey of A&E patients between April 2012 and March 2013. 80,000 people were interviewed on the reasons for their visit. The results are revealing. ‘A&E is viewed as a quick, efficient and reliable way of receiving treatment.’ And, unlike a GP surgery, you don’t need to book. Further, there is a seemingly widespread belief that A&E staff are more qualified than GPs.

Importantly, the majority of people said they attended A&E to gain reassurance. Reassurance that their ailment is not something serious. As a gold card-carrying member of Hypochondriacs Anonymous I can empathise with this view. But within the existing NHS framework, even if it is sometimes difficult to get a GP appointment or if there are a significant number of inappropriate A&E referrals from NHS 111, there was an opportunity to resolve the crisis at the margin and in the short-term through a clear message from the media and from leading politicians along the lines of: please think hard before resorting to A&E for minor, non-urgent conditions. There is also scope for pharmacists to help with minor ailments. Only 22% of those surveyed thought their condition was an emergency.

Hopelessly naive? Would A&E queues dissolve overnight? No. But at the margin, appealing to all of us on a crisis displacing the elderly, frail and disabled could work. Spirit of ’45. And as the survey points out, it’s not just patients that are using the service inappropriately, doctors’ receptionists (and NHS 111) are seemingly too often deciding that patients need to go to A&E rather than get a GP appointment. A clear message would reach them too.

In an age of outrage, the failure of our Accident and Emergency service on this scale is a subject worthy of our anger. But with any service that is free at the point of demand, we also need to ask to what degree any failure is down to the service or its funding and to what degree it’s down to how we are using it. Though the media did a reasonable job of explaining that it was pressure in other parts of the health and social care service that helped create the crisis, the overall tone was: vent on the NHS. That doesn’t give anyone outside of the NHS pause for thought, the idea that their actions count too. Admittedly, it would be a brave politician who took a line that might be construed as ‘oh, it’s OUR fault is it?’, but I suspect that, providing it was supported with evidence that the service was being misused, many of us would accept that the quickest way to solve the crisis would be for us all to think hard about how we use that service. That brave politician might get some respect.

I attended Andy Burnham’s speech at the King’s Fund on Tuesday. Despite growing up in a family where I’m the only one who doesn’t work in the NHS, I’m still in the foothills of knowledge of the health service. Nonetheless, my short take on Labour’s plan is that I can see that the integration of health and social care would ultimately improve the quality of service, but it’s not obvious to me how it would result in significant cost savings. This overview from the Guardian seems right. With that speech and Liz Kendall’s talk at the Fabian New Year Conference, be in no doubt that the Labour team have an excellent command of the detail. It’s obvious that they have put in a huge amount of time on the ground and voters should be reassured that Labour would manage the quality of care well. There’s just a bit more work to do to convince on the finances.

Book review: Half the Sky

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‘The economic implications of gender discrimination are most serious. To deny women is to deprive a country of labour and talent but – even worse – to undermine the achievement of boys and men. One cannot rear young people in such ways that half of them think themselves superior by biology without dulling ambition and devaluing accomplishment. In general the best clue to a nation’s growth and development potential is the status and role of women.’

Gender equality and women’s rights will be one of the main themes of this blog and the quote, from David Landes in his The Wealth and Poverty of Nations and reprinted in Half the Sky, helps to explain why. There’s an evident fairness argument for gender equality but there’s also a less obvious and, for men, more self-interested angle: men benefit too. If Half the Sky is right, women hold the key to the growth and development potential for society as a whole. They also determine something further down our hierarchy of needs: security, stability and the absence of war, because there’s a clear correlation with war and conflict and societies with a disproportionately high number of young men or where women are repressed. Trumping all of this is the catalogue of human rights abuses against women detailed in the book.

Half the Sky is a wonderful book from the minds of husband and wife team Nicholas Kristof and Sheryl WuDunn. Nicholas Kristof is a well-known American op-ed columnist and author, dubbed the ‘Indiana Jones of our generation of journalists’ for his remarkably wide travels and ability to uncover human rights abuses and social injustices around the world. Sheryl WuDunn is an American business executive, writer and lecturer. She was the first Asian-American to win a Pulitzer and has worked as both a business editor and foreign correspondent at the New York Times.

