The Northern Strategy: How Nixon won the South. How Boris will try and win the North.

Up until the 1950s the Southern States of the USA were solidly Democrat. From the 1870s onwards the “Solid South” voted Democrat even when the rest of the USA voted Republican. This map shows the 1956 Presidential election. The blue states held out for the Democrat Adlai Stevenson while the rest of the US went to Eisenhower/Nixon:

This is hard to believe for my generation who grew assuming that the Southern States had always been dominated by white identity politics, gun ownership and banning abortion. This shift from Blue to Red wasn’t an accident of history, it was the result of a political campaign – the Southern Strategy – promoted first by Barry Goldwater and Richard Nixon in the 1960 – 1972 Presidential elections.

The Southern Strategy was simple and cynical. Exploit the racial tensions of the civil rights era and stir up grievances among white voters to persuade them to switch to the Republicans. Ken Mehlman, Chairman of the Republican Party under GW Bush went so far as to apologise for this to the NAACP:

“Some Republicans gave up on winning the African-American vote, looking the other way or trying to benefit politically from racial polarization….I am here today as the Republican chairman to tell you we were wrong.”

Today’s Republican party apparently shows no contrition for promoting white supremacy in the Southern States.

The Conservative Challenge

Here in the UK we are shuffling unhappily towards another sharply polarising General Election, with all the enthusiasm of a teenager being sent to tidy their bedroom. The Conservatives are in the process of reshaping themselves as a party of authoritarian English Nationalism. This will almost certainly cost them all of their 13 seats in Scotland, marginal seats like St Ives in the South West, and London seats like Richmond Park.

Despite this the Boris Johnson seems convinced he can win a majority. To do this they need to win roughly 30 seats. I’m being generous and assuming they can retain the seats of the 21 MPs they just expelled.

Lets start with the top 50 Conservative target seats, arranged by the swing needed to capture the seat:

Constituency Current MP Region/Nation Maj%
Perth and North Perthshire SNP Scotland 21 0.02%
Kensington Labour London 20 0.03%
Dudley North Labour West Midlands 22 0.03%
Newcastle-under-Lyme Labour West Midlands 30 0.03%
Crewe and Nantwich Labour North West 48 0.04%
Canterbury Labour South East 187 0.16%
Barrow and Furness Labour North West 209 0.22%
Keighley Labour Yorkshire and the Humber 249 0.24%
Lanark and Hamilton East SNP Scotland 266 0.26%
Ashfield Labour East Midlands 441 0.44%
Stroud Labour South West 687 0.54%
Bishop Auckland Labour North East 502 0.58%
Peterborough Labour East of England 607 0.64%
Oxford West and Abingdon Lib Dem South East 816 0.68%
Westmorland and Lonsdale Lib Dem North West 777 0.75%
Colne Valley Labour Yorkshire and the Humber 915 0.76%
Ipswich Labour East of England 831 0.81%
Bedford Labour East of England 789 0.81%
Stockton South Labour North East 888 0.82%
Edinburgh South West SNP Scotland 1,097 1.11%
Warwick and Leamington Labour West Midlands 1,206 1.12%
Penistone and Stocksbridge Labour Yorkshire and the Humber 1,322 1.33%
Carshalton and Wallington Lib Dem London 1,369 1.35%
Argyll and Bute SNP Scotland 1,328 1.38%
Eastbourne Lib Dem South East 1,609 1.40%
Ayrshire Central SNP Scotland 1,267 1.41%
Lincoln Labour East Midlands 1,538 1.58%
Portsmouth South Labour South East 1,554 1.74%
Warrington South Labour North West 2,549 2.06%
Derby North Labour East Midlands 2,015 2.07%
High Peak Labour East Midlands 2,322 2.16%
Battersea Labour London 2,416 2.19%
Wakefield Labour Yorkshire and the Humber 2,176 2.35%
Wolverhampton South West Labour West Midlands 2,185 2.58%
Wrexham Labour Wales 1,832 2.61%
Stoke-on-Trent North Labour West Midlands 2,359 2.82%
Dewsbury Labour Yorkshire and the Humber 3,321 2.94%
Vale of Clwyd Labour Wales 2,379 3.07%
East Lothian Lib Dem Scotland 3,618 3.24%
Kingston and Surbiton Lib Dem London 4,124 3.32%
Norfolk North Labour East of England 3,512 3.36%
Reading East Labour South East 3,749 3.39%
Gower Labour Wales 3,269 3.59%
Blackpool South Labour North West 2,523 3.61%
Great Grimsby Labour Yorkshire and the Humber 2,565 3.61%
Linlithgow and Falkirk East SNP Scotland 4,077 3.63%
Darlington Labour North East 3,280 3.66%
Ayrshire North and Arran SNP Scotland 3,633 3.83%
Weaver Vale Labour North West 3,928 3.88%
Rother Valley Labour Yorkshire and the Humber 3,882 3.92%

Lets take out the seats in Scotland and Wales (where an English Nationalist Tory Party have no chance) London marginals, and seats in the South East which are strong Remain. This gives us 34 seats, roughly the minimum the Conservatives need to win a slim majority. I’ve organised them by region to see the geographic spread:

Constituency Current MP Region/Nation Maj %
Ashfield Labour East Midlands 441 0.44%
Lincoln Labour East Midlands 1,538 1.58%
Derby North Labour East Midlands 2,015 2.07%
High Peak Labour East Midlands 2,322 2.16%
Peterborough Labour East of England 607 0.64%
Ipswich Labour East of England 831 0.81%
Bedford Labour East of England 789 0.81%
Norfolk North Labour East of England 3,512 3.36%
Bishop Auckland Labour North East 502 0.58%
Stockton South Labour North East 888 0.82%
Darlington Labour North East 3,280 3.66%
Crewe and Nantwich Labour North West 48 0.04%
Barrow and Furness Labour North West 209 0.22%
Westmorland and Lonsdale Lib Dem North West 777 0.75%
Warrington South Labour North West 2,549 2.06%
Blackpool South Labour North West 2,523 3.61%
Weaver Vale Labour North West 3,928 3.88%
Canterbury Labour South East 187 0.16%
Eastbourne Lib Dem South East 1,609 1.40%
Portsmouth South Labour South East 1,554 1.74%
Reading East Labour South East 3,749 3.39%
Stroud Labour South West 687 0.54%
Dudley North Labour West Midlands 22 0.03%
Newcastle-under-Lyme Labour West Midlands 30 0.03%
Warwick and Leamington Labour West Midlands 1,206 1.12%
Wolverhampton South West Labour West Midlands 2,185 2.58%
Stoke-on-Trent North Labour West Midlands 2,359 2.82%
Keighley Labour Yorkshire and the Humber 249 0.24%
Colne Valley Labour Yorkshire and the Humber 915 0.76%
Penistone and Stocksbridge Labour Yorkshire and the Humber 1,322 1.33%
Wakefield Labour Yorkshire and the Humber 2,176 2.35%
Dewsbury Labour Yorkshire and the Humber 3,321 2.94%
Great Grimsby Labour Yorkshire and the Humber 2,565 3.61%
Rother Valley Labour Yorkshire and the Humber 3,882 3.92%

Some of these seats are bellweather marginals. Stockton South changed hands in 1997, 2010 and 2017. It’s last Tory MP was the hapless James Wharton who will be remembered only for coming top of the ballot for private members bills and choosing to propose the European Union Referendum Bill. Wanker.

