Since waking rather early this morning, and without the benefit of any alarm clock, Nigel Farage's by-election result (I hesitate to call it a victory) has been dominating my day. That includes recording a video on what I think the consequences of this might be, which will be out before lunchtime.
It would be all too easy in that case to ignore other political stories this morning, and yet some very clearly stand out and merit comment.
Wildfires
The first of these concerns wildfires here in the UK. These become very personal and rather more alarming when the news reports on people's homes catching fire and being lost, as a wildfire spreads through a domestic housing estate in Stourbridge in the West Midlands. It is not yet clear how many houses have been lost, but aerial footage suggests that perhaps 10 houses were simultaneously ablaze. To pretend that this is an issue affecting only the rest of the world is now impossible. Also pretending that it only affects open land is similarly implausible. Climate change is now threatening domestic life and the security of people's homes here in the UK, whether through fire, flood, overheating, or system failures.
As a matter of fact, there is no market defence against the threats posed by these issues. The defence against fire, flood and other natural catastrophes has always been a public good, and can only be funded and provided by the state. So when will we start talking about that, and the need to enhance these defence mechanisms, as well as to tackle the root cause of this problem?
So far, I have seen mainstream broadcast commentators make clear that these issues are the result of human-created climate change, and that is welcome. However, those same commentators are not asking, straight to camera, whether people are willing to change their behaviour to tackle this issue.
Are they willing to give up their holidays abroad?
Are they willing to reduce their consumption?
Are they willing to cut their energy use?
These uncomfortable questions remain off the news media, just as questions about the creation of additional resources, particularly in the fire service, are not subject to any serious comment that I have seen as yet.
In that case, I have one question which is, when will the tipping point be reached? Isn't the sight of people's homes burning through no fault of their own the moment for that to happen? If not, what will be needed to make people take this issue seriously?
Water
The second issue is that Ofwat approved increases in water prices yesterday for a range of English water companies, including Thames Water. The farce of privatised water continues in that case, and the government insists that the cost of any alternative is too high, yet permits the dumping of the excess cost of the existing system onto all households.
In doing so, they continue to use fabricated data on the costs of nationalisation of this industry that suggests that all shareholders and bondholders would have to be compensated in full for their losses, when any such suggestion is clearly unsustainable, and payment of the negligible market value of many of these assets would undoubtedly survive any legal challenge from those who own them.
Yet again, my question is, when will the tipping point arrive and when will this issue have to be tackled?
Universities
My third concern is another issue about which the same question could be asked.
The success of young people sitting A-level and other exams, who receive their results this week, has shifted the media focus onto the plight of our university sector. It is thought that at least 40% of our universities are now running deficits, including some in the supposedly elite Russell Group. I believe that this has the potential to create what might fairly be called a macroeconomic crisis in the UK.
The survival of any one university is, in itself, a microeconomic issue. However, I have long argued that when an institution has such economic significance in the local economy in which it is located that its failure would have major local economic ramifications, it should be considered a public interest entity (or a PIE, as they are termed in accounting), and these are characterised by the fact that they have macroeconomic significance, even if only in a locality. Their failure always poses the risk of major economic distress in the location where they are based, and if the risk of failure is systemic rather than individual, as appears to be the case here, they can, in combination, create the possibility of major macroeconomic risk. I think that this is possible in the university sector now.
As we now know, it seems as though it will be hard for all our universities to survive in a world where deliberately promoted government agendas that are racist in tone have excluded UK universities from world education markets in which they once competed very successfully.
I make the point in this way quite deliberately. It is not universities that are failing. It is government policy that is failing universities, and the people who work in them, the students who attend them, and the communities who host them.
To pretend that the policies created in response to the racism promoted by Nigel Farage, and now by Restore, would be cost-free was absurd. The fact is that we are going to see that consequence in the failure of universities, and this current Labour government, like its Tory predecessor, has indicated that it will not necessarily prevent such failures by providing financial support.
Let's put aside for a moment the fact that this victory for racist politics is something that this country cannot and should not tolerate, and instead consider the economic incompetence of a government that likes to pretend that universities are outside the state sector, not least when that is clearly not the case.
