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Democratising the knowledge of Economics - What happens when ordinary people learn economics?

Aditya Chakrabortty in The Guardian

In a makeshift classroom, nine lay people are battling some of the greatest economists of all time – and they appear to be winning. Just watch what happens to David Ricardo, the 18th-century father of our free-trade system. In best BBC voice, one of the group reads out Ricardo’s words: “Economics studies how the produce of the Earth is distributed.”

Not good enough, says another, Brigitte Lechner. Shouldn’t economists study how to meet basic needs? “We all need a roof over our heads, we all need to survive.” Nor does the Earth belong solely to humans. Her judgment is brisk. “Ricardo was talking tosh.”

So much laughter rings out of this room that the folk outside must wonder what’s going on. They’ve been told this is an economics course – and participants on those don’t normally dissolve into giggles.

Inside, Pat Bhatt chimes in: “Everything you see around you comes from nature. That’s the basis of everything. Economics is the wrong word. It should be … ecolo-mics.”

Ooohs and aaahs. “Very clever!” beams the facilitator Nicola Headlam and scribbles it down on the flipboard.

“I invented it,” says Bhatt.

“My work here is done,” replies Headlam. “I’ll get my coat.”

Some days, democracy looks like a bashed-up ballot box. Some days, it looks like a furious demo. But on this sun-splashed weekday morning, democracy looks like this low-ceilinged meeting room in a converted church, slap bang in the middle of the road that runs from Manchester to Stockport.

None of the “students” have ever picked up an economics textbook. At a guess, most would be either stumped or sedated by the Financial Times. Yet here they are, starting a crash course in something that to them is a mystery. The majority are retired, having worked their entire lives. But when asked how many of them feel some control over the economy, not one raises a hand. So who is in charge?

“Journalists – who are paid by rich people.”

Amid all the humour pokes a truth. For this group, economics is something that’s done to them, by people sitting far away in Westminster or the City. They bear the brunt of spending cuts; they struggle with the rottenness of Northern Rail and they see neighbours sinking into debt – and they have no decent account as to why. They have been bashed over the head again and again, and not even been shown the offending shovel.

Over in the corner sits Sue O’Connor, who today comes “sponsored by Visa!” Another gentle joke that masks the debtor’s panic of having her disability benefit hacked back. Cancer meant she lost all her income and wound up in sheltered housing. Now 64, she suffers severe arthritis, yet her Motability caris about to be taken away.

While at a secondary modern, her class was judged too thick to learn any maths. Partly because the teenager wasn’t taught to count, the grey-haired woman still feels she doesn’t count. “Information is power,” she tells the group. “If I can learn in this class, maybe others will listen to me.”

More confident is 70-year-old “raging feminist” Lechner. “The economy is a system, right?” she says. “I understand systems like patriarchy and how it’s set so certain people get hurt … and I want to know how the rules of the economy are set.”

Headlam nods: “Somehow, someone, somewhere made these rules up. They aren’t laws of nature.” And they determine “who’s got what and where and why”.

‘Short of paying nine grand a year for a degree, how else are laypeople meant to find out about the most potent social science of all?’ A flyer for the course. Photograph: Christopher Thomond for the Guardian

That tearing sound you can hear is the veil that normally partitions economics from society and politics.

Up till 2008, someone like O’Connor would have been told over and over that if she’d failed to get ahead it was her fault, not the system’s. She’d just not followed the rules. Then came the financial crisis, which turned into a crisis of economics.

When the Queen famously asked why no economist saw the crash coming, she cut to the heart of the matter: perhaps those who wrote the economy’s laws and policed their observance weren’t so qualified after all. And while some practitioners claim that theirs is a semi-science, all prescriptions to revive the economy – from George Osborne’s historic austerity to the hundreds of billions doled out to asset-owners by the Bank of England – underline how it’s fundamentally political. By the time Michael Gove remarked in the Brexit campaign that “people in this country have had enough of experts”, he was picking a squelchy-soft target.

One of the biggest battles over economics kicked off just up the road from this community centre. At the University of Manchester in 2013, economics undergraduates – tired of memorising abstract models while the eurozone burned – linked up with students from around the world to demand their economics curriculum be changed. Nothing beyond the orthodoxy of free-market economics was being taught; no conflicting global developments, nothing of its critics such as Keynes or Marx, despite their contemporary relevance. Thus began an epic, and epically imbalanced, fight of a bunch of teenagers taking on the very professors marking their exam papers.

Student passions usually fizzle out faster than you can say “snakebite and black”, yet a half decade on, the struggle to prise open economics has got broader. Those ardent undergraduates propping up the union bar are now civil servants pushing for change in government economics; or they’re directing charities such as Economy, which is putting on this crash course in Levenshulme. The aim is to nail the format, then do 15 courses next year, partnering with housing associations, local authorities and others across the UK.

As you might expect from the first session of the first course, this morning’s proceedings betray some nerves. In an ordinary jacket and denim skirt, Headlam tells the class: “We had no idea if you would come.” Unlike the brogue-wearing professoriat, she and her co-facilitator Anne Hines give no sense that they come from a distant planet. Tomorrow morning, former pharmacist Hines sits her own economics exam for an Open University degree course while Headlam, even with her doctorate, describes her academic career as making “target practice for the elite institutions”.

‘Levenshulme is supposed to be gentrifying.’ Photograph: Christopher Thomond for the Guardian

The pair are giving their time for free, and attendees don’t pay a penny. Economy’s Clare Birkett put together the course and organised the pilots on a part-time wage. All five courses, each lasting up to two months and educating anywhere between 50 and 80 people, will together cost little more than the tuition fees for one solitary economics degree.

A few academic economists will ask what authority a bunch of amateurs have, but Birkett has prepared her fighting talk: “If they say, ‘How dare you talk about this?’, I’ll say, ‘Why shouldn’t I? I’ve put in the work, I’ve studied these things. This stuff belongs to all of us.’”

Short of paying nine grand a year for a degree, how else are lay people meant to find out about the most potent social science of all? The internet is full of blind alleys, while even public lectures within universities typically assume some prior knowledge. Given how some economists rage that they’re not listened to enough on issues such as Brexit, it’s notable how little they actually engage with the public (one excellent exception is the annual Bristol Festival of Economics).

Not so long ago, a Levenshulme resident could learn economics – or any number of other subjects – through the adult evening classes offered by the University of Manchester. The extramural programme stretched as far afield as Wigan and Burnley, and by the 1970s employed more than 30 academic staff. Then followed decades of cuts, until the entire department was shut down in 2006.

Which makes economics the humpty-dumpty subject: trust in it is thoroughly broken, yet the public lack the basic tools to put the discipline back together again in a form that reflects their needs. A YouGov survey in 2015 found that more than 60% of respondents did not even know the definition of GDP (gross domestic product) – that staple of BBC bulletins and Westminster debates.

To make the economy more democratic, as everyone from Theresa May to Jeremy Corbyn proposes, we need to democratise knowledge of economics. That’s a truth now cottoned on to by organisations as disparate as the Bank of England and Momentum.

‘Everyone here brings their own lived experience of economics.’ Photograph: Christopher Thomond for the Guardian

Those doing the Levenshulme crash course don’t look like your typical seminar room attendees. Not only are they decades older; all but one is a women. The average undergraduate economics course, according to the Royal Economic Society, is about 67% male and 25% privately educated(compared with 7% of the population). After the class, a charity van pulls up outside, offering three bags of short-dated food for £6. Several “students” collect their groceries for the week.