But lots of these seats have never elected a Tory; Rother Valley, Bishop Auckland, Stoke on Trent North, Dudley North have been Labour since they were established. The Tories last won Great Grimsby and Wakefield under Stanley Baldwin, the last Tory leader to win Newcastle Under Lyme was Disraeli.

In stark terms – to have any chance of winning a majority the Conservatives will need to pick up dozens of traditional Labour seats in the Midlands, Yorks and Humber and across the North, including seats which have never elected a Tory before.

To complete the picture this is the list of Labour and Tory targets

Region Tory Targets Labour Targets Total
South East 4 10 14
South West 1 5 6
Midlands 9 17 26
North West 5 6 11
NE&C 4 1 5
Y&H 7 5 12
East  4 6 10
Wales 0 7 7
London 0 9 9

This is more than just persuading those voters that they have the best policies. Politics is as much about a sense of identity as it as about specific policies. People who identity as Labour or Tory, are unlikely to change their views based on specific policies. The question the Tories face is: How do you change people’s tribal political identity.

Goldwater and Nixon: Loss Resentment and Crisis

The Republican’s Southern Strategy gives us a worked example of how to go about this.

The first step was to create a sense of loss. A loss of privilege, a loss of identity, a loss of values.   A loss of status or position in a social hierarchy. The loss of a traditional order which placed white people above black people. The loss of a way of life.

The second step was to turn that loss into resentment and grievance.   That others are being given privileges that by right belong to them.  That others identities are being promoted above theirs, other peoples values above their own. They are being treated unfairly. They are the real victims, persecuted by wicked federal politicians from far off Washington DC.

The final step was to create a sense of urgency, of crisis. That racial tensions of the civil rights era threatened a race war, riots, conflict. That unless they acted urgently all they held dear was under threat. Maybe even the existence of the white majority itself was at threat.

A popular slogan on the traditional white supremacist right captures this:

“We must secure the existence of our people and a future for white children”

Unsurprisingly the states which were swung to the Republicans in this way experienced a big increase in gun ownership among white families.

Boris and the Northern Strategy

If we use the same 3 steps we could see how the Tories can target white voters in blue collar constituencies that historically voted Labour.

It’s pretty easy to see how this will play out. I’m going to pick on Sunderland for the next bit, not because it is a Tory target seat, but because I know it well and it shares many characteristics with the seats the Tories are aiming for. It is also well Brexity:

In many of these constituencies the sense of loss is palpable, it is all around you. I remember what Sunderland was like in the early 1970s before we joined the EEC. The high street was bustling, the town had it’s own department stores: Doggarts and Joplings, and people travelled from across the region to shop there. My own gran had a large collection of matching hats and coats from Joplings.

The Department stores are gone, and with them most of the shoppers. The same high street today is dominated by a large Poundland, occupying the site opposite the old Joplings building:

When Joplings was at it’s heyday you could leave school with no qualifications and find well paid manual work which would give you respect, and pay enough to raise a family. If you kept your nose clean you could get on without having to have college education.

The working environments for manual jobs were all white and all male. You could say what you thought without anyone complaining you were being racist, sexist or homophobic. Outside of work things werethe same; pubs, football grounds, CIU were just as homogenous. The whole North East was a white male only safe space.

The communities that large scale manual labour produced had their own distinctive character. They were tight knit, and followed a kind of practical socialism, rallying round to help each other. These societies were also rigidly socially conservative, and highly conformist. Everyone knew each others business, and any deviation from rigid conformity wasn’t tolerated. A woman’s place was in the kitchen, a gay person’s place was in the closet, and the only Asian faces were behind the counter of a take away. Age was respected, and the opinions of older people were listened to regardless of whether they were sensible or not. Respect your elders and your betters.

The economics of these communities has changed. To get on you need college education, and without it opportunities are restricted to zero hours contracts on the national minimum wage. Jobs that don’t get respect.

The distinction between the old skilled manual employment that didn’t need formal qualifications and modern unskilled manual employment may seem slight to people with degrees, but the difference is profound in terms of wages and respect.

Skilled manual employment allowed people in an area like Sunderland to afford a reasonably sized house, a decent education for their children, state healthcare and a reliable pension. Foreign holidays too, and a new car every few years.

Unskilled manual employment in the current labour market means poorly paid and/or insecure employment jobs that make the worker feel that have no control for the circumstances . A house, holiday and car are out of reach for these employees.

These workers no longer find political representation through the Labour Party or the Trades Unions, neither of which offer any solution to this decline in employment status

But the change in employment patterns isn’t just economic – it is cultural too. As technology removes skilled manual jobs, men are pushed increasingly in work which involves interaction with customers. In these jobs workers are expected to act and speak in line with socially liberal values. Interactions are policed by supervisors who record calls and check to ensure that the customers ethnicity, sexuality, gender characteristics are being privileged. Management control doesn’t just include work tasks, but how people express themselves.

The tight knit homogenous communities that mass skilled manual labour produced are in permanent decline. People might share their lives on social media but they don’t want their neighbours to know their business, or judge them on their politics or sexuality. Society is just as heirachical, but their position in it is much less certain, and the respect that came with age no longer applies.

None of these changes of course have anything to do with the EU, and leaving won’t change a thing, but that doesn’t matter. It is the sense of loss that matters, and for communities which used to be the backbone of the Labour movement that sense of loss is palpable and no-one in the Labour leadership seems to have noticed. The modern world doesn’t share their values or respect them, nor does the Labour Party, which is entirely given over to social liberalism.

Turning that sense of loss into resentment and grievance is the easiest part of the process. Others are being given privileges that by right belong to them.  Not just privileges, but financial preferment through the benefit system. Others identities are being promoted above theirs, other peoples values above their own.   The press have been eager to exploit these resentments, insecurities and grievances for years.  Some politicians had too, but many steered clear of openly embracing this agenda, partly for fear of unleashing forces beyond their control, but also because they felt, like David Cameron, that embracing a socially liberal centre ground was the way forward.  

One of the key areas of grievance was the welfare system. Too difficult for honest people to get help, too easy for those who wanted to milk the system. In particular too easy for immigrants to access, without accepting the moral obligations implicit in the system. This clash between self reliant practical socialism and the central welfare state run by privately educated politicians who would never need it was a key grievance, easily exploited by newspapers and politicians who were prepared to blur truth and fiction in order to encourage a sense of unfairness.

One of the chief grievances is the sense that an English national identity is under threat, and that expressions of this English national identity are frowned upon while all other identies are celebrated. It’s easy to laugh when this English nationalist sentiment is expressed by daft memes on social media about banning flags, or burning poppies, but that doesn’t mean it is any less strongly felt.

Corbyn is clearly hugely unpopular with this group of voters, not because of any particular policy, but because he represents a middle class leftie political identity. This is of course, precisely why he is so popular with his middle class supporters. But the problem goes back longer than that. Many of these voters had been uneasy with Labour embrace of social liberalism under Blair, and it’s enthusiasm not just for immigration, but for the identity politics of immigrant communities.  Sunderland has low levels of immigration and a rapidly shrinking population, but despite that immigration and immigrant identity is much greater grievance.