As a matter of fact, the cost of the vast majority of domestic students' education is currently borne by the UK government as it is incurred. I am well aware that the pretence is made that this cost creates an asset on the government balance sheet as a consequence, which the student will then, supposedly, be required to repay over their working life, but this accounting artifice does not avoid the fact that the government is, in reality, meeting the cost of this education day in, day out and, therefore, the vast majority of the cost of supporting ongoing domestic university student education is being borne by the UK government. This is a matter of fact, and will be in the future when those loans are not repaid, as many of them will not be.
In that case, to pretend that there is no issue here for the UK government, or that it can wash its hands of all those towns and cities that might face massive local macroeconomic disruption as a consequence of the failure of their university, and of the employment opportunities it provides and the spending power that it creates within those places, is quite staggeringly negligent.
As with water, the pretence that the privatisation of universities has worked has to be abandoned. It has not, and the fact that universities are only in trouble because of the failure of government policy, from both this administration and previous Tory ones, is clear evidence of that. If the risk of failure is, as I suggest, being created by government, then the government has also to accept the cost of making good the problem it has created.
That requires three things.
The first is to bring the universities back into the state sector.
The second is to bring to an end the fiasco of student loans, both for those now at university and for those who have been in the past, and where those loans have been sold to the private sector, the use of newly created government bonds to provide compensation to those who now own those debts is a necessity.
Third, we need to integrate universities more fully into the needs of society, local communities, and the broader needs of employers, people, and other types of organisations with whom graduates work. The pretence that universities are just another component within the neoliberal market structure has failed. We need to move on to recognise that, like the fire service and the provision of water, universities are public goods that require public funding for a public purpose.
Whilst Farage is trying to distract, it is our job to understand that the failure of the politics he and other arch-neoliberals promote is now evident all around us. The job is not just to reject him, his racism, and that racism seen in too many other political parties now, but to put in place the policies that we need to deliver a politics of care and an economics of hope.
The Binface factor
Maybe I should sign Count Binface up to the cause. The reality is that he could do no worse, and may do a great deal better, than all those neoliberal politicians who currently vie for votes, and successively fail, with that failure becoming more apparent, which is the issue that he has so clearly highlighted in this morning's election result.
We are in trouble
We are in trouble. It is time to acknowledge it. It is time to take action. It is time to cast aside all those parties who have created this trouble, whether deliberately or through inaction. Both behaviours have failed us. We need to move on and take action if we are to have any chance of success. The moment for that - the tipping point - has arrived.
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Well said, Richard. We really have got ourselves into an absurd situation, haven’t we? I don’t understand the seemingly entire lack of common-sense joined up thinking today. One profound problem that I see all around me, and especially in my working life, if the problem of what somebody (I can’t recall who) called “layering”. Layer upon layer of needless complexity surrounding everything, leading to a kind of stasis, because it seems to me there are so few people who know how to get things done today. Just one simple example would suffice, in that several new build schools, including one down the road from me in Bridgwater, are being demolished as the buildings are substandard and unsafe Demolition of newly-built schools could cost £150m – BBC News
This isn’t a new story, nor is dodgy cladding, but too many layers of procurement, and hands in wallets, might be at the nub of the problem. The Bridgwater problem needs new roads building, so massively increasing costs, but no-one seems to be taking into account the collapsed birth rate and how this is already leading to reduced school & nursery rolls Nursery Closures
And HS2, student loans, lack of empathy with others, etc., etc. Rant over.
Rants encouraged.
They regulate us, using the proper meaning of the word.
They are so removed from actual life nothing will be done until it impacts those at the top of the roost, they are so high up they are yet to smell the smoke. I swear we are expendable machines for the monetary and capitalist good. Until the old ways fall there is little room for new. I fear for our planet this year and it alarms me so many are screaming and no one is listening. Like with Packham the propaganda machine is working like a charm. Its okay for now though we need to wear sun cream and think about not having outdoor disposable bbqs. That’s going to help a lot I feel safer already.