Everyone here brings their own lived experience of economics. In her motorised wheelchair, Joanne Wilcock notes how “everything is much more expensive when you’re disabled”. Bang on, yet you hardly ever read that in an article on the latest inflation figures. Bhatt knows that Levenshulme is supposed to be gentrifying – “fancy cars, flash weddings” – but notices his neighbours can’t afford to do up their own houses. “All fur coat and no knickers!” he concludes, and the room cracks up.

And if you’re expecting them to trot out the usual left-itudes about fixing the economy, you’re wrong. A discussion about Northern Rail does produce calls for nationalisation – but also arguments as to how it should be turned into a co-op, or run by an arms-length organisation of technocrats.Q&A
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Lechner starts on about “citizen scientists” – amateurs who conduct their own experiments – and casts an eye around the room. “Why can’t we be citizen economists?”

That may be the most radical suggestion of the day, because it cuts directly against how both right and left usually do their business. In 1894, the year before cofounding the London School of Economics, Fabian Beatrice Webb confided to her diary: “We have little faith in the ‘average sensual man’. We do not believe that he can do more than describe his grievances, we do not think he can prescribe his remedies … we wish to introduce into politics the professional expert.”

That impulse may now be dressed up in polite euphemism – but it lives on. “So many thinktanks and MPs come up with good ideas to change our economy, but they’re all stuck in their political bubble,” says the head of Economy, Joe Earle. “Ordinary people barely get a say in the thing that rules their lives.”

Contrast that with this class and its polite horizontalism, where no one is presumed to be a total expert and everyone is treated as if they have something valuable to say. It is the seeds of that ferment described by Hilary Wainwright in her recent book, A New Politics from the Left.

‘Aklima Akhter only came to this country in 2013.’ Photograph: Christopher Thomond for the Guardian

Drawing on her experience of feminist and workers’ self-organisation, she writes: “Rebel movements shared and developed their own kinds of knowledge, via practice and through debate and deliberation, and on to producing new ideas and the basis of new institutions. Authority, once it has been confidently questioned by those on whose obedience it depends, crumbles in ways that make it difficult to put back together again.”

At the end of the class, each participant tells the rest the best thing they have learned. There’s a pause when it gets to Aklima Akhter, who only came to this country in 2013 and has been sitting so benignly quiet in her white headscarf. She starts haltingly: “It is difficult for me, you know … the subject, the language.”

All around her are faces pursed in little moues of encouragement, but then Akhter speeds up with fluency. “But my favourite word was ‘nationalisation’. Because when things are privatised it is the rich who get all the benefit.” And for once in this room, no one is laughing.

Capitalism’s new crisis: after Carillion, can the private sector ever be trusted?

Will Hutton in The Guardian


It is one of the most spectacular corporate failures of recent years. Carillion’s collapse, with £2bn of debts, threatens to deprive tens of thousands of workers, directly or indirectly, of their livelihood. The company had only £29m of cash left. This broaches new levels of fecklessness and the impact will be felt across Britain.

For Carillion was not only a major construction company: it had entered the lucrative public service delivery business. The shockwaves have been felt not only on building sites but in multiple schools, hospitals and even prisons, where tens of thousands of cleaners, porters and maintenance workers have suddenly found their employer has gone bust.

The hospital and school workers on TV news, worrying about their next payslip, are a forceful reminder of how deeply privatisation has entered everyday life.

Schools are run by private academy trusts and school meals provided by companies like Carillion. Switch on the light, catch the bus, post a letter, turn on the oven, drink a glass of water, register for an apprenticeship, use a train, park the car or eat the food in the hospital canteen – it’s all provided by private companies.

The amount of activity now performed by organisations we all own and whose overriding purpose is public service is minimal. Day-to-day life now depends on private companies with private ambitions.

The intertwining of the public and private is not new: it is as old as the state. Elizabeth I’s navy was built in private shipyards; the warplanes and engines that won the second world war were built in corporate factories. There is nothing novel in contracting out or public commissioning; the debate is where to draw the line – and whether the contractors will deliver what they promise.

It was the advent of Margaret Thatcher that saw the first major redrawing of the line, with a wave of wholesale privatisations.

Private owners would necessarily perform better than any public owners because they were private, it was asserted. But that was only the beginning.

Why couldn’t the same principle be extended to the heartland areas of public provision in central and local government? Private companies, like Capita or Carillion, could accept commissions to run the functions of the state more cheaply than government could itself. The state could become no more than a commissioning and procurement agency. The public services delivery industry was born.

In the 1990s, John Major’s government flirted with going further, getting private companies to own and finance public facilities, such as hospitals and prisons. However, whatever the ideological attractions, private borrowing costs were prohibitively high.

It took New Labour’s zeal to get private borrowing off the public books, at any price, for the private finance initiative (PFI) to boom: nearly all Britain’s PFI deals – more than 700 of them – were done by New Labour. 

There is now a sense, growing with every successive scandal, that the privatisation of the everyday has gone too far – a mood captured by startling opinion poll majorities of 80% in favour of renationalising utilities. The opposition leader, Jeremy Corbyn, struck a chord when he said Carillion’s failure was a key moment.

Carillion’s failure is part of a wider story of corporate mishaps and debacles. The financial crisis, starting with the run on Northern Rock and culminating with Royal Bank of Scotland teetering on the point of closure, was a tipping point: banks and building societies could no longer be trusted.

Since then, a succession of illustrious British names have become embroiled in varying crises. BT, Tesco and, most recently, GKN have all suffered from multimillion-pound accounting irregularities, with the resulting fall in GKN’s share price exposing it to an opportunistic £7bn hostile takeover last week.

The public service delivery industry, of which Carillion is part, is not exempt. Serco and G4S have had to repay £180m for the overcharging of tagged prison offenders.

Learndirect – privatised and sold to the private equity arm of Lloyds Bank in 2011 and, until recently, Britain’s biggest training provider – proved to be systematically failing up to a third of its apprentices; it is being investigated by the National Audit Office.

Stagecoach and Virgin say they will walk away from their East Coast mainline contract unless the government waives up to £2bn of contract payments.

PFI, aimed at getting debt off the government’s books, turns out to be organised hugely in the private sector’s interest. The taxpayer is up to £150bn out of pocket. And now Carillion.

But is it capitalism, or capitalism British-style, that is at fault? The Conservative party, as the promoter of capitalism and the private sector, sees no differentiation – and neither does the current leadership of the Labour party, who are in receipt of a political gift.

There must be an end to privatisation’s dogma and rip-offs, runs the attack by Jeremy Corbyn and John McDonnell: the answer is plainly nationalisation and bringing contracts back “in-house”, which, if Labour were elected, would become a statutory requirement. There will be no more indulging of the private sector with the taxpayer picking up the bill. How could Carillion continue to be awarded contracts last year, including for HS2, after issuing a series of profit warnings? Above all, says Labour, it seems to be one law for workers and another for overpaid directors.

These are telling criticisms, but they do not get under the skin of why so much has gone wrong. Britain’s nationalised industries suffered from inefficiency and persistent underinvestment. Taking activity back in-house is a strong soundbite, but no panacea.

While some public sector delivery is outstanding, notably in parts of the NHS, the general pattern is more patchy. It is for this reason that governments for decades have been contracting the private sector to deliver goods and services. Trying to extend that principle is not unreasonable if high-quality private sector partners step up to the mark: the problem is they are in such short supply. Equally, a better-designed private finance initiative could have transferred risk and debt to the private sector more equitably. Why did British companies drive such an impossibly expensive and unfair bargain? 

