Who gets the benefits of technology?

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Politicians from those increasingly pea-in-the-pod parties, the Tories and Reform Ltd, have come up with a solution to the strike by train drivers on the London Underground: replace them with technology. Well, when I say ‘solution’, I (like them) am obviously referring to future strikes rather than the current one; whether the cost of automation is the £10 billion claimed by Sadiq Khan or some arbitrary lower figure pulled out of Farage’s flat cap (clue: based on historical trends in public infrastructure, Khan’s figure is almost certainly an underestimate, not an overestimate), it would take years to implement. The suggestion might generate the odd headline, but it’s not going to address the immediate dispute.

Promising to replace anyone who goes on strike with technology is an ‘interesting’ approach. Not only is it likely to be extremely costly, but (unless alternative jobs appear somewhere else), there is at least an outside chance that it adds to the numbers of unemployed people claiming benefits. They haven’t been imaginative enough though. Many of those whose journeys have been disrupted are commuters travelling to and from work – if they were replaced by technology, London wouldn’t need the trains at all. Maybe I shouldn’t give them ideas.

Whether in response to the disruption caused by strikes or not, it is clear that technology will eventually replace humans in a number of roles, and sooner or later, that is likely to include the introduction of driverless trains. Fans of automation like to claim that replacement of vast swathes of the working population by robots, computers and AI will actually create new opportunities, pointing out that that is what has always happened with new technology in the past. Perhaps they’ll be proved right, but the fact that it’s happened previously isn’t always a good guide, and even if it does, there’s likely to be a transitional period during which new jobs may not match, in terms of numbers and skills, those destroyed. One of the long-promised advantages of technology has been the idea that humans would have more time for leisure and cultural activities rather than being bound to a rigid timetable laid down by their bosses. Whether that’s ever achievable depends in large measure on how the benefits are shared. The omens are not good; as things stand, benefits are likely to flow to the richest rather than the no-longer-needed workers.

But, just supposing for a moment that we collectively decided that the benefits should be more widely shared, how might such a reduction in the need for workers be managed in a mutually acceptable way? One way of doing that might be through a gradual reduction in working hours without a reduction in pay running in parallel with the introduction of more and more technology. We can assume that capitalists and their political representatives will resist that all the way, as they have always resisted the idea that workers, not just capitalists, should benefit from innovation. By coincidence, it’s worth noting that at the heart of the current dispute on the London Underground is a demand for a reduction in working hours to 4 days / 32 hours per week with no cut in pay. Seeing the introduction of technology (and sacking workers as a result) as an alternative to that, rather than a potential complement, tells us a lot about the nature of the battle still to come over sharing the benefits of technology.

Maybe we need a 'bad chaps' theory of government

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In a plot twist so obvious and predictable that even Nadine Dorries would have avoided writing it, it has emerged that former PM Boris Johnson appears to have been using the public funds allocated to his office, alongside his contacts made whilst in office, to enrich himself. Yawn. Labour’s Margaret Hodge declared that the reports suggest that “Boris Johnson is prepared to break the ethical standards of behaviour” (yawn again) and appeared to have acted “with complete impunity” (double yawn). From a man who has gone through life ignoring all rules and doing as he pleased to satisfy his own needs and desires, none of this is a shock or even a mild surprise. None of which stopped the Lib Dems’ Cabinet Office spokesperson Sarah Olney from declaring that “These allegations are extremely shocking”. Anyone genuinely shocked by these allegations would probably also be surprised to discover that the Pope is a Catholic. Even the Lib Dems can’t be that naïve.

The Guardian’s report also states that: “Revelations from the Boris Files will place pressure on Johnson to explain how some of his recent contacts with foreign governments on behalf of commercial interest fall within the rules”. No they won’t. This is a man completely impervious to pressure or criticism, and who adheres to the Mary Poppins maxim of never explaining anything. In this case, the ‘rules’ he has broken appear to be both unwritten and unenforceable. All the revelations really prove is that the ‘good chap’ theory of government only works when those involved are ‘good chaps’. But there is no mechanism for ensuring that they are – or for dealing with those who aren’t. And we already knew that.