I’m not sure that a good understanding of the concept of public goods is being shown here. Fire defence is indeed a public good. If all the neighbours have fireproof materials and there’s a hydrant, then a new build house benefits from that situation and if built to the same standard does not take away from the the defence of other houses.
Classical economic theory says that government should ensure that there is fire defence. It does not say who owns the provision. It does seem to be the attitude of socialism in the UK that insists provision must be by the government. Government provision can work and I would argue local is better than national here, but the public goods concept doesn’t insist on that. The UK thankfully has mixed provision and I speak as a fire marshal for a small private office block with responsibility for reporting hazards, no-one left behind in an evacuation, and using extinguishers appropriately.
Politely, don’t be an idiot.
We discovered centuries ago that it was always the state that had to deliver fire services, because they were a public good.
Being a fire marshal is something very different. If you cannot tell the difference, do not comment.
I thought Emilio Lawrence plays for Luton Town?
I lost touch with their fortunes when Eric Morecombe did.
Emilio – the Titanic is sinking and all you want to do is re-arrange the deck chairs and ensure that the brass band is playing to the correct tempo as it sinks lower in the water.
It’s got nothing to do with ownership Mr Neoliberal; it’s about what happens when things go wrong – always the acid test for anything set up – be it public or private.
I’d like to levy a surcharge on privately owned SUVs – but how would people get around on Britain’s shit bus services and its destroyed railways? Now we have an over dependency on private cars, many are still diesel or sucking energy off the grid.
We are stuck.
Because Emilio we had socialism for the car – not public transport. Savvy?
As for fire services, it wasn’t long ago that Right wing politicians were asking questions about what the fire services were doing when they were not fighting fires. Apparently it was wrong to sit there/sleep waiting for something bad to happen and not value for money! Wages stagnated and it was felt that firefighters could be part time – yes that’s right – have two jobs instead to be more ‘productive’. And that stuff they use to fight fires – what is called – water? – that’s it! – well, all that water can be provided by privately owned water pipes that we could use to fight fires ….er except that these private pipes are pissing thousands of gallons of water into the soil every day.
Ownership (owner’shit’?) is only important now Emilio because of the mess it has caused. And ‘private’ has failed. Completely. Accept it.
Thanks
Do you think that your small private office block owners would bother to have a fire marshal if the government had not introduced health and safety laws?
The whole point about public goods is that they must be supplied even if no private provider wants to provide them. And most private providers are not interested in providing anything that does not make them a profit.
Good point
Perhaps, Emilio, you could share with us, examples of countries with fully privatised successful Fire & Rescue services? Presumably the “markets” have come up with a solution SOMEWHERE? (especially as demand seems to be increasing, fires in summer, floods in winter – have you invested yourself? Maybe in “Fa***e Fire & Rescue Services Ltd”? Sounds like a great investment opportunity. )
RobertJ asked “Emilio, you could share with us, examples of countries with fully privatised successful Fire & Rescue services?”
The answer is ‘NO’. But I have a counter question which is can you name a country with a successful fully publicly provided Fire & Rescue service run on the ideological basis that public goods must be publicly provided rather than publicly ensured which was my main point.
“Ensured”? Insured, surely? And that was the model that failed which gave rise to out successful fire service for a very long time until neoliberals began to defund it.
Don’t call again.
Whilst I’m not picking on a particular individual, an example of what I believe to be excessive ‘layering’ can be found in the Building Society sector. Whilst I prefer the fact that such institutions are “owned” by their members, and it is true that many societies tend to charge less interest on mortgages over the long-run, there is a problem with executive pay in the sector.
For example, I see that the remuneration package (ignoring pension contributions) of the CEO of the Yorkshire BS in 2025 was £925,000 basic salary, £686,000 bonus, giving £1,611,000 total. Sure, about £34,230 NI and £711,153 income tax would be paid, but the salary still works out at £30,981 per week, netting down to £16,464 per week. What on earth can they do with such a high income (well, I might be able to help)? Whilst I understand that running a medium-sized financial institution brings much responsibility, I’m sure that YBS has staff earning similar incomes, pro-rata, a year that the CEO picks up in a week. And don’t even look at Nationwide Building Society!