The final part of the process is the sense or urgency, of crisis. That was why the current moment is so politically charged. Brexit is in crisis, potentially an existential crisis. The current crisis creates the sense of urgency – something valuable is at urgent risk  – Brexit, and with it the chance to return to some older values, recapture what was lost.  That urgency, discontinuity is key to breaking down political identities and re-shaping them.

This is why the current shambolic crisis engulfing Johnson and the whole Brexit process hasn’t damaged his poll ratings. A sense of crisis, of things in the balance, or fast moving events works in his favour. It gives the impetus to change political identity. The last chance to save Brexit before it is too late.

If Johnson succeeds these voters might become tribal Tories for decades to come, embracing an authoritarian English nationalist political identity, particularly if Johnson can convince them he will spend money on the NHS and make the benefit system fairer. Some of these voters were naturally drawn to authoritarianism – there were plenty of hangers and floggers in traditional working class communities. Others are prepared to endorse authoritarian policies only to protect or reclaim their privileges and identity.  

Johnson might be losing votes in the Commons, but so far he is winning the process of political transformation. One of the key features of Leave voters is that they are mistrustful of the political establishment, but at the same time willing to place almost uncritical trust in establishment politicians like Farage, Johnson or even Rees Mogg. They trust these politicians because they understand the sense of loss, the feeling that change is loss, and they accept the legitimacy of their grievances no matter how crazy.

A few months ago Trump heralded the election of Boris Johnson by calling him “Britain Trump”. I think he is wrong.

Johnson is the British Nixon. An unprincipled little man stirring up grievances and insecurities among white voters to get power heedless of the consequences.

Brixon.

The Britain Trump is a few years down the line. We might even look back on Brixon with nostalgia.

Links:

https://www.sunderlandecho.com/news/crime/sunderland-protester-billy-charlton-goes-on-trial-accused-of-stirring-up-racial-hatred-540567

https://www.theguardian.com/uk-news/2016/aug/09/post-brexit-sunderland-if-this-money-doesnt-go-to-the-nhs-i-will-go-mad?CMP=Share_iOSApp_Other

https://research-information.bristol.ac.uk/files/167839376/Sunderland_Final_070918.pdf

Brexit and Trump: are we the victims of a massive conspiracy?

I love conspiracy theories. From the novels of Thomas Pynchon to websites with names like Above Top Secret I find them endlessly entertaining.

I just don’t believe in them.

Don’t get me wrong, I think that from time to time conspiracies do happen, but they tend to be limited, temporary and hard to conceal. In particular I don’t believe grand narrative conspiracy theories. Governments sometimes try to cover up things that have gone wrong, and sometimes they meddle in the affairs of other countries to promote their own interests.

But I don’t believe that they routinely commit terrible crimes and deliberately bamboozle the public to hide them. Same way that I loved the X Files, but I never actually believed they were true.

I am also a massive fan of US political historian Richard Hofstader, and I would recommend any and all of his books without hesitation. His finest moment is the extended essay “The Paranoid Style in American Politics” which describes the mixture of heated exaggeration, suspicion, and conspiratorial fantasy that dominated the thinking of Goldwater Republicans.

People choose conspiracy theories because the world isn’t working the way they think it should, and they don’t know why. For decades and decades conspiracy theories were largely a right wing phenomenon, restricted to Conservatives.

Conservatives, who saw the world becoming more socially liberal, and less confirming to socially conservative mores saw conspiracies in all kinds of places. Hollywood, the Illuminati, Pizzagate and Q-Anon. The extent to which conspiracies have come to dominate right wing thinking can be seen on websites like Zero Hedge, which started out with a mix of economics and financial markets, and which is now almost entirely given over to crazy Goldwateresque fantasies.

These are from the last few day’s headlines:

There were left wing conspiracy publications like Lobster, which flourished during the Cold War and the Northern Ireland conflict (when conspiracies were definitely going on) but which fizzled out in the decades after the Berlin Wall came down. Their popularity was largely confined to the authoritarian left who mourned communisms passing and saw all world events as a conspiracy against righteous leftiness.

Liberal lefties like me believe in progress, that things can, and do, get better. Poverty is falling world wide. Life expectancy is rising. We accept that conspiracies take place, but we don’t believe that they shape world events.

The arc of the moral universe is long, but it bends toward justice.

A series of events have shaken this liberal left worldview; Brexit and the election of Trump in particular. Our faith in progress has been badly shaken.

People on the liberal left are starting to embrace conspiracy worldviews that a few years ago were confined to the the small group of authoritarian lefties who saw everything that happened since Thatcher as a wicked neo-liberal conspiracy to make everything worse. Some people on the left have gone even further and embraced conspiracy theories about Israel and Jews that a few years ago were the hallmark of the far right.

Once it was only right wing people who called me a sheeple, or who told me the mass media were telling me what to think. Now it is predominantly lefties, sometimes promoting conspiracy theories that I am used to seeing decorated with Pepes.

Conspiracy theory based left wing websites like The Canary and Skwarkbox have sprung up, offering the same over-heated, under-factual stew that Conservatives have been lapping up for decades. Mostly these are ridiculous:

Sadly at times rather more sinister conspiracies are promoted, including suggestions that Jews invent anti-semitism to “smear” Corbyn, which at times cross over into outright racism:

Arseholes.

But here is the problem.

Even though I don’t believe in conspiracies there is something about recent events which does look a lot like a conspiracy.

Lets start with Trump. There is something deeply weird about Trump’s election, particularly the way he won the electoral college without winning the popular vote.

Trump isn’t the first President to win an election that way. It happened twice in the C19th in the aftermath of the American Civil War (Hayes and Harrison). In both cases there was well documented interference with the Electoral College to manipulate the outcome.

No President won the electoral college without winning the popular vote for over 100 years, and then it happened twice. Dubya won in 2000, losing the popular vote by a tiny margin, with his victory achieved by a re-count in Florida overseen by his own brother. Trump lost by nearly 3m votes, the largest losing margin in history.

The last Republican President to come into office by winning the popular vote was George Bush, back in 1988.

It is difficult to see that this is a co-incidence.

There are 2 possible explanations for this.

Firstly it could be that there is a systematic bias in the US voting system. The US political system gives a greater weight to the views of white voters, particularly white voters in rural areas, then it does to non-white voters in urban areas. As a consequence politicians who appeal to rural white voters (Republicans) have an advantage over politicians who appeal to urban and non-white voters.

This is due to the way that electoral college votes are allocated to states. Smaller rural states, with a mostly white population, have more electoral college votes relative to their population compared to larger, more diverse states

This means that rural white voters can elect a Republican President against the wishes of the majority of the electorate. This effect is magnified in states which use voter suppression techniques to reduce the black vote.

The second possible explanation is that there was interference in the last Presidential election, that illegal techniques were used, and the this caused the Trump upset.

This explanation implies that there was some kind of conspiracy to rig the result of the last presidential election. There are 2 variants of this conspiracy theory:

  1. The Great Hack: the Trump campaign and Cambridge Analytica used data mining and “weapons grade” manipulation techniques to swing the Presidential election, in particular using personality quizzes to build up a psychological profile of voters which they then used to manipulate them.
  2. Russian interference: The Russian Government used social media to carry propaganda messages that helped sway the election Trump’s way

The Mueller report and a separate Senate investigation both found evidence that Russia had tried to interfere in the last Presidential election, while a Commons Select Committee found significant evidence to support the Great Hack theory. 13 Russian agents have been indicted. Facebook have admitted that there was a data breach linked to Cambridge Analytica, who have ceased trading as a result of the revelations.

