26 January 2017
Crossword by Boffles
Comics and Cartoons
26 January 2017
7 What sustains Desperate Dan (3,3)
8 Rodent rival of Donald Duck (6)
9 The Addams family had some really strange ones – like Tristan and Isolde and Kitty (4)
10 Imaginative faithful friend featured in 3dn (6)
11 Was this dwarf Dopey or Grumpy? (7)
13 Add a county to this and you are Superman (5)
15 A Dan known as ‘Biggles in Space’ (4)
17 Published a progress or two but nothing to do with pilgrims (7)
21 Lord Snooty was much …….. than the Ash Can Alley gang (6)
22 Vainglorious amphibian animated many times (4)
23 Family member who appears often and has even had her own show (4)
24 What they come in and what Jane does (6)
1 Sailor man fond of his greens and Olive (6)
2 Tarzan’s companions (4)
3 Features a Charlie (7)
4 What they seek to do (on the whole) (5)
5 The Bash Street Kids were not keen on it (6)
6 Donald Duck used to lose his (6)
12 Flying one appeared in ‘Dumbo’ (8)
14 Tom and Jerry found it difficult to do so (2-5)
16 Captain Hook was boss ……. the Jolly Roger (6)
18 At least they get to do the voices (6)
19 Lady’s companion (5)
20 Spielberg produced this cerebral rodent and his companion, Pinky (5)
26 January 2017
Will Trump Explode? by John Watson
And if so, will he take us with him?
In The Beginning by J R Thomas
The realities of Trumpism.
Not On The Map by Neil Tidmarsh
Some countries just don’t exist.
Spend, Spend, Spend by Frank O’Nomics
Should we emulate Viv Nicholson or Mr Micawber?
Just Among Friends by Chin Chin
Favours must be returned.
Liberating Populism by J R Thomas
“…by any other name would..?”
January Blues by Lynda Goetz
A few suggestions.
Film reviewed by Adam McCormack.
Crossword, by Boffles: “Dance While You Can Can”.
Solution to the last crossword “Plain Vanilla 16”.
Quiz, by Boffles.
Answers to Quiz.
26 January 2017
By John Watson
A year or so ago, I was at a literary lunch where the speaker was Nick Robinson, television presenter and one time political editor of the BBC. It was before the Brexit vote and he was talking about the then Prime Minister, David Cameron, praising the way in which he made decisions. That drew immediate dissent with someone who asked him how he could possibly say that the decision to intervene in Libya had been a good one. The questioner was speedily corrected. Robinson was not talking about whether the decisions in themselves were wise or not but about the way in which they were made. Cameron was apparently good at pulling information together, deciding what he thought and coming to a conclusion.
The dichotomy between wisdom and technique runs through politics. Politicians are either wise or they are not. Their decisions may or may not serve the public good. That however is quite a separate matter from whether they are good at the process of arriving at a decision, implementing it and carrying the public with them.
There is little point at this stage in debating the points made by Mrs May in her speech at Lancaster House. That will be done ad nauseam. Suffice it to say, for the benefit of those who were not invited, that her shopping list comprised:
“Certainty wherever possible. Control of our own laws. Strengthening the United Kingdom. Maintaining the Common Travel Area with Ireland. Control of immigration. Rights for EU nationals in Britain, and British nationals in the EU. Enhancing rights for workers. Free trade with European markets. New trade agreements with other countries. A leading role in science and innovation. Cooperation on crime, terrorism and foreign affairs. And a phased approach, delivering a smooth and orderly Brexit.”
Well, how much of that we will actually get remains to be seen and depends on all sorts of factors which are entirely unpredictable. What is interesting, however, is the dynamics of the speech as a piece of political theatre and how Mrs May worked to carry the audience with her.
The first thing of course is that much of it came out of the blue. Up until then, the government’s reticence had made people wonder whether they had a coherent negotiating position at all. The discovery that they have, albeit an ambitious one, came as a relief to everyone and is probably why, although the possibility of leaving the EU with no agreement was clearly canvassed as a rather dismal Plan B, the pound rose. Someone, it seemed, was in charge after all.