The UK national fire service is a tipping point. Cuts of staff, machines, stations means that the system is stretched to breaking point.
Take the New Forest fire Hampshire Fire & Rescue has to rely on crews from other regions, eg from Suffolk. to help them.
This is just in time theory gone mad.
Global warming is the cause of the increase in fires. The cycle is wet spring, results in vegetation growth, drought, which dries out the vegetation, fires with warm winds which drives the spread of the fires, with the risk of megafires which create their own winds systems.
But what is not being discussed as stated in the New Scientist is we should not “ignore the underlying cause burning fossil fuels and greenhouse gas emissions”.
The UK must find the money to improve prevention, number of fire crews etc.
More importantly we as individuals must start to cut back on our consumption and hope that collectively it has an impact.
A great deal to agree with
Would the concern about student debt reduce somewhat if we reframed it as a graduate tax?
The government pays the fees. Graduates tend to earn more and so pay more income tax anyway. If necessary you could add a graduate tax supplement for say 20 or 30 years.
Would that be more equitable than the current system, where the government pays the fees as a loan to the students, the highest earners pay off their student debt quickly, and some people earning small amounts pay little until the “debt” is written off, but a large bulk of people in the middle pay years and years of interest. Who does that benefit?
In a word, no.
Why should a public good – education – be paid for privately?
Education is a public good up to. point but not forever!!!
Explain
Why a ‘graduate tax’ especially ? Surely a truly progressive income tax system would take care of such an imbalance in earning capacity?
Agreed
The truth is, we have not done enough quickly enough, so we are probably beyond some environmental and climatic tipping points already. Like the event horizon of a large black hole, we have not noticed that we have passed the point of no return.
Which is not to say that we should accept the inevitable and do nothing. We can still reduce the impacts. But we have fallen off the building and the ground is rushing up. There may be still time to deploy a parachute, as long as we don’t leave it too late.
Who exactly were/are Universities accountable to in particular the post WW2 ones?
Their trustees/ board.
On the question of climate breakdown I listened yesterday to a discussion with the climate scientist Kevin Anderson – I don’t know if you are familiar with his work.
https://www.youtube.com/watch?v=mBFos_T7cT0
I thought he was brilliant and refreshingly straightforward. He had such a good analysis of so many aspects of the issues not least that of social justice. So many things that chime with what you write. The only negative part was when the conversation turned to how the transition would be paid for – back to the old household analogy and tax first to fund. A little enlightenment wouldn’t go amiss. It’s on Novara media with Aaron Bastani who, interestingly, seemed a little taken aback at the radicalism of some of what Kevin said. It’s quite a long listen but I found it very compelling……and quite disturbing, as it should be. Well worth the time!
It must be 25 years since I was in touch with him, but he was and is very good. Agreed. Shame about the household analogy though, but this is Novara all over.
Maybe time to get in touch again ?? I think he’d be very open to your explanations and ideas about funding and resources – Aaron Bastani was the one pushing the “what would you cut to pay for it.”
Noted
As ever your blog is full of relevant arguments which allow us to challenge the status quo. I wonder if you would consider exploring the idea more generally beyond the university sector of public interest entities PIEs) in a future item ( possibly as part of your u tube strategy)?
I understand from what you write how their failure always poses the risk of major economic distress in the location where they are based but it is too late for those involved when a major employer fails ( I speak from personal experience) so what criteria should we apply to identify a PIE in advance and what policies should be applied to prevent failure?
Perhaps more broadly I think the issue of job security is not given enough priority in discussions about the economy. I realize that it is unrealistic to propose that there can be a seamless transition between jobs ( and I don’t want to open up the job guarantee debate again) but I can’t help feeling that there is a parallel between the traumatic effects of losing your home through ” no fault eviction” which is now considered unacceptable and losing your job after many years of service due to decisions taken by others for example such as the relocation of 600 jobs by BT from Liverpool.
https://www.bbc.co.uk/news/articles/clyj4r79303o
Although not a PIE the article references the negative effects on the local economy as well as the many individuals concerned. Trade unions can only offer appeals and warm words at this point.
