Bletchley

We took a day of leave this week to travel to Bletchley Park near Milton Keynes. It was an early flight to fly down and then get a train to Bletchley (and a late night to get back home). But it was fascinating. We had planned to go down a few years back but were unable to do so – just as well in the sense that we benefited from the recent investment to renew and recreate the centre of wartime codebreaking.

The place is a proper museum now though it still has a lot of further work planned. Many of the huts where crypto-analysis and computation took place have been restored along with the mansion house and the grounds. It feels more like a campus than anything else. There are various multi media strands, as well as a reconstituted ‘bombe’ computer and archaeology such as coding sheets found doing the restorations. There are of course lots of Enigma machines and various decoding brain teaser exercises (are they still recruiting?).

Alan Turing is, rightly, everywhere, not least because of the recent Benedict Cumberpatch film which is also unavoidable. But there is a real sense of history and importance about the place and it is incredible how close we came to losing the site altogether (there were plans to extend a housing development which did in part extend into the historical site). The museum designers or recreaters have made a great job of it though there are still blocks outside that are waiting the same treatment once sufficient funds are raised.

It was a bit emotional for me walking round the site and taking it in because I knew that my mother, then a teenager, had been a WRN working in a Bletchley outstation in London towards the end of the war. She did not talk about it until comparatively recently (they took their secrecy seriously). This was a principal reason for wanting to visit and also why in a sense it is a shame that the museum has only recently become the fantastic resource it now is. If you ask her now about it, the things she most recalls about the work include the close work of setting up the machines for computation, and working to strict navy watches of 8 hour shifts. She also remembers the  Heath Robinson cocktail parties – but that is another story.

‘Back to the Future’ or Council Tax: How we Arrived Here

Last week I was invited to a session of the Local Tax Commission to provide a context-setting potted history of local government finance in Scotland. I am no historian but it was an interesting task to delve back into the pre-20th century material as well as the more recent post-war period and especially the last 30 years. I started active research investigating the poll tax and its impact on the housing market, so my historical work was also self-reflective, looking to my own papers from the late 1980s (I even found a longhand essay from 1988 – I used to have quite good handwriting!).

The longer term perspective allows us to think more about the sustainability of local government finance systems and also about recurring themes and problems, some of which predated 1900. A number of generalities struck me as I assembled material for the presentation.

First, there is nothing new in the centralization v localization tensions so apparent since the post-1970s. Goshen reported in the 1870s on local government financing and stressed not only the growth of grant funding (from 0 at the turn of the 19th century to as much as 14% in 1890) but that there were political tensions between Westminster and councils which might be expressed in modern parlance in terms of the desire of councils to promote local accountability and locally sourced tax revenues versus the increasing use in the 20th century of general grant in aid (ie not just specific grants) to support issues of territorial equity by reducing inequalities caused by varying tax bases or different levels of need.

While, in the contemporary era business rates have been nationalised (and become a form of grant) and there is more reliance on fees and charges (and more recently on local council reserves) to balance books, the shift has clearly been towards the centre and away from local accountability. The share of revenues attributed to revenue supporting grant has fallen from its high water mark in the early 1890s but still unquestionably dominates the system.

A second theme is that the British disease, otherwise known as our political inability to enforce general revaluations, is actually a venerable tradition that has been with us for many decades. After revaluing in 1934, domestic rates were not revalued again till 1956 (and then only to 1939 prices – shades of the council tax). The 1963 revaluation became enmeshed in the controversy over the future of schedule A income tax (also based on rateable values). Prior to the council tax, the last English revaluation happened in 1973 and the last Scottish one, infamously, happened in 1985. So, the inability, Wales excepted, to carry out a council tax revaluation has a long backstory, often related to manifesto pledges to support the (home-owning) ratepayer. Without enforcement, a statutory pledge to revalue looks a little hollow.

Third, the memory of the poll tax is very long. This operates on several levels. First of all the council tax was grafted on to the poll tax finance system and also included important features of the poll tax such as the personal discount. Second, the poll tax catastrophe for central government, local government finance, accountability and credibility casts a long shadow and creates an inertia that, outside of Scotland, renders political classes largely unable to contemplate reform of the council tax because of the (well-grounded) fears that ‘there be dragons’. Until the inertia is offset by the palpable failings of the existing system causing real pain politically, it is less clear that meaningful reform can occur.

