A WIN FOR INDEPENDENCE FROM LONDON VOTE

Final Breakdown of UK vote in 2014 Euro Elections - Source: The Telegraph

Like many people I was surprised by the number of anti-EU candidates on my European Parliament election ballot paper last week. In fact, they were more numerous than those representing the main political parties, including the United Kingdom Independence Party, so I was not too surprised by the strength of the final UKIP vote, as shown in the above diagram.

One of the minority parties was called "An Independence from Europe". However, I would describe the election outcome as a win for the independence from London vote. In the capital, incidentally, UKIP secured only 11% of the vote with Labour in the lead position. Nationally, the election was a firm thumbs down amongst a minority turnout - about 33%  - who voted against the metropolitan elite.

UKIP leader Nigel Farage has shown himself extremely adept at challenging the London elite, except on their home ground. The big losers, of course, are the Liberal Democrats and leader Nick Clegg, in particular. The loss of their traditional stronghold amongst England's grass roots to UKIP and the Greens does indeed represent a tectonic shift - to quote the former deputy prime minister Lord Prescott - in British politics.

THE UK'S PROPOSED NEW EU REGIONAL AID MAP

Map A - Proposed UK Regional Aid (Assisted Areas) 2014-2020

Map B: Assisted Areas (excluding Northern Ireland) 2006-13

On 20 April 2014, Business Minister Michael Fallon announced a proposed new regional aid package for the UK giving potential access to European Union funding - http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140430/wmstext/140430m0001.htm The Minister's announcement included the following comments:

"The Commission’s regional aid guidelines (RAG) define the parameters for assisted areas for 2014 to 2020. Under the guidelines the UK’s overall regional aid coverage may cover a maximum of 27.05% of the UK population, an increase on the 23.9% coverage in 2007-14.

Working within the guidelines, assisted areas coverage has been granted based on the potential to use regional aid to encourage economic growth through levering private sector investment, as well as the economic need of the locality. A strong principle underpinning the map is for coverage to focus on areas that are able to use the flexibility provided: many parts of the UK do not have the scale of industrial or development sites necessary to exploit assisted area status.

There was a high level of demand for assisted areas status, and given the limited population coverage available, we have targeted those areas that can benefit most. The UK’s industrial heartlands are central to the map, and a wide range of different sized manufacturers are included, from the high-tech sectors at the core of our industrial strategy to the more traditional industries that still provide vital employment to many communities. Support will also be available for additional disadvantaged coastal areas. Sites and businesses that can support growth in less advantaged localities have been included, as well as many that will make significant contributions to growth at a regional and national level."

The devil, as they say, is in the detail and included amongst the proposed areas identified is a greenfield site to the north-east of Worcester, near Junction 6 of the M5 motorway. A technology park proposal for this location was refused a £18 million grant from the Department for Business Innovation and Skills Regional Growth Fund last year following due diligence. The project is a controversial one which has been opposed by local communities because of its environmental impact and by Birmingham City Council and others because of its potential for undermining economic regeneration at Longbridge and elsewhere in the West Midlands conurbation.

With this "case study" in mind, and when comparing the UK Assisted Areas Map (A) for 2014-20 with than of the period for 2006-2013 (Map B), it does seem that the industrial regeneration impetus of regional policy which favoured older urban areas with major brownfield sites is being eroded in favour of promoting greenfield development, whether this represents sustainable value for money or just the present geography of political influence is a subject to which I shall return.

DCMS: MORE CULTURE, LESS MEDIA AND SPORT

A recent version of the famous Arabian Nights

Earlier this week, I wrote to the new Secretary of State for Culture, Media and Sport Sajid Javid about the possibility of his department supporting a series of Massive Open Online Courses (Moocs) on the cultural heritage of the Muslim world. This follows an excellent mooc sponsored by the Danish Government and led by the University of Copenhagen on the subject of "Constitutional Struggles in the Muslim World" - https://www.coursera.org/course/muslimworld - around which there was much online discussion of cultural themes, including music and literature.

Now Sajid Javid's appointment has been met with some teeth-grinding amongst UK arts institutions because he appears to come to DCMS (Department for Culture, Media and Sport) with little cultural background, having previously been a banker and subsequently, after his election as MP for Bromsgrove, Financial Secretary to the Treasury. As it happens, however, I can see a literary connection between these two roles and offer some recommended summer holiday reading to Mr Javid. "The Man Who Counted" - http://www.arvindguptatoys.com/arvindgupta/count.pdf - is, according to its wikipedia entry, "a series of tales in the style of the Arabian Nights, but revolving around mathematical puzzles and curiosities. The book is ostensibly a translation by Brazilian scholar Breno de Alencar Bianco of an original manuscript by Malba Tahan, a (fictitious) thirteenth-century Persian scholar of the Islamic Empire"(see http://en.wikipedia.org/wiki/The_Man_Who_Counted)*

"The Man Who Counted" was recently recommended on the BBC Radio 4 statistical programme "More or Less" -  http://www.bbc.co.uk/programmes/b006qshd - in which presenter Tim Harford "explains - and sometimes debunks - the numbers and statistics used in political debate, the news and everyday life". However, with regard to the running of his new department, my advice to the Secretary of State is mathematically straightforward: "More Culture, Less Media and Sport", with the exception of equestrian show jumping and eventing which need more coverage on the BBC.