Some of the answers lie in the Carillion scandal. Its top directors were exceptionally well rewarded if they could keep the share price up, which meant running the company to minimise short-term costs and cap investment, with no margin for error. Carillion might have survived one mishap, but a succession inevitably bowled it over.

When the terms of directors’ pay was changed in the very small print of a remuneration report, so that extravagant short-term bonuses could still be paid even if Carillion collapsed, no shareholder noticed the change. Nor did any of the proxy voting agencies to whom many shareholders delegated their votes and decision-making rights. Indeed, when Carillion was begging the government for a short-term £150m loan at the very last, no investors were alongside them, mounting or supporting a rescue package. The main shareholder activity was to sell the shares short.

This was an ownerless company denuded of any purpose except seemingly to enrich its directors and keep its rootless multiple shareholders happy from one profit-reporting period to another. There was no mission to deliver, no drive for excellence, no pride in service. Workers were disposable notations on spreadsheets. Yet it could be different.

This malaise is at the heart of too many British companies and is what lies behind the litany of disasters and economic under-performance. One leading international investment manager, who wishes to remain anonymous, says that British companies suffer from a disproportionate number of irregularities, fines, missed profit forecasts and malpractice compared with the companies in which he invests in other countries. It is part of a wider picture in which British companies tend to under-invest and under-innovate – even while executive pay has grown at a startling rate to become, per pound of turnover, the highest in the world.

So what to do? One of the striking distinctions of the British system, as the Big Innovation Centre’s Purposeful Company Taskforce revealed in its 2016 Evidence Report (full declaration: I am the co-chair), is that British quoted companies do not have “anchor” shareholders owning a critical mass of their shares (blockholders in the jargon) – engaged owners who will support them through thick and thin. Instead, British companies have the most diffuse, disengaged and transactional shareholder base of any corporate sector in the advanced industrial world.

With so many shareholders, the voice of any single one is easy to ignore. The yardstick becomes immediate financial performance. A preoccupation with the short-term share price becomes inevitable, with shareholders linking executive pay to achieving just that.

On top of this, there is a culture, imported from the US and legitimised by the dominant free market theories of the 1970s and 80s, that the sole purpose of a company is to make as much money as possible as quickly as possible.

In Professor Milton Friedman’s conception, a company can only make a lot of money if it is delivering economic and social good. But maximising shareholder value has become corporate Britain’s intellectual god.

British company law does not require companies to declare any purpose when they incorporate: indeed, the whole British ecosystem is organised to put short-term financial priorities first, and all the other things that make a company great – its people, its relationship with its customers, its capacity to innovate, its declared reason for being – in second place. Bad economics married with Britain’s unique institutions delivered what we now have: a rogue form of capitalism.Q&A
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The task now is to repurpose that capitalism – a task with no single solution, but rather a range of initiatives that cumulatively will move the dial.

The first step is to make declaring a purpose beyond profit-making mandatory, and incorporating it in the constitution of the company – its articles of association. Another is to harden up the requirements to incorporate wider stakeholder interests into corporate decision-making. Companies should be required to put their reason for existing to a regular shareholder vote, a “say on purpose” beyond merely maximising profits.

Every effort should be made to widen company types beyond the public limited company. There should be more co-operatives and employee-owned companies – companies consecrated to delivering a public benefit first and foremost. The £7 trillion asset management industry should take its obligations as owners much more seriously: every inhibition to forming “anchor” shareholding groups should be dropped, every incentive to become more active long-term stewards encouraged.

Directors’ bonuses should be paid only after a period of between five and seven years, so that boards think long-term. Trade unions should be encouraged, their voices heard and built into company decision-making. Pension funds should be encouraged to invest in purposeful companies; up to £100bn could be earmarked. The 40,000 pension funds should also be consolidated into many fewer entities, so they have genuine clout. The under-resourced and under-powered Financial Reporting Council should become a proper business regulator.

There is a movement for change, but it is on the margins. In Britain, along with the Purposeful Company Taskforce, there is Tomorrow’s Company and Blueprint for Better Business all arguing for systemic change. Internationally, the thinktank Focusing Capital on the Long Term makes a similar argument, as does the “inclusive capitalism” movement. The TUC, under Frances O’Grady, is pushing a parallel agenda.

The best and most reflective people in the business lobby are alarmed by the growing “trust gap” and want to close it. There is intellectual support: the new economics is attempting to integrate the best of free-market, Keynesian and even Marxist traditions. Companies cannot be seen as solely profit machines, but as complex problem-solving organisations, bound together by the social glue of shared purpose, in which tensions and power battles between management and stakeholders will be inevitable. How companies are owned, purpose expressed, directors paid and stakeholder interests traded off will be of fundamental importance.

More Carillion-style disasters lie ahead as the economy slows down. The government cannot continue to ignore these failings, nor can the Labour party simply promise to nationalise everything. The debate about our capitalism can only deepen. For the ordinary Briton, the sooner it is resolved the better.

Carillion collapse a ‘watershed’ for outsourcing

George Parker and Gemma Tetlow in The Financial Times

The collapse of Carillion, the company responsible for everything from building hospitals to providing school meals, is a “watershed” moment that proves that the private sector should not be running swaths of Britain’s public services, according to Labour leader Jeremy Corbyn. 

The revolution in outsourcing public services started by Margaret Thatcher, which by 2014-15 accounted for about £100bn or 15 per cent of public spending according to the National Audit Office, faces a thorough reappraisal, with Mr Corbyn standing ready to disrupt the industry altogether. 

“It is time to put an end to the rip-off privatisation policies . . . that fleeced the public of billions of pounds,” said Mr Corbyn, in a video that was watched almost 300,000 times in 24 hours on Facebook. 

“Across the public sector, the outsource-first dogma has wreaked havoc. Often it is the same companies that have gone from service to service, creaming off profits and failing to deliver the quality of service our people deserve,” he added. 

Outsourcing of public services to the private sector was virtually non-existent in the 1970s, but Mrs Thatcher changed that in 1980 when local authorities — which had previously directly employed blue-collar workers to build roads and houses, and collect refuse — were required to put the work out to tender. 

David Willetts, a former Treasury official, policy wonk and later Tory MP, was a key promoter of the private finance initiative, but admits that in some recent projects the scheme has gone awry. 

He argues that it was right to hand projects to the private sector if there was a genuine transfer of risk, but that the Carillion collapse had exposed cases where in the end, the risk reverted to the government, which had to maintain public services. 

Last year John McDonnell, shadow chancellor, vowed at the Labour conference to nationalise such contracts as part of a wider plan to roll back private sector involvement in public services. Carillion has strengthened his resolve. 

 

In a more detailed email briefing, the party’s position seemed more nuanced. It said Labour would “look to” take control of PFI contracts and that it would review all of them and — “if necessary” — take them back in-house. 

This has unsettled some Labour moderates. “Where is the element of choice if everything is done in house by a public sector body?” asked one Blairite former minister. “Could things be done differently? All that would be lost.” 

Since 1980 huge swaths of services — from providing school meals to refuelling RAF aircraft — have been outsourced to the private sector under Conservative and Labour governments. 

This outsourcing boom led to the creation of new companies, such as Capita, that specialise in serving public sector clients but it also attracted existing overseas municipal providers, such as Veolia. 

NAO figures suggest the bulk of central government spending on outsourcing goes to pay for IT, facilities management and professional services. Local authorities rely on the private sector to provide a range of services from social care to waste disposal, and the private sector provides healthcare to NHS-funded patients. 

