Issue 105:2017 05 18:Tree planting, topography, timber and toxins(Lynda Goetz)

18 May 2017

Tree Planting, Topography, Timber And Toxins

Do we need to plant more trees? How to get one planted.

by Lynda Goetz

It is believed that around 3,000 BC some 50-60% of the UK was forested.   But, that being said, any belief that forest cover has been in continual decline since then is totally erroneous.  A fascinating resource here is the Forestry Commission timeline, which evidences clearly how events, and in particular wars, have influenced the way we have used our timber supply throughout the centuries.  Today’s cover at around 10% in England (13% in the UK owing to greater cover in Wales and Scotland) may not be as much as the Government had hoped, but it is double the percentage in 1300, when war and massive clearances for animal grazing had taken their toll; far higher than at the end of the 16thC after the increase in housebuilding, shipbuilding and use of charcoal in various processes (including gunpowder production);  more than twice that in 1815 when timber usage in the Napoleonic wars had reduced woodland cover to an all-time low and 1900 when cover once again down at  5%, shortly to be made worse by the advent of the First World War, led to the founding of the Forestry Commission in 1919.

In the light of this, are headlines referring to ‘an all-time low’,  words like ‘appalling’ and ‘shocking’, and expressions such as ‘drastic decline‘ and ‘prospect of deforestation’, really appropriate or necessary?  This is the sort of reporting which greeted the release of figures last June by the Forestry Commission and also this year’s quarterly report.  It is true that these comments mostly refer to tree planting rather than forest cover and also that between 2011 and 2014 there was a great deal more creation of woodland than there has been over the last two years.  Is this a problem and if so, why, and what can be done about it?

It is a fact that the Government’s aim was to achieve some 12% cover in England by 2060.  This is of course still possible, but it will require planting at a much higher rate than the current one.  This is partly because we are also using more wood.  As our population increases, so the demands for timber increase with it.  Over 80% of our timber is imported.  Use of wood has changed through the centuries.  Wood is currently being used again for heating our homes and hot water (wood burners and wood-pellet boilers); it is being used for furniture, as a clothes fibre and for medicines (e.g. yew for docetaxol and paclitaxel chemotherapy drugs) inter alia.  Not only is there actual usage to consider, but the environmental value of woodland is now much more understood and appreciated.  Many people derive pleasure from being able to access woodland, but as most now know, trees have an important environmental role as well.

Only this week, the academic scientific journal Atmospheric Environment has, according to the BBC environment correspondent, produced an article suggesting that not only should we be planting trees, but that hedges are also essential for absorbing harmful pollutants from the atmosphere.  Lead author Professor Prashant Kumar suggests that where possible in towns and cities, councils should plant low hedges between pavements and roads to help trap harmful toxins from vehicle exhaust pipes.  He is not suggesting that they should stop planting trees, indeed he feels that many more should be planted, simply that hedges could provide a further defence against our increasingly polluted air.

Woodland is also important in reducing flooding; increasing water absorption into the ground, preventing soil erosion and reducing sediment going into rivers, as well as creating a physical barrier to floodwater.  Studies into these ‘soft engineering’ aspects of managing flood risk have shown ‘significant scope for using woodland to reduce flood risk’, although it needs to be part of a ‘whole-catchment approach to flood-risk management’ (Woodland flood control: a landscape perspective)

Part of the problem, it would seem, is that the current regulation of forest in this country is shared between four separate Government departments; Department for Environment Food and Rural Affairs Agency (DEFRA), the Forestry Commission, Natural England and the Rural Payments Agency, all administering the Countryside Stewardship Scheme.  In addition, last November the Government opened the Woodland Carbon Fund to encourage more large-scale planting.  The grant scheme for landowners wishing to plant forest changed in 2015 and there have been delays in processing contracts and payments.  Negotiating the complex bureaucratic procedure appears to be something of a nightmare and this, combined with the uncertainty around what correlation, if any, exists between tree planting and EU agricultural subsidies, may have led many farmers and landowners to avoid new tree-planting altogether.

Austin Braby, a spokesman for the The Woodland Trust, the UK’s largest woodland conservations charity, said last June that “there have been lots of really interesting and well-informed conversations… but the system… is not matching up with the fine words.  It is not fit for purpose.”  It may be that the system has needed time to bed down, but as Countryside Stewardship is funded by the European Agricultural Fund for Rural Development, which of course will not be available after Brexit, it may take some time before it really does and we can get back to the planting rates needed to meet the Government-declared targets.