Orthodoxy was always the intention of the OBR

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Criticism from within the Labour Party about the remit and actions of the Office for Budget Responsibility and the slavish adherence to its conclusions by the Chancellor is long overdue. It’s a pity that it’s taken an accidental slide into an election for a new deputy leader to wake anybody up, but no sooner had Haigh launched the mission than she declared that she was not going to be a candidate. Whether it was never her intention or whether the campaign was halted before it got going by the stitch-up giving candidates just days to collect 80 supporters from among the party’s MPs is unclear. Paradoxically, the fact that the attack on financial orthodoxy is no longer associated with an internal leadership election might make it easier to take it seriously. Candidates for internal elections in the Labour Party have traditionally argued from the ‘left’ to attract the votes of the members, only to end up moving to the right once elected. Sir Starmer is a classic example of the genre.

I don’t agree with Haigh’s definition of the problem in terms of the OBR having been “Originally created to provide an independent check on economic forecasts and help policymaking” or that it “has morphed into a gatekeeper of orthodoxy”. It has always seemed to me that it was a deliberate trap set by George Osborne as some sort of insurance against a future Labour government, and that institutionalising (Tory) orthodoxy was its main aim from the outset. The enthusiasm with which Labour ran into the trap was astounding. Some have interpreted recent appointments by Sir Starmer as an attempt to undermine his Chancellor, but those he’s appointed seem almost to be even more steeped in orthodoxy than Reeves herself: more about keeping her on the narrow track and reinforcing her view of economics in 10 Downing Street than undermining her.

Other than that faulty analysis of how we got to where we are, Haigh makes some very good points. Her claim that “It is beyond comprehension” that the Bank of England is paying interest on central bank reserves to commercial lenders echoes a point that a number of economists have repeatedly made – and there are plenty of examples of other countries that do not make such payments. At a stroke, not making these payments (or even just reducing the entirely arbitrary interest rate paid) would ‘save’ up to £40 billion a year, and make a big difference to the government’s income and expenditure accounts. The only reason for not changing this is a Chancellor and PM who are utterly wedded to the ‘household analogy’ for government accounts and think that austerity and a small state are really good ideas.

Sadly, someone holding views such as those expressed by Haigh would be extremely unlikely to be elected as Labour’s deputy leader, even if she were to stand; and, either way, her influence on government policy from outside the cabinet (and there is little chance of Sir Starmer appointing the winner of the contest to his cabinet, with the position of deputy PM already neatly sewn up) will be small. Not enough to change the narrative and approach of her party’s leadership, most of whose MPs seem quite content to continue down the road of facilitating Farage. They are far too comfortable languishing in the trap which Osborne laid for them.

Upping the stakes

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President Trump has been widely (and justifiably) mocked for his promise to reduce the price of medicines in the US by up to 1,500%. It’s an illustration of his somewhat shaky grasp of elementary mathematics, although I suppose it helps to explain how he managed to bankrupt casinos. By and large, UK politicians have not shown themselves to be quite so mathematically challenged as Trump, and the argument about the extent to which immigration should be allowed has largely stayed on the positive side of zero. Until last week.

Robert Jenrick has now attempted to trump Labour, Reform and his own party by calling for a ten year period in which net migration to the UK should be negative. It’s a reduction of more than 100% in the level of immigration, even if it’s not yet quite in the Trumpian league of 1,500%. Give him time. But given what we know about the falling birth rate, he is effectively demanding that the population of the UK should be cut as a deliberate act of government policy. To say that it puts him somewhat outside the normal range of political consensus is an understatement: other politicians (including both Farage and Badenoch) have recently been calling for measures to increase the birth rate to tackle the potential problems associated with a declining population (even though that rather ignores the fact that using an increased birthrate to fill gaps in the UK economy has a rather lengthy lead time). But being outside the consensus is probably what he’s after.

The consequences of a falling population would be significant, not least because those being driven, or encouraged, to leave are likely to be of working age and therefore making a positive contribution to the productive economy. Unless, of course, he wants to offer incentives – which an increasing number of us might even be willing to consider, with madmen like Jenrick and Farage in danger of leading a government – for UK pensioners to emigrate. I suspect not, however: something tells me that predominantly white UK-born people aren’t the ones he wants to get rid of. He hasn’t yet offered a solution to that economic conundrum, and probably won’t. Not only because there isn’t a simple one, but also because spelling out the consequences might somewhat undermine the blatant appeal to prejudice.