Perhaps Scotland therefore can be the beacon for the rest of Britain? Though one might also reasonably ask why the Scottish political system and its government is willing to go for reform now – though wide cross party consensus is clearly an important contributory factor.

A fourth theme, and one apparent from re-reading the many inquiries and green papers of the last 50 years (Allen through Layfield up to Lyons and Burt, as well as the many government papers) is that there is considerable risk in just looking at local taxes in isolation from their interaction with local services, the geography or functional bounded-ness of local authorities (and whether unitary or other structures are in place), as well as the underlying balance of central grant and local tax.

There have been reasoned external critiques of the Lyons Review that was commissioned by New Labour but it was surely right on one point. Making reforms in limited parts of the system only makes sense if the reforms offer a road map and enable further complementary reforms e.g. to the grant system or raising more local revenues later on (if that is the target). When we consider reform to Scottish local taxes we must ensure that we do not close the door to the second and third rounds of necessary reform to local government finance.

Finally, the mid-1970s Layfield Commission remains an absolute benchmark of sanity and systematic thinking about the subject. They focused on the long term, on the balance between centralizing and localizing forces. They offered a solution involving a reformed property tax and a local income tax as a way to improve fairness and accountability and to reduce revenue risk. This final point remains highly relevant to modern Scotland. For anyone getting in to the subject they could not do much better than returning to Frank Layfield’s excellent report.

The House Price Hockey Stick

A couple of housing-related things gave been going round my head in recent days and I thought it might make sense to link them, however, realistic or useful that might be.

First of all, a couple of weeks back I was at the Scottish Housing Event in Edinburgh, a government-led housing policy and practice conference about delivering the Scottish Government’s housing strategy, building out of a series of workshops and roundtables. It was all very inclusive and participative, if not, as yet decisively conclusive. However, apart from the interesting nuggets and networking that went on there was, for me, a striking contextual presentation by David Signorini from Communities Analytical Services (a written up version of the presentation is on the Government website dedicated to the conference: http://www.scotland.gov.uk/Topics/Built-Environment/Housing/reform/housing-event,) The slides covered a range of important background trends and themes but the one that struck me the most concerned house prices and affordability.

The Communities ASD diagram (based on ONS data for Scotland) shows that while real house prices have come down since 2010, the impact on the house price to earnings ratio has been moderated by first falling and then flat earnings. Moreover, the absolute level of the ratio, falling from just over 9.0 to a little less than 8.5, remains very high, historically (i.e. 2010 was I think the modern record high).

Despite the recent moderating trend, it is quite hard to overstate how bad these numbers really are but some voices will no doubt say: don’t worry; there will be a correction once interest rates rise and some process of mean reversion will kick in. I, for one, am pretty sceptical that we will get back to stable price to income ratio values of 4 or even 5 and that is where the second issue comes in.

Via a retweet at the weekend of Tim Hartford’s blog I read the excellent paper by Katharina Knoll and colleagues, summarised in the VOX CEPR portal at http://www.voxeu.org/article/homes-prices-1870.
In their paper, Knoll, Schularick and Steger present a new house price index for 14 developed economies using a consistent data series from 1870 to 2012. This provides a fascinating long term house price series. Now, I would be the first to recognise the difficulties of pooling international house price data but it is intriguing reading and raises some big questions.

First of all, they find in general what they call a hockey stick pattern – real house prices were relatively stable till the middle of the 20th century when they started an (ongoing) strong and accelerating increase in value – tripling since 1900. This is despite the relative stability of income growth – i.e. the price to income ratio especially in recent decades has been increasing sharply.

Much of this real house price growth is associated with booming land prices (some four-fifths of house price growth is explained since 1950 by rising land prices). They argue that this has become more pronounced because of the long term effects of reduced transport costs making more land economically usable (increasing supply) until the post-war period when land became more like Ricardo’s fixed factor of production. They also point to the importance of restrictions on land use at the same time that economic (income elastic) demands for housing space increased.