In the meantime, some of you may be interested to know that as an individual who is not a farmer or a landowner, you can still ‘do your bit’ and get a tree planted, although of course there is no EU grant attached.   You do not however need a spade or a garden.  All you have to do is to sign the Tree Charter.   As 2017 is the 800th anniversary of The Charter of the Forest ( a separate dedicated charter of all the rules contained in the 1215 Magna Carter relating to forests), some 50 organisations led by the Woodland Trust have got together to promote the importance of trees.  Just by signing the charter you ensure a tree is planted on your behalf.  If only everything were so simple!


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Issue 104: 2017 05 11: Quiz – Answers

11 May 2017

Quiz – Answers

by Boffles

  1. Arthur Wellesley, the Duke of Wellington.
  2. PayPal.
  3. Nikola Tesla, the Serbian-American engineer and scientist (1856-1943) who invented the alternating current (AC) induction motor.
  4. The Ottoman sultan, Mehmed II.
  5. Bosphorus comes from classical Greek and means cow passage (or ox-ford) and the name refers to the myth of Io who was condemned, after she had the misfortune to attract the attention of Zeus, to wander the earth as a cow until she crossed it.


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Issue 104:2017 05 11:Week in brief Financial

11 May 2017


NEWS, the word in pink on a grey background

CAN’T GIVE IT AWAY: It’s not easy owning a bank nowadays – but it is even more difficult getting rid of one.  Readers will remember RBS’s struggles to get rid of its Williams and Glynn’s arm, Barclays has struggled to sell some of its peripheral operations, and the Coop Group has been trying to sell its bank – the Cooperative Bank – for several years.  It looked as though a deal was done earlier this year, with rumours that Virgin Money was the buyer, the latest suitor in a little list, which included Clydesdale Group, and JC Flowers – no relation to Paul Flowers, the bank’s former chairman whose extraordinary lifestyle brought the bank’s problems to the public attention in the first place.  The difficulty continues to be two fold – firstly the complex ownership structure which reflects the original rescue plan by the Coop Group which brought in a group of hedge funds to recapitalise the bank, Coop itself being too light on capital to do that by itself; and secondly the troubled nature of the bank’s loan book. Apparently, although nine years have passed since the banking crash, the bank has only made slow progress in sorting out its portfolio of bad or non-performing loans.  The bank has a concentration of business in the North West, with much credit extended to small business owners and particularly the smaller end of the property industry, including development finance.  These have proven difficult to work through, and the North West has been slow to recover from the recession.  The bank is no minnow; it has nearly 1.5 million customers, many private individuals with great loyalty to the other parts of the Coop Group – now principally its retail food business and a very strong funeral business.  Shutting the banking operation down is not thought to be an option although the shareholders have considered splitting it into two to get the non-performing loans into a “bad bank” where they can be dealt with, and leaving the retail bank as a clean and private customer focussed business.  It is understood though that the banking regulators are not keen on this because of the weak capital base of the bank, and its very complex pension plan, which covers the whole Coop Group and is in deficit.  If the bank cannot be sold, then further capital will have to be introduced – which is a problem for the Coop because neither it nor the regulator want to let that shareholding go below 20%.  The current talk is that £750m will have to be injected soon, the Coop part funded, at least in part, by forcing bondholders to convert their holdings to equity.  But the hedge fund shareholders cannot agree whether that is the way forward or how much can be injected.  Which may yet mean that a buyer just has to be found…

FEELING SICK?  The problems of the NHS are well publicised but not so often commented on is the rapid growth in the private healthcare sector in the UK.  The public, if they can afford it or are insured – as many office workers are under employer-provided healthcare insurance – increasingly take health issues to private hospitals or care centres, to such an extent that the business in the UK is said to be worth over £6bn and growing fast.  In fact it has grown so fast that it is said that there is over capacity in the private sector, with specialist machinery and operating facilities standing out of use.  The sector does contract with the NHS to do some work, but pricing is of course an issue there.  One of the biggest private healthcare treatment businesses in the UK is currently up for sale – Aspen Healthcare which owns six private hospitals and two cancer treatment centres.  The price is said to be around £150m, and the vendor is Tenet Healthcare from Texas which is under some pressure financially because of a large fine imposed following a bribery scandal in its US business.  Tenet only bought the business in 2015, from a private equity group, for £144m.  Revenues are thought to be running at around £120m and have shown only modest growth over the last two years.  Even so the price seems modest and reflects both the demand and revenue issues in the UK private sector, and Tenet’s need to raise cash.