Several high-profile outsourcing failures have raised questions about whether the taxpayer is getting best value for money from some contracts. Carillion’s collapse is the most recent, but not the only example. 

Members of the armed forces were drafted in to provide security for the 2012 London Olympic Games after G4S was unable to provide sufficient numbers of staff.

The failure of Metronet, which had been contracted to maintain and upgrade the London Underground, in 2007 cost the taxpayer at least £170m. Several privately run prisons have hit the headlines over the past 18 months as levels of violence have increased while spending and staff have been cut. 

But many other public services have been successfully outsourced with little or no public comment. 

“Most people in Britain are endlessly using contracted-out services without really noticing it,” said Tony Travers, a professor at the London School of Economics. “The question is what is the contract mechanism to ensure that what is done is done appropriately.” 

He said at least two lessons could be drawn from recent failures. The first is that overzealous efforts by government to drive down costs in contracts are not necessarily a good thing. 

Carillion is not the only private provider to have signed up to contracts committing to providing services at implausibly low cost. At the end of last year, the Competition and Markets Authority highlighted concern that private providers of social care that serve mainly the public sector were “unlikely to be sustainable” unless local authorities paid more for their services. 

The second lesson is that ministers and civil servants need to carry out proper due diligence on companies tendering for public contracts.

The “Inefficient” State Mops up the Disasters caused by “Efficient” Private Companies.

George Monbiot in The Guardian


Again the “inefficient” state mops up the disasters caused by “efficient” private companies. Just as the army had to step in when G4S failed to provide security for the London 2012 Olympics, and the Treasury had to rescue the banks, the collapse of Carillion means that the fire service must stand by to deliver school meals.

Two hospitals, both urgently needed, that Carillion was supposed to be constructing, the Midland Metropolitan and the Royal Liverpool, are left in half-built limbo, awaiting state intervention. Another 450 contracts between Carillion and the state must be untangled, resolved and perhaps rescued by the government.

Fire services ready to deliver school meals after Carillion collapse


When you examine the claims made for the efficiency of the private sector, you soon discover that they boil down to the transfer of risk. Value for money hangs on the idea that companies shoulder risks the state would otherwise carry. But in cases like this, even when the company takes the first hit, the risk ultimately returns to the government. In these situations, the very notion of risk transfer is questionable.

Nowhere is it more dubious than when applied to the private finance initiative projects in which Carillion specialised. The PFI was invented by John Major’s Conservative government, but greatly expanded by Tony Blair and Gordon Brown. Private companies finance and deliver public services that governments would otherwise have provided.

The government claimed that the private sector, being more efficient, would provide services more cheaply than the private sector. PFI projects, Blair and Brown promised, would go ahead only if they proved to be cheaper than the “public sector comparator”.

But at the same time, the government told public bodies that state money was not an option: if they wanted new facilities, they would have to use the private finance initiative. In the words of the then health secretary, Alan Milburn: “It’s PFI or bust”. So, if you wanted a new hospital or bridge or classroomor army barracks, you had to demonstrate that PFI offered the best value for money. Otherwise, there would be no project. Public bodies immediately discovered a way to make the numbers add up: risk transfer.


Nurses might be laid off, but the walls will still be painted


The costing of risk is notoriously subjective. Because it involves the passage of a fiendishly complex contract through an unknowable future, you can make a case for almost any value. A study published in the British Medical Journal revealed that, before the risk was costed, every hospital scheme it investigated would have been built much more cheaply with public funds. But once the notional financial risks had been added, building them through PFI came out cheaper in every case, although sometimes by less than 0.1%.

Not only was this exercise (as some prominent civil servants warned) bogus, but the entire concept is negated by the fact that if collapse occurs, the risk ripples through the private sector and into the public. Companies like Carillion might not be too big to fail, but the services they deliver are. You cannot, in a nominal democracy, suddenly close a public hospital, let a bridge collapse, or fail to deliver school meals.

Partly for this reason, and partly because of the inordinate political power of corporations and the people who run them, governments seek to insulate these companies from the very risks they claim to have transferred to them. This could explain why Theresa May’s administration continued to award contracts to Carillion after it had issued a series of profit warnings. Was this an attempt to keep the company in business?

If so, it was one of a long list of measures designed to privatise profit and socialise risk. PFI contracts specify that if there is a conflict between paying the private provider and delivering public services, the payments must come first. However deep the crisis in the NHS becomes, however many people must have their cancer operations postponed or be left to rot on trolleys, the legal priority is still to pay the contractor. Money is officially more valuable than life.

If a PFI consortium is contracted to deliver maintenance and ancillary services, these non-clinical functions are ringfenced, while the clinical services delivered by the public sector must be cut to make room for them. This forces public bodies to respond perversely to a funding crisis: nurses might be laid off, but the walls will still be painted. Many of the contracts cannot be broken for 25 or 30 years, regardless of whether or not they still meet real needs: again, this insulates the private sector from hazard, leaving it with the public. The risk lands not only on the state but also on the people. Carillion leaves behind a series of scandals, such as the food hygiene failure at Swindon’s Great Western Hospital, and the failings at the Surgicentre clinic it ran in Hertfordshire, revealed in a horrifying report in the Observer. Similar crises have attended many other deals with private providers: operating theatres flooded with sewage, power cuts which have left nurses to ventilate patients on life support by hand, school buildings falling apart, useless services continuing to be delivered while essential services are cut.

None of this was unforeseen. Some of us warned again and again during the New Labour years that this programme would prove to be an expensive fiasco. Even the Banker magazine predicted, in 2002, that “eventually an Enron-style disaster will be rerun on a sovereign balance sheet”. But the government didn’t want to know. Nor did the Conservative opposition, whose idea it was in the first place. Nor did the other newspapers, now apparently scratching their heads and wondering how this happened. There is no joy in being proved right, just immense frustration.

Risk to a company is not the same as risk to those who own and run it. The executives keep their payoffs. The shareholders take a hit on part of their portfolios, but limited liability ensures they can walk away from any debts. The company might disappear, but ultimately it’s just a name and some paperwork. But the risks imposed on the people – including the company’s workers – are real. We pay for these risks twice: first, when they are nominally transferred to corporations; then again, when they are returned to us. The word used to describe this process is efficiency.

Public Benefit Company to replace Public Limited Company

Three-quarters of British voters want our rail, gas and water renationalised but it’s expensive – there is a business model that offers the best of both worlds


Will Hutton in The Guardian

Public ownership is fashionable again. Turning over Britain’s public assets, lock, stock and barrel into private ownership and relying only on light-touch regulation to ensure they were managed to deliver a wider public interest was always a risky bet. And that bet has not paid off.

Recent polls show an astonishing 83% in favour of nationalising water, 77% in favour of electricity and gas and 76% in favour of rail. It is not just that this represents a general fall in trust in business. The privatised utilities are felt to be in a different category: they are public services. But there is a widespread view that demanding profit targets have overridden public service obligations. And the public is right. 

Thames Water, under private equity ownership, has been the most egregious example, building up sky-high debts as it distributed excessive dividends to its private-equity owners via a holding company in Luxembourg, a move designed to minimise UK tax obligations. As the Cuttill report highlighted, at current rates of investment it will take Thames 357 years to renew the London’s water mains: it takes 10 years in Japan.

Equally, BT’s investment in universal national high-speed broadband coverage has been slow and inadequate, while few would argue that the first target of the rail operators has been quality passenger service – culminating in the most recent scandal of Stagecoach and Virgin escaping their contractual commitments. Most commuters, crowded into expensive trains, have become increasing fans of public ownership. Jeremy Corbyn’s commitment to renationalisation surprised everyone with its popularity.