Second, Hartford like Knoll et al also link this to the Picketty thesis that capital has become much more important in recent decades because in part of the growing role of private housing wealth and rising real estate asset values. Rising price to income ratios stretches unaffordability and reinforce inequality by locking more and more people out of home ownership who might previously have been able to get on the ladder – but tighter lending rules and unreachable price to income ratios serve to segregate further insiders and outsiders. And as others like Beverley Searle have previously noted, this is likely to have all manner of ramifications as cohorts of people have no assets to turn to meet risks and care costs, etc. in later life – the long term neglect of house prices will end up in part increasing public spending and higher taxes or at least putting further pressure on budgets to support care and other age-related services.

The historical record suggests that rising real house prices (and relative to incomes) are a long term feature of capitalist economies – so, to the extent that the future remains similar to our recent past couple of generations, do not expect a sustained mean reversion to earlier more affordable days any time soon.

The Return of Dudley Smith

I have spent much of the last ten days reading Perfidia, the new crime novel by James Ellroy. He is well-known for his series of novels blending fact and fiction, real and imagined people, in a continuous historical narrative stretching across nearly 30 years of post war American history mainly in Los Angeles. Several of his books have been filmed along with other screenplays. LA Confidential was a huge celluloid success; the Black Dahlia, less so.

There are three interconnected stages to the mature Ellroy books – first the four crime novels that start with the Black Dahlia and end with White Jazz. Second, there is the biographical My Dark Places which tells the story of his mother’s murder, his subsequent journey through tortured times till he became a successful novelist and then used his newly found resources to re-investigate his mother’s death. Everyone should read this book but don’t expect light entertainment. Third, he constructed his own fictional account of the alternate 1960s focused around the Kennedy and King assassinations, Hoover, the CIA and the Mob, drawing extensively from characters introduced earlier in the crime novels. The Underworld Trilogy began with American Tabloid and the Cold 6000. After a long delay the third book (Blood’s a Rover) moved to the early 1970s and dealt with the CIA in Central America, less so with domestic politics, and also rounded off the arc of the key remaining characters.

The classic crime and political novels are characterised by large ensemble casts, complex and highly detailed plotting, electric and often shocking prose, a highly stylised form of writing in the historical vernacular, and the unceasing, relentless analysis of evil in the pursuit of money, power, racial prejudice and control (usually) over women. It can be very dark but when it works it is compelling.

My introduction to Ellroy was White Jazz, out of order and last of the 4 LA crime novels. I had never read anything like it – how could the main protagonist, Dave Klein, someone of dubious morality himself, but wholly committed to an ethical goal, possibly survive and achieve his ends whilst multiple forces are arrayed against him. I think I then saw the film of LA Confidential and thereafter read the four novels in order. The Big Nowhere is probably the classic crime novel of the set but the book version of LA Confidential is by far the most complex story and much richer and deeper than the admittedly excellent film.

The key character through the LA quartet is Dudley Smith, the epitome of premeditated evil and avarice, all embodied in a clever, funny, smooth Irish-American police detective. Smith is to my mind one of the greatest creations of modern crime fiction.

The political trilogy that begins with American Tabloid and the Cold 6000 were broader and bolder and reinvented the Sixties in a powerful series of dark conspiracies, hidden agendas and political brutality. Scapegoats and media manipulation are developed alongside the unfolding plans of highly professional operators in the pay of different illiberal puppet-masters.

Each book is structured around on three or four characters with each short chapter loosely from one of their perspectives or tracing their actions and thinking processes. You see this sort of approach in a lot of modern writing but Ellroy is for me the master of this relentless style. The books have grown larger and more dense but are none the worse for it. You need to commit and submerge yourself in their fascinating though often shocking worlds that operate under the Hollywood radar.

So it is with this baggage that I approached reading Perfidia. I was slightly disappointed with Blood’s a Rover, his previous book, and while I looked forward to the new planned quartet of wartime LA crime novels involving younger versions of the key characters from both existing series, it was with a little trepidation.

I need not have worried. The new book is simply tremendous and a genuine return to his best form. Several of the key characters from both the Black Dahlia and American Tabloid are present and correct. There is the development of a new key character, the future LA police chief William Parker. There is the usual melange of serious crime and murder mayhem interwoven with powerful economic interests and political corruption and conspiracy – on this occasion the LA response to Pearl Harbour and Japanese internment. Best of all, at the heart of the book is a younger but instantly recognisable Dudley Smith who dominates the book. It is great to have him back, monster that he is.