The second thing that came through was the clarity. We had all been fearing something waffly of the “Brexit mean Brexit” variety; yet here was a collection of clear positions. The one place where some uncertainty was shown was on how we would like our relationship with the Customs Union to work where Mrs May confirmed that she was not yet certain of the best route. One or two commentators seized on this as being a weakness, but in a speech of this kind, an admitted uncertainty is also a strength. It gives the impression of a government still thinking things through, not totally inflexible, able to move to meet events.
So much for the way in which it addressed the British public, but this speech and its successor at Davos were also aimed at wider audiences. EU leaders were clearly taken by surprise. The confident tone has not gone down well over there. They had expected something more consensual and perhaps (let us be honest) apologetic or deferential. Actually, a full list of what we would like must be the right way to start the negotiation, even if we do not believe we will get it all. There is high authority (albeit in a slightly different context) for the proposition that if you ask you will get. It was surely the right way for Mrs May to approach things.
Then there are the international leaders from outside the EU and the stress on the openness with which we will approach the rest of the world. There is clearly some interest in trade deals out there. Who knows what it will really amount to, but a welcoming stance must be the right one.
So much for the obvious audiences, but there is a little more to it all than that. This speech is a sales pitch for a new approach. The vision of a free-trading, independent country which controls its own affairs and takes trouble to see that its prosperity is shared amongst its people is a seductive one in a world currently racked by populist movements. Those who dislike the status quo, who distrust elitism and globalisation, who believe that they are cut off from the benefits of international prosperity, will read this speech and wonder. Will the May government bring in a “third way”, neither as socialist as the EU nor as capitalist as Britain and the US? Who knows? Perhaps all the stuff about bringing in the disenfranchised will prove to be empty words. Perhaps not. If, however, Mrs May follows through with action she could find herself at the front of a movement which could sweep aside many of the assumptions and certainties of post-war Europe.
These are heady thoughts and one must not get carried away. A speech is just a piece of rhetoric, and without policy and action to implement that policy it adds up to nothing. Still, for the moment it seems to have gone down reasonably well with a public which at the same time accepts that by no means all of it may prove to be deliverable. Perhaps it has done something else as well. For those of us who voted to Remain, politics since the Brexit vote has been about damage limitation. Suddenly, however, there seems to be a breath of air. Perhaps something really can be created that we will all end up being proud of. Let’s hope so. Or it may all end up by being a car crash. Well, if so, at least it will have been a wild ride.
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26 January 2017
Who would want to run an electricity supply company in these times? More and more choice for the consumer, with all sorts of potential supply, including pumping heat from under back gardens or powering freezers from mini windmills on the roof. Vicious competition in an industry that was, until a generation and a half ago, a state owned and run monopoly. Stirred in with a level of popularity that puts electricity companies on a par with traffic wardens and tax inspectors, and only slightly higher than bankers, one almost starts to feel sorry for the electro-executive in his comfortably warm office.
Electricity is of course (adjusted for inflation) much cheaper than it was a quarter century ago. But consumer memories are short and expectations of pricing and service are high, stoked by the endless fire of the media which seems to have it in for the supply end of the business.
Although prices have been lower for a long time, with some fluctuations when the oil price rose to well over US$100 a barrel a couple of years ago, the recent direction of costs is generally up. Much of Britain’s electricity still comes from carbon based sources; traditionally of course coal, but increasingly, in the latter part of the twentieth century, gas (oil fired power stations are rare; gas is the main provider and of that, more than 60% comes from UK controlled gas fields, most of them under the sea). Coal has almost entirely vanished as a source of power generation; there are nine remaining coal powered plants, of which three are about to be converted to biomass firing; all the rest will be closed, the government intends, by 2025. But, even now, they are mostly on standby, for those winter peaks and just to make sure Britain has enough reserves to cope with economic growth – especially in manufacturing, which, not surprisingly, uses more electricity than, say, financial services.