Are these events simply part of our economic landscape or can the politics of care provide policies which could mitigate the worst effects?
Let me muse on this
people might need to make some changes, but there are war-crazed maniacs bombing everywhere and burning vast amounts of fuel doing it, so my few hours on a plane is a drop in the ocean.
And if everyone was as selfish as you, nothing would change
So all modern life must end so that Trump can use all the oil for his ships and fighter jets? We are constantly told to do our bit and no one wants to tackle those who pollute the most. We can’t individualise this. That’s the same neoliberalism you argue against, passing all responsibility to the individual. I have to fly a few hours less while the super rich fly in private jets? Yet I’m the selfish one?
You really don’t like anyone saying anything that doesn’t 100% align with your views.
Not at all true.
I just don’t like trolling idiots and twenty years years in my game has given me plenty of experience in spotting them. You fur the bill perfectly.
In 2010, Jeff Goodell wrote jn ‘How to Cool the Planet’ “The thing I fear worst is that we won’t do anything at all. ” We will argue about it on TV and write books and … nothing much will change.
It would be good if the government introduced *something* now while we are all aware of drought and wildfires. For instance:
· * Heavy charges or forbid private aviation from all British airports
· * Introduce a 50 mph max speed limit in the UK – and warn that lower limits will follow.
[After the attack on Pearl Harbour which brought the US into WW2, the US national maximum speed limit was 35 mph. Yes! 35, not 85!]
· Ration petrol and diesel as in the UK in WW2.
· Nationalise gas, water and electricity companies. Introduce low prices to cover basic needs with escalating prices for more extravagant use.
· * Reform council tax to the same sort of pattern as above.
· * Offer some kind of preferential terms for trade with nations that adopt similar policies.
· * Aim for half hourly public transport services as much possible.
· * Draught-proof and insulate housing street by street (as recommended by Professor Kevin Anderson of the Tyndall Centre for Climate Change research) bringing flats above shops into use as homes.
Above all, start! Get on with it.
You describe a Green New Deal, as I did in 2008….
It would be good if the government introduced *something* now while we are all aware of drought and wildfires.
Hey, they’ve temporarily banned the sale of disposable barbecues, haven’t they? I mean, thank goodness for Andy Burnham – Keir Starmer would never have been so bold!
Plus I got a very loud emergency alert on my phone earlier this evening, so that’s it, job done.
I think I needed my irony alert for that one.
I did not get that alert. Jacqueline did. She thinks I am now in theirs list of expendable people.
That alert summed up the government for me. The only other one I’ve had was a genuine red alert on severe wind/storm 6/12/2024 18:58hrs. This one last night was in the “severe alert” category, intended for warnings about “severe threats to life and property”. But it was no such thing – it was government advice about behaviour and they misused the emergency alert system to distribute it. They weren’t warning me about a wildfire, they were telling me not to start one. I reckon they will have annoyed “nanny state” ranters AND those who ARE bothered about planetary catastrophe.
Given that they’ve been ignoring global heating since coming to office, the alert made me very angry, especially as it overrode my emergency alert audio settings and nearly gave me a heart attack. (I immediately peed into a paper bag, put it over my head, hid under the table, and waited for Uncle Vladimir’s ICBM to take me to a better place).
🙂 and wholly appropriate
Joe Burlington = Lord Keynes?
Very surprised about wildfires in the UK! When living amongst the gum trees in Western Australia we expected them but were, therefore, prepared with a plan, a fire-hose and a petrol powered pump with a lifting hose to drop in the swimming pool if mains pressure was lost. Like NOT having large awnings and air-conditioning fitted as standard in every home to cope with summer heat, a big part of the current UK problem is simply being totally unprepared for what will rapidly become the new normal over the coming years.
Richard, You explained that banks do not use peope’s savings to finance the loans they give out. So what do the banks use those savings deposited with them for?
Another infographic, to come…..