Postscript: On the subject of *Latin American-Middle Eastern intersectionality, a forthcoming Coursera Latin American Culture Mooc might provide a model for something similar on the Muslim world - https://www.coursera.org/course/latinamericanculture

GOVERNMENT EVERGREENING OF UK ECONOMY

Whe David Cameron declared that the Coalition was going to be "the greenest government ever"   and upset the Green Great and Good - http://www.jonathonporritt.com/Campaigns/greenest-government-ever - I just put this down to a "Dave the Vague" moment (of which there have been many!). However, the prime minister has turned out to be a more "eel-like customer", to use a recent Boris Johnson description of Tony Blair, than I initially envisaged. The big difference, of course, is that the nation's coffers are far more depleted than in the heady days of "New Labour" and, so thankfully, opportunities for foreign misadventures have been restricted, but that is about the only good news.

My guess is that when Mr Cameron referred to "the greenest government ever" he really meant that the Coalition would engage in the greatest "evergreening"* of any modern British administration. Now the term "evergreen" is used with a number of different meanings so I will clarify its usage in this post by referring to a Financial Times article of 25 March 2011 - http://www.ft.com/cms/s/0/59864380-570f-11e0-9035-00144feab49a.html#axzz31CkN4Zo5 - entitled ""Evergreening" will still leave UK banks in the red". Written by Marryn Somerset Webb, of Money Week and SuperScrimpers fame, the article uses "evergreen" according to the FT Lexicon - http://lexicon.ft.com/Term?term=evergreen-loan -  to mean a "short-term loan that is continuously renewed by the lender." The FT's Gillian Tett also uses the expression with the same meaning in an article of 30 December 2010 - http://www.ft.com/cms/s/0/c23e885e-1422-11e0-a21b-00144feabdc0.html#axzz31CkN4Zo5 - on the subject: "Commercial property loans pose new threat".

To return to the Somerset Webb article, she comments: "One of the odd things that happens after a credit crisis is bad loan “evergreening”. Banks need to reduce their loan books to get their capital adequacy ratios back in order. But they can’t get rid of their low-quality loans (they need to keep rolling them over so no defaults turn up). As a result, they end up reducing their good loans instead. This looks slightly counter intuitive from the outside (bank in trouble reallocates its business away from good-quality assets towards lower-quality assets) but it makes sense for the bank: it buys it time to run down the bad loans slowly and earn its way out of trouble."

Unfortunately, the scale of the financial crisis and the level of state involvement in the banking sector, as well as the wider structure of the UK economy (which certainly has not re-balanced since 2010!) has meant that the Coalition has also followed this strategy. In short, lots of bad historic loans, including those obtained by public sector and other organisations under the so-called Private Finance Initiative (PFI) - see my earlier post below - have been, or are in the process of being, evergreened. This is not good news, as noted in 2012 by the TaxPayers' Alliance - https://www.taxpayersalliance.com/bettergovernment/2012/07/pfi-deals-costing-300-billion.html - who refer to a Guardian newspaper article of 5 July: http://www.theguardian.com/politics/2012/jul/05/pfi-cost-300bn

The big difference between state and bank "evergreening", of course, is that the mechanism is not restricted to short-term loans. In the case of the UK government, "long-term evergreening" is the name of the game. However, whilst this may help shore up the nation's finances until after the next General Election, the strategy, as Marryn Somerset Webb notes, has the downside of diverting resources from good projects. This accounts for the lack of positive investment, in for instance the green economy, which many identify with the Coalition, and leaves me wondering whether evergreening will not just leave the country in the red, but also colour the nation's vote in 2015.

* "Evergreening" is also used to describe controversial practices associated with the pharmaceuticals industry: http://en.wikipedia.org/wiki/Evergreening

MORE LEVIATHANS IN THE LURE OF MAMMON

The original Leviathan by Thomas Hobbes

"Leviathan in the lure of Mammon: limits of political Islam in Turkey" is the title of a recent article on the Open Democracy website by Kerem Oktem - http://www.opendemocracy.net/kerem-oktem/leviathan-in-lure-of-mammon-limits-of-political-islam-in-turkey In this, Oktem uses the context of "Western-style liberal democracy's" apparent increasing loss of appeal to discuss the current political economy of Turkey. However, the article's rather brilliant title, invoking the "Leviathan" of Thomas Hobbes, might also be used to describe the state of global and state capitalism as this manifests in so-called Western-style liberal democracies.