Hard to think of a better word to describe this than a conspiracy?

If Trumps victory was tainted by conspiracies then what about Brexit? The Great Hack suggests that there might have been similar techniques used in the Brexit campaign, which showed a complete disregard for moral rules of campaigning.

This is where I struggle if I am honest. I worry that the Guardian, in pursuit of clicks is at risk of overstating the story.

The Leave campaign did use some campaign techniques that were deeply misleading. We know this because the same commons select committee forced Facebook to release “dark” ads that the Leave campaign. These included ads designed to gather data on individuals which could be used to target, as we as the targeted ads themselves

The problem is that the ads the Leave campaign used don’t look much like the ones in the Great Hack. The data gathering FB ads used by the Trump campaign used personality tests to shape a psycholigical profile which was used to identify who to target.

The ads by the Leave campaign were much more basic, designed simply to identify people who were gullible.

These are examples of the dark ads that the Leave campaign used during the referendum:

This isn’t a sophisticated exercise in manipulating an election. It isn’t even new. We have seen this kind of thing before. This is exactly the same techniques we have seen the financial services industry use to miss-sell products to customers for decades.

It’s no surprise that this many of the principals in the Leave campaign came from this background, because their tactics to manipulate people during the Leave campaign look remarkably similar to the tactics used to mis-sell any number of financial products from mortgages and pensions through to PPI.

Not only that but the demographics of people who are mis-sold financial products shows a big cross over with key groups of leave voters. For those familiar with mosaic classifications the 2 largest groups mis-sold financial products are “Vintage Value” and “Senior Security”. These 2 groups were among the most likely to vote leave.

Comparing the 2 data sets being the victim of the mis-selling of financial services strongly predicts voting Leave. The same gullible people have been ripped off and manipulated for decades.

I realise that leave voters reading this will be gnashing their teeth by now, but it’s really hard not to come to the conclusion that the Leave campaign used the same crude techniques to target gullible people that the financial services industry uses. In an extreme example data held by Eldon Insurance (owned by Arron Banks) was used to target Leave voters in the Brexit campaign.

Despite all of this I am still a sceptic. There were definitely conspiracies around Trump, but I’m not convinced that they got him elected. I think that the Koch brothers spent years creating the right environment for the USA to elect an authoritarian nationalist only to see their careful plans hijacked by an orange faced clownshoe whose election was the result of a system rigged in favour of white voters and a whole load of luck. He is going to need even more luck and even more rigging to win again.

I also think that if we ran the EU referendum 10 times Remain would win 9 and Leave would win 1. Sadly we live in the timeline with the 1 Leave victory. In the case of Brexit the nation fell victim to crude manipulation of gullible, older voters, using techniques that we should have outlawed decades ago.

In the UK and the US failure to follow through with meaningful electoral reform and failure to control the actions of cynical corporations brought us to this point. Not weird conspiracies.

The marble Milliband FA broods….

Left wing conspiracies; john pilger, the canary blaming political zionists, skwarkbox

I

realise that this will infuriate lots of my middle class mates, but increasingly we live in

We find it easy to believe in conspiracies because we don’t know people any more

“if you don’t understand how someone could possibly believe something as stupid as they do, that this is more likely a failure of understanding on your part than a failure of reason on theirs”, 

https://www.newstatesman.com/politics/uk/2019/08/why-liberals-now-believe-conspiracies

https://www.parliament.uk/documents/commons-committees/culture-media-and-sport/Fake_news_evidence/Vote-Leave-50-Million-Ads.pdf

https://goodwinbarrett.co.uk/who-are-the-victims-of-investment-mis-selling/

https://blogs.kent.ac.uk/epop/files/2016/07/Thrasher-Borisyuk-Rallings-Carr-and-Turner.pdf

http://natcen.ac.uk/media/1319222/natcen_brexplanations-report-final-web2.pdf

Spin, spin, spin the wheel of policy. How the same shit policies come round again and again.

If you follow public policy long enough you see the same shit policies over and over again.

This isn’t surprising. After a while an administration runs out of steam, runs out of ideas. They start asking Civil Servants what they should do, and Civil Servants tend to give the same advice to Ministers regardless of political complexion.

The pasty tax was offered to Blair and Brown who both turned it down before Osborne fell for it. Universal Credits was a Gordon Brown policy that Ian Duncan Smith fished out of the waste paper basket.

The Johnson administration deserve a prize for running out of ideas faster than any previous Government. Only 4 weeks into his reign as PM Johnson has announced a review of hospital food, led by a celebrity chef:

This, of course, isn’t the first time a Government has made the same announcement. This is the same policy initiative under David Cameron, which had a tie in BBC TV series:

This is an identical review announced in the dying days of the Brown Government:

Heston’s main recommendation apparently was seaweed. Only 6 months earlier NHS North West had hired Simon Rimmer from Saturday Kitchen to review their hospital food:

This is the Blair Government, scrapping their celebrity chef hospital food review only 4 years earlier:

This wasn’t the only celebrity chef review of hospital food that Blair commissioned. Anton Edelman did exactly the same review in 2001, which apparently vanished without trace.

Albert Roux led in identical review for the Major Government in 1995. This was before the internet, and I don’t have a press cutting for it, sadly. The Roux review did however lead to a response by the National Audit Office:

https://www.nao.org.uk/pubsarchive/wp-content/uploads/sites/14/2018/11/National-Health-Service-Hospital-Catering-in-England.pdf

The Roux review was part of the Citizens Charter, the 2nd most important policy initiative of the Major Government after the Cones Hotline. Or maybe the Cones Hotline was part of the Citizen’s Charter? The whole Major Government seems now like a grey blur.

I don’t know why Maggie Thatcher or Jim Callaghan didn’t hire a celeb chef to review hospital food, but both of them strike me as people who would prefer Fanny Craddock’s spotted dick.

All of these policy initiatives failed, and cost loads of money, but that doesn’t stop Governments endlessly recycling the same policy announcements., and making the same mistakes. From Major onwards the Government has announced on average a new hospital food initiative every year; new recipes, local sourcing, better procurement, higher nutritional standards.

The failure of every single one of these initiatives can be summed up in one sentence:

Gimmicky top down initiatives don’t work.

Sadly that doesn’t stop Governments trying. The same daft ideas just come round and round. “improving hospital food”, “reducing government red tape”, “simplifying the tax and benefit system” and “cutting crime by increasing prison places”. Getting celeb businessmen to advise Government is equally daft; Digby Jones advising the NHS on becoming more business like, Sir Phillip Green advising how Government could become more efficient, or Alan Sugar advising Gordon Brown on stuff.

I give you a binding commitment that if elected Prime Minister I will not commission a celebrity chef to review hospital food. I may however re-introduce Fanny Craddock’s spotted dick.

https://www.sustainweb.org/publications/twenty_years_of_hospital_food_failure/

Who socialised US healthcare: Why Trump can’t get rid of Obamacare.

