Monday, 27 May 2013

London's New Sewer - A Hot Investment ?

London badly needs a new sewer - a super-sewer which will stop raw sewage being discharged into the River Thames when it rains hard. Add heavy rain to lots of sewage and London's Victorian sewers can't cope.

According to the Financial Times (27 May 2013), the projected "Tideway" sewer will be 16 miles long and cost a projected £4.1 billion. By way of comparison, the lowest (Government) estimate for the cost of replacing the UKs four nuclear weapon carrying Trident submarines is £15 - £20 billion.

Thames Water, the water industry regulator OFWAT and the Government want China to pay for the new sewer. China has a sovereign wealth fund - the China Investment Corporation - and it has lots of money which has to be invested.

The UK does not have a sovereign wealth fund (SWF). Only creditor nations have those - China, Norway, Qatar. Thirty years ago, when it found that it had North Sea Oil and Gas, the UK was in a position to create a future-oriented SWF from the massive royalties and taxes generated. But Mrs Thatcher decided to spend the money on tax cuts in order to ensure that Mrs Thatcher got re-elected, which she did: Britain's voters aren't interested in the long run - in the long run, they say, we're all dead. They don't say that in Norway which also found it had North Sea Oil and Gas and did use it to fund a SWF which it still has today.

Should China pay for London's new sewer? And if not, who should?

The starting point, I suppose, is to realise that in the UK no one really wants to pay for the new sewer. It's a long term infrastructure investment - and in the long run, we're all dead.

Suppose you said that Londoners should pay for a new sewer to carry away their piss and shit and stop it polluting their local river. To this, Londoners might object that since their city is full of business visitors and even more full of tourists - who all piss and shit too - then it's unfair that the cost should fall (wholly) on them.

True, many Londoners make their living out of servicing the requirements of London's visitors - but the taxes they pay on their earnings, the VAT they collect, the Stamp Duty they pay on their houses - these all go to national government not the London County Council. There isn't a London County Council.

So should the UK Government pay, since it collects an awful lot of tax from Londoners? Unfortunately, the UK government doesn't have any money and, even if it did, Londoners' taxes are earmarked for other things:

- transfers to prop up the ailing regime in Northern Ireland ( reckon a few billion a year)
- transfers to prop up the ailing regime in Wales (reckon a few billion )
- transfers to prop up Northern England ( a few billion)
- defence of the Falklands where an awful lot of bored squaddies have to sit it out (at around a billion)
- and, yes, Trident replacement where on the most conservative estimate one submarine will cost as much as 16 miles of sewer

You get the picture. Since it might be hard to persuade the Chinese to fund the submarines (though they could probably build them as well which would make it more attractive), you can see why they are being shepherded towards the shit. Probably the Chinese also believe, as we do, that where there's muck there's brass.

But if there is, why isn't the City of London agitating for a public Bond issue, free standing or linked to Thames Water, which would allow all those wealthy Londoners (and there are many) to subscribe to the cause of building the sewer which will not only carry away their shit but promise a handsome dividend on the investment?

Why not indeed? Is the problem that the Londoners are looking for short term profits? Is it that they can't be persuaded that a sewer is as good as a dot com bubble?

But that can't be the way that their  Pension Funds think, can it? Don't Pension Funds have to think long term too? So why aren't they elbowing to put their money into this wonderful project?

Answers please. Especially ones which would persuade Mr Cameron to do a deal with China on the submarines.







Thursday, 23 May 2013

Dignity and The Bus Pass

I have never claimed my Free Bus Pass, available to me like everyone else from the age of 60. At 65, if I board a bus I pay and I prefer it that way. It's more dignified. When I watch passengers of my age board , waving their Passes, I find it a bit embarassing. Where is their self-respect? It's a bit offensive too: there are  younger people sitting on every bus who have paid their fares though they are less well off than many members of the Bus Pass Brigade.

I can't think of a good reason why the state should pay my bus fares any more than it should pay my Broadband connection. I can't see any good reason for shepherding older people towards using the bus rather than using their feet or a bicycle or a car or a taxi (the latter is the best method of transport for a frail person going shopping). These are things about which we should want to make our own choices. Where did this idea come from, that older people should have their choices made for them?

I can think of very good reasons why the state should seek to ensure that those who are no longer able to work - or work so hard - should have arranged for themselves, with state encouragement and support,  adequate pensions. And I can think of very good reasons why it should provide for those who have failed to make such provision. The feckless and the unfortunate are always with us and it is too much of an Inquisition and too unreliable an Inquisition to distinguish between them.

A decent pension is the basis on which older people can retain their dignity. In preferring the Free Bus Pass to adequate financial support they have traded dignity for a second-rate freebie. The real beneficiaries are politicians who are hoping that Free Bus Passes will bring them votes - or, at least, forelock tugging. Thank 'ee, kind Sir.










Sunday, 12 May 2013

The Military Virtues: Discipline and Indiscipline

When an American President or a British Prime Minister sends in the troops to some poor and unhappy country, he or she knows for sure that some of them will loot, torture, rape and kill. Not many, but enough to turn local hearts and minds decisively against the occupying forces.