The present controversy around US drugs giant Pfizer's - http://www.pfizer.com - take-over bid for the UK's Astrazeneca - www.astrazeneca.co.uk - seems to illustrate that there are a lot more Leviathans in the lure of Mammon around the world. Indeed this metaphor seems to sum up very well not only the whole dynamic of global capitalism, epitomised in the financial system - much of which in Britain is still state-owned - but also what Oktem describes as "authoritarian power regimes" of the kind that can be found, not only in countries like Turkey, but in the relationship dynamic between the private and public sectors here in the UK.

The relationship between the pharmaceuticals sector and the British National Health Service (NHS) - http://en.wikipedia.org/wiki/National_Health_Service - provides a very good example of this.  As one of the world's largest employers - http://en.wikipedia.org/wiki/List_of_largest_employers - the NHS has always invited comparisons with other public and private sector Leviathans, such as China's People's Liberation Army and US supermarket giant Walmart. However, it is in its more recent role as a commissioning and partnership body for private sector services that the lure of Mammon has really come in to play.

In short, the NHS is not only a global cash cow for the pharmaceuticals sector, both homegrown and international, but the partner of choice for a variety of companies providing a whole range of contract services through the so-called Private Finance Initiative (PFI) - http://en.wikipedia.org/wiki/Private_finance_initiative All this offers the prospect of a potential feeding frenzy of positively Olympian proportions for Leviathans in the lure of Mammon, and it is hardly surprising, therefore, that our esteemed National Health Service should have provided a centrepiece of London 2012's  opening ceremony. Roll on the Great Global Grab!

THE GLOBAL GRAB FOR LAND AND RESOURCES

The sale of farmland belonging to the troubled UK Co-operative Group - http://www.theguardian.com/business/2014/may/03/co-op-farms-sale-chinese-buyers - has highlighted the global grab for land and resources, of which Britain is both an origin and destination: "In a similar way to central London property, farmland is now seen as a safe bet by foreign investors – while the average value of prime residential property in London has grown by 135% over the last decade, the value of prime British farmland has increased 273% to an average price of £8,500 per acre, according to Savills." In this case, it is the prospect of a single Chinese buyer for the Co-op's 17 000 hectares (44 000 acres) which is cause for concern. However, research by Land Matrix - www.landmatrix.org - shows that the British are just as active in international land investment. An extensive article in the United States Monthly Review - http://monthlyreview.org/2013/11/01/twenty-first-century-land-grabs - by Fred Magdoff, professor emeritus of plant and soil science at the University of Vermont, covers the history of the land grab from a global perspective. However, whilst the present focus of attention is agricultural land, this should be seen in the larger context of a grab for the earth's resources. It is to be hoped, therefore, that environmental and natural resource economics, as well as land economy, will be on the preferred curricula of the International Student Initiative for Pluralist Economics - http://en.wikipedia.org/wiki/International_Student_Initiative_for_Pluralism_in_Economics - whose open letter (from the Glasgow Unversity Real World Economics Society) in today's Guardian calls for their subject to respond to "the multi-dimensional challenges of the 21st century - from financial stability to food security and climate change".

ECONOMIC HETERODOXY SOUNDS GOOD TO ME

After reading Ha-Joon Chang's article, "Economics is too big a deal to leave to the experts" http://www.theguardian.com/commentisfree/2014/apr/30/economics-experts-economists, in today's edition of The Guardian, I decided to check out his Wikipedia entry:  http://en.wikipedia.org/wiki/Ha-Joon_Chang This states that: "Chang's contribution to heterodox economics started while studying under Robert Rowthorn, a leading British Marxist economist, with whom he worked on the elaboration of the theory of industrial policy, which he described as a middle way between central planning and unrestrained free market. His work in this area is part of a broader approach to economics known as institutionalist political economy which places economic history and socio-political factors at the centre of the evolution of economic practices." Co-incidentally, after my post of yesterday, I was reminded of an excellent book on the subject of spatial economics called "The Geography of De-Industrialisation"* edited by Robert Rowthorn, that sadly now seems to be out of print. Greater heterodoxy on the subject of the spatial economy would certainly be very welcome.

* Some of the themes of this book are taken up in a recent publication entitled "The Economic Geography of the UK" http://www.amazon.co.uk/Economic-Geography-UK-Neil-Coe/dp/1849200904, part of whose introduction is available here. http://www.uk.sagepub.com/upm-data/35376_01_Coe_&_Jones_Ch_01.pdf