Déjà vu all over again

From time to time, ministers decide there is too much government, and too many civil servants and costing too much. Civil servants are not allowed to publicise their opinions but, if they did, they would suggest, respectfully of course, that government does indeed need improving but the problem lies with the ministers who are wholly untrained for their roles and do not stay in post long enough to learn them. They do not really know what they want, what is achievable or how to get it. Most could not run a bath, never mind the country.

This quote from the Civil Service Commission may ring a bell: “About 380,000 people work for the UK’s Civil Service. However, this number is expected to drop in the near future as a result of the Government’s effort to reduce public spending. But besides reduction of the expenses through smaller size, the Civil Service reform also foresees far reaching changes of its structure and organisation in order to make it more efficient yet remain one of the nation’s best employers.” The date? 2012. The number of civil servants eight years later? 456,410 and it has grown since. The last government announced a cull to pre-Brexit levels, namely by 20%, or even 40% in some departments, by 2025. The total reduction would number 91,000. The civil service unions took a dim view of that and muttered about cuts to public services and strike action. A Times readership poll of 10th June found 55% of its readers in favour of the cuts and 45% against.

Whilst there are indeed an excessive number of civil servants, the lack of ministerial competence, or perhaps training, is just as big an issue. Future chiefs of the armed forces attend Staff College, or the equivalent, to prepare them. A new minister, by contrast, arrives at his desk with no training whatever. There is no college for future ministers but there should be. Their senior colleagues may give them a few tips but they have never been trained either. How many can explain the difference between an executive agency and a non-departmental public body (NDPB)? Or know that NDPB employees are not civil servants at all? Realism should be top of the syllabus for this ministerial college. According to its 2021/22 annual plan, HM Treasury’s three priority outcomes were:

“1. Place the public finances on a sustainable footing by controlling public spending and designing sustainable taxes;

2. Level up the economy, ensuring strong employment and increase productivity across the regions and nations of the UK; and

3. Ensure the stability of the macroeconomic environment and financial system.” [5]

They are ludicrous because they are unquantified, too broad and beyond the remit of the Treasury. How, exactly, are their desk-bound 2,042 staff (2021/22 annual report Figure 1B) going to increase productivity UK-wide?

Each government department’s annual plan should have realistic, achievable and quantified targets and be discussed with the relevant select committee before the year begins. Before the summer break the following year, the department’s annual report should be reviewed at a meeting of the relevant ministers and select committee. Performance should be compared with plan and prior year.

Second on the syllabus should be arithmetic. It is astonishing that the Cabinet Office does not know how many it employs: recent estimates vary from roughly 2,000 to just under 13,000.[6] And the new Chancellor of the Exchequer, when Business Secretary, had plans for energy that, concerningly, did not add up.

Third on the list should be staff alignment with objectives. Executive agencies exist to deliver policies, leaving policy-making and legislative matters to the departmental central core. NDPBs have the ambiguous status of being independent and not independent at the same time. They should be converted to executive agencies if their objectives are essential and closed if not. The importance of assigning the relevant teams to executive agencies, whatever the contrary advice of civil servants, is that it greatly enhances of delivering the objectives.

In short, reducing the size of the civil service whilst improving the quality should be accompanied by formal training for would-be ministers in how government works now and how it should work in the future.

We tend not to believe in grand theories

And yet there’s the beginnings of an interesting idea here:

I can’t help thinking that we have undergone a reverse transformation in cultural attitudes over the past generation or two, and the past couple of decades in particular. We live in a society where the political virtues of long-term planning and strategic patience have been replaced by an obsession with the here and now.

We tend not to think that the long term is a political virtue. We think that’s a failure in fact. For:

When the lights go off this winter, it will finally dawn on everybody that neglecting our energy requirements for the best part of three decades was probably a tad unwise, all things considered. You can put it down to the short-termism of our political system, or just to immense and consuming stupidity on the part of successive governments. Either way, because the need for a few dozen nuke plants did not seem imminently pressing in 2001, say, nobody was minded to order them to be built.

We could call into evidence Nick Clegg’s comment in 2010 that there’s no point in new nuclear as it won’t come online until 2021, 2022 or so.

Or, we could look at water systems, Jackson Mississippi:

“The nature of local politics is that city governments will tend to neglect utilities until they break because they’re literally buried,” he said. “One of the things that is a perennial challenge for governments that operate water systems is that the quality of the water system is very hard for people to observe. But the price is very easy for them to observe.”