FLYING LOW:  Ryanair was once said to be the world’s least favourite airline, but it remained the one every budget conscious traveller flew, with super low fares and reliable schedules, and a fleet of modern jets.  If it flew to some pretty obscure places (Frankfurt-Hahn, anyone?) it opened up new destinations and brought prosperity to some modest towns across Europe.  In recent years the airline has sought to improve customer loyalty by being generally nicer and cutting out some of its more controversial charging supplements.  But if it is improving passenger opinions, it will now have to work on doing the same with investors.  Seven pension funds have just announced that they are selling their holdings in the airline, because they are concerned about labour relations at Ryanair, which is involved in a series of disputes in continental Europe about locally employed labour.  Ryanair argues that its staff are subject to Irish employment law – staff say that if they work exclusively in one jurisdiction they should be subject to the relevant law in that jurisdiction (when it is more beneficial to them, unsurprisingly).  The pension fund investors say that this is not acceptable and think Ryanair should do the right thing by its people.  They also worry about the long term effect on the business model if staff become too restive.  Michael O’Leary, CEO and a major shareholder in Ryanair, is famous for his plain-speaking.  He commented that he does not care if the pension funds don’t want to invest in his business, calling them “idiots”.  The Ryanair share price has risen 10% so far this year.

IRON ORE:  We have added iron ore to our commodities list.  Iron ore is a still a key component in many manufactured goods and its price movements are an insight into industrial production, especially in the eastern growth economies.  Last August the price was $60 a tonne, from which point it climbed as output from mines was cut and investors expected Chinese industrial production to recover fast.

Recently there have been further dramatic movements in price, back now to $60 from over $90 in late February this year, which reflects that industrial output in the Far East is modestly improving – but mine output, responding to that peak, has enormously increased – and there are suspicions that some users have big stockpiles which they bought as the price rose so fast. That means somebody is sitting on some ever growing losses. As there is not much speculative trading in iron ore – not easy stuff to handle if you have to take delivery – the main traders are mines and manufacturers. So it is almost certainly steel manufacturers that are sitting on the losses.

KEY MARKET INDICES:  (as at 9th May 2017; comments refer to changes on last 7 days; $ is US$)

Interest Rates:

UK£ Base rate: 0.25%, unchanged: 3 month 0.32% (steady); 5 year 0.77% (rising).

Euro€: 1 mth -0.37% (steady); 3 mth -0.33% (steady); 5 year 0.13% (rising)

US$: 1 mth 0.99% (steady); 3 mth 1.18% (rising); 5 year 1.98% (rising)

Currency Exchanges:

£/Euro: 1.19, £ rising

£/$: 1.29, £ rising

Euro/$: 1.09, € steady


Gold, oz: $1,225, falling

Aluminium, tonne: $1,878, falling

Copper, tonne: $5,465, falling

Iron Ore, tonne: $60.72, falling

Oil, Brent Crude barrel: $49.43 falling

Wheat, tonne: £149 slight fall

London Stock Exchange: FTSE 100: 7,343 (rise). FTSE Allshare: 4,031 (rise)


Last week was pretty quiet; this week certainly wasn’t. Commodities all fell; gold a bit, oil and iron ore a lot – oil dipping below that key $50 a barrel price to, as we write, $49.43 (it was lower at opening). But the LSE likes this – prices rose, with the All-share again breaking through the 4,000 mark. Long term interest rates continue to edge up and the pound strengthened a little.

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Issue 102: 2017 04 27:May Calendar (AGGro)

27 April 2017


 by AGGro

1st MON:Early Easter Bank Holiday (aka May Day) – International Workers Day.

2nd TUES: 35 years ago: Falklands War – Argentine ship, General Belgrano torpedoed by British submarine HMS Conqueror.   320 Argentine crew perished & 700 rescued.

Football:- Champions League semi-finals, first legs until 3/5.

3rd WED: General Election:  Parliament to be dissolved 25 working days before polling day.

Polish National Day:there are an estimated one million Poles in the UK.

Equestrian: Badminton Horse Trials until 07/05.

4th THURS: Local Elections: 4,851 council seats being contested in England, Scotland and Wales.  6 new Metro Mayors.

Football: Europa League semi-finals, first legs.

5th FRI: Cricket: 1st One Day International – England v Ireland, Bristol County Ground.

Cycling: Giro d’Italia until 28 May.

6th SAT:  UK compliance with European Directive (SI 2017/554):  DVLA to provide vehicle owner details at time of certain traffic          offences when requested by another EU country within 12 months of alleged offence.

Horse racing: 2,000 Guineas, Newmarket.

Tony Blair: is 64 today.