The trouble is, it’s expensive: at least £170bn on most estimates. Of course the proposed increase in public debt by around 10% of GDP will be matched by the state owning assets of 10% of GDP, but British public accounting is not so rational. The emphasis will be on the debt, not the assets, and in any case there are better causes – infrastructure spending – for which to raise public debt levels.

And once owned publicly, the newly nationalised industries will once again be subject to the Treasury’s borrowing limits. If there are spending cuts, their capital investment programmes will be cut. What voters want is the best of both worlds. Public services run as public services, but with all the dynamism and autonomy of being in the private sector, not least being able to borrow for vital investment. It seems impossible, but building on the proposals of the Big Innovation Centre’s Purposeful Company Taskforce, there is a way to pull off these apparently irreconcilable objectives – and without spending any money.

The government should create a new category of company – the public benefit company (PBC) – which would write into its constitution that its purpose is the delivery of public benefit to which profit-making is subordinate. For instance, a water company’s purpose would be to deliver the best water as cheaply as possible and not siphon off excessive dividends through a tax haven. The next step would be to take a foundation share in each privatised utility as a condition of its licence to operate, requiring the utility to reincorporate as a public-benefit company.


Regulators, however good their intentions, too easily see the world from the view of the industry they regulate

The foundation share would give the government the right to appoint independent non-executive directors whose role would be see that the public interest purposes of the PBC were being discharged as promised.

This would include ensuring the company remained domiciled in the UK for tax purposes and guaranteeing that consumers, social and public benefit interests came first.

The non-executive directors would engage directly with consumer challenge groups whose mandate is to be a sounding board for consumer interests but at present are little more than talking shops, and deliver an independent report to an office of public services each year, giving an account of how the public interest was being achieved. It is important to have an independent third party: regulators, however good their intentions, too easily see the world from the view of the industry they regulate.

Because the companies would remain owned by private shareholders, their borrowing would not be classed as public debt. The existing shareholders in the utility would remain shareholders, and their rights to votes and dividends would remain unimpaired. So there would be no need to compensate them – no need, in short to pay £170bn buying the assets back. Indeed, the scope to borrow could be used to fund a wave of new investment in our utilities.

But the new company’s obligation would be to its users first and foremost, and would be free to borrow free from any Treasury constraint. Nor would any secretary of state get drawn into the operational running of the industries – one of the major reasons Attlee-style nationalisation failed. Inevitably decisions get politicised. 

The aim would be to combine the best of both the public and private sectors. If companies do not deliver what they have promised, there should be a well-defined system of escalating penalties, starting with the right to sue companies and ending with taking all the assets into public ownership if a company persistently neglected its obligations. But the cost would be very much lower, because the share price would fall as it became clear it was operating illegally.

Britain would have created a new class of company. Indeed, there is the opportunity to start now. If Virgin and Stagecoach are unable to fulfil their contractual obligations on the East Coast line, the company should be reincorporated as a public benefit company. The shareholders would remain, but the newly constituted board would take every decision in the interests of the travelling public guaranteed by the independent directors, empowered consumer challenge groups and the office of public services – so that the taxpayer can trust her or his money is spent properly. Corbyn and John McDonnell have a way of delivering what the electorate want – and still keeping the industries off the public balance sheet. The circle can be squared.

Publicly owned energy minnows take on big six in troubled UK market

Adam Vaughan in The Guardian


A wave of new publicly owned companies is taking on the big six energy suppliers, as local authorities search out new revenue and seek to restore faith in public services and tackle fuel poverty.
Islington council last week launched a not-for-profit energy firm, London’s first municipal operator in more than a century, while Doncaster’s energy company will start early next month.

Portsmouth is also on the verge of becoming the first Conservative-controlled council to launch one, to bring down residents’ bills as well as bringing investment to the city.

The first and best-known publicly owned energy companies, Robin Hood Energy in Nottingham and Bristol Energy, started two years ago. But the growing trend came to the fore this month when Nicola Sturgeon promised to create a Scottish public energy company by 2021.

“No shareholders to worry about. No corporate bonuses to consider. It would give people – particularly those on low incomes – more choice and the option of a supplier whose only job is to secure the lowest price for consumers,” Scotland’s first minister said, in an echo of the marketing used by the councils who have already started their own energy companies.

Sturgeon’s firm will be entering an increasingly crowded space: publicly owned firms include Liverpool’s Leccy, Derby’s Ram, and Leeds’ White Rose. Councils in Sussex are clubbing together to launch Your Energy Sussex latter this year.

The driving forces for these councils stepping into the complex, heavily regulated energy space are largely twofold. One is the need to create a new revenue stream in a time of austerity, as well as rebuilding the public sphere – councils are perhaps most visible to residents when they close libraries and cut other services.

But there is also a political project afoot as well, as Labour-controlled councils such as Nottingham push an agenda that has since been picked up by Jeremy Corbyn during the last election.

There is also genuine concern over fuel poverty, and a hope that local authorities will be more trusted than the usual energy suppliers, that even Theresa May says have ripped customers off.

“It’s about councils trying to provide a trusted and better service for people to switch. We want a challenger model to the big six,” said Labour MP Caroline Flint, whose Doncaster constituency will see the launch of publicly owned Great Northern Energy on 7 November.

The flurry of such firms showed Labour’s manifesto pledge of a publicly owned energy supplier in each region was happening regardless of the party’s failure to win power in June’s snap general election, Flint said.

Tackling the growing amount of households in fuel poverty, which number 2.5 million in England and Wales, is another big motivation.

Steve Battlemuch, chair of the board of Robin Hood Energy and a Labour councillor, said: “Nottingham has a lot of fuel poverty, lot of people on prepayment meters [which people in energy debt are often moved on to]. That was what drove us: coming into the market and driving down prices for the customer.”

Like other public firms, part of his sales pitch is that there are no corporate masters to pay.

“There’s no shareholder bonuses, because there’s no shareholder apart from Nottingham city council. There’s no director bonuses. I had a cupcake on our first anniversary,” he said.

Peter Haigh, managing director of Bristol Energy, said his organisation was more inclusive than private companies, and its physical presence in the city was a big attraction.

“Customers can and do walk in, sign up and pay a bill. That often attracts customers who have never switched, people who can pop in face to face,” he said.

Part of the reason councils are getting into energy is the barriers to market are not as great as they once were.

Mark Coyle, strategy director of Utiligroup, which has provided services to most of the publicly owned energy companies, said: “We’ve been able to lower the barriers for them, without lowering compliance.”

But while the sector appears to be burgeoning, combined these companies are a minnow compared with the blue whales that are the big six firms, which between them account for 80% share of the market.

Bristol Energy is biggest publicly owned energy supplier, with about 110,000 customers; Robin Hood has just over 100,000. Both have created more than 100 jobs locally, but neither has yet recovered their start-up costs.

Moreover, while such firms appear to be proliferating, most are simply rebranding off Robin Hood rather than setting up as fully licensed suppliers which can buy energy on the wholesale market. The approach has its critics.

“Islington are doing a good thing but it’s a shame that they’ve had to go to Nottingham to buy the energy,” said Caroline Russell, a Green party London assembly member.

Sadiq Khan, London’s mayor, has promised to create an energy company for Londoners, but has been slow to deliver.