We could even connect that to why the British water systems were taken out of direct government control. Because while government could, in theory, allocate the societally optimal amount of capital to their maintenance and upgrade, they didn’t. There was a vast backlog of repair to be done and looking forward vast bills for the desired rising standards. Government simply wouldn’t allocate that money - paying off the diversity advisors was always more important.

Government simply isn’t good at long term decisions because politics gets in the way. The only proof of that contention we need is that capital investment in the water system rose after privatisation. If government had previously been allocating the optimal amount then that could not have been the result now, could it?

We are willing to listen to the Stern analysis of discount rates. Market interest rates leading to effects many decades out carrying near to no weight in current decision making. But the solution that therefore government should be making those long term decisions seems suspect to us. For as the evidence before us insists, the government - driven as it is by politics - decision making horizon is even shorter.

Don’t forget, the Coalition seemed to think that a decade was beyond its planning horizon, as per N. Clegg. While the longest planning horizons on the planet seem to be in the large mining and fossil fuel companies - they’re regularly looking at projects with 30 and 50 year lifespans.

So, why has society become more short termist, why do we have supposedly strategic decisions made on those short term grounds? Because the political horizon is always the next election, even if that. So, the more that long term, that planning of the future, is devolved to politics the shorter term the horizons becomes.

As we say we’re usually not entirely convinced by grand theories but this one does seem to explain the world around us and also accord with Occam’s Shaving Kit as a method of analysis. Politicians are short term beings therefore decisions made by politics will be short term.

That also then provides our policy solution. Stop the government from making the plans and return them to those entities with the longest planning horizons of all human institutions. The players in the markets. Something which has one grand virtue. If market players get it wrong then they lose all their money - at least eventually. Until we institute a system of stealing back political pensions we’re not going to gain that similar long term feedback mechanism, are we?

Folk don't value things that don't have a value to them

A little bit of basic human nature here. We - or perhaps the greener type of environmentalists - can squeak all we like that the rainforests are unpriceable, beyond mere monetary value, priceless in fact. That it’s not in fact us either living in them, chopping them down or not doing so means that our evaluations of their worth are meaningless.

It’s whatever value is ascribed to them by those interacting with them that matters. And if, just as an example, you are trying to live on $600 a year’s worth of consumption - about right for much of central Africa - then clearing that next acre of forest for a few crops of maize looks worth doing, whatever the effects upon water levels in New York harbour next century.

To stop the clearance, to preserve that priceless forest, it’s necessary for that acre to be worth more as forest than maize. And worth it to the individual standing there about to make that decision to slash and burn or not. On the entirely logical grounds that the slash and burn decision is being made by that individual thus it’s the incentives faced by that individual that determine which way the decision goes.

The president passed tough pro-environment legislation, jailed ivory smugglers, kicked out illegal loggers but, crucially, also allowed businesses land for sustainable activities, including palm oil production and legal logging as long as processing was done in the country. This attracted criticism from the purists who want no interference with nature.

“To save the forest, you have to be able to exploit the forest,” White, now 57, said. “We have to encourage the private sector, only by giving the forest value will people then ‘value’ it. It is all about management.”

Yes, obviously.

This idea that we need to value, in monetary terms, the environment around us is not some excresence of late stage capitalism nor an irruption of neoliberalism. It’s a simple observation of human nature. The money is just the method of counting, the underlying point is that people will do what benefits them, in their view. So, to preserve that environment it needs to be worth more to those there, at that time and place, than not.

Forests will be preserved where they’re worth more to the local peasantry than a few years of runty corn. Which means that late stage capitalism, all that irrupting neoliberalism, of course. For that’s the way that forests to gawp at are worth more - because everyone’s off doing indoor work, no heavy lifting - than a subsistence diet for a family.

It’s not because capitalism that we put a money value on the environment, it’s that putting that value upon it provides the justification for the economic development which capitalism - uniquely - brings about.

The UK already doesn't subsidise fossil fuels

We will, as sure as eggs is eggs, have someone popping up to shriek that Britain must stop subsidising fossil fuel consumption:

Global fossil fuel subsidies almost doubled in 2021, analysis finds

Support amid huge industry profits is a ‘roadblock’ to tackling climate crisis, says International Energy Agency

It is, quite obviously, an odd thing to do, subsidise fossil fuel usage if you’re trying to reduce fossil fuel usage. So, we shouldn’t be doing that, equally obviously.