I won’t say anything about the plot or its multiple threads to war, politics, crime and Hollywood. Racism in its different forms often plays a key role in Ellroy’s books and in this one the treatment of the American Japanese and the cynical manipulation of the situation to secure advantage is laid out in detail.

This has been the fictional book of the year for me (thus far) and it is great to have him back. I hope the next volume will not take 5 years. I know that Ellroy is not to everyone’s tastes but for those of who do like his books, Perfidia is very welcome and contains quite a few surprises.

The Case for Pluralism in Economics: An Evening with Steve Keen

In certain respects, there should be wider support for pluralism in academic economics (i.e. the wider use of non neo-classical ideas such as old and new institutional economics, Austrian economics, post-Keynesianism, behavioural economics, evolutionary economics, strategic decision-making, etc). On the one hand there is the negative case made by the failure of the mainstream macro orthodoxy to predict or in any sense be ready for the GFC and subsequent long recession. From a more positive perspective, no-one in economics should be in favour of monopoly and instead welcome the possibility of new insights and innovation from whatever source. But there are powerful forces of resistance to change. It is in this context that the bottom-up upsurge in interest in pluralising the undergraduate economics curriculum in North America, Europe and parts of the UK is so welcome.

Steve Keen, author of Debunking Economics and predictor of the GFC, gave a lecture on Tuesday evening at the University of Glasgow invited by the student-led real world economics society. Keen is no shrinking violet and is nothing if not provocative – but he backs it up with a careful series of arguments that draw their criticisms of mainstream neo-classical economics from a range of theoretical and empirical critiques that speak to Post-Keynesian economics, Minsky’s work on financial instability, institutional economics and of course the role of banking and private debt.

I have been to a lot of events in recent months, mainly referendum-related, so it was nice to get back to economics especially this kind of more fundamental analysis. The first striking thing about the evening was Keen’s capacity – he spoke for an hour and three quarters and was consistently engaging, intelligent and entertaining.

Keen went through his fundamental macro debt argument (and his ongoing dispute with Krugman concerning whether bank debt creates demand or simply redistributes wealth between lenders and borrowers) and used his own dynamic systems open software (called ‘Minsky’) to illustrate his point. This also allowed him to attack the failure of the conventional macroeconomics profession to see the looming crisis and subsequent recession that he had for many years been anticipating. Keen then went on to attack the conventional microeconomics of utility maximisation, particularly the axioms underlying Samuelson’s revealed preference estimation of consumer demand and the broader problem of aggregating market demand from the sum of individual demands (the difficulty he argued arose from the heterogeneity in tastes and preferences).

He has evidently developed and continues to modify a polished and substantial lecture or set of talks based around his book and subsequent research. His presentational style and multi dimensional AV was very impressive – including running his model in real time to demonstrate his arguments, referring to key literature, showing a clip of an embarrassing own goal (which made sense in context) and engaging directly with his audience throughout.

I read Debunking Economics a few years back and was struck by its challenging core ideas, particularly how the house price:mortgage debt question relates to his ideas about private debt and the aforementioned critique of microeconomic fundamentals. While he is quite critical of behavioural economics in his book, I was interested to hear him say that he believed the alternative to the rational choice modelling he sought to unpick was in fact through the habit and custom and implicitly the bounded rationality inherent to contemporary thinking from (old) institutional economics. His critique of the completeness theorem of Samuelson’s revealed preference theorem (that there are just too many combinations of bundles of goods to choose from to do so in a deterministic optimal way as suggested by the model) and the consequent satisficing solution he put in it place did sound a lot like behavioural heuristic solutions to cognitive problems to me. His fundamental point was that the evidence of empirical regularities (such as demand falling after prices increase for a specific good) does not warrant a dodgy or false theory.

And what about the economics curriculum revolution? There is a strong group at Glasgow, judging by the composition of the large audience at the lecture. and, The undergraduate programme in Glasgow does now incorporate a chunk of Post-Keynesian economics, Keen’s analysis and an element of this broader set of heterodox perspectives – admittedly within what remains a fundamentally mainstream economics degree. I did this degree in the 1980s and we did include an honours core course on methodology which featured Shackle and Austrian economics ideas but it was still overall a strongly orthodox programme.