The Americans have a huge aversion to socialised health care.  While all other major Western economies have developed some model of state or socialised healthcare the USA alone leaves it’s health in the hands of the market.  Brits like me who grew up with the NHS are baffled and appalled at the way the US manages its nations health.  

The limited reforms introduced by Barrack Obama as President took the US a tentative step down the road towards universal healthcare, amid much controversy.  His successor Donald Trump has pledged to get rid of Obamacare, but faces an irreconcilable problem – compulsory insurance is really unpopular, but stopping insurers from refusing people with pre-existing conditions is really popular.  The problem is that you can’t have one without the other, otherwise no-one would take out health insurance until they get sick, and the insurers would go bankrupt.

I have a fundamental problem with this narrative.   It wasn’t Obama who socialised US healthcare.   

He inherited a socialised healthcare system from Dubya, and tried to make sense of it through some limited reforms, which provided a decent baseline for future reforms.

To explain that lets start by defining what a socialised healthcare system is. All of the major Western healthcare systems have the same mix of funding:

  1. Out of pocket/fee for service/co-payments
  2. Private health insurance
  3. National and Local Government

The only difference is the balance between those different elements. The US has very high levels of out of pocket and private health insurance, the UK has high levels of National Government expenditure.

A socialised healthcare system is one in which the Government, local and national controls the majority of healthcare expenditure.

The US passed this point 13 years ago, not under Obama, but under Dubya, due to increased entitlements and the rising costs of military and veterans healthcare, the legacy of wars in Iraq and Afghanistan.

As you can see from the graph, there was a big increase in federal expenditure in the 1960s with the initial introduction of Medicaid and Medicare, plus an increase in defence and veterans healthcare costs due to the Vietnam war

I cross checked my data with the Centre for Medicare and Medicaid Services. What I had never appreciated before was the extent of State and Local Government involvement in healthcare funding. In fact State and Local Governments spend a higher percentage of its expenditure than the Federal Government

When we add in State and Local level expenditure the graph changes massively:

Taking total public funding into account the US has been operating a socialised healthcare system since Lyndon Baines Johnson.   It just runs a socialised system in an incredibly expensive and inefficient manner due to the obsession with market approaches to healthcare.  In particular it spends crazy amounts on administration costs, insurance overheads, and is dreadful at controlling the costs of drugs.   The average American spends more on pharmaceuticals than the average Brit does on healthcare, and yet Brits have lower morbidity and a better life expectancy.  

This shows exactly why Trump’s efforts to repeal Obamacare are such a disaster.   The Republican Party want to replace Obamacare with a non-socialised healthcare program.   The problem is that in order to achieve that they have to turn the clock back to a pre-Civil Rights era version of America.   

There is a reactionary right wing movement in American politics that has long wanted to exactly that – turn the clock back to pre-Civil Rights America, stripping away employment and environmental protections along with equal rights legislation.   The Koch Brothers have poured billions into this campaign, with the goal of electing a reactionary President, only to find their careful planning hijacked by an orange faced chancer. 

There are even large parts of the Republican voter base that would cheer on this kind of initiative, but that doesn’t mean that it is a practical prospect, particularly because the people who are most dependent on socialised medicine are the blue collar voters who swung behind Trump in 2016. 

This is why America is on a long slow march towards a fully socialised healthcare system.   The last Republican President to leave office with a lower percentage of healthcare spend controlled by the state was Reagan.   Bush senior and Junior both increased socialisation by more than Obama and Clinton. 

The Republican Party’s “southern strategy” from Nixon onwards has made it the party of poorer, less well educated white voters, particularly in rural areas. They might be prepared to vote for tax cuts for millionaires, and big corporations but not if that means that their own entitlements get shredded at the same time.

That’s why becomes the harder for Republican’s to roll back socialisation. They want to be the Party of small state reactionary politics, but they are dependent on voters in states that are the most dependent on Federal spending.

With the death of David Koch, who spent billions on a reactionary plan for America and achieved little beyond making US politics even more unpleasant, there is an opportunity to try and have an honest debate about what kind of socialised healthcare the US wants and can afford.

https://www.cms.gov/Research-Statistics-Data-and-Systems/Research-Statistics-Data-and-Systems.html

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf

https://www.healthaffairs.org/doi/full/10.1377/hlthaff.27.5.w349

https://data.oecd.org/healthres/health-spending.htm

Peterloo, finally facing my Peterloo. The Chadwick family and C19th electoral reform

This week is the 200th anniversary of the Peterloo massacre. It was Britain’s Tiananmen Square, with pro-democracy demonstrators facing off against the military, on St Peter’s Fields in Manchester, 16th August 1819.

My great-great-great Grandfather was in the front line of the demonstrators and an eye witness to the violence.

If you know a lot about C19th British history, maybe from Fred Wharton’s A level class, you can skip the next bit.  

Harsh economic conditions and a political system that excluded most people in the North had created enthusiasm for political reform.   Parliament had passed the Corn Laws – protectionists legislation that benefited landowners at the expense of ordinary people.   

A mass meeting was held to hear radical orator Henry Hunt give a speech urging parliamentary reform, which attracted a crowd of nearly 80,000 people.   At the time only a tiny number of people, all men, could vote, and cities like Manchester had no MPs

The demonstration, while entirely peaceful, was seen as deeply threatening by the local magistrates, who had no official police force to keep order. The Terror of the French Revolution and the subsequent Napoleonic wars had scared the English ruling classes beyond belief and demonstration of this size terrified the local magistrates. Fearing a revolution, local magistrates ordered the 15th Hussars to charge the crowd forcing them to disperse, killing 18 and injuring nearly 700.

The impact of the Hussar charge was huge.  The incident was nicknamed Peterloo, after the battle of Waterloo.   The campaign for electoral reform was strengthened hugely, and reform of the police followed shortly after.

Percy Bysshe Shelley immortalised events in his poem Masque of Anarchy, where he describes Tory leader Viscount Castlereagh and the Manchester magistrates in these bleak terms:

I met Murder on the way –
He had a mask like Castlereagh –
Very smooth he looked, yet grim;
Seven blood-hounds followed him:

My ancestor, Thomas Chadwick, was in the front ranks of the Chartists on the day, and was an eye witness to events. History books recall Thomas as a mill owner, but I think this is a bit overstated.  He came from a family of weavers, and his mill probably only had a few looms run by family members.  His descendant Robert Chadwick would go on to become a large scale mill owner, and by all accounts a proper bastard. Robert married into the Staffordshire branch of the Chadwick family in order to gentrify himself. Another relative, Andrew Chadwick, was a slum landlord, who died fabulously wealthy. Thomas is my great-great-great Grandfather.

His brother James’ best friend was next to him, and was killed in the Dragoon charge.  The next day he wrote to his brother and described the events.  His description contains one of the most memorable lines ever written about Peterloo:

“an inhuman outrage committed on an unarmed, peaceful assembly.”

I was able to secure a copy of the letter in it’s entirety from the Rochdale archives.

EPSON MFP image
EPSON MFP image
EPSON MFP image
EPSON MFP image

Matching the letter to the list of victims I think he is describing the death of William Bradshaw, who was shot with a musket.