The other generator of electricity is of course….no, not green sources, not yet, but nuclear power. That too is running down fast as the great nuclear power stations built in the 1950’s and 1960’s come to the end of their lives, though Hinckley Point when it gets built (one is still tempted to say “if”) will to an extent reverse that trend. There are also proposals to build or rebuild some of the smaller stations, though that will no doubt cause furious arguments and debate, so don’t expect anything to happen too qiuickly. Nuclear power from old financially depreciated plant is quite cheap, though, expressed like that, possibly not too reassuring to anybody who lives down wind of one.
The growing contributor to our electricity grid is of course green energy, or renewables. Those landscape desecrating turbines are the biggest, but also the most expensive and least reliable, contributor to the green mix, but the real growth is from solar panels; those glinting fields coyly hidden behind hedges on south facing slopes are indeed agriculture’s new earners. But also significant are the solar panels that householders are putting on their house or shed roofs, which, if large enough and facing the right way, can not only power the house underneath but also feed into the national grid.
And also under this heading we have bio-energy whichdoes not just mean burning crops grown for the purpose – willow and eucalyptus in particular (at least those power stations must smell nice), but also household and small factory wood chipping and straw plants, methane from rubbish dumps and – yuk – sewage plants.
Hydro-electric power, very in vogue in the 1960’s has not advanced since then, partly of course due to the lack of energy in British rivers, but also because the most powerful water courses tend to be in areas of outstanding landscape beauty. New schemes for coastal and river barrages may make it a growth sector – but not yet.
So, the consumer must be thinking, what is the problem? Lots of different sources of power, and healthy competition among generators, surely. The problem is that the cheapest forms of power are the ones that we are making less and less use of, for environmental reasons, and that clean green power is expensive. Although technology is heavily reducing the cost of solar panels, for instance, the research costs for renewable energy are loaded by the government by special tariffs on to the electricity companies. They pass this on to consumers and so it ends up on your quarterly bill. This surcharge accounts for getting on for 8% of household bills and it will go up even more as green energy grows. It does mean that Britain’s carbon footprint has diminished more quickly than almost any other nation (feel that warm glow), but the cost is in your bill – and your employer’s if your employer happens to be a steelworks or car plant.
But don’t expect your electricity bill to just go up 8% this year. Although our carbon stations are mostly gas fired, the gas price moves with the oil price – and reading the Shaw Sheet business pages you will be aware that oil has doubled in price from its low point eighteen months ago. The power supply companies are forecasting that their costs will be up 15% this year – not surprising with gas prices to wholesale users up 44% in 2016 – and they would like the consumer to bear most of that. That is not just because their executives have mortgages and school fees to deal with, but because power companies are heavily regulated and their profits are not that great to start with, although they are admittedly low risk businesses with investors willing to accept relatively low returns in return for reliable performance.
That means controlling costs and operating efficiently. Some are better at that than others. Npower is the supplier everybody loves to hate; it is famous for the number of customer complaints it generates and features regularly in financial problem pages for its inability to (supposedly) get anything right or fix anything that goes wrong. But Npower is also the cheapest supplier in most league tables; its margins are narrower than most of its competitors so its service is also minimalist – although it seems not to have got that message across to its customers.
So what is the outlook for your household budget for the next few years? In the short term, not good – carbon generated power will cost more, and the costs of investing in green energy will go on increasing, with a nice kick from Hinckley Point subsidies to EDF (its operator) when (if) it comes on line. But maybe in the longer term, not too bad. We are getting much more efficient in the way we use electricity – insulation in new homes and old is greatly improving and a Cat 5 modern house will need no heating (or cooling) except in extreme weather. Not that there are many of those, but, as the housing stock is renewed, its energy usage will reduce. Your electric oven uses much less than power than your old model did, and so does the office air conditioning, helped by triple glazing and solar powered window systems. On the production side, green energy often has high capital costs but they will depreciate over time, and new technology is reducing green energy production costs – and reducing distribution costs as consumers’ roofs become little power stations. Plus, whisper it, the UK’s fracking revolution, now moving into production, if very controversially, should extend our carbon power sources for a good long time yet.