7th SUN:  Cricket: 2nd One Day International – England v Ireland,  Lord’s.

French Presidential Election:Second round takes place after first round of 23rd April.

2 years ago: UK General Election 2015: Con 331, Lab 232, SNP 56, Lib Dem 8, DUP 8, Others 14.

8th MON: VE Day: WW2- marks Allied victory in Europe 72 years ago (Eastern Europe celebrates on 9th May).

75 years ago: WW2 – Battle of the Coral Sea – US aircraft carrier victory over Japan navy.

Eddie Butler: TV Rugby commentator is 60 today.

9th TUES: Football: Champions League semi-finals, second leg until 10 May.

Vince Cable: is 74 today.

11th THURS: General election:  Deadline for parliamentary candidates to file their nomination papers.

Football: Europa League semi-finals, second leg.

12th FRI: Horses: Chatsworth International Trials, Derbyshire until 14 May.

13th SAT:100 years ago: Catholic Church: Our Lady of Fátima, Virgin Mary appears to 3 Portuguese children.

Eurovision Song Contest: 2017 Final (62nd) Kiev, Ukraine. 43 entries – not including Russia.

Rugby Union:  European Rugby Champions Cup final, Edinburgh.

Football: – Women’s FA Cup final, Wembley.

14th SUN: Formula 1:  Spanish Grand Prix, Barcelona.

Mark Zuckerberg: Facebook founder is 33 today.

15th MON:Birthdays: Zara Tindall is 36 and Andy Murray is 30.

17th WED: Film: Cannes Film Festival until 28 May.

20th SAT: Football: League One Play-off Final, Wembley.

Rugby League: Magic Weekend, Newcastle until 21 May.

Rugby Union: World Sevens Series, Twickenham until 21 May.

21st SUN:  Smoking: Changes to legislation effective following law change on  20/05/ 2016.  Cigarettes to be sold in plain packaging, withdrawal of smaller packs of 10 cigarettes and packs of less than 30g of rolling tobacco.

Football: Premier League and Scottish Premiership seasons end.

22nd MON: General Election:  Last date to register to vote.

Tennis: French Open, Roland Garros until 05 May.

23rd TUES: Flowers: RHS Chelsea Flower Show, Royal Hospital SW3 until 27 May.

George Osborne is 46 today.

24th WED: Football:Europa League final, Stockholm.

Birthday:Dominic Grieve is 61 today.

Cricket: 1st One Day Internationals – England v South Africa, Headingly, Leeds.

25th THURS: Schools: Half term  (London maj) until 05 June.

Ascension Day: 40th day after Easter – commemorates the bodily Ascension of Jesus into heaven.

Hay-on-Wye: Book Festival until 04 June.

Birthday: Alastair Campbell is 60 today.

26th FRI: Sailing: America’s Cup qualifiers, Bermuda until 03 June.

27th SAT: Ramadan: Islamic time of fasting & spiritual renewal until 25 June.

Football: FA Cup Final 2016, Wembley Stadium (and Scottish FA Cup in Hampden Park).

Rugby Union: Premiership final, Twickenham and  Pro12 Grand Final, Dublin.

Cricket – 2nd One Day Internationals – England v South Africa, Southampton.

35 years ago: Falklands War – Battle of Goose Green.

Birthday:Paul Gascoigne (footballer) is 50 today.

28th SUN: Tennis: French Open.

Formula 1: Monaco Grand Prix.

Rugby Union: England XV v Barbarians, Twickenham (Old Mutual Wealth Cup).

Football: – League Two Play-Off Final, Wembley .

Birthday: Mary Portas is 55 today.

29th MON: Late Spring Bank Holiday.

Table tennis: World Championships, Dusseldorf, Germany until 05/06.

Football: Championship Play-Off Final, Wembley.

Cricket: 3rd One Day International.  England v South Africa, Lords.

75 years ago: WW2 – Reinhard Heydrich assassinated in Prague by British trained resistance fighters.

100 years ago: John F. Kennedy  (1917-1963) born.

Birthday: Noel Gallagher (Oasis) is 50 today.

30th TUES: 75 years ago: WW2 – 1000 British bomber raid on Cologne.

31st WED: General Election: Deadline to apply for a proxy vote.

World No Tobacco Day (WNTD): to encourage abstinence from all forms of tobacco around the world.