A key part of why the book is so compelling in highlighting the plight of women around the world is that it mixes data and statistics with real-life stories of extraordinary women. The early chapters deal with the prevalence of forced prostitution and the enslavement of around three million women and girls as sex workers. We tend to forget that modern slavery is very much alive and the numbers are shocking. The International Labour Organisation estimates that there are currently 12.3 million people in forced labour of all kinds.

It is difficult to escape the view that it is the societal attitude to women that allows forced prostitution and enslavement to flourish. More specifically, there appears to be a correlation with sexual conservatism, with India, Pakistan and Iran having disproportionately high numbers of forced prostitutes. Young men sleep with prostitutes rather than their girlfriends in order to preserve the latter’s ‘virtue’ for marriage. Brothel-keepers seem to get away with extraordinarily brutal tactics such as removing prostitute’s babies to both stop them lactating or running away. Given that local police officers are regular customers, there is little hope of support from the authorities. It is hardly surprising that girls soon give up and accept their fate. A life of forced prostitution is unpleasant enough, but the prevalence of AIDs means it is often a death sentence.

Having explored the scope of human rights abuses through individual stories, the book is also good at offering hope by discussing initiatives and aid programmes, again using individual case stories, often of women. In the case of forced prostitution and enslavement, it describes two broad solutions – government crackdowns or legalize-and-regulate. It uses the examples of Sweden and the Netherlands to compare and contrast the effectiveness of the methods but the authors also draw on their own significant observations and discussions, saying that they have moved from a legalize-and-regulate view towards enforcement of law. Though the book is realistic about the prospects of completely eradicating forced prostitution, the line ‘when a social problem is difficult to solve entirely, it is still worth mitigating’ seems wise.

The middle chapters deal with the harrowing subjects of ‘rule by rape’ and honour killings. As discussed, sexual conservatism and the corresponding enormous shame of failing these strict rules seems a common factor. The horror of rape for an individual becomes a punishment for an entire family, with suicides not uncommon. There are thought to be approximately 5,000 honour killings per year, all within Muslim communities. What is perhaps surprising is that women seem to acquire the society’s misogynistic values and exalted codes. Mothers-in-law can be just as deadly as men. As the book points out, laws are important but the key is to try to overturn values and thinking.

Half the Sky reminds us that childbirth is far from routine in the developing world. The idea of the maternal mortality ratio (MMR) is explored, and shows how our single digit number of deaths per 100,000 births compares with 900 in sub-Saharan Africa and an extraordinary 2,100 in Sierra Leone. And these are ‘per childbirth’ statistics, risks that multiply in areas with restricted family planning. There appears to be a strong correlation between a society’s marginalisation of women and a high MMR.

This empathy gap has been addressed in quite an interesting way by the Huichol tribe in Mexico. Women in labour can hold on to a string tied to their husband’s testicles. Each contraction gets a tug. I would guess that universal adoption of this method might focus minds. That aside, the example of Sri Lanka in dealing with maternal mortality is inspiring. Since the 1930s, Sri Lanka has reduced its MMR from 550 deaths /100,000 births to 58, despite ranking 117th in the world for GDP. As the book quotes ‘Looking at maternal mortality is a great way to look at a health system as a whole, because it requires you to do lots of things. You need family planning, hospitals, etc.’ Britain (and Norway) has a good record on aid here, incidentally.

Given the risks of childbirth in these areas, family planning is particularly important. Contraception in the form of condoms also has a big impact on HIV/AIDS. Religion seems to play an important part of policy in this area and therefore sympathetic religious leadership and guidance is vital. To give an idea of the challenge, however, the Catholic Church in El Salvador persuaded lawmakers that condoms should carry a warning that they didn’t protect against AIDS.

Chapter 9 asks the direct question ‘Is Islam Misogynistic’. ‘Of the countries where women are held back and subjected to systematic abuses such as honour killings and genital cutting, a very large proportion are predominantly Muslim.’ In a 2008 WEF ranking of countries according to the status of women, 8 of the bottom 10 were majority Muslim. The book reminds us that the early history of Islam was quite progressive for women’s rights, ahead of other major religions. It suggests, however that Islam hasn’t moved on much in this regard from this early period in the way that other religions have.