All this is not just a UK phenomenon either; solar and wind and hydro production is increasing all over the world, fracking is on the march, and the upshot of this competition is likely to be that oil and gas prices are going to tend to trend downwards – maybe not this year, but in the longer term. Still, best for the prudent householder to put on a sweater for the winter – but soon because he wants to save the planet, rather than because he cannot pay his power bill.
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26 January 2017
POOR CONNECTION: BT’s share price dropped 16% in opening trading on Tuesday morning after the telecoms giant released updated guidance on trading in the current year. BT had already indicated that it was expecting a slow year for profits, as the continuing competition in the telecoms sector and the political rumpus over Openreach, its broadband business, puts a brake on profit growth; the telecoms regulator Ofcom wants to distance BT from Openreach. Now BT has said that it expects 2017 performance to be flat at best, with no growth in 2018. Part of this is due to problems in BT’s Italian unit which has been the subject of write downs and restructuring because of a long term accounting scandal. The original cost of this was estimated at £145m, but latest investigations by independent accountant KPMG have suggested that the impact will be much greater and BT is proposing a writedown of £530m to cover the position. Also a problem – though BT is not putting figures on it yet – seems to be a reduction in BT’s work in the public sector, where guidance is for a significant decline in both public sector and international business demand in the current quarter (to end March 2017). But it is a reduction in the forward public sector order book that is driving the downbeat forecast for 2017 and 2018 (and impacting the share price). It is not clear if this reduction in expected business is due to lower public spending per se, or to BT facing increasing competition in a public sector increasingly looking for private sector standards of service and back-up.
LENDER ADVICE: Barclays refused to confirm that it is facing a write off of around £25m on its loan to the major law firm King Wood Malleson, the UK arm of which (formerly SJ Berwin), went into administration last week. Financial failures by law firms are unusual, but not unknown, but one on this scale is a pretty major event. It is likely to affect the terms on which such professional firms can borrow in the future; they have previously been regarded as pretty much sure fire risks for their debt obligations by lending banks, but if this rumour is true bankers will be adjusting their lending policies – and their risk margins.
LET ‘EM ROT: Last week we carried a story on the likely costs of clearing all the abandoned infrastructure standing in the North Sea which would swallow most of the likely profits from extracting remaining reserves. Now two experts have come up with the solution – don’t. Ed Davey, the former energy minister, and Jonathon Porritt, long standing green campaigner, wrote to The Times to suggest that there was no need to remove the platforms and well heads at all – they could just be left to fall onto the sea bed where they would do no harm and form artificial reefs which are attractive to fish and other sea creatures. Indeed, they say, removing the giant structures may do more environmental harm than leaving them where they are, given the disruption to the sea bed, the costs and energy consumption involved, and the risks of future leaks from the sealed fields. Instead of paying to removing the structures, say Porritt and Davey, the money saved could be contributed by the energy companies and invested into an environmental fund which could be used for marine or other conservation generally. As the fund could eventually be in the region of £5bn, it could become a major force for conservation activity. The oil and gas companies have so far said little on the idea, though they are known to be lobbying for a change in the law to enable them to leave at least part of the structures at sea. However it is certainly proving controversial with environmentalists, some of whom are not keen on the idea at all, some of whom welcome the concept. Presumably North Sea sailors may have something to say on the issue as well…
DRAG ‘EM OUT: Able UK, a northern specialist dismantler is rather hoping that some of the North Sea structures will be dismantled though. It has just created a new dockside facility at Hartlepool, County Durham, which will be used to dismantle the top section of the Delta rig from Shell’s Brent field, which is about to be removed in one piece and then towed in to Hartlepool for cutting up – a 24,000 tonne job, which Able UK hopes will be the first of many. As there are said to be over 100 platforms weighing an estimated 652,000 tonnes of steel, the firm expects that it will get at least some work decommissioning them.