Birthday: John Prescott is 79 today


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Issue 100: 2017 04 13:Revolution (J.R.Thomas)

13 April 2017


Fading Icons:  The Mayor, Aldermen, and Common Councilmen of the Corporation of the City of London

by J.R.Thomas

All around the world populism is sweeping the established politics aside, the old order and ancient ways give place to the new.  We perhaps saw it first in the Middle East and North Africa with the Arab Spring – though that has faded rapidly to a pretty bleak winter – and then we marvelled at a progression of dominos as the EU Referendum result swept away Mr Cameron and much of his cabinet.  Across the water, while Bernie Saunders threatened the Clinton coronation, Mr Trump prevented a Bush one and then seized the White House.

In the peace loving Netherlands, the remarkable coiffure of Geert Wilders pushed the ruling moderate right coalition further from the centre as Dutch politics suddenly stopped being consensual and started to offer clear choices – with the left and right fringes giving haircuts to the moderate middle.   Austria only just failed to elect a far right president (choosing the Green candidate instead) on a simple majority.  We have a French Presidential contest looming where it seems quite possible that the traditional political parties will not feature among the top three nominees from the first round.  And there are Italian elections yet to come.  There the traditional party structures have almost vanished.

Is there nowhere that political tradition and serenity rules?  In our edition of the 16th March we looked at the elections then approaching in the City of London, when all one hundred seats in the Corporation were coming up for the judgement of the electorate.  The shock waves from that have spread – well, it is probably true to say that the shock waves have not spread very far, but certainly in the City there has been a sense that barricades may be beginning to be pushed into place among the glass and steel.  The Labour Party won five seats, having previously won one at a by-election.  All of these were in City wards with a high residential population, in the north-west corner of the Square Mile, around the Barbican and Golden Lane estates, part of the great post-war rebuilding of the heavily bombed City which in this corner was reinvented through the medium of Brutalist architecture.  The rebuilding was not just designed to show that the City read and admired Le Corbusier along with the rest of 1950’s hip Britain; its residential focus was to help the City survive as a self-governing area, there then being a severe threat of abolition of the business vote and the incorporation of the City into a neighbouring borough.  Hackney, anybody?

It is not just having a Labour bloc on the Common Council, or the prospect one day of a Labour Lord mayor of London replacing the mayoral finery and waving a Mao hat  in the Lord Mayor’s Procession, that is causing the City grandees alarm.  It is also the concept of party politics entering the Guildhall, the great City tradition being that candidates are “independent”.  One does not have to scratch very far to find that most members of the Common Council are only independent when it comes to the City but it is a good line to sell to local electors (and to any future reforming Westminster government) that the City is run in a spirit of pure pragmatism.

But this approach is showing signs of disintegration; not only is there the major shock of a lurch to the left; there is another grouping which is causing consternation.  This is a strange alliance called “Temple and Farringdon Together”, not the most catchy of names but certainly clear enough as to its geographic origins.  TAFT, as it does not call itself, is an alliance of Barristers and Butchers, the Inns of Court and the Burghers (or at least burger makers) of Smithfield.  This swept the board in Farringdon Without – the Without meaning that it is outside the ancient City wall  (For those curious about these things there is indeed a ward of Farringdon Within).  TAFT seems an innocuous enough grouping, wanting to improve public transport and reduce pollution in the City, but it has swept the old independent representatives aside and set a trend which may spread – that of special interest groups in different wards.  It is, in City terms, revolutionary indeed.

Does this matter?  In some ways no, not at all.  The City is more or less that literal Square Mile and just runs itself.  It has done that task historically quite well, though there are constant mutterings about the amount of money spent on prettifying the City whilst the neighbouring boroughs – especially Hackney and Tower Hamlets-  have great financial difficulty providing even basic services.   The City got a very nasty shock in the early 1990’s with the success of Canary Wharf, the major development on the Isle of Dogs, which set off to become – and to the Corporation’s horror did become – a City in the East.  A large number of City banks migrated east – including Barclays, formerly resident in the City for three hundred years, and HSBC, a cuckoo which had invaded the City and then departed to the Wharf with Midland Bank under its arm.  Where bankers go, lawyers tend to follow, and the net effect of this was almost a collapse of the City office market.  The City fought back – led by Michael Cassidy, Chairman of the City’s planning committee and effectively the City’s Prime Minister, and the Chief Planning Officer Peter Wynne Rees who changed much of the City’s planning codes to allow the construction of the towers which now define the financial district – to a large extent, now back in the City.