The significance of letters like this was crucial to the way Peterloo was perceived. The magistrates fought hard to get their version of events across, and newspapers like the Manchester Mercury were happy to oblige, praising “the necessary ardour of the troops in the discharge of their duty”, and blaming the radical orator Henry Hunt, who deserved “the deep and lasting execrations of many a sorrowing family”. 

The Times however went with the account of a Manchester businessman John Edward Taylor, which appeared on their front page on August 18th 1819

Taylor went on to found the Manchester Guardian as a direct response to Peterloo.

The Press condemnation, and the impact of letters like Thomas Chadwick’s had a profound effect. EP Thompson wrote “Never since Peterloo has authority dared to use equal force against a peaceful British crowd.”

Tiananmen Square by contrast did not prove to be decisive in changing Chinese history despite the stark image of the protestor facing down the tanks:

The true nature of events at Tiananmen Square are still disputed, however it is likely that nearly 10,000 were killed by 27 Army Group, according to a British Diplomatic cable:

It would be great to think that modern events would have more Thomas Chadwick’s recording their accounts, which would make it easier for the truth to get out. Instead it is easier for people who want to create a counter-narrative to spread disinformation and for Government’s to control the flow of information.

It would be great to think that current events in Hong Kong would have a better outcome than Tiananmen, but looking at troops massing at the border I am doubtful that is the case

Chadwick History Bit

For those of you interested in Chadwick family history this is my Grandfather, Robert:

My grandfathers grandfather was George Chadwick of Prestwich Manchester, baptised St Marys Prestwich 12/7/1807, married and buried All Saint Stand. His father was Thomas Chadwick, baptised 27/6/1766, St Marys Prestwich, the witness to the Peterloo massacre.

Thomas’ mother was called Alice, and his father was Samuel. Samuel was baptised St Chads Rochdale 24/4/1721, married Sarah Lock, 11/9/1757. His father was Robert.

At some point in the C17th my family moved from Rochdale to Prestwich. The last family member to live in Rochdale was Robert or Roberte Chadwick. The problem is that there are so many Robert(e) Chadwicks in Rochdale in the C17th that it’s hard to work out which one. There is a Roberte Chadwick who married a Dibrah Healey, but I think that the last Rochdale Chadwick is a generation older.

Working out why the family moved is equally hard. My best guess is that after the English Civil War Colonel Lewis (Louis) Chadwick, a hero of the New Model Army, moved to Lancashire. He was from the more aristocratic Staffordshire branch of the Chadwicks, but married into the Lancashire branch, gaining land.

This would make my family Roundheads; Puritans or Presbyterians. It does stick out that my family seem to have a rather limited choice of names; lots of Roberts, Andrews and Johns, which continues to this day. This is a feature of puritan families. We also have in the family tree a female relative called Silence Chadwick, which is about as Puritan as you can get.

My guess is that we were a fairly austere puritan family working in the cloth trades, probably as craftsmen working from home, who moved to Prestwich following Lewis Chadwick and his son John, who also served with distinction under Cromwell. A century later the black sheep of the family Thomas Chadwick, joined the Princes Manchester Regiment to fight for Bonnie Prince Charlie, for which he was hung drawn and quartered at Tyburn. Accounts at the time stress the pious protestantism of his family, and their aversion to popery.

Getting much further back from the mid-C17th is a tricky task, give the numbers of Robert Chadwicks in Rochdale. In the C19th Robert Chadwick, the horrible mill owner, had a number of his poorer ancestors dug up and re-buried in his new family vault, in order to disguise his humble origins. Without their grave stones to act as a cross reference we have little that allows us to work out which Robert Chadwick is our ancestor.

https://en.wikisource.org/wiki/UK_cable_on_Tiananmen_Square_Massacre

Social Care funding and outsourcing. Bad ideas from both main parties

Two sharply contrasting policy announcements from the two major parties over the last couple of weeks, but equally frustrating.

First up was BoJo, with an announcement that he will prioritise funding for health and social care:

Next up was Shadow Chancellor with an announcement about ending public sector outsourcing:

There is of course one policy that would address both sets of policy issues:

Bring care homes back into public ownership.

Frankly this makes a lot more sense than bringing school catering contracts back in house. Delivering health and social care is a core competency of the public sector. It’s bloody good at it, and operates the largest health care organisation in the world. Schools are good at teaching, but mass catering isn’t really one of their core skills. It’s something that the private sector does much better.

[As a side note – lots of Local Authorities – many of them old Labour operated race and gender bars in Council employment well into the C21st. The most highly paid manual jobs were reserved for white men. Women and non-white workers were paid much less. Councils face huge bills for discrimination – Birmingham Council will spend more than £1bn on equal pay claims. It was easier to outsource these jobs to different providers]

If you don’t mind I’m going to shift between talking about policy and talking about economics. Health care is provided or commissioned by the NHS and is free at the point of use. Social care is means tested, and is the responsibility of the individual to look after themselves. This distinction goes back to the establishment of the NHS in the 1940s.

Where it gets complex is NHS Continuing care, where the individual has social care needs which are contingent on a healthcare condition, for example someone who has dementia. If you aren’t eligible for NHS continuing care but you are in a Nursing home you can be asked to pay for the social care costs. This is what BoJo is referring to in his Express article. There is a perception that having to sell property assets to pay for social care rather than handing them down to your children is an affront to people’s rights to inherit wealth. If you are reading this in Scotland social care in residential homes is free, although I think that money would have been much better spent tackling chronic ill health and falling life expectancy 

Before we use this definition to start and look at some statistics about care it is important to acknowledge that an enormous amount of caring takes place within families, and isn’t recognised in the statistics. As services have shrunk in the age of austerity so the amount of unpaid caring has increased.

The number of local authority residential care places peaked in 1984. Councils provided 144,564 places, the private sector provided 66,700 places and the voluntary sector 42,704. Although the extent of private sector provision was low, it was increasing rapidly – in 1980 it had only been 37,177.

By 2017, Local Authorities provision had shrunk to 19,200 places, the voluntary sector was roughly the same – 44,600, while private sector provision had soared to 179,000 places

Some of this was due to the Private Sector building more homes, while Councils closed them. Durham County Council closed it’s last remaining care homes, including Chevely House in Belmont a few years ago, claiming that the cost per bed £918 per week per bed for Council run homes compared to £474 it paid to the Private Sector.

By comparison there are just over 200,000 nursing home beds. The average cost for a care home bed is just over £600 per week, the average cost of nursing care just over £800

Demand is growing as the number of over-65s increases, and even though people increasingly prefer to be cared for at home we are close to the point where there are more people who want/need residential care than there are beds. This has huge implications for the NHS were the main reason for a delayed discharge of care is the lack of a suitable residential placement. 

But lots of the shift was pure outsourcing. Council homes were handed over to the private sector who ran them at a profit, and at a lower cost.

It might be helpful to explain my own perspective here. I did lots of work on older people’s care when I was a PCT CEO. The NHS had inherited a massive mess from the outgoing Conservative administration. They had been encouraging the NHS to reduce the number of cases funded through continuing care in order to force more people to meet their own costs.

If you are already familiar with the history of continuing care legislation you can skip the next bit, as it deals with shifts in Government policy over the last decade or 2.