ANOTHER SALTY TALE: North Sea drilling may be coming to an end but in Cornwall, long a centre of metal mining (copper, tin, and lead traditionally), a new era of drilling may be about to begin. A new company called Cornish Lithium has obtained rights from several dormant mining companies which still owned mining rights in south Cornwall, and from Tregothnan Estates, owned by the Boscawen family who also grow tea on their land (making what must be a unique mix of production from the same land – tea and lithium) and will sink wells up to eight hundred metres deep to layers of hot brine which carry lithium. The brine will be pumped to the surface and the lithium extracted. It is a product whose value is rapidly growing because of its use in high power batteries for mobile phones and electric cars. At the moment the technology for Cornwall is not yet proven and Cornish Lithium is seeking to raise £5m from bold investors to make detailed studies and trial drills. It was the presence of hot brine that ironically caused the closure of some of the Cornish mines originally – it made deeper working impossible on safety and economic grounds.
POOR PETS: We must have neglected our pets this Christmas. Among a rather set of mixed Christmas trading results coming from a range of retailers, Pets at Home, the largely retail park based specialist retailer of pet food and essentials (and not so essentials) reported a weaker than expected performance with a marginal uptick in total sales to £204m for the quarter ended January 5th. Sales of merchandise were actually slightly down, but that was compensated for by a very good performance – turnover £26m was up 48% – in the company’s veterinary division and its grooming business (grooming pets, not owners). Half of the group’s 440 outlets have grooming and veterinary services on site and the company intends to continue to add such services – including freestanding veterinary or other added valued businesses, and to grow by local acquisition. It bought 6 formerly independent practices last year. Analysts say that while the food and essentials business may be impacted by supermarkets wanting to sell to Fido and Fluffy, the special services end of the business shows continuing good growth prospects.
KEY MARKET INDICES: (as at 24th January 2017; comments refer to changes on last 7 days; $ is US$)
UK£ Base rate: 0.25%, unchanged: 3 month 0.36% (steady); 5 year 0.84% (rising).
Euro€: 1 mth -0.37% (steady); 3 mth -0.32% (steady); 5 year -0.0% (rising)
US$: 1 mth 0.77% (steady); 3 mth 1.04% (slight rise); 5 year 1.92% (rising)
£/Euro: 1.16 £ rising
£/$: 1.25, £ rising
Euro/$: 1.07, € rising
Gold, oz: $1,213, slight fall
Aluminium, tonne: $1,870, slight fall
Copper, tonne: $5,775, slight fall
Oil, Brent Crude barrel: $55.24, falling
Wheat, tonne: £147, slight fall
London Stock Exchange: FTSE 100: 7,280 (rise). FTSE Allshare: 3,941 (rise)
Briefly: The markets have had a long run of upward trending; this week that ended with slight movements down in all commodities we cover. That may be due to some profit taking; or some nervousness with recent political events, or simply responding to the upward movement in long term interest rates – which may be resuming its course of last autumn.
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26 January 2017
reviewed by J.R.Thomas
Occasionally we like to recommend a good book in the columns of the Shaw Sheet, one which we think our readers might not have come across, but which they may enjoy. This week we take a leap into deep water – and recommend a book on fishing. Before you press the page-turn button, bear with us though; this is no commonplace book on fishing. It is (the puns do come in spate on books to do with fishing and rivers) a journey into very deep waters; and on how to get back to dry land. Enough puns; it is a serious book and we will behave accordingly. Although it is centred around fishing, that is the hook (sorry) on which a deeper tale is told.