With the towers came an explosion in City employment – over four hundred thousand work there now – many of whom, a careful eavesdrop on a walk down Lombard Street will reveal, were not born or educated in the UK.  These offshore bankers, working for offshore banks, are not interested in City government or practices but just want the place to provide an efficient working environment.  Largely it does, but the amount, disruption, and volume of building works – and the City’s own endless tinkering with traffic management and landscape – has caused muttering about the mess in the streets, especially in the residential wards.  It is probably that which, coupled with some less than competent management of the two big residential estates, Golden Lane in particular, and noise from the burgeoning night life,  has triggered that swing to Labour and to TAFT.

But there is something deeper than that.  The City, surprisingly to a modern generation, has been for centuries a centre of radicalism.  This was where new fortunes were made, where the new money lived and multiplied, where new ideas were fomented and turned into cash machines.  It was the centre of immigration – at least just outside its boundaries to the east, not always from overseas;  Dick Whittington was almost an immigrant, coming down from Durham to London.  It was the centre of religious dissent – Wesley’s Chapel in the City Road is still a centre of Methodism – and revolution, with much of the direction (and financing) of the English Civil War centred in the City.

As late as the 1950’s the City Corporation was one of the most dynamic local authorities in the land; the Barbican and Golden Lane being a concrete (very concrete) demonstration of that, part of a one hundred year plan to rebuild the City two levels up, with people above and traffic and servicing below  (Hence the odd walkways and staircases that go nowhere in strange places).   But the present corporation seems to have lost that verve, that edge of radical solutions.  Maybe the electors feel in their bones, if not populism, an urge for something a bit more lively and creative.  Maybe we will yet see further upsets in City politics and the Lord Mayor in a Nissan Leaf.


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Issue 97: 2017 03 23: Moving the interest rate goal posts(Frank O’Nomics)

23 March 2017

Moving the interest rate goal posts

 The Bank of England has forgotten its mandate

 by Frank O’Nomics

The Monetary Policy Committee of the Bank of England sets UK interest rates with a view to keeping inflation close to 2% over the medium-term.  If inflation is forecast to exceed this target at a two year horizon, they are supposed to look at raising interest rates, and conversely they consider rate cuts if a serious undershoot is predicted. Any significant deviation of inflation from target (1% either way) requires a letter of explanation from the Governor, which generates one in response from the Chancellor.  Why then, after nearly 10 years without a rate rise, is the Bank ignoring high and rising inflation, leaving the base rate at a historic low of 0.25%?  The Federal Reserve in the US set in motion what is likely to be a series of rate rises last week. There may be some differences to the UK, not least the potential stimulus coming from President Trump’s likely tax cuts, but there are also some striking similarities in the rising level of US CPI and the steady fall in unemployment.  Last summer’s UK rate cut was supposedly an emergency measure, and there is growing evidence that the emergency has not only passed, but also that there are strong arguments for material rate rises rather than just taking back the precautionary move.

Inflation, measured by the Consumer Price Index, hit a three and a half year high of 2.3% in February, up from 1.8% in January and looks set to rise much higher.  The Bank of England expects it to peak at 2.8% next year, although many economists are forecasting levels in excess of 3%, which would prompt a letter from the Governor in which he would explain why this had happened and what the MPC intended to do about it (it was only last December that he had to write a letter explaining an undershoot).  Some are happy to describe this as a “blip” resulting from sterling’s post-Brexit vote depreciation, but how much of a blip will it be if sterling remains under pressure? The bigger problem is that price rises will prompt wage increases (real wage growth is currently negative), thereby provoking an inflationary spiral.  Further, the currency factor is not the only driver, with signs that the price trend in commodities has turned up again.

Those who insist that interest rates should remain low will add to the argument of inflation being transitory, concerned by the prospect of a slowdown in consumer spending that could result from the uncertainty that surrounds our departure from the European Union. This is a reasonable stance to take – just because there has not been a loss of confidence so far does not mean that it won’t happen. However, there are strong justifications for starting to “normalise” the level of interest rates.  The emergency cut in rates last summer was justified by the imminent danger of a sharp economic slowdown.  The MPC was particularly concerned by low readings from forward-looking indicators such as purchasing managers surveys.  Not only were these fears not realised (the PMI data turned back up quickly) but the actual growth numbers came out surprisingly strong, at 1.8% for 2016 overall.  The combination of this, together with the strong CPI data, suggests that, at the very least, the August rate cut should be reversed.