Last month he was advised by experts to piggyback off an existing supplier, rather than create his own licensed company. While cheaper and quicker to do, it would also mean he had less power and flexibility to offer something genuinely new and different compared with the 50-plus private firms already in the market.

Nigel Cornwall, founder of energy analysts Cornwall Insight, said that while he was supportive of publicly owned energy companies, it was revealing that many councils were opting to ride on Robin Hood’s coat-tails rather than set up their own licensed firm.

“This is high-risk stuff. The sector is complicated. You [the council] probably don’t have the resources. You’ve probably underestimated the costs. And that’s with costs of entry falling dramatically,” he said.

Cornwall said he was also sceptical as to whether the companies would be sustainable and would become a permanent fixture in the market – but that would not stop them trying.

Battlemuch said: “What we need to do is break through into the mass market. That’s what we’re trying to do.”

British banks can’t be trusted – let’s nationalise them

Owen Jones in The Guardian


Sometimes the case for a policy is as overwhelming as the level of ridicule it will get from the punditocracy. The nationalisation of Britain’s failed banking industry – the sector responsible for most of our country’s current ills – is one such example. According to a recent poll, half the electorate support nationalising the banks, despite almost no one arguing for such a policy in public life.

It may well be because the banks plunged Britain into one of its worst economic crises in modern history, spawning, according to the Institute for Fiscal Studies, perhaps our worst squeeze in living standards since the 1750s. The fact that they have been bailed out by the taxpayer but allowed to carry on as though little happened – including more top British bankers in 2013 being gifted bonuses worth over €1m than all EU countries combined – while public services are gratuitously slashed, has rightly riled some British voters. 

Nationalisation of the banks is not about vengeance, though. Sure, the rip-off inefficiency of rail privatisation, or the failure of the great energy sell-off, or the fact that even the Financial Times has argued that privately run water is an indefensible debacle – all are testament to the intellectual poverty of the “private good, public bad” argument. None quite compete, however, with the matter of the banks leaving the entire western world consumed with the gravest series of crises since the second world war.

Would Brexit, Donald Trump, or the gathering demands for Catalonia to secede from crisis-ridden Spain have happened without the financial collapse? Almost certainly not. It is now somewhat darkly comic to note that most commentators and politicians claimed Labour lost the 2015 election because it was too leftwing. It is notable, then, that over four in 10 voters back then believed Labour was too soft on banks and big business, compared to just over one in five who differed.

Economist Laurie Macfarlane says the banks make a mockery of the nostrums of free-market capitalism. Because the banks were given state bailouts after their catastrophic failures, there is the assumption that, when another crisis hits, the same will happen again.

No other industry enjoys the same protection. They are “too big to fail”, which means they benefit from an implicit subsidy – worth £6bn in 2015. The Bank of England is their lender of last resort. State-backed deposit insurance of up to £85,000 per consumer is another de facto mass public subsidy.

As the New Economics Foundation says, it is commercial banks who are now responsible for creating the vast majority of money in economies like the UK, a source of vast profit. This is called “seigniorage” and – as the foundation puts it – it represents a “hidden annual subsidy” of £23bn a year, or nearly three-quarters of the banks’ after-tax profits. And banks are an essential public utility: it is almost impossible to be a citizen without a bank account, and there is no public option when it comes to making electronic payments.

Even now, as Macfarlane notes, the British state technically owns a fifth of the retail banking industry because of its stake in Royal Bank of Scotland. Repeated RBS scandals, and the aftermath of the EU referendum result, have dented the worth of the company’s shares, meaning that the state selling its stake would result in eye-watering losses. Meanwhile, small businesses have struggled to get the credit they need, and escalating household debt threatens the foundations of the stagnating British economy. But the state’s arms-length approach means RBS has failed both its customers and the broader economy. A profit-driven banking sector closed 1,150 branches in 2014 and 2015; about a third of those were owned by RBS. The bank once promised never to close the last branch in town; the pledge was broken, and 1,500 communities have been left with no bank branch. Vulnerable customers and small businesses inevitably suffer the most.

By contrast, foreign publicly owned banks are self-evident successes. Take Germany: KFW, the government-owned development bank, is crucial in developing national infrastructure as well as the renewable energy revolution. On a regional level, state-owned Landesbanken are responsible for industrial strategy. Then at the most local level, there are Sparkassen: they focus on developing relationships with local businesses and consumers. They’re not beholden to shareholders – instead, they have a stakeholder model, focused on helping local economies – indeed, their capital has to remain in local communities.

It is impossible to understand Britain’s current plight without examining the country’s rapid deindustrialisation in favour of a financial sector concentrated in London and the south-east. And according to New Economics Foundation, while foreign stakeholder banks lend two thirds of their assets to individuals and businesses in the real economy, that’s true with only a tiny proportion of British shareholder banks. Overwhelmingly, it goes to mortgage lending and lending to other financial institutions.

Our current banking system is rigged in favour of a crisis-ridden City. The New Economics Foundation suggests transforming RBS – in which the state still has a three-quarter share – into a network of local banks. Labour’s 2017 manifesto backed a review into these plans. A management board would run the network day to day, but a board of trustees would ensure the bank was accountable to the broader economy and customers, not shareholders.

A third would be elected by workers, a third by local authorities and a third by local stakeholders. The mandate of each local bank would be to promote local economies – not least their small businesses – rather than the City of London. Here is a model of democratic ownership that can, in time, be extended to the rest of the economy.

Can it really be argued that private ownership of the banks is a case study of the glorious success of free market capitalism? The principle architect of Labour’s recent manifesto, Andrew Fisher, called for the nationalisation of Britain’s banking sector in his 2014 book The Failed Experiment: And How to Build an Economy That Works. He was surely right then and he is right now. As Macfarlane notes, there are different possible routes to the banks’ nationalisation: whether it be swapping corporate shares for government bonds, using quantitative easing to buy up shares, or simple nationalisation without compensation. Labour is right to call for a German-style public investment bank, backed up by similar publicly run local banks.

But such proposals are not in themselves sufficient. Britain’s privately run banks have proved a disaster for everyone except their shareholders. The only good alternative is public stakeholder banks, run by workers, consumers and local authorities, with an obligation to defend the best interests of our communities. Privately owned banks have proved a catastrophic failure – for our economy, our social cohesion and our politics. There is surely no alternative to public ownership.

Why religion is here to stay and science won’t destroy it

Peter Harrison in The Wire.In



In 1966, just over 50 years ago, the distinguished Canadian-born anthropologist Anthony Wallace confidently predicted the global demise of religion at the hands of an advancing science: ‘belief in supernatural powers is doomed to die out, all over the world, as a result of the increasing adequacy and diffusion of scientific knowledge’. Wallace’s vision was not exceptional. On the contrary, the modern social sciences, which took shape in 19th-century western Europe, took their own recent historical experience of secularisation as a universal model. An assumption lay at the core of the social sciences, either presuming or sometimes predicting that all cultures would eventually converge on something roughly approximating secular, Western, liberal democracy. Then something closer to the opposite happened.

Not only has secularism failed to continue its steady global march but countries as varied as Iran, India, Israel, Algeria and Turkey have either had their secular governments replaced by religious ones, or have seen the rise of influential religious nationalist movements. Secularisation, as predicted by the social sciences, has failed.

To be sure, this failure is not unqualified. Many Western countries continue to witness decline in religious belief and practice. The most recent census data released in Australia, for example, shows that 30 per cent of the population identify as having ‘no religion’, and that this percentage is increasing. International surveys confirm comparatively low levels of religious commitment in western Europe and Australasia. Even the United States, a long-time source of embarrassment for the secularisation thesis, has seen a rise in unbelief.