Laurence Catlow is the author, one of those wonderful types on whom the United Kingdom once relied heavily to make things work and to keep an eye on its moral compass. It is, alas, a type that one suspects is becoming rare, and increasingly confined to the fringes of these islands, both physically and metaphorically. More’s the pity, you might think after reading this book, his latest in a series which deals with his life-long interest in country sports. Fishing is Mr Catlow’s passion, fishing in the northern Pennine rivers, mostly for trout, and his back-up passion is shooting, again, amongst the northern hills and on quiet unfashionable shoots, including Mr Catlow’s own fifty acres or so of rough shooting land, High Park. Great salmon rivers, Scottish or Icelandic or Canadian, do not feature in his writing, nor bone fishing or Hemingwayesque struggles with Caribbean marlin; neither will you find him among the Purdy dressed lot on fashionable shoots with lunches in castle dining rooms and enormous battues to pass the morning. Mr Catlow is what some of us like to think of as a proper sportsman, the rule of thumb being not to catch or shoot more than you personally can carry home on your shoulders (this scribe confesses that for him this is oft forgot in the excitement of the chase).
Your reviewer came across LC (One could not possibly call him Laurence without a formal introduction, and Mr Catlow is too stiff for such an informal man) as a columnist in a shooting magazine, liked his writing style and what he had to say, and bought one of his books. It was beautifully written, and offered a gentle old fashioned view of the countryside and the modest role of the sportsman in it, that struck a chord, and rather changed my view of what was desirable and proper.
It is not surprising that he writes so well. LC is from a modest background but got himself to Cambridge and took a good Classics degree. After some teaching experience elsewhere he went to Sedbergh, a fine old Catholic boarding school (LC is a devout Catholic) in the rural upper lands of Lancashire, and quickly became Head of Classics there. One senses that he was a very able and admired teacher, not least because although devoted to his subject, reading ancient Greek and Latin poets for pleasure, he had also that rich hinterland of his fishing, and later, his game shooting, which he took pains to share with boys from the school.
He began The Healing Stream many years ago as a history of his life through his fishing, almost a fishing confession about how he learned to fish and acquired the etiquette of a country sportsman. He says in the finally finished book that he made very few amendments to this early section. It is certainly honest and open about the daft things we all do when we are young and confident and think we know everything, yet whilst somehow knowing that we are flawed and unlearned, if only we could ever admit it (which very few of us ever do). This first part is to some extent also a fishing guide, and no doubt young aspiring trout fishers would learn much from it, about rods and waters, and flies, especially flies. But this is no standard fishing manual, the quality of the writing and the openness of the author’s musings set it way above a normal fishing tome.
But…at this point, you ain’t read nothing yet. Some twenty five years on, our hero took up his abandoned manuscript to write the second part. He had much to tell us. He had matured as a fisherman and as a man, overcome some personal struggles of early life, and had a particular tale to tell, about himself and as to how in his view fishing had saved his life, or at least his sanity, though your scribe would also offer a bow to the empty and wild northern hills where he spent time wandering alone and which contributed their spirit as well as their waters to the healing process.
LC had retired from teaching, from Sedbergh, at the age of sixty, feeling, not that he was exhausted or had nothing more to give, but that perhaps the best of that part of his life was done, and that he had another life by the streams and on the fells that would delight the next part of his life. But that was not how it turned out. Within a few months he began to suspect that he was seriously ill. He was, but not with the cancer or liver disease that he feared, but with severe depression. He does not dwell much on what caused that sudden dive in his mental well-being, but he delivers a deeply moving and thoughtful account of what he went through, and as to how he began a steep and stumbling climb back to a stronger sense of being and worth.
LC is, one detects, a private and reserved man in possession of a large reserve of no-nonsense northernness. This cannot have been an easy book for such a man to write. Indeed there are considerable parts where his reserve fights fiercely any urge at disclosure; the history of his illness is interspersed with a recent diary of fishing expeditions, as LC twists and weaves away from relating his troubles. He did recover and he is once again active with rod and gun in the northern dales, though, as he very casually reveals in passing, still with regular infusions of drugs to keep his re-found equilibrium. He pays tribute to his drugs, although it took sometime to get the mixture right and to overcome the cynicism of a cynical patient who felt he didn’t need them or might become addicted to them. He is much more scathing about the sessions with psychiatrists and counsellors who attempted to draw him out and to make him understand himself. And very grateful indeed to his friends and relatives who took the trouble to care for him, and to show him that they loved him.