Beyond this there are sound economic arguments for pushing rates up further.  If we have an environment of normal, or long-term trend growth, then shouldn’t we have a “normal” level of interest rates?  This would point to a level closer to 2% rather than the current 0.25%.  Two former members of the MPC have been articulating their concerns that low rates are causing problems for the economy.  Dame Minouche Shafik has expressed concerns that low rates may be depressing productivity and last week Sir Charlie Bean (who is now with the OBR) said that low cost credit was allowing the survival of “zombie” firms which suffer from low productivity.  Phillip Hammond is keen for improving productivity to become the engine of growth in the UK, but this will be difficult to achieve unless higher rates force weaker firms out of business.  The only concern is that, as these firms fail, they take some stronger businesses with them.  The growth of consumer credit would further suggest that, from the point of view of household finances, people need to be discouraged from increasing debt to a point that they will struggle to repay or service it once rates finally rise.

There are others who argue more strongly for a rate rise, with four of the eight members of the Institute of Economic Affairs Shadow MPC (which meets quarterly) recently voting for a rate rise.  Only one member of the MPC proper voted for a rise last week – Kristin Forbes – and sadly she will be leaving the committee in June, but this was the first time since June last year that the committee has not been unanimous.  One can only hope that someone who is mindful of the MPC’s mandate, and forceful enough to remind his or her new colleagues, will replace her.


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Issue 95:2017 03 09:Twelfth Night (Adam McCormack)

09 March 2017

Twelfth Night

The National Theatre

reviewed by Adam McCormack

Stars: *****

It is very rare for a new production of a Shakespeare play to succeed in every aspect, but Simon Godwin’s Twelfth Night has virtually no identifiable weakness. This is not a “safe” or standard approach – not only has the action been shifted to the twenty-first century, but the gender of Malvolio has been changed to a female – Malvolia. The modern setting works exceptionally well in providing a perfect backdrop for the bacchanalian romps of Sir Toby Belch and Sir Andrew Aguecheek, and the gender shift sits perfectly with the key plotline of the shipwrecked twins Viola and Sebastian, with the former passing herself off as a man.

The puritanical, socially ambitious Malvolia, wickedly misled into playing out her crush on Olivia, only to face mock imprisonment for lunacy, works just as well in a lesbian context, particularly given the modern setting.  The real beauty of this approach, however, is that it allows us to appreciate the prodigious talents of Tamsin Greig.  Her Mrs Danvers style management of her mistresses affairs and attempts to crush Belch (Tim McMullen) and Aguecheek’s (Daniel Rigby) revels, allow for great moments of farce which work beautifully as a result of their comic talents; they are also enhanced by the presence of Doon Mackichan as the fool, Feste.  Grieg exudes self-importance and hubris and her transformation into the cross-gartered, yellow-stockinged suitor is hilarious.

Mackichan’s singing is worthy of such a strong production, as is the talented musical accompaniment. The musicians appear regularly on the stage and add much to the modern Illyrian feel. Their musical dexterity stands out, moving from witty sax to illustrate “If music be the food of love” to pounding dance music to energise the athletic Aguecheek and simpering disco queen Olivia (Phoebe Fox). That they are able to do this is one of the many triumphs of the set, the essence of which is a rotating staircase that, from facilitating the initial shipwreck scenes, opens out to provide backdrops for the various elements of Olivia’s villa. The garden scenes complete with fountains and topiary help generate the maximum effect from the duping of Malvolia.  The seduction of Viola by Olivia in a Jacuzzi is hilarious and uncomfortable in equal measure.

For those who have been unable to get tickets for this sell-out run, there is the opportunity to see the production in cinemas on 6th April.  Johan Cruyff was much lauded for his creation of total football – the National should win a similar crown for the development of total theatre.


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Issue 90:2017 02 02: Donald and Teresa (J.R.Thomas)

2 February 2017

Donald and Theresa’s Love In

The way to implement

by J.R.Thomas

One of the most irritating features of modern news management (that is, attempted management of the media by politician’s inner offices) is that one is told the day before the set piece speech what the revered one will say.   “Mrs May will say that she and Mr Trump will rule the known world…”,  “Mr Corbyn will say that he is firmly in favour of…”.   But suppose that, when they rise behind the lectern, they don’t say that all?   Suppose Mrs May had actually found on meeting Mr Trump a person she could not possibly contemplate doing business with, and decided to say so?   Suppose that Mr Corbyn, on eating breakfast, considered other perspectives and found himself torn between them (unlikely, we know) and decided to turn his address into an opportunity to muse on what might be the best course.

No danger of this with Mr Trump of course.  A thought comes into his head that he needs to share.  Some event blows up that he should express an opinion on.  Out comes the gold (we’re surmising it might be gold) cell phone and the world is informed in 140 characters – or less.  Nobody knows what the Donald will say until he says it.  Even, one suspects, the Donald.   He has plans, ideas, stratagems, of course.   But (as we have said in this column before) he is a businessman, he seeks angles and opportunities, he seizes moments, he reacts to changing circumstances.