While it is welcome that students and some staff are challenging the mainstream we cannot underestimate the strength of the orthodoxy and the career and academy dominance of the mainstream neo-classical worldview. Keen concluded tonight that his fears for another financial crisis, premised on historically high levels of private debt right now, might as one consequence shock economists into revising their approaches, but it is high price to pay!

This is all not just about micro theory or monetary macroeconomics. Alex Marsh and I have been looking through the housing economics literature to see to what extent that group of applied economists predicted or expected what happened after 2006 in the USA and after 2007 elsewhere. Not only is there not much evidence that the mainstream was in any way prepared (other than an unresolved debate about housing bubbles and one or two honourable exceptions), the post-mortem afterwards has not taken us much further forward. Partly this is because many of these economists are the very same folk who study the macro and financial markets but also are located in the same neo-classical schools.

We recorded the Keen lecture and we will shortly put a version of it on the Policy Scotland website (http://policyscotland.gla.ac.uk).

Legacy?

In a few days Glasgow will host its first mega event. The preparations, the visitors and the symbols of the Commonwealth Games are inescapable throughout the city. Even where I live in Lanarkshire, the triathlon is taking place in Strathclyde Park and I’ll be able to walk to the event.

Since the announcement that Glasgow had won 2014 more than six years ago, with academic colleagues we have been debating the Games, the notion of legacy and the pros and cons of committing to such a massive project. It will cost more than £560 million, not counting the disruption and other unaccounted for real costs, and many have argued that this is a high price to pay for what is predominantly a sporting festival. Critics point to the previous evidence of other sports and cultural events, which found little evidence of long-term benefits. Others argue that these mega events represent neo-liberal responses to urban decline and post-industrial regeneration through sport and cultural tourism attached to more or less city boosterism. Contrary to the position stressed by the organising hosts, critics argue that far from being inclusive, they are examples of and reasons why local people lose out when events like the Games are imposed on them.

The response to this from those more favourably disposed or at least willing to test the proposition is multi-faceted. First, the external bodies awarding future games require credible legacy pledges. So, if you are going to bid, there will necessarily be clams being made. Expectations of legacy have also steadily risen with each round of bidding. Are they realistic and have they been modified in the light of the experience of preparing for Glasgow 2014? Second, unlike previous events, Glasgow is different because it has since the awarding of the 2014 Games been planning for legacy, developing a multi-level evaluation framework for the different dimensions of legacy and involving extensive independent research testing both the Government’s and the council’s legacy frameworks. Third, legacy happens after the Games and analysis and measurement will go on for 5-7 years after the event is over. But the evaluation commitment will need to be sustained if these lessons are to be learned.

These are all lessons learnt from previous games in places like Barcelona, Manchester and London. Glasgow is another step on that journey and the 2014 Games is a different stage on the city’s long term regeneration which offer the possibility of impacting positively on that process. But to be clear, these are all propositions to be tested, and, moreover, the multiple nature of the legacy goals (e.g. economic growth, environmental sustainability, inclusiveness, international connectedness, etc.) may well come into conflict with each other and not simply be additive.

As part of my policy knowledge exchange work we have established a new legacy research network which we hope will bring cities and academics together to discuss sharing knowledge and learning about what works and what does not from sporting and cultural events around the world (and also provide a space for robust critical analysis). Initially, we are looking at Glasgow 2014 and we seek to clearly situate legacy in terms of Glasgow and its regional regeneration/development. We are working with the City, its cultural and sport agency Glasgow Life, and representatives of the three Universities in the city. Our first activity was to hold a panel session last week asking what is legacy, what can it mean for Glasgow and what lessons can we draw about its evaluation? We plan to hold an inaugural international conference in Glasgow in the middle of October 2015.