It would also be seriously at odds with the rest of his political philosophy. Actually, a reduced population would not, in itself, be an entirely bad thing, ignoring for a moment that merely moving people from one country to another doesn’t exactly achieve an overall reduction. It would reduce the demand for finite resources which is hardly a poor idea, but it would also require a significant rethink in the way the economy works to ensure that economic benefits are shared more equally rather than being increasingly concentrated in fewer and fewer hands. That, or force an increasing proportion of the population into poverty, which is not an obvious election-winning strategy, particularly if the deliberately-impoverished come from the voting demographic being wooed by his rhetoric. As they inevitably would. We shall have to see who will attempt to out-compete him, by assigning a hard number to the target for exporting residents in a government-sponsored people trafficking scheme. The way things are going, I wouldn’t put it past Labour to open the bidding.

Papers, please?

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There are some advantages to the idea of issuing ID cards to all, but unsurprisingly they’re not necessarily the ones which advocates use, nor are they as easily implemented as those advocates have suggested. The sort of electronic ID which is being mooted could make it easier for citizens to access government services, depending on how it is implemented. They could make it easier to prove identity when seeking credit, or buying age-restricted products. They also have some potential advantages in policing, although that only works if people are obliged to carry them. It is precisely that potential obligation to carry them which raises concerns for many, as well as carrying echoes of an unpleasant past. There’s a practical obstacle as well: whilst most of us do have smartphones these days, not everyone does, and even those who do don’t always feel it essential to carry them at all times.

One of the more novel reasons suggested this week for implementing ID cards is that it would allegedly help to reduce the ‘pull factor’ of the UK economy, which means that the UK apparently attracts migrants because they find it easy to get work in the black economy. To say that I’m unconvinced about the logic of that would be an understatement. If people are able to get work in the black economy without a NI number and without paying PAYE, then what exactly is the mechanism by which the need to have electronic ID changes that? An employer prepared to take on a member of staff without that person demonstrating the right to work in the UK is no more likely to demand to see an ID, whether physical or electronic, than (s)he is to demand a NI number. It’s called the black economy for a reason.

I’m not a huge fan of the idea of ‘British values’, largely because I’ve never seen a clear definition of them which is anything like uniquely British nor which comes close to matching the observed values of those who claim to espouse them. But given that they are supposed to be a thing, to the extent that I understand what that thing is there’s something very un-British about any move towards a ‘Papers, please!’ type of society. And there’s something very dishonest (another breach of those same values?) about a claim that doing so will reduce migration. Authoritarians always want more control over citizens, and this looks like another attempt to get that, using whatever short-term crowd-pleasing argument comes to hand.

We shouldn't be driven by speculators

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The market for government bonds works in what looks to most of us a very strange way. Despite the newspaper headlines about rising interest rates, the interest rate is actually fixed for the whole term of the bond. What appears to make the interest rate change is that the bonds can be traded, and the price at which they are traded doesn’t necessarily bear any relationship to the amount which the government accepted into savings when it issued the bond or the amount which it is obliged to return to the saver when the bond matures. So a £100 bond issued at 3% for 30 years will cost the government £3 a year in interest, and the government will refund £100 at the end of the term. In the meantime, that bond may have been bought and sold many times at varying prices: for anyone buying at less than £100, the interest rate will look higher than 3% and for anyone buying at more than £100, it will look lower than 3%. But, to the government, it is always £3 per year. For any new bonds, the government might need to match the apparent interest rate being paid on existing bonds, but changes in the bond market price do not and cannot affect the cost of existing commitments.