Also, as a businessman, he delivers product fast; so, he thinks, will his Administration.  Never before has a politician delivered so clearly and quickly on his election promises.  He said he would engage with his programme on taking office, and the Presidential pen has been busy engaging.  Oddly, given that outrage is usually directed at politicians who ignore their manifesto commitments, this President is been vilified for delivering.  What he is delivering is certainly controversial, but hardly unexpected.  But perhaps his opponents never believed that he meant it – which may give as much insight into their approach to politics as Mr Trump’s.

What might be more cogently criticised though is the detail and implementation of the executive orders flooding out of the Oval Office.  There is a reason in the USA, as in the UK, for having cabinet officers and massive departments of state behind them, lawyers and civil servants and PR persons, lobbyists who can be used to disseminate suggestions as well as seeking favours, political contacts who can be consulted and briefed, friendly executives who can be informally consulted and pre-armed.  This is the formal and informal machinery of government, and it means that executive action can be polished and shaped to avoid the obvious weaknesses and potholes in changing procedures and laws.

Previous presidential pens were normally deployed after some sounding and consulting, often a considerable amount, had been carried out, the ink only being placed on documents after the implications and consequences had been thought through more than a little.  Sometimes, the security of the state or the urgency of the situation means that this process cannot be gone though, and the legislation is rough and ill considered but achieves an urgent objective, knowing that slamming the door may, as it were, break a few fingers but will keep out the bad guys.  Mr Trump would doubtless say that this is exactly the position concerning his order to extend the wall on the Mexican border (there is nearly 600 miles of high security fence already, remember) but given that he needs Congress to vote the funds for the construction of the wall, the executive order is really just an order to get ready.  He has cited security threats as being behind the temporary ban on Moslem entry to the country whilst stricter vetting processes are put in place.  This may be based on some threat identified by the intelligence services of which we have not been made aware; but if not, then it does look like a clumsy and ill drafted order which at the very least is a gift to the Presidents political opponents – elderly and infirm entrants refused entry, celebrities fearing they will not be allowed entry, crying children denied entry.  This is a short term humanitarian disaster, and if the President does not care about that, a PR one as well.  He might not worry about such perceptions a few days into his Presidency but it is very early to be creating waves that may lead in time to impeachment moves, and risks alienating an already doubting party in Congress.

The rest of the orders and memoranda flooding from the White House are largely symbolic because they either relate to things which will need formal legislation or which require funding.  They are statements of intent, a reassurance that the President is indeed beginning the draining of the swamp, that he wishes government to be crisper, cheaper, more effective.  And he is parking his tanks not on the Congressional lawns but on the very steps, giving them notice that he intends to deliver as promised.

What he delivers though needs to be better thought through than the border security measures enacted last weekend or he may find that in the streets and in the courts and in Congress there is so much opposition that nothing gets done.  This is certainly not unknown in Washington even with politically skilled presidents, but would be a remarkable achievement indeed for a President whose party has control of both Houses and, according to the polls, majority support (albeit narrow) for what he has done so far – though (early warning Mr President) his personal ratings are declining.  Which brings us to where we began – even if you are out to drain swamps and change the world, some of those old techniques are still useful – such as thinking before you speak, and leaking what you are thinking of saying before you say it so that you can gauge reactions and tailor your words and actions accordingly.

Mrs May might also need to take a refresher in these matters.  That the most cautious of politicians, a woman who presented with fresh ground will dig and double dig, and then dig the other way just to be sure, should fall into such a minor but embarrassing pit as to publicly invite her new friend for a state visit, without consulting the one who will have to host it, or precedent, or public opinion, is very odd indeed.   She has much on her plate, and has had little to do with foreign affairs.  Did she consult? Was her Foreign Secretary asked what he thought?  Or was this a calculated decision taken in full knowledge of normal process and procedure in the Whitehall swamp, calculating that The Donald and Theresa Brexit Show would help towards an early trade deal with the USA, more important than the downside of a bit of hoo-haa over an unprecedentedly early State Visit.

If it was this, Theresa may have got it right.  Polls suggest that the public think on balance that being polite to the most powerful man in the world is a Good Thing, and are not as bothered as civil servants and royal advisors about the precedents and rules as to when a visit is a State visit, or just a visit.  But Mrs M, maybe next time you get the urge to entertain, perhaps leak the day before that you are thinking of inviting a mate round, just to gauge the reaction first.


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