The Thatcher government were keen to change the original definition of health and social care contained in the 1946 Act in order to reduce the amount of care which was free at the point of use, and increase the amount that was means tested. This led to the 1990 Health Service and Community Care Act, and in particular a rather awful policy document issued by the NHS Management Executive – HSG (92) 50:“Local Authority Contracts for Residential and Nursing Home Care: NHS Related Aspects”

HSG (92) 50 starts with the ominous sentence:

“The original distinction between health and social care contained in the 1946 Act had been changed by the 1990 Health Service and Community Care Act” .

It went on

“The local authority is responsible for purchasing services to meet the general nursing care needs of that person, including the cost of incontinence services (eg laundry) and those incontinence and nursing supplies which are not available on NHS prescription. Health authorities will be responsible for purchasing, within the resources available and in line with their priorities, physiotherapy, chiropody and speech and language therapy, with the appropriate equipment, and the provision of specialist nursing advice, eg continence advice and stoma care, for those people placed in nursing homes by local authorities with the consent of a DHA”

This redefinition of nursing care shifted costs from the NHS to the individual because Local Authority care was means tested. If you really want to hate the Tories for doing bad things to the NHS hate them for this.

HSG (95) 8; LAC (95) 5) made this clearer:

“Many people regard care in a Nursing Home as health care, and therefore the purchasing responsibility of the NHS. However, under the NHS and Community Care Act, Social Services were given a new responsibility for purchasing Nursing Home beds. As with the previous arrangement through the Department of Social Security this is subject to a means test. The regulations governing this are laid down nationally”

If you didn’t work in the NHS in the last days of the Tories you have no idea of the tyranny of Health Service Guidance and Health Service Circulars (HSG and HSC) often issued more than once a day by the Health Service Executive. The vast expansion of NHS bureaucracy under Thatcher, then Major had spawned the HSE housed in a purpose built impregnable management fortress near the Leeds ring road:

If there is one thing to praise the Blair Government for it did at least get rid of the Health Service Executive, and limit the number of HSCs that could be issued.

The continuing care rules were legally challenged in R. v. North and East Devon Health Authority, ex parte Coughlan, a landmark judgement which had forced the NHS to accept liability for a large number of continuing care cases.

Justice Hidden, in his judgement made the following ruling:

“I conclude that nursing is “health care” and can never be “social care” and that ….. HSG (95) 8 did not make any change to any NHS responsibility for health care services including nursing”.

In this context I was a newly appointed PCT CEO charged with sorting out the impact of this judgement on local patients.

Redcar and Cleveland Council still had a mixed economy. There were large Council owned Care Homes across the Borough, mixed in with private provision. We had continual battles with the private home owners, and kept a common line over costs:

https://www.thenorthernecho.co.uk/news/6973452.cash-and-ideas-may-keep-nursing-home-open/

While all of this was going on the Council was closing some of it’s own residential homes, moving patients into the private sector and replacing them with sheltered housing or specialist dementia care.

https://www.gazettelive.co.uk/news/local-news/redcar-cleveland-care-homes-close-3708757

My experiences with the care home market in Redcar and Cleveland left me with a profound belief that models of service provision based on outsourcing everything don’t work. In a key market like care provision the public sector should retain their own provision, even in a mixed market, in order to be able to shape market provision.

As a side note to this when we were reviewing patients for eligibility I came across an individual who had been allowed to move into older people’s residential care in his mid-50s because he was mates with the Councillor who chaired Social Services committee. For my generation a moving into residential care seems like a terrible way to live, clearly not for some!

Now that we have established the policy/legal context lets look at the private sector market structure.

The 4 largest providers have only 15% of the market between them: Four Seasons (4.9%), Bupa Care Homes (4.7%), Barchester Healthcare (2.8%) and HC-One (2.4%). The top 25 provides have 30% of the market. Small and medium sized providers still have lots and lots of the market. HC-One are in the process of aquiring BUPAs business, making them the single largest provider. The majority of companies in the market have less than 3 homes.

This would indicate that there are few economies of scale, and the cost base of care homes is driven by people costs – the number of staff needed to cover care rotas. At the moment staffing costs are 57.5% of total costs across the sector, and in order to maintain profit homes need to reduce the percentage of their income which goes out in wages. The problem of costs is linked inextricably with high staff turnover, as high as 30% of staff per year in some regions. The industry has a high level of immigrant employees, and the hostility to immigration over the last decade has made staffing problems worse.

As well as these direct care costs there are significant costs associated with the purchase or construction of buildings and meeting Care Standards Commission standards. These costs are typically funded through borrowing, and the whole industry has high levels of debt. The largest providers have high levels of Private Equity debt.

It was this kind of financing crisis which brought down the Southern Cross, the then largest care home provider in 2011. Things improved briefly, but a similar financing crisis forced Allied Health care into administration in December last year, and Four Seasons into administration 4 months later. There have been similar, smaller regional collapses on a regular basis.

These companies have 2 main customers; those funded by Local authorities, those funding their own care. Local Authorities have a lot more purchasing power than private funders, and can negotiate a much better price, typically 40% lower. Roughly 60% of customers are LA funded. The bigger chains of care homes have much higher proportions of LA funded clients. Smaller, privately owned homes have much higher proportions of private payers. Homes with higher proportions of private payers are much more profitable, and are concentrated in more affluent areas. The bigger chains have higher numbers of LA funded clients because they offer a more stable and predictable source of income which their investors like

Source: House of Commons Library

This is one of the commercial factors that drives BoJos policy – not only are some people having to fund their own care, but there is a perception that by paying higher prices they are subsidising other residents. In reality private paying clients tend to live in homes with low levels of Council funded residents and vice versa.

The Competition and Markets Authority investigated the care home market last year to investigate cross-subsidisation, although they concluded that the problem was lack of funding into Local authorities rather than private funders being ripped off. This reflects the reduction in fees paid by Local Authorities – since 2010 Local Authority rates per bed have fallen by 6% in real terms.

There is a starct contrast betwen the golden age of social care funding increase under the last Labour Government – peaking at 4% above inflation in 2006/7, and a rea terms cut in central government funding for social care

The Coalition Government’s 2010 Comprehensive Spending Review, local
government spending fell by 26% in real terms by 2014/15, although the fall was mitigated to 14% once council tax increases and other factors were taken into account. 

Spending on care by local authorities (including funds transferred from the NHS through the Better Care Fund) fell by 5.3% in real terms between 2010-11 and 2016-17 despite rising demand and a more acute illnesses.

As fees fell so did the profits of care home companies. EBITDA across the sector has fallen from 30%+ 10 years ago to 20% now. This still seems pretty generous but when the costs of finance are taken out there isn;t much profit left

Despite the Coughlan judgement people with conditions like Dementia are still liable to pay for their own social care costs until their assets fall below a particular level.  At the moment the floor is £23,500.  The last Conservative Manifesto Conservative proposed raising that floor to £100,000 and introduce a life time cap of £72,000.   For the first time in the case of people being cared for in their own home, that calculation includes the value of their house.  This was attacked by the Labour Party as “the Dementia Tax”forcing a Government U-Turn.   Crazy that a supposed left wing Labour leadership would defend inherited wealth in this way.

This was a massively expensive promise, costing nearly £15bn over the next decade.  It would nearly as expensive as implementing a Scottish style free social care model.