Global public subsidies for fossil fuels almost doubled to $700bn in 2021, analysis has shown, representing a “roadblock” to tackling the climate crisis.

Despite the huge profits of fossil fuel companies, the subsidies soared as governments sought to shield citizens from surging energy prices as the global economy rebounded from the Covid-19 pandemic.

Most of the subsidies were used to reduce the price paid by consumers.

It’s that last sentence which is important here.

We’ve had, as a major theme here for many years, an insistence that how you count what you count matters. Further, to understand what is being counted you’ve got to delve into the details - otherwise you’ll be making all sorts of idiot errors.

There are two - both arguable in themselves, but very different - ways of counting fossil fuel subsidies. One is the one that gives us that $6 trillion number sometimes bandied about. That is totted up by deciding what should be the correct level of taxation to start with. So, the externalities of fossil fuel use - CO2 emissions, particularate emissions, congestion, accidents, the kitchen sink - and claim as a subsidy any price that doesn’t include all of those. Britain, amazingly, does charge near exactly the right amount for all of those on regular petrol and diesel. Further, if there’s a VAT then energy must pay the full whack of VAT. This makes the 5% domestic energy rate a subsidy in this sense.

Well, OK, it’s arguable but that’s what the measure is.

Then there’s this method of counting here, which gives us this $700 billion. That’s direct subsidies to consumption. Not variances from some theoretically pure system of taxation but actual cash handed out to make energy cheaper for consumers (whether domestic or industrial). Britain does not do any of that.

We can track that from the press release, the website, the database and then the country report.

So, we’re going to have the usual talking heads popping up to insist that this $700 billion number proves that Britain must stop subsidising fossil fuels. By their comments ye shall know them - those saying such will be ignorant. Because by this measure, this $700 billion, Britain already does not subsidise fossil fuels. We’ve already stopped doing it.

Should'a gone fracking

We tend to disagree with Michael Marmot, even in his uses of the words “and” and “the”. He has a new report out today which needs to be addressed though:

Both “cold” and “poor” will contribute to worse health and greater health inequalities. It is a humanitarian crisis. One that will not be solved by tax cuts or removing levies that favour green energy, as seems to be the “solution” proposed by our likely next prime minister. We need to act on the immediate crisis, but we also need to ask how we got here, and what to do to solve the problem of fuel poverty, and its effects on health inequalities, in the longer term.

Well, yes, that seems to be something that could be addressed by having cheap energy.

Economists from Paul Krugman to Paul Johnson to Torsten Bell have solutions, going beyond conventional economics, of what we need to do to fix this winter’s looming crisis. Now, though, is also the time to deal with the longer-term problems that led us here in the first place.

That also seems a reasonable enough goal. Just what is to be done?

Households in Britain will see their spending power cut by an average £3,000 by the end of next year unless the new government acts to counter the biggest drop in living standards in at least a century, research has indicated.

Adding to pressure on Boris Johnson’s successor as prime minister to tackle a worsening cost of living crisis, the Resolution Foundation thinktank said soaring energy bills would cut household incomes by 10% and push an extra 3 million people into poverty.

Household spending power isn’t to be cut by such numbers at all. Rather, it’s to be diverted, to pay for fuel not other things. But the same solution suggests itself - if energy were cheap then we’d not have this problem.

So, where is energy cheap and they don’t have this problem? That would be the United States of course. And what’s the big difference in energy policy between the US and the pair of the UK and continental Europe? The existence or not of fracking, equally of course.

So, we solve the problem of the poor and huddled masses by doing as the US - or, as we’ve been saying these years, Should’a Gone Fracking.

Prices work, no, honestly, they do

Energy is higher in price now than it was last year - people are changing their behaviour:

The owner of Kleenex and Andrex is to power its lavatory paper factories using “green” hydrogen as Russia’s invasion of Ukraine pushes natural gas prices to record levels.

Kimberly-Clark will buy green hydrogen made from wind and solar power as part of a deal with renewables company Carlton Power for its factory in Barrow-in-Furness in Cumbria, which it claims will reduce its reliance on natural gas by 30pc.

Whether that’s entirely the way to go we’ll leave to Kimberley-Clark to work out. But it does show that changing prices changes peoples’ behaviour.