It means that headlines about rises in the rate of interest increasing the cost of ‘borrowing’ and putting huge additional pressure on the government can be misleading. They only increase the cost of ‘borrowing’ on any new bonds issued, not on all bonds currently in existence, although one wouldn’t necessarily understand that from the headlines. There are a number of factors which have pushed the rate for new bonds upwards, not all of which are in the control of the Chancellor. Many of them are part of global rather than local trends. The extent of the impact of the required higher rates depends on whether, and to what extent, the government is obliged to issue new bonds to cover its spending. The Chancellor and government choose to believe that they have no choice in the matter, a conclusion which pushes them inevitably in the direction of austerity and/or tax rises, which just happens to suit their own ideological view. It isn’t the only view, though. As Professor Richard Murphy points out, the government could simply stop issuing bonds and wait for the price to fall, as it inevitably will.

Murphy isn’t alone in challenging the tyranny of the bond markets. There was a letter from another professor in Wednesday’s Guardian addressing the question of bond markets very succinctly. To quote Professor Kushner, bond traders “…strive to reduce long-term stability to short-term volatility in order to multiply transactional opportunities”; in other words the price (and therefore the headline interest rate) is very largely being driven by gamblers and speculators out to make a quick buck rather than by investors making long term decisions. A half-decent Chancellor would seek to isolate us from, rather than fall into line with, the interests of such casino capitalism. It really is time to challenge and smash the hold which these people have on economic policy rather than allow them to cripple the ‘real’ economy in which most of us live in order to satisfy their greed and selfish interests.

Starmer, Amazon, and cats

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Fast, efficient and effective delivery isn’t an entirely unworthy objective of an organisation, as Amazon would attest. It’s certainly better than failing to deliver. So Sir Starmer’s promised obsession with delivery isn’t as entirely vacuous as some have suggested. There is, though, another parallel with Amazon: as long as they receive the punter’s cash and deliver the box, they don’t really care a great deal what’s actually in the box. It could be anything, anything at all; they really don’t care. Sir Starmer seems to be on the same path: what is to be delivered is incidental to the fact of delivery. Where Sir Starmer and Amazon part company, though, is that Amazon do care, at least a little bit, about whether what’s in the box matches what the customer thought they’d ordered, whereas Sir Starmer doesn’t seem particularly bothered about that. Just as long as the box gets to the doorstep.

Entirely incidentally, there are two other constituencies which enjoy receiving Amazon deliveries, other than the paying customer. Cats and small children. Few things please them more than a nice empty box. A happy cat or child doesn’t guarantee a happy customer, of course, but it’s a nice bonus. It’s not clear, however, that Sir Starmer’s deliveries will even arrive in boxes. And relying on pleasing non-voting cats and small children with virtual empty boxes which might or might not have once contained something that the voting customer might or might not have wanted doesn’t look like the brightest of political strategies. There’s a bit more to this delivery business than having an efficient courier – and so far, Sir Starmer doesn’t even seem to have found one of those.

A choice of possible legacies for Starmer

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There is a lot not to like about the new voting system which will be used for the Senedd elections next year. Whilst most seem to object to the idea of voting for parties rather than individuals, I tend to see that as little more than validation of what already happens: people tend to vote for parties not individuals, even if individual candidates prefer to believe that their ‘personal’ vote is a bigger factor than it is in practice. I've been there myself. The bigger issue for me is that, effectively, only first votes count – votes cast for any party which does not win enough votes to gain a seat are effectively worthless. It is simply not true, as proponents of the system claim, that it means that ‘every vote counts’. Like many others, I would prefer a system of STV, which overcomes both of those objections.

As systems go, however, it’s still better than the one we use for Westminster elections. At the last election, Labour gained absolute power and almost two-thirds of the seats. This is described as an overwhelming victory, despite Labour receiving only a little over one third of the vote. Latest opinion polls (and there’s a lot which can change in the interim, including a high probability of a Farage-led implosion) suggest that it’s a trick which might be repeated by Reform Ltd at the next election. It would, again, be described as a huge victory. Opinion polls for the Senedd suggest a similar level of performance by Reform Ltd in terms of votes which, translated into seats, might even make them the largest party – but they would be a very long way short of a majority. And given that their only conceivable coalition partner is the Tories, there is a vanishingly small probability that they will get anywhere near forming a government. Some have talked about how excluding the ‘winners’ from government is somehow undemocratic, but the problem is with language not democracy. A party which can only win around one third of the vote and cannot find one or more coalition partners to get it up to 50% of the membership of the Senedd hasn’t ‘won’ the election, even if it has more votes than any other party. The only thing they’ve ‘won’ is a few seats, the same as any other party represented in the Senedd. Generations of dealing with a system based on first past the post has led us to a degree of confusion about what ‘winning’ means, and we need to recalibrate our language. The ‘winners’ of an election held under a system of proportional representation are those who end up with enough partners close enough in outlook to them to be able to form a government.