Sadly this bit of politicking has made the debate harder – the system isn’t sustainable without additional resources.  Because older people are richer than working age adults any policy which increases tax payer funding for social care in highly regressive.   Any policy changes are expensive  – £20 per week extra in costs per person equals £1bn a year

The current generation of older people have large amounts of unearned wealth generated by the property market, and the fairest way to fund the increase in social care funding is using this accumulated wealth.  We would still need additional taxpayer funding, but by asking older people to contribute some of the wealth tied up in their properties we would make the burden on current taxpayers (most of whom don’t have the same level of accumulated property wealth 

But extra funding doesn’t answer all of the problems.   It will help raise the prices homes can charge, which will stabilise the sector.

In order to expand supply the state should start and by up distressed chains of care homes. The big cost that is sinking homes is debt. The Government can refinance this debt at a heavy discount.   Once the state is actively playing in the market it can start and expand it’s own provision taking advantage of cheap Government borrowing.   As an active participant in the market it can start and shape future provision and address market failure.  

The state can also give care home workers more chances for career progression, from caring into Nursing for example, making care work more attractive as a career.   

The UK also has a shortage of housing with care – effectively retirement communities.   Only 0.6 per cent of over 65s live in housing with care, 10 times less than in more mature retirement housing markets such as the USA and Australia, where over 5 per cent of over 65s live in housing with care. Obviously the climate in Florida is more attractive than Saltburn or Seaham, but areas like this with cheap land would be obvious areas to expand purpose built retirement communities.   At the moment the way that Local Authorities and the NHS are funded mean that no-one would welcome such a development in their local area

This gets us to the existential problem. Without an expansion of supply the sector we will start and run out of beds in the next 5 years.   In some parts of the country it is a lot less than that, and residents will have to move a further and further away to find a place. This is the urgent problem that needs Government to solve, not protecting inherited wealth, or re-nationalising dinner ladies.

https://www.theguardian.com/politics/2019/jul/20/labour-pledges-to-push-councils-into-taking-back-local-services

https://www.laingbuisson.com/wp-content/uploads/2016/06/Care_OlderPeople_27ed_Bro_WEB.pdf

https://www.dailymail.co.uk/news/article-7254331/Two-homes-proud-owners-sold-pay-crippling-dementia-care-costs.html

https://www.thenorthernecho.co.uk/news/11134577.durham-county-councils-five-remaining-residential-homes-in-stanhope-belmont-ferryhill-peterlee-and-chester-le-street-recommended-for-closure/

https://www.grantthornton.co.uk/globalassets/1.-member-firms/united-kingdom/pdf/documents/care-homes-for-the-elderly-where-are-we-now.pdf

Self Unemployment and fiddling the numbers

We are living through a golden age of near full employment according to the Department of Work and Pensions and the Office of National Statistics.

Despite a slow growing economy and low levels of business investment unemployment is back to levels not seen since the 1970s.

I have mixed views about this. I do think that there are lots of good things about the UK labour market. The combination of the National Minimum Wage, Tax Credits, and increased workplace protections have made the labour market more flexible, drawing in more workers. That flexibility has benefitted employers, who have hired more people.

But there is something going on that makes me sceptical. I remember what 1970s full employment was like and this isn’t it.

Some of this scepticism is because I think that the Labour Force Survey isn’t really up to the job of measuring unemployment in a complex labour market with high levels of self employment, zero hours contracts and part time working.

This was one of the first blogs I ever wrote:

https://jon-chadwick.com/2017/03/18/unemployments-rising-in-the-chigley-end-of-town/

While employment has been rising, so has the number of companies. The number of new businesses created in the UK between 2007–08 and 2015–16 grew from 3.4m to 5.6m, higher than in any other OECD country, The number of businesses with employees grew much slowly than the number of sole traders. The number of employees grew by 15%, while self-employment (including those operating as a sole trader or as a partner in a partnership) grew by 25%..

We can see the same effect more dramatically by comparing the growth of companies with employees and the growth of companies without employees:

The growth in business ownership is driven entirely by sole traders, and the number of foreign-born sole traders more than doubled between 2007–08 and 2013–14, accounting for one-third of net growth in the sole trader population over that period. There increase accelerates after the credit crunch.

There are some other things that we know about sole traders.

Sole traders on the whole have very low incomes. The mean annual taxable income (from all sources) of sole traders was £21,000 in 2015–16 (£10,000 below that of employees) median income was just £13,000, with 36% (1.5 million people) earning below £10,000. The income sole traders derive from their business (profit) is even lower on average (£12,100) and has fallen by £3,300 (21%) in real terms since 2007–08

There is also a very high turnover of business start up and closure. Between 2014–15 and 2015–16, the sole trader number of sole trader businesses grew by almost 70,000, but this was 650,000 start ups and 580,000 closures, with sole traders moving in and out of business ownership.

20% of newly set-up sole traders are not trading after their first year; 60% have ceased trading by year 5 and 80% have ceased after 12 years.

The growth in sole trader self employment co-incides with the long term decline in UK productivity since the credit crunch, a trend that has got worse since the Brexit vote. Business investment is low, productivity growth is low, wages are low, self employment is high

The UK definitely has a “long tail” of unproductive companies, much longer than Germany and France. The Bank of England regularly identifies the long tail as the main reason for UK’s poor record on productivity

Sole trader businesses typically are low profit/low investment businesses. 1 million sole traders (23% of the total) had total business costs below £1,000 in 2015–16, 2 million had business costs below £10,000. 300,000 had no business costs at all. Low investment, low productivity, low profit.

It could be that low interests and a willingness to live on very low wages, supplemented by tax credits, has allowed “zombie” businesses which make no money to survive, unproductive.

It is also possible that productivity is a misleading measure – craft products. If all of the sole traders were running artisanal bakerys, making craft gin or small batch cheeses then productivity would be falling but only because that is what customers want. But this doesn’t match with the low investment, low profit model.

The final thing we know is that the typical sole trader is an older man. Some of these are white collar workers laid off in the credit crunch who have returned to their previous industries as self employed consultants. Others are people forced into fake self employment in the gig economy by employers trying to circumvent the National Minimum Wage.

But some of this is however is the result of the Department of Work and Pensions encouraging people into fake self employment.

For someone who has paid their stamp you are entitled to 6 months of Job Seekers Allowance. JSA is a non-means tested benefit worth £73.10 a week. Once the 6 months are over JSA ends, and instead you go onto Income Support, a means tested benefit. For people with savings or a redundancy payment Income Support pays no money, but you are still required to go through the hassle of regular interviews and job applications.

Job Centre Plus has any easy solution for people in this conundrum. Register a business with Companies House and sign up for New Enterprise Allowance Scheme. NEAS pays a non-means tested benefit worth £1,274 over 26 weeks, just for completing a business plan. This puts you back onto benefits, and gets rid of the hassle of interviews and job applications.

After Ian Duncan Smith made such a big fuss over closing apparent benefit loopholes it is rather suspicious that this one was allowed to remain open, particularly as it has the effect of reducing unemployment.

What’s even more suspicious is that since 2010 the number of companies struck off the register by companies house has acce

OK. It’s not really suspicious. It’s a deliberate manipulation of unemployment statistics.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/januarytomarch2019

https://www.ft.com/content/b6513260-b5b2-11e7-a398-73d59db9e399

https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf