Monthly Archives: February 2014

This is what can happen when a politician sets a target without thinking about whether it has the power to meet it, never mind whether it is a good idea:

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Like many people from Edinburgh, I once worked at Standard Life. It was the summer of 2001 and I spent an enjoyable few weeks opening, sorting and delivering mail alongside a pony-tailed Australian with a fondness for somnolent afternoons. Working for the big fund manager full-time was a popular idea among my peers; it was a running joke at my school that the careers advice office should be renamed the Standard Life recruitment department. My neighbour with the nice car worked for the company.

The point of these hokey anecdotes: Standard Life is a big employer in a city where one in ten people work in financial services. I suspect most people will know someone – or know of someone – who works there. The charts below from Edinburgh City Council show the capital’s top companies by pre-tax profits (2011) and employment (2012). The latter also includes public sector organisations; Standard Life was the sixth biggest employer and the third biggest private sector employer in Edinburgh as of 2012.

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The chart below marks a moment in the history of English housing:

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In January I visited my old school in Edinburgh, where I met four pupils from its gifted and talented programme. When I asked the 12-year-olds what they had been doing that day, one explained they were rewriting fairy tales. Her friend picked up the thread; once upon a time Ariel, from The Little Mermaid, had turned Jasmine, the heroine from Aladdin, into a similarly semi-aquatic character. Jasmine drowned. This ploy was meant to clear the way for Ariel to seduce Aladdin. Unfortunately for the princess, he turned out to be gay. His marriage to Prince Charming was imminent, continued another pupil. The End.

This story would not score well on the Programme for International Student Assessment. Pisa compares student achievement in OECD countries. Its latest results have worried western governments and parents; Chinese pupils, even those from poor backgrounds, are scoring higher than most of their American and European peers. Perhaps I should be horrified that the clever kids I met were sounding more like Roald Dahl than mathematicians. Read more

In the film There Will Be Blood, Daniel Plainview, a monomaniacal oilman played by Daniel Day-Lewis, tries to lowball the Sunday family, whose hydrocarbon-rich land he covets, by claiming that he wants their acreage for quail-hunting. But Eli Sunday knows Plainview’s real intentions. He asks for $5,000, ostensibly to invest in his evangelical church. Many years later, Eli, who never received the money from Plainview, tracks the multi-millionaire oilman down in his Xanadu. Eli complains of past grievances and brings a quixotic plan for future exploration of the Sunday land.

I won’t spoil the ending but there is something – an admittedly tenuous something – of the Eli Sunday in the Scottish National party’s arguments about North Sea oil and gas. Alex Salmond’s party is right to be critical of how opportunities were wasted but it is too sanguine about what oil and gas would offer an independent Scotland. Read more

David Cameron, prime minister, has described his government’s “welfare” reforms as a “moral mission”. I support much of what the coalition is trying to do; for example, the effective marginal tax rate for people such as Natalie should come down under Universal Credit. (It could also have come down without a massive project but that is for another post.) Any government taking power in 2010 would have had to cut the social security budget.

But the government’s haughty self-righteousness is risible in the face of evidence of unnecessary suffering. The rhetoric around benefits and the millions who receive them is already toxic. We could do without the idea that pointing out problems is somehow treacherous. If you look at what the Christian leaders are saying, as this atheist has, they are careful to focus on the practical consequences of specific decisions. There was only one side talking the language of crusade last week and it was not the ones whose job it is to promote the idea of ascension. Read more

If you are an overseas investor curious about British people, or at least their property, I suggest you spend an hour watching the popular television programme Location, Location, Location. A typical episode will feature two couples, each looking for a house. At the outset, they tell us about their budgets, which are tangible, and their dreams, which are intangible but often manifest themselves through the medium of original fireplaces.

The tension between reality and aspiration, heightened by a pair of plummy presenters, makes the show. After a tour of the local market and the ritual sacrifice of an interior design fantasy, prospective buyers will find a place and make an offer, usually from a pub. Cue music. Will the owner accept the bid? Not for that price, surely? Yes! I would not say I enjoy the anxiety but, like millions of others, I cannot turn it off.

They call it reality television for a reason. Britain has mass angst about housing. Prices and rents are rising across the country, particularly in London, where growth is in double digits. In December, official figures showed that the average UK house price had for the first time risen above £250,000, or about 10 times median income. The divide in wealth between those who own property and those who do not is growing, and with it a gap between equity-rich baby-boomers and “Generation Rent”. Read more

Roger Angell is 93-years old. His body has “become sort of a table potato”. He is a “a world-class complainer”. And his essay on life as a nonagenarian is the best writing I have read in a long time. Angell gently destroys aged stereotypes about aged people, with the panache one would expect from E.B. White’s stepson. No slouch, this guy.

Beginning with his physical condition and trips to the hospital (“my human-wreckage gym”), the New Yorker writer describes life in the nineties in a way that undermines the conventional notion of ageing as decline. He is still working and, yes, loving, or at least thinking about loving. Sure, an eye is blurry and a knee is busted. But why do we think physical wear and tear means decline? Here is an old man that is living in every sense that remains possible. Decline? Try ascent.  Read more

One of the arguments made by proponents of a higher minimum wage or a “living wage” is that it would raise more revenue for the Exchequer. Higher wages would, they argue, mean higher income tax and National Insurance receipts, and lower spending on tax credits; the state would pick up less of the employer’s wage bill. It is an argument that encourages some fiscal conservatives to support a wage hike.

But the government disagrees. Read more

Alex Salmond’s speech on Monday was billed as a response to George Osborne’s rejection last week of a formal monetary union between an independent Scotland and the rest of the UK. But this formed no more than a quarter of the first minister’s speech. Mr Salmond was keener on rejecting what Mr Osborne said in 2010 (announce cuts to public sector spending) and what David Cameron said in 2013 (promise a referendum on UK membership of the EU), than what they said in 2014. Read more

In a lecture last year, Sir Nicholas Macpherson, HM Treasury permanent secretary and perhaps the most powerful old Etonian in Britain, explained the “Origins of Treasury control”. Sir Nicholas said that Treasury’s power came from three sources: conflict, links to Parliament and being able to outwit the rest of officialdom. All three were in evidence this morning, as George Osborne cited his top official’s advice and told Scots they can have independence or the pound – but not both. Read more

An independent Scotland would be refused entry to a monetary union with the rest of the UK, according to reports on Wednesday. George Osborne, Ed Balls and Danny Alexander – a Cerberus of currency doom – are later this week expected to individually reject the Scottish National party’s proposal for a formal sterling union. I do not know whether this means a monetary union would be ruled out under any circumstances – but words being used by those involved in the interventions include “definitive” and “emphatic”. So far, the chancellor has said that a monetary union would be “very difficult”. Read more

“Equality of What?” asked Amartya Sen in 1979. The question pithily captures the defining debate of the political left. On Monday evening, in his Hugo Young speech, Ed Miliband gave an answer to Sen’s question: (nearly) everything. Read more

Of course, the most important chart for this particular episode is not one showing Defra spending but the one showing average rainfall. Nevertheless, I find the story of flood defences indicative of the coalition government’s approach to public spending.

Here, as in other areas, it seeks to make up central government shortfalls with local or private spending. This might be a perfectly sensible or unfortunately necessary idea but it is disingenuous to present it as increased government spending. Flood defence spending also looks like a good case of a missed chance for public investment. Read more

The UK energy secretary has written to the energy market regulator and the nascent Competition and Markets Authority – two of the three institutions reviewing competition in the energy market, an area of intense public and political interest – suggesting that Centrica is making too much money in its domestic gas supply business. Read more

Frey and Osborne’s work knowingly complements The Second Machine Age, a much-cited book by Erik Brynjolfsson and Andrew McAfee. Brynjolfsson and McAfee argue that “computers and other digital advances are doing for mental power … what the steam engine and its descendants did for physical power”.

If the various authors are right, then many of the assumptions regarding how labour markets will change are wrong. This could have major consequences for economic and social policy – and for politics more broadly. Read more

The Scots who have yet to make up their minds ahead of September’s referendum are the most important people in Britain. They will decide whether the 307-year old political union will come to an end. In the third of our videos for the FT’s Scotland series, I tried to figure out who they are and what they want.  Read more

At times it can seem there are more data released on Scotland and independence than there are caramel wafers made by the Tunnock’s factory. Below are some of the charts I find most useful when thinking about independence. I have pulled them all together here. The last two charts are almost certainly the most important. Read more

The FT’s “If Scotland goes” series includes three short videos. In the first, I looked at the changing nature of Scottish nationalism. The second, available below, considers whether the pro-union campaign is making enough of an emotional case; Better Together has focused on practical issues ahead of the independence referendum.

This is perfectly sensible: the economy is the most important issue in the referendum. And when asked by pollsters, Scots typically express a dual identity, feeling both Scottish and British. Still, travelling around Scotland, I could not help but notice the enthusiasm gap between nationalists and unionists. Read more

One Sunday last year I was walking through London Fields and a pretty couple stopped and asked if I would like to buy some Camembert. They had a bicycle and a basket and a baguette and French accents. I have been offered more exotic bootleg goods in Hackney but this was a pleasant, if suspiciously stereotypical, reminder of the growth in London’s French community. Read more