Equally, there are now those predictions that some vast majority of the population will be in fuel poverty this winter - spending more than 10% of household income on heating. They won’t be of course. For behaviour will change. Heating will be turned down - perhaps as far as was commonplace half a century ago when central heating was still a novelty - because prices change peoples’ behaviour. Don’t forget, that definition of fuel poverty is not what people do spend, it’s what they would spend to reach a certain level of heating.

The aim this past couple of decades has been to try to change peoples’ energy consumption - in both type and volume. We’ve been told that this all hasn’t been happening fast enough, that there must be more plans, more intervention, to make it all go faster. Now here we are having changed prices and we’re getting a tumbling rush to change type and volume of energy consumption.

As we’ve been saying all this time it might well have been simpler to use prices - for as we can see they work - all along. Rather than the planning which has led to this emergency surge we could have had a gentle and far less disruptive change over time. Not that this is just us, it’s the same thing the Stern Review said, it’s what Bill Nordhuas got his Nobel for pointing out.

If you want to change what everyone does then change the thing that everyone faces - prices.

The only mystery left is why everyone in power entirely ignored the science on this subject.

Sumptuary laws and the asparagus firing cannon

There’s a little tale - which we admit we can’t quite nail down right now - about the plethora of cutlery that sits upon an aristocratic dinner table. It doesn’t actually matter in the slightest which knife, which fork, is used to do what - nor even that they fire their asparagus at each other from cannons. What does matter is that they know and you don’t. That makes them inside the group, you outside it and that’s the purpose of the enterprise.

Still, nothing that can’t be solved by Madame Guillotine or by good manners (we are reminded of Prince Phillip eating with his fingers so that Lady Tebbitt did not feel awkward) but then those latter are rare enough.

But - the point is the definition of the ingroup and the outgroup.

At which point modern fashion:

But this is changing. With circularity now a cornerstone of mainstream strategies toward sustainability, consumers and brands are looking at clothes through a new lens. Circularity is focusing attention on the longevity of a garment’s appeal and its value in the future resale market. This is a radical departure for the value system of an industry that has historically hero-worshipped brand new clothes – preferably with tags on, and tissue-wrapped – and has tended to dismiss as irrelevant to the fashion conversation any clothes that have already been worn.

The history of capitalism can, in fact, be seen in clothing. As has been remarked we know that QE I had a pair of stockings, the day she received them is in her diary. It was capitalism that allowed the mill girl to also have a pair or two.

Fast forward to today and pretty much anyone can have a new outfit - of a type, to be sure - for an hour or two of work. New clothes simply do not work as a marker of distinction, of being part of the ingroup. It really is only very recently indeed that the wearing of the same outfit to a “do” or two was regarded as the most unfortunate gauchery. A new outfit for each was a minimum requirement of being fashionable. We even recall - and it really was only in recent years - breathless articles about how Kate or the like had “recycled” an outfit by wearing it more than once.

If everyone including the proles can have new clothing whenever then fashion isn’t performing its duty - of marking that ingroup and that outgroup. So, the definition of what is fashionable must change in order to preserve that function. Which is exactly what is happening.

One group arrowing in from one side wants to ban “fast fashion” in a modern version of sumptuary laws. Stop the proles from having access to cheap new clothes so as to preserve the distinction. From the other direction comes this insistence upon sustainability - change what fashion means away from having new clothes. For no other reason than that the proles can have new clothes so the marker of distinction has disappeared.

They’re firing asparagus at each other from cannons for no reason other than to mark that distinction between ingroup and outgroup. The rest of us should probably just leave them to it, pay them no mind. We can get on with enjoying what capitalism hath wrought, a world in which copious clean and new clothes are available to the entire population. It has, after all, taken us many millennia to get here.

This is not how competition works, no, really, it isn't

Certain examples of childcare cost vast fortunes:

More than 20 councils in England and Wales have paid the equivalent of £1m a year or more to place a single child in a private children’s home as the cost of specialised care soars, data released to the Guardian shows.

The reason?

The most costly placements were to look after some of society’s most vulnerable children, often at very short notice. Some were as young as 12 and needed four staff watching them 24 hours a day. Many had issues of serious self-harm and of hurting their carers, and in some cases a judge had authorised for them to be locked up in a secure home.

These children, deemed a risk to themselves and others, qualify for places in secure children’s homes, all run by the state or voluntary sector. But there are now only 14 of these specialist therapeutic institutions in England and Wales, not nearly enough to match the need. On any given day, approximately 50 children are waiting for a place, according to Ofsted, the inspectorate.