The panel session involved contributions from Bridget McConnell (Director of Glasgow Life), my colleague Ade Kearns (who leads the Go Well programme and the east end community evaluation of 2014 legacy) and Robert Rogerson (Strathclyde University) who for three years has been funded to examine legacy in an innovative partnership involving the same partners who are involved in our legacy network. The main points that struck me from the debate were the following:

1. The evaluation of the legacy will be complex (to put it mildly). Isolating cause and effect and capturing the independent effects of Games-related activities that are genuinely additional, to point to just two issues – will be methodologically challenging in the extreme.
2. The panel were clear that there would be no simple answers confirming or denying lasting legacy effects. As Ade Kearns pointed out, almost any element of the games project investments can be viewed in positive and in negative terms depending on perspective and context. Moreover, the idea that legacy impacts will follow in an emulative way always runs the risk of depending on how the individuals concern choose to respond. Interventions cannot make people be more active, for instance, if they have other countervailing incentives that trump the intervention.
3. A novel feature of the 2014 model is early access to community facilities for local people. This has been successful and is likely to help sustain the facilities investment (as well as make wider local provision available).
4. Ade Kearns also argued that broader regeneration initiatives (in public health and in physical infrastructure via the M74 motorway extension and Clyde Gateway business space investment) would inevitably overwhelm the independent effects of 2014. But that does not mean that legacy’s complementarity to the bigger regeneration programme is not worthwhile.
5. It was also pointed out that the opportunity cost figure is not straightforward because some of the big investments represent the acceleration of investments that were planned but were able to be brought forward and done so together for 2014. For instance, the national sport centre was accelerated while the adjacent velodrome was completely new.
6. The hosting of 2014, assuming it is successful, also places Glasgow in a more competitive position to draw benefits from future bidding for sports and cultural events to the benefit of the city and region. In 2015, for instance, Glasgow will host the World Gymnastics. Will the city develop a capacity to build on this success, how do we assess the returns on such a direction taken strategically, and, who stands to benefit from it?
7. Finally, Glasgow city council has recognised the partnership working benefits of delivering a huge project like 2014. They are keen to not lose these process benefits when normal service is resumed and they are therefore looking at how to mainstream them into everyday council activities.

Like the study of area regeneration, research and evaluation in this field is remarkably difficult and challenging, which makes it so interesting and this is precisely why knowledge exchange and opportunities to work with other cities including to challenge legacy ideas and beliefs – is something that seems really worth doing. You can find out more about the legacy research network at the Policy Scotland website (http://policyscotland.gla.ac.uk).

First things first – there are events to deliver and sport to enjoy. We’ll talk more after the festival is over.

Brown in Motion

As part of my day job at Policy Scotland we have been hosting and co-badging a series of events about the independence referendum. We are neutral in this endeavour and the objective simply is to put evidence into the debate. We have to that end hosted events by both sides and a series of ‘what if’ scenario debates. We had a lecture by John Swinney, a session by Douglas Alexander, a debate on the currency options were there to be a yes vote, and last night we had Gordon Brown.

The Chancellor of the University, Sir Kenneth Calman, introduced the event and said some nice things about Policy Scotland. Gordon Brown spoke for 45 minutes before taking questions for about a further 25 minutes.

I have seen him speak before. In 1997, as part of the devolution referendum, a series of Labour ministers flush from the landslide election victory came to Hamilton to talk up voting yes for a Scottish Parliament. I remember him being impressive, quite academic and almost scholarly in his speech. But perhaps he also benefited from following a less impressive John Prescott?

Last night he was speaking in the University Charles Wilson lecture theatre – a remodelled church with a steep banking of seating but a place I always like going to for these kinds of events. His name and reputation brought a big crowd, media and a buzz of anticipation for a rare sighting of the former PM. The large audience were generally very warm and supportive. The only heckler of note actually wanted to turn the unionist clock back to the position before 1999.

I thought I might use this post to talk about the rhetorical style he deployed rather than the substantive details, most of which had been widely trailed in the media before and after the talk. He remains an impressive speaker, building his argument and working the crowd hard.

He started in the classical style with three or four jokes. This included quite a good line about Universities and their stressing of integrity and rationality. All the virtues, he noted, that were left behind when he went into a career in politics. He made the usual jokes in favour of the host city he was speaking in at the expense of other cities and Universities.  The lines were well-delivered and often quite funny. He can be a bit ‘clunky’ but somehow it still all works as a package.