Given the activities of the Islamic State – which arose after the publication of the book – the passage ‘A society that has more men than women, particularly young men, is often associated with crime or violence’ seems apposite, given that this imbalance can also occur through the marginalisation of women. ‘The status of women more than other factors that predominate in Western thinking about religious systems and politics links Islam and the democracy deficit.’ The book also uses the example of pre-war America – which had an excess of males – as an example of a violent society.

To return to the opening quote, David Landes, an eminent Harvard historian, has suggested that openness to ideas, best measured by how a country treats its women, was the key reason that the Industrial Revolution occurred in Europe rather than Asia or the Middle East.

Investing in education. The book is clear that educating girls is one of the best ways of reducing poverty and it is also key in allowing women and girls to be assertive in demanding equality. Higher education is also correlated with better family planning. It concedes, however, that it’s a difficult area to prove statistically.

Though the most obvious route for improving education is to build more schools and train more teachers, less direct (and cheaper) measures also help such as de-worming (a big increase in attentiveness) , feminine hygiene and iodizing salt to counter iodine deficiency have a significant impact. It is estimated that iodine deficiencies reduce humanity’s IQ by around one billion points.

Key to female emancipation is access to credit and control of finances and here the revolution in microcredit in the developing world is helping a significant number of women escape poverty. Access to finance has historically been difficult in conservative areas like Pakistan but husbands seem to accept profitable initiatives. True in all parts of the world, when women control finance, child health and nutrition improve. Inheritance law also needs to be reformed – women own just 1% of the world’s land.

Beyond finance, when women gained the vote in the US, child mortality declined by 8-15%, a staggering reduction of 20,000 deaths per year at the time. The political system had quickly adapted to women’s priorities with improved healthcare.

China’s economic success is cited as an example of the benefits of empowering women and the book also cautions against the media being too harsh on sweatshops. The fact is that many east Asian women regard sweatshops as a step up from the fields and they have allowed women to participate in the workplace, earn money and have some degree of control over finances.

An interesting, if extremely sad, example of the benefits of female equality is Rwanda. Following the 1994 genocide the population mix became 70% women. Not only out of necessity – men were widely reviled for their role in the genocide – women took roles in both the workplace and in parliament. The first country with a majority of female legislators – 55% in the lower house – Rwanda is now one of the least corrupt, fastest-growing and best governed countries in Africa.

The penultimate chapter is arguably the most disturbing one, on female genital mutilation. Worldwide, 130 million women have suffered this procedure, with an ongoing 3 million per year in Africa alone. Since news broke about the scale of it in the UK, I have tried to fathom how any belief system could have got to this. The book is clear, the aim is to minimise sexual pleasure to reduce the likelihood of promiscuity. For me, it is a tangible measure of misogyny. We will know attitudes towards women have changed when this sort of activity stops.

The final chapter is a call to arms, ‘What you can do’. The book concludes with multiple examples of how groups and societies with more women function better. In encouraging all of us to get involved it references an interesting thought on happiness. Studies of happiness suggest that if you’re hit by a truck and end up a paraplegic or, alternatively, win the lottery, your happiness after about a year remains pretty much unchanged. You adapt to your new circumstances. The only way to move the dial is to ‘connect with something larger’ – a greater cause or humanitarian purpose, normally fulfilled by a religious belief system. We seem to be wired for altruism.

Migration: a campaigning issue

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Ed Miliband fielded a question from hell at last Saturday’s Fabian New Year Conference. ‘Could it be true that London regional has instructed activists not to talk about the economy because it’s not one of our strong points?’ asked a delegate. Ed didn’t blink, but his body language betrayed the fact that the latest regeneration of Malcolm Tucker would shortly be dispatched to monster some overzealous strategist at the Brewer’s Green HQ.

True or not, the micromanagement of election campaigning fits with an increasing perception that all of our political parties are obsessed with PR, polls and focus groups. Tail wags dog doesn’t do it justice. Weirdly disembodied tail is more like it. If you want to understand the issue of mass disengagement with politics this ‘weather vane not signpost’ charge is perhaps not a bad place to start.