The percentage of atheists in the US now sits at an all-time high (if ‘high’ is the right word) of around 3 per cent. Yet, for all that, globally, the total number of people who consider themselves to be religious remains high, and demographic trends suggest that the overall pattern for the immediate future will be one of religious growth. But this isn’t the only failure of the secularisation thesis.

Scientists, intellectuals and social scientists expected that the spread of modern science would drive secularisation – that science would be a secularising force. But that simply hasn’t been the case. If we look at those societies where religion remains vibrant, their key common features are less to do with science, and more to do with feelings of existential security and protection from some of the basic uncertainties of life in the form of public goods. A social safety net might be correlated with scientific advances but only loosely, and again the case of the US is instructive. The US is arguably the most scientifically and technologically advanced society in the world, and yet at the same time the most religious of Western societies. As the British sociologist David Martin concluded in The Future of Christianity (2011): ‘There is no consistent relation between the degree of scientific advance and a reduced profile of religious influence, belief and practice.’

The story of science and secularisation becomes even more intriguing when we consider those societies that have witnessed significant reactions against secularist agendas. India’s first prime minister Jawaharlal Nehru championed secular and scientific ideals, and enlisted scientific education in the project of modernisation. Nehru was confident that Hindu visions of a Vedic past and Muslim dreams of an Islamic theocracy would both succumb to the inexorable historical march of secularisation. ‘There is only one-way traffic in Time,’ he declared. But as the subsequent rise of Hindu and Islamic fundamentalism adequately attests, Nehru was wrong. Moreover, the association of science with a secularising agenda has backfired, with science becoming a collateral casualty of resistance to secularism.

Turkey provides an even more revealing case. Like most pioneering nationalists, Mustafa Kemal Atatürk, the founder of the Turkish republic, was a committed secularist. Atatürk believed that science was destined to displace religion. In order to make sure that Turkey was on the right side of history, he gave science, in particular evolutionary biology, a central place in the state education system of the fledgling Turkish republic.

As a result, evolution came to be associated with Atatürk’s entire political programme, including secularism. Islamist parties in Turkey, seeking to counter the secularist ideals of the nation’s founders, have also attacked the teaching of evolution. For them, evolution is associated with secular materialism. This sentiment culminated in the decision this June to remove the teaching of evolution from the high-school classroom. Again, science has become a victim of guilt by association.

The US represents a different cultural context, where it might seem that the key issue is a conflict between literal readings of Genesis and key features of evolutionary history. But in fact, much of the creationist discourse centres on moral values. In the US case too, we see anti-evolutionism motivated at least in part by the assumption that evolutionary theory is a stalking horse for secular materialism and its attendant moral commitments. As in India and Turkey, secularism is actually hurting science.

In brief, global secularisation is not inevitable and, when it does happen, it is not caused by science. Further, when the attempt is made to use science to advance secularism, the results can damage science. The thesis that ‘science causes secularisation’ simply fails the empirical test, and enlisting science as an instrument of secularisation turns out to be poor strategy. The science and secularism pairing is so awkward that it raises the question: why did anyone think otherwise?

Historically, two related sources advanced the idea that science would displace religion. First, 19th-century progressivist conceptions of history, particularly associated with the French philosopher Auguste Comte, held to a theory of history in which societies pass through three stages – religious, metaphysical and scientific (or ‘positive’). Comte coined the term ‘sociology’ and he wanted to diminish the social influence of religion and replace it with a new science of society. Comte’s influence extended to the ‘young Turks’ and Atatürk.

The 19th century also witnessed the inception of the ‘conflict model’ of science and religion. This was the view that history can be understood in terms of a ‘conflict between two epochs in the evolution of human thought – the theological and the scientific’. This description comes from Andrew Dickson White’s influential A History of the Warfare of Science with Theology in Christendom (1896), the title of which nicely encapsulates its author’s general theory. White’s work, as well as John William Draper’s earlier History of the Conflict Between Religion and Science (1874), firmly established the conflict thesis as the default way of thinking about the historical relations between science and religion. Both works were translated into multiple languages. Draper’s History went through more than 50 printings in the US alone, was translated into 20 languages and, notably, became a bestseller in the late Ottoman empire, where it informed Atatürk’s understanding that progress meant science superseding religion.

Today, people are less confident that history moves through a series of set stages toward a single destination. Nor, despite its popular persistence, do most historians of science support the idea of an enduring conflict between science and religion. Renowned collisions, such as the Galileo affair, turned on politics and personalities, not just science and religion. Darwin had significant religious supporters and scientific detractors, as well as vice versa. Many other alleged instances of science-religion conflict have now been exposed as pure inventions. In fact, contrary to conflict, the historical norm has more often been one of mutual support between science and religion. In its formative years in the 17th century, modern science relied on religious legitimation. During the 18th and 19th centuries, natural theology helped to popularise science.

The conflict model of science and religion offered a mistaken view of the past and, when combined with expectations of secularisation, led to a flawed vision of the future. Secularisation theory failed at both description and prediction. The real question is why we continue to encounter proponents of science-religion conflict. Many are prominent scientists. It would be superfluous to rehearse Richard Dawkins’s musings on this topic, but he is by no means a solitary voice. Stephen Hawking thinks that ‘science will win because it works’; Sam Harris has declared that ‘science must destroy religion’; Stephen Weinberg thinks that science has weakened religious certitude; Colin Blakemore predicts that science will eventually make religion unnecessary. Historical evidence simply does not support such contentions. Indeed, it suggests that they are misguided.

So why do they persist? The answers are political. Leaving aside any lingering fondness for quaint 19th-century understandings of history, we must look to the fear of Islamic fundamentalism, exasperation with creationism, an aversion to alliances between the religious Right and climate-change denial, and worries about the erosion of scientific authority. While we might be sympathetic to these concerns, there is no disguising the fact that they arise out of an unhelpful intrusion of normative commitments into the discussion. Wishful thinking – hoping that science will vanquish religion – is no substitute for a sober assessment of present realities. Continuing with this advocacy is likely to have an effect opposite to that intended.

Religion is not going away any time soon, and science will not destroy it. If anything, it is science that is subject to increasing threats to its authority and social legitimacy. Given this, science needs all the friends it can get. Its advocates would be well advised to stop fabricating an enemy out of religion, or insisting that the only path to a secure future lies in a marriage of science and secularism.

Public luxury for all or private luxury for some: this is the choice we face

George Monbiot in The Guardian


Imagine designing one of our great cities from scratch. You would quickly discover that there is enough physical space for magnificent parks, playing fields, public swimming pools, urban nature reserves and allotments sufficient to meet the needs of everyone. Alternatively, you could designate the same space to a small proportion of its people – the richest citizens – who can afford large gardens, perhaps with their own swimming pools. The only way of securing space for both is to allow the suburbs to sprawl until the city becomes dysfunctional: impossible to supply with efficient services, lacking a sense of civic cohesion, and permanently snarled in traffic: Los Angeles for all.

Imagine designing a long-distance transport system for a nation that did not possess one. You’d find that there is plenty of room for everyone to travel swiftly and efficiently, in trains and luxury buses (an intercity bus can carry as many people as a mile of car traffic). But to supply the same mobility with private cars requires a prodigious use of land, concrete, metal and fuel. It can be done, but only at the cost of climate change, air pollution, the destruction of wonderful places and an assault on tranquillity, neighbourhood and community life.