Children who cannot find a place in a secure children’s home are usually detained elsewhere, often in flats or other accommodation with large teams of agency staff.

Vast resources of labour and time are dedicated to caring for these very children. That’s why it all costs so much. But what is being blamed for these costs?

However, profiteering is a growing concern for us

Well, no, that’s something that needs to be proven, not something that is to be assumed. Show that having state owned, state run - perhaps council owned, council run - facilities at the margin are cheaper. At the margin because this is the margin. These costs are paid for those who could or possibly should be in those voluntary or state run homes but are not given a lack of capacity. When capacity becomes available they are moved into them.

This is all about the edge cases - the margin.

All of which being exactly the sort of information we don’t think we’re going to get. For on this same subject The Guardian has another piece in which we are told:

“But I think part of the competition in this market has meant that basically a provider can charge what they want and it may or may not relate to the cost of caring for the child.”

No, really, that’s not how competition works. That’s the effect of not enough competition. not of the existence of it. And if the people totting up the costs are going to get things so badly wrong then what weight would we put on anything else they say about costs or institutional structures?

What we need to know is what is going to be the cost of expanding those not-for profit homes some capacity of which - this is talking about the margin, recall - will go unused at times? Is this more expensive, to have fully staffed and funded capacity sometimes to often unused, than paying hiring fees on the outside market sometimes?

For if we don’t ask the right question we’ll never get the right answer, will we?

At least it's in the open now

Sir Ed Davey:

In 2012, he introduced a strict regulation that means companies have to halt work if they trigger tremors over 0.5 magnitude.

Shale gas firms have said commercial fracking cannot take place under the rule. Appearing on Channel 4 in 2019, Sir Ed said the rule had “actually meant that the fracking industry has not developed in this country at all”.

“I’m very proud that you’re looking at the person who basically stopped the fracking industry in this country,” he added.

The rule was there - is there - in order to stop fracking. Not because that level of quake or tremor is actually important, but in order to stop fracking. Therefore, if we do wish to have fracking - something we think we should at least - then there’s no problem with overturning this rule. Because it’s only there to stop fracking, not for any reality-based reason.

It’s also possible to mutter about delusion:

In the same interview, he said fracking was not needed because of the “success of our renewable policy, particularly in offshore wind, means we’re not going to need anywhere near the amount of gas we did before”.

If this were true then we’d not be having the current little problems now, would we? That we are having the current little problems tells us that this statement is not true. And beliefs that fail in the light of reality are indeed known as delusions.

Sir Ed told The Telegraph he stood by what he had said in 2019, saying: “Fracking across Britain’s countryside would not mean lower heating bills as gas prices are set internationally and would not provide energy security now or in the long term.

And if that were true then the American natural gas price, driven by fracking, would not be a fraction of the UK or the varied European (there are many different European gas prices and yes indeed, they differ) ones.

So, we seem to have energy policy based upon a series of delusions. Any wonder that we have problems with energy policy?

Isn't this a problem that requires a solution?

The private schools have been taking the mickey out of the education system - so some say:

What does the dramatic fall in GCSE grades tell us? That private schools were gaming the system

We also seem to have a problem of bias - unconscious or not - in those who teach:

Unconscious bias in marking could be contributing to the underperformance of children from poorer backgrounds, researchers have suggested.

Teachers were more harsh in their grading of students from a lower socioeconomic background, a study from the University of Sussex appeared to show.

Those behind the study insisted it was not an “attack on teachers”, but rather should be used “as a mandate for educational institutions to better support teachers” with training to mitigate potential biases.

The findings, based on an experiment with 416 teachers, found a grading difference of 4.4 percentage points being awarded to those of higher and lower socioeconomic status.

None of us - well, all those other than the parents of richer but dimmer children - want the system to be this way. While many won’t go with the modern liberal insistence upon an equal outcome for everyone we do think we could find a solid majority for the old-style liberal ideal of at least all being judged by the same standards.

The dual accusation today being that this is not what is happening. Therefore we need a solution.

One does occur. Grading, that sorting into academic sheep and vocational goats, could be done by a double blind test. Something external to the organisations doing the teaching, against some known and set parcel of standards. Those doing the grading not knowing where the test comes from, those taking the test not knowing who will grade.

That would seem to solve the problems being complained of. All that’s left is to work out a name for this new system. Given that it is to examine the performance of the pupils, against some set and sacrosanct standard, we propose the portmanteau “examination”.

Who knows the system, if not the word, might catch on.