Whistling past the economy is one thing, but it’s important that the main parties don’t rein in activists on the subject of immigration just because it doesn’t poll well. Politics can’t leave it to the Pub Landlord to call time on Ukip.

First, some numbers. According to David Charter’s book Europe: In or Out, an average of 170,000 long-term migrants from the new EU member states came to the UK each year between 2004 and 2011. Expectations, based on independent research, were for between 5,000 and 13,000 per year. So that’s 20 or so years’ worth of forecast migration occurring every year. For a number of years. All of the arguments about the benefits of migration are at least challenged in the short term with that volume of people arriving. It’s not racist to be concerned about this.

There are, however, examples of the successful integration of this level of migration, notably Israel’s accommodation of over 700,000 Russian émigrés during the 1990s. Unemployment for native Israelis fell over this time.

As Philippe Legrain points out in his excellent book Immigrants: Your Country Needs Them, in an increasingly service-oriented economy it’s not unreasonable to think of the pool of relatively low-skilled, low cost EU labour as of much of a boon to rich economies as the lower cost goods that a free trade area provides. This augments the benefits of diversity arguments – look at the success of Hollywood, Silicon Valley and Premiership football teams, for example – and answers the ‘what have immigrants ever done for us?’ question.

To see what happens to the service economy when you avoid migration or restrict it to high-skill workers, go out for a meal in Japan and look at the bill. Japan has long closed its borders to immigration yet is hardly a poster child for a successful economy, in recent decades at least.

To illustrate some of the benefits of immigration let’s look at a real life example: employment at an Amazon fulfilment centre. I hesitate to use Amazon because it gets a lot of hackles up over its tax and working practices but it’s a fast growing, large employer and it’s difficult to deny that, from a consumer perspective, it delivers goods at lower cost. Lower costs are just as much a part of our standard of living equation as higher wages.

From a British-born worker’s perspective, Amazon offers tough jobs at around the living wage. Its growth means that it generates a decent number of jobs for both British workers and EU and other migrants, so the ‘coming over here, taking our jobs’ argument (a subject that requires its own blog) is not so easy at Amazon. From an EU migrant perspective, Amazon offers tough jobs at around three times the minimum wage in eastern European countries. Working hard for £8 per hour is one thing. Working hard for a domestic equivalent of £19.50 per hour (3 times our minimum wage) is another. EU workers obviously have to pay UK living costs while working here but live frugally, do some overtime and live near Easyjet airport links to eastern Europe and it suddenly becomes a good deal. Lots of EU migrants seem to agree. We get Amazon-level pricing to factor into our cost of living – something that will become even more important when they move into essential goods like food – and migrants get a deal that’s difficult to match back home.

A key question is whether Amazon could meet its hiring requirements exclusively from British-born workers. The demanding productivity targets – that translate into lower consumer costs – mean that the relative attractiveness of the wage is important. In practice, Amazon relies heavily on migrant workers. Spend a day as a shift manager at Amazon and you’ll find it difficult to cast migrants as lazy benefit tourists.

As for benefit tourism, I have to say that I don’t buy it. I don’t buy it in the sense that I doubt that a significant proportion of migrants come to the UK with the ambition of living off benefits forever. Relocating to another country is a daunting prospect. You need va va voom, ambition, to want a better life. The real advantage to a migrant moving from a low income area comes at the margin, when they earn enough to put some money aside. That means hurdling higher UK living costs.

The Amazon example illustrates that low-skilled migrant workers offer an opportunity to tackle one side of the cost-of-living crisis – costs – through jobs that migrants themselves regard as far from exploitative. The further benefits of belonging to the EU lives to fight another blog but immigration via open borders and the pros and cons of EU membership are obviously entwined.

Another consideration is that an abundant source of low-skilled, low-cost workers is an important factor in freeing women to work and encouraging gender equality in the workplace. This symbiosis of low-skilled and higher-skilled jobs applies more broadly too. There is obviously a debate to be had though, over the fairness of usually female migrant au pairs and nannies supporting their richer counterparts. I’ll start to address this theme in my Saturday blog this week, a review of Nicholas Kristof and Sheryl WuDunn’s book Half the Sky.

Thursday, 22nd January 2015