This conflict is repeated in financial terms. In order that the very rich can pay less tax, public playgrounds are allowed to fall apart. The beneficiaries might use the extra money to build private play barns for their children. Public toilets are closed so that some people can install gold-plated taps in their bathrooms. Public swimming pools are put on restricted hours so that the very rich can turn up the thermostats in their private pools. Public galleries need to charge for entry so that billionaires can expand their own art collections. Wealth that could be shared and enjoyed by all is sequestered by a few.


Public luxury for all, or private luxury for some: this is the choice we face at all times – especially at this election

It is impossible to deliver a magnificent life for everyone by securing private space through private spending. Attempts to do so are highly inefficient, producing ridiculous levels of redundancy and replication. Look at roads, in which individual people, each encased in a tonne of metal, each taking up (at 70mph) 90 metres of lane, travel in parallel to the same destination. The expansion of public wealth creates more space for everyone; the expansion of private wealth reduces it, eventually damaging most people’s quality of life.

  ‘Look at roads, in which individual people, each encased in a tonne of metal, each taking up (at 70mph) 90 metres of lane, travel in parallel to the same destination.’ Photograph: Matt Cardy/Getty Images


This is a global issue, as well as a national one. According to the Global Footprint Network, every person in the UK uses the equivalent of 5 hectares of land and sea through the food we eat, the products we use and the carbon we release, which has to be absorbed somewhere if it is not to accelerate global warming. Yet the UK’s “biocapacity” (our ability to absorb these impacts) is a little over 1 hectare per person. Our extravagance is a cost that others must bear.

Public luxury available to all, or private luxury available to some: this is the choice we face at all times, but especially at this election. It is the conflict between these two visions that defines – or should define – our political options. There is a significant difference between Labour and the Conservatives in this respect, but I wish it were stronger.

Labour, through its proposed cultural capital fund, will reinvest in public galleries and museums. It will defend and expand our libraries, youth centres, football grounds, railways and local bus services. Unlike the Conservative manifesto, which is almost silent on the issue, Labour’s platform offers a reasonable list of protections to the living world.

But it also promises to “continue to upgrade our highways” (shortly after vowing to “encourage and enable people to get out of their cars”) and to provide new airport capacity. The conflicts are not acknowledged. Progress in the 21st century should be measured less by the new infrastructure you build than by the damaging infrastructure you retire.

Labour also misses a wonderful opportunity in its plans to expand affordable housing, to promote accommodation that both revives community and makes better use of space. In co-housing developments, people own or rent their own homes but share the rest of the land. Rather than chopping the available space into coffin-sized gardens in which a child cannot perform a cartwheel without hitting the fence, the children have room to run around together while the adults have space to garden and talk. Communal laundries release living space in people’s homes. Carpools reduce the need for parking. Isolation gives way to conviviality.

More importantly, and less surprisingly, the Labour manifesto fails to acknowledge the left’s great conundrum: the environmental damage caused by efforts to create jobs through economic growth. Like the Conservatives, like almost every party everywhere (the Greens are a notable exception), Labour’s economic vision is based on the presumption that there are no limits. Both conservative and social democratic parties see the world as a magic pudding that can never be exhausted. They build their economic programmes on a fairytale.

Kelvingrove Art gallery in Glasgow. ‘Labour, through its proposed cultural capital fund, will reinvest in public galleries and museums.’ Photograph: VisitBritain/Britain on View/Getty Images

And they have another unexamined premise in common: that money legitimately buys you the power to take what you want from the world. There is an almost universal assumption in politics that you have the right to help yourself to as much of the global commons (atmosphere, soil, water, fish) as you can afford, though this reduces what is left for other people to share. You have the right to occupy as much physical space as your money can buy, regardless of the restrictions this imposes on others.

Where does this licence arise? Even if private wealth were obtained through the exercise of virtue (an unlikely proposition at the best of times) or through enterprise and hard work (ever less probable, in this new age of inheritance and rent), it is hard to discern the just principle that translates this money into permission to acquire the space and resources on which other people depend for a decent quality of life. When and by whom was this permission granted? How does it correspond to our notion of equal rights, or our concept of democracy, which is based on an equal power to decide?

You will not find these questions asked in this election or in any other. They are fudged by recourse to the magical belief that there is enough space and resources for everyone to do as they wish, that infinite growth ensures that no one – when the parties’ economic promises are fulfilled – will need to intrude on the interests of others. Yet, on this finite planet, they are the questions that will determine not only the quality of our lives but our security and, eventually, our survival. The primary task of all far-sighted politicians should be to decide first how much we can use, then how it can best be shared.

When the questions that count above all others are beyond the scope of politics, when almost everyone in public life is either too blinkered or too frightened to answer them, when – even in this great, defining election, which at last offers people meaningful political choice – neither large party can even name them, you begin to recognise how much trouble we are in.

Why a new toilet law could flush cafes and takeaways down the pan

Chitra Ramaswamy in The Guardian

How many seats in a coffee shop does it take to necessitate provision of a customer loo? Fifteen? Five? A solitary stool and a sticky counter? An existential question and one that, according to this toilet-user, depends on a complex set of circumstances, from what’s on the menu to where the chairs are positioned. (Five outside? Toilet unlikely. Four inside? Expect a small, whiffy loo with no paper towels in the dispenser.)

The correct answer, according to section 20 of the 1976 Local Government Miscellaneous Provisions Act, is 10. As in, cafes with fewer than 10 seats are not legally required to provide customer loos. Which is presumably why you can’t scoff a sausage roll in Greggs and then demand use of the washroom but you can order a takeout coffee in a central London Starbucks and get a key to the saddest toilets in Soho. (When it comes to public conveniences don’t be fooled by the romance of a key.)

Despite the 10-seat guideline, thousands of takeaways and coffee shops could now be forced to install a toilet or get rid of seating following a recent case in Hull. Two branches of Greggs, both of which had fewer than 10 seats, lost a legal battle with the council after the judge ruled that not providing facilities gave them an “unfair commercial advantage”. If the ruling, which is being appealed, sets a precedent, as many as 21,500 takeaways and 5,230 coffee shops across the UK – the vast majority of which are small independent businesses – could be affected.

“It would be a major problem,” Raymond Martin, director of the British Toilet Association, says. “Most of these are not going to be able to provide a toilet. Many would be forced to close down.” Would he expect a loo in a takeaway with only a few tables? “It does seem right to provide a toilet if a takeaway allows me to consume food and stay on the premises for a period of time,” he replies diplomatically. “But should we force takeaways to put in toilets? I don’t think we can.”

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The real issue, he adds, is the loss of public toilets from our cities and town centres. The law currently does not compel local authorities to provide public toilets – of which there are around 4,000 in the UK – and the result is that Britain has lost more than 40% of its facilities in the past decade. “We reckon we are losing toilets faster than we’re gaining them,” Martin says. “Every day we get calls from councillors saying: ‘We’re thinking of closing some, if not all, of our toilets. What’s our legal position?’ In years gone by, people would have got their food from a takeaway and then used a public toilet later. That is no longer the case.”

Meanwhile stores, supermarkets, petrol stations and other commercial providers have stepped in, hopeful that, after we’ve relieved ourselves in their lovely free toilets, conveniently located right at the back of the store so we have to walk past all their goods to get to them, we’ll do a spot of shopping. Perhaps toilets are the latest trick in retail, the new piped muzak luring us in to spend a penny before we spend, spend, spend. “The government wants people out shopping, eating, keeping the economy flowing,” Martin notes. “But it doesn’t want to provide the toilets.”