This is not just, or indeed really, a book about fishing; nor is it a book about how to cope with depression. It is a very honest account of how one man coped with and recovered from a mental illness; a man of that type who will always tend to reject the suggestion that it could happen to him or that he might need help in recovering and rebuilding himself. It is beautifully written and fishing is key to the man – skip if you must some of the (actually fascinating) broodings on which tied flies might most attract trout in certain rivers in certain weathers in certain conditions of water, but by the end you will understand the completeness of his recovered life. As a moving insight into one man’s struggle with his own demons it is well worth the read; the fishing advice comes free.
The Healing Stream, by Laurence Catlow, is published by Merlin Unwin Books
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26 January 2017
by Frank O’Nomics
They are all at it. First, Theresa May told us of the “need to address economic inequalities that have emerged in recent years”. Then we had Jeremy Corbyn (briefly) argue for a wage cap to “tackle Britain’s high level of income disparity”, which was then watered down to a pay ratio between the highest and lowest paid in a company (backed by an official kite-mark). Finally, we even had the World Economic Forum, ahead of its meeting in Davos, cite income inequality as one of the key risks facing the world. The WEF has a strong point, if you focus on the bottom billion, but for the developed world, and for the UK in particular, income inequality has been falling steadily for some time. In fact, according to recently released ONS data, the difference in real disposable income between the bottom 20% of households and the top 20% is the lowest for over thirty years. It seems that our senior politicians have been focusing on the top 1%, or even 0.1%, high profile individuals who have seen some fabulous increases in income over the last few years, rather than the population as a whole. Does this mean that we should stop worrying? Sadly, not. The data still mask some major concerns for the poorer elements in our society and, even in the broader sense, the extent of the narrowing in income inequality could easily go into reverse over the next couple of years.
Economists and sociologists have for many years used the Gini coefficient, developed by Corrado Gini in 1912, to measure wealth distribution across a nation’s residents. If we were in a utopia where every household had the same disposable income, then the coefficient would be at zero. Conversely, if all of a nation’s wealth were concentrated in the hands of one household, the coefficient would be 1. For the UK, this measure, when looking at household disposable income (after taking off taxes and adding in tax credit and benefits), is 14% lower than its peak in 1993. The improvements since the financial crisis of 2007/08 have been particularly striking. Those households in the bottom 20% are 13% better off in real terms over the last 8 years, while middle-income earners have only seen progress of 5% and the wealthiest 20% are still 3% worse off than they were on 2007/08.
Why has this happened? A lot of the improvement can be put down to the fall in unemployment over the period, but although the recent dip below 5% represents a fall from well over 8% since 2011, this is only marginally below that seen before the financial crisis. In fact the improvement seems to be more down to measures taken by the government, particularly the raising of tax allowances and introduction of tax credits, as well as efforts to address the lag in pensioner’s incomes by the introduction of the “triple lock”. Pensioners overall have seen a 13% increase in real incomes since 2007/08. The other major factor has been the very low level of inflation that we have seen over the period. Wage growth may have been below 2% per annum for much of the last 10 years, but this has produced a steady improvement in real disposable income given the benign pressure on the CPI.