Nowadays, we are supposed to see such things as a failure of discipline. But in the past, they were often the sanctioned reward for discipline. If you fought as you were told to fight, did not run away and were victorious - then often enough your reward was a temporary licence to do as you pleased: to loot shops and homes, to rape women, and to kill anyone who displeased you.

Occasionally, the whole purpose of a military intervention was to terrorise a local population. Aggrieved by their defeat by Afghan forces during the first Afghan War in the 1830s and 1840s, Britain sent in an "Army of Retribution". It was called that and that was its task, carried out with calculating malice - troops even  pausing to cut rings in the bark of  fruit trees to destroy Afghan orchards.

In the Crimean War, permission to loot was given  both as a reward for successful campaigning and to relieve the boredom and frustration  of British troops as they camped out in uncomfortable conditions.

That the First World War involved terrorising civilian populations was a fact half-known to my generation of British school boys who all knew the words of the song "Three German Officers crossed the Rhine".

At the end of the Second World War, as is now widely known, Red Army troops terrorised German women on their march to Berlin, raping tens of thousands and killing thousands. Stalin knew and approved: in his opinion, the men must have some reward.

But much less well known is the fact that Free French troops did the same as they entered Germany from the West, not on such a large scale but causing real terror in a few towns (Freudenstadt is the one most often mentioned) where they paused to enjoy themselves. American GIs also raped, though not in the same organised fashion.

Nowadays, we are accustomed to reading about the crimes of British and American troops in Iraq and Afghanistan. Those crimes are rooted in the the way we recruit, train and deploy our troops.

Military discipline aims to ensure that troops do as they are told. It is never wholly successful - all military histories are full of accounts of troops running away and even modern armies have detachments at the rear to catch and punish them. And doing as you are told does not mean the same as doing it willingly. Troops under pressure are often tired, stressed and frightened. American troops cope by using drugs and British ones by using alcohol. Both sometimes relieve the pressure by abusing the natives even when they have not been ordered to do so.






Sunday, 5 May 2013

Niall Ferguson, John Maynard Keynes - and an Offence too Fast?

The historian Niall Ferguson is in hot water for saying that John Maynard Keynes' economic theories were influenced by the fact that he was gay and childless. This then suggests that we should read his famous statement, "In the long run, we are all dead" as an expression of lack of interest in the future - and occasioned by the fact that, having no children, he had no stake in the future. Apparently, Ferguson is not the first person to advance this idea - though he has done so in reply to a conference questioner rather than a developed essay.

If someone had put this idea to Keynes, my guess is that he might have replied, "That's interesting but I don't think it's true. After all, when I handle investments on behalf of my College, I am often thinking of the long term".  He could also have replied, "That's a bit offensive. It's like saying that because I am gay I am uncaring." A lot would depend on the tone of voice: there is some difference between a polite  "Professor Keynes, do you think your economic theories are influenced by the fact ....?" and a rather aggressive, "You only think that because you're gay and childless" (And note that "You only think that because ..." is the kind of thing which people in intimate relationships sometimes hurl at each other).

I am not sure that he would have got into a tizz and demanded Retraction! Apology! which is what has been demanded of Ferguson (who has done both).

There is something wrong with a political correctness which has only one response to a thought which it doesn't like : Retract! Apologise! Grovel! It sometimes looks like simple intolerance of difference - in this case, different ways of viewing the world.

Now I am pretty sure that different ways of viewing the world are going to be around for some time yet. Best to get over it. Some people are going to go on being wrong-headed whether you like it or not and we have to find a way of living with them. I don't think outraged Tweets are the answer. They just sound like unpleasantness to me - but then I am not a Tweeter. [ See footnote below]

Political correctness plays a vital role when it puts a stop to prejudice and discrimination which condemn other people to lives which are lesser than they could and ought to be. And over a few decades, political correctness has worked: people who were once excluded and limited by an enormous weight of false opinion and institutional discrimination are now included and free to make the most of their lives.

Ironically, some of those who benefit from political correctness promptly sign up to Conservative political parties and ghastly institutions like the Roman Catholic Church - rather as the children of immigrant refugees sometimes become vocal opponents of immigration. Am I being intolerant if I raise my eyebrows at that?

From that thought, I draw the conclusion that at one time or another, on some issue or another, we all behave like Pots and Kettles. I don't see an easy solution. But even if prudence dictates a measure of silence on some subjects, I take comfort  that - unlike Keynes - we're not living in the 1930s and are therefore free to tell Stalin jokes.

Footnote added 7th May 2013: Judith Mackrell, biographer of Keynes's wife, Lydia Lopovka, offers a reasoned rebuttal of Ferguson in today's Guardian. She points out that he was bi-sexual rather than gay, and that he and his wife wanted children. In addition, she reminds us of Keynes's self-sacrificing efforts through the early 1940s to lay the foundations of a post-war world economic order, eventually formalised in the Bretton Woods agreement. It is commonly thought that Keynes hastened his own death by overwork.