There should be a lesson there for Westminster parties (and most especially Labour) in that first past the post may well gift absolute power to Farage and Reform Ltd, but a system of proportional representation would be likely to lead to a very different outcome. As Polly Toynbee pointed out in Monday’s Guardian, based on current polling Sir Starmer has a choice of legacy: he could be the man who reformed the UK’s electoral system or he could be the man who gifted the UK to Farage. The omens are not good. Not just because this is not a man who never seems particularly enamoured with the idea of changing very much at all, but because he also seems to belong to that strand of thought which has long dominated the Labour Party which would prefer to exercise absolute power occasionally (leaving the Tories or even Reform Ltd to hold similarly absolute power the rest of the time) than share power almost continuously. Choosing between enabling Farage and blocking him ought to be what is jokingly called a no-brainer, but Sir Starmer seems likely to make it literally so, by avoiding the engagement of a single neuron in the process.

Men of fighting age

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Those who would stir up anti-migrant feelings have recently taken to describing migrants being accommodated in hotels as ‘men of fighting age’. There’s no universally-accepted definition of ‘fighting age’, but broadly speaking most of us would probably think in terms of 18-45 year olds. I haven’t seen any definitive statistics on the question, but it is probably not unreasonable to assume that many of those arriving (in small boats, in particular) do indeed fit that demographic. The objective of using the term is clearly to encourage fear of the asylum-seekers.

There are some very obvious reasons why the demographic would be slanted in that way, however, and they’re nothing to do with a desire to terrorise the local population. It is precisely the demographic likely to be targeted by the regimes they are fleeing – whether as potential dissenters or even as potential soldiers. There is also a natural human resistance to risking the lives of families with children; and if a family wants to flee, who better to send as the ’advance party’ than those perceived as being most likely to be able to establish themselves in the new country.

That leads us to the corollary of the ‘fighting men’ trope: that same group are also the most likely to be capable of adding to the productive economy and the least likely – at least until any other family members arrive – to be adding to demand on services such as health, education and benefits. Allowed to work, even if only temporarily whilst their asylum claims are processed, they would actually add to, rather than subtract from, the economic health of the UK. Referring to them, more accurately and usefully, as ‘men at their peak productive age’ would, of course, have little effect on those determined to demonise them, but then those who reach their political position on the basis of prejudices and priors are never going to be swayed by mere facts anyway. It might, though, help to encourage a more reasonable debate amongst those to whom facts continue to have some salience.

No rules were broken

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That scratchy old record was being played again last week by supporters of the deputy PM, Angela Rayner, over her purchase of an apartment in Hove. And they’re right, of course. As far as anyone can see, no laws were broken, no rules contravened, no tax avoided. Some might find it strange that she would buy a home – the only home she owns – in Hove, around 250 miles from her constituency, but there has never been a requirement for MPs to live in the constituency they represent, and there’s plenty of history of MPs who don’t. The Tory attempts to make some great scandal out of it are little more than a pathetic bit of mud-slinging, but about par for a party which no longer pretends to have any positive policies about anything.

And yet… It’s also another example of the way in which politicians in their little bubbles are happy to outsource any question about what is right and what is wrong to whoever makes ‘the rules’, as though slavish responsibility to the rules is the only criteria on which they should be judged. The criticism is unfair, pathetic, reminiscent of kindergarten politics … and totally predictable. Did she, and those around her, really not stop to think, just for a moment, about how it might be perceived, particularly by anyone wanting to make mischief? It is, of course, wholly unfair to hold politicians to a higher standard than the rest of us, but it comes with the territory. She has done nothing ‘wrong’, but the inability to anticipate the likely response is staggering.