Despite these latest ONS numbers looking very encouraging, and certainly contrary to the impression purveyed by senior politicians, there is still much to be concerned about. Firstly, there are still far too many families in the UK living in persistent poverty, which is defined a living with low income this year and two out of the last three years. The latest ONS data puts this at around 6.5% of the population, or 3.9 million people. We also do not look so impressive when compared with other countries. The most recent data comparing income distribution in 30 OECD countries had the UK as the seventh most unequal; worse than France, Germany and Italy (Sweden was the most equal). Further, the data looks far less impressive when looked at across age groups. Those measures to help pensioners were overdue, but when one strips them out, non-retired households actually have an income that is still below pre-crisis levels. There are also still wide differences in income levels across the country, and between rural and urban populations. Finally, it should be pointed out that, while there has been a narrowing of income inequality in the UK, there is still a very wide disparity in wealth, with the older generation in particular being helped by the impact of quantitative easing on asset prices, especially housing.
The bigger danger in becoming complacent about a falling Gini coefficient is that it seems unlikely to continue. The benefit of a very low inflation rate seems to be disappearing very quickly, helped by the post-Brexit fall in sterling. The impact of price rises could be compounded by an increase in interest rates, and economic growth, while healthy, does not seem to be at a level that will allow a compensating increase in wages. Some of the other supportive factors will also fade, given that benefits for non-pensioners look set to be frozen until 2020. As a result, the Institute of Fiscal Studies and the Resolution Foundation have suggested that 2016 will be the last year for some time that the level of income inequality in the UK will fall.
Has the argument gone full circle? It seems that Mr. Corbyn and Mrs. May, while they might be wrong on current evidence, are right to raise the issue as a matter for pre-emptive action. As to what that action should be, it seems unlikely that a wage cap will work. Not only will this inhibit UK business from hiring talent, it will encourage the development of finding new ways to pay, by increasing benefits-in-kind or housing allowances. From Mr. Corbyn’s point of view he should be wary of further alienating the electorate by making it impossible for British soccer teams to recruit the stars they need to compete on the European stage. The narrowing of income inequality we have seen has occurred more as a result of helping the poorer 20% of UK households than of taxing the richest. If we can find more ways to do this then we may be able to revisit Harold Macmillan’s 1957 claim “you’ve never had it so good”.
26 January 2017
by Adam McCormack
This laugh-out-loud black comedy from writer David Spicer is another hit for the Park Theatre. At times surreal and ultimately frenetic, this is an engaging production that never lapses and benefits from highly talented actors whose feats of coordination and physicality demonstrate British theatre at its best.
The plot revolves around two disaffected brothers, united in their loathing of their long dead mother Martha. Roger is a failing alcoholic businessman, Gerry a drug-soaked and lovelorn hippy who runs the family “farm” which has been producing frogs for dissection for many years – or least had been. What are now produced are Cane toads, whose venom is extracted to “spice up” the produce of the 30,000 cannabis plants that Gerry has been cultivating. The problem is that Gerry has been sampling a little too much of his produce and is constantly visited by 6-foot frogs in lab coats who want to experiment on him. The dilemma for the brothers comes when an anti-vivisection group decides to dig up Martha and ransom her skeleton in return for the farm releasing the frogs. The issue is further complicated by the two hapless grave robbers being in the thrall of Martha’s granddaughter, Caro, who is the brains behind the operation – and her motivations are questionable. The fast paced action that develops is critically enhanced by very funny philosophical and existential debate between the characters. That Spicer has written extensively for radio is clear. He ensures that our attention never wavers.
The action becomes ever more madcap as Martha’s bones are re-buried and then re-distributed by the local dog population. Overseeing all of this to give us some narration is the frustrated policeman, Inspector Clout. He may profess to know what is going on, but his vision is distorted by finally having a real crime to solve – one which he does his best to elevate to the level of terrorism.
Tom Bennett and Joel Fry play the grave robbers perfectly, along the lines of Jasper and Horace from 101 Dalmatians, but with more violence. Stephen Boxer and Julian Bleach, as the brothers, extract the full yield of humour from the dialogue, while Gwyneth Keyworth is suitably machiavellian as Caro. Special praise is due for Jeff Rawle’s portrayal of Inspector Clout, which is a perfect study in occupational frustration, with a high degree of gullibility. This is a production that deserves to go further.
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