I was also very struck by two distinctive features of the presentation. First he had, no teleprompter, notes or aide memoire but rather performed something of a feat of memory including plenty of statistics, stories and historical evidence. Second, rather than stand at a lecturn, he spoke by prowling from one side of the stage to another with a large banner behind him that stated ‘strength, stability, security’. Throughout the evening he was in perpetual motion and this rhythm seemed to be a key to working his way through the structure of his speech.

A further key to the speech was that familiar rhetorical trick of repeating the same phrase again and again till it was independently bouncing around inside your head. How many times did he say ‘pooling and sharing’ fundamental social and economic rights? I think this is a standard part of his speaking style but it was particularly striking.

Like 1997 he drew a lot on the historical record, such as the key role of Tom Johnston during the war promoting the case for a nationalised NHS against the majority of the war coalition cabinet. During the Q&A he argued that there was not anything uniquely or more radical about the Scottish political position relative to others in the UK – but that there is a myth of a Scottish progressive tradition that can be built on.

And those jokes? Some were old but they were still generally effective. Two examples:

A new Chancellor of the Exchequer receives four sealed envelopes from his chief advisor on the grounds that they are only to be opened in consecutive order in times of real crisis. Things eventually do go badly wrong – the first says ‘blame your predecessor’, the second says ‘blame the statistics’, the third says ‘blame the EU’, the fourth says ‘write four letters for your successor’.

Richard Nixon travels to Ghana for its independence celebrations when vice president in 1959. He goes into the crowd and asks everyone he meets how it feels to be free. The third person he asks says ‘how should I know, I come from Alabama’.

In the end, those committed to the opposing sides of the debate will make up their own mind on the merits of the arguments Gordon Brown deployed and I was not surprised to see a wide range of reviews from the media present at the lecture. I am sure people will consider the significance of his intervention and the apparently wider role he appears to be taking in the referendum campaign. However, even if you disagree entirely with his position, we were given the rare opportunity to witness the effective rhetoric of an old-fashioned political speech made by a senior politician who can still unquestionably ‘do the business’.

 

 

Planning Futures and Glasgow’s History

A few years ago I spent some time dipping into the Scottish Screen Archive looking for films on Glasgow’s housing redevelopment phase in the 1960s and beyond. There are some amazing bits and pieces that can be found at their website. Last night and completely by accident I found an amazing film: http://ssa.nls.uk/film/0974.[1]  A half hour film, ‘Glasgow 1980’ was made in 1971 and asked what would the city, its people, its housing and employment look like by 1980 from the earlier vantage point.

Now I may just have stumbled on an already well known urban propaganda planning film but if you have not seen it, it is well worth watching. This was the period of the apogee of motorway development through the city centre and the completion of the Kingston bridge joining the M8 on both sides of the Clyde. The footage of the hole through the north of the city centre is amazing – both my parents’ childhood homes were demolished for this purpose or for the adjacent Anderston comprehensive redevelopment.

The optimism of large-scale planned urban renewal is everywhere in the film along with the confidence that technology would drive economic regeneration. Of course, de-industrialisation had already set in but in 1971 there was incredible optimism about the future and the self-belief of the state prior to the oil crises of the 1970s hastening the process of economic restructuring thereafter. There is also a nice section on the city plan and discussion of the mixed use and amenities planned for the key areas of comprehensive redevelopment.

At the other end of the scale there is a fascinating segment on city night life in 1971. However, the motif throughout the film is the car on the motorway system and the film ends with what appears to be the famous bridge to nowhere (or at least a bridge to nowhere) – itself an ironic precursor.  The final credits are also worth waiting for. I defy Glaswegians, social historians and housing or urban specialists not to be affected by this film on a number of levels. It is an amazing piece of history, culture and an insight into the assumptions made by planners and their representation in an earlier era, though one that we remain the recipients of those decisions made primarily in the 1960s.

I leave the critical de-construction to others but do watch if you have a chance.

[1] Copyright of the National Library of Scotland and Scottish Screen Archive

On Demolition

Anderston Glasgow September 1 2013

I was at a multi-storey demolition in Glasgow today (see story on BBC News page: http://www.bbc.co.uk/news/uk-scotland-glasgow-west-23921636 ). My housing association is redeveloping a large part of Anderston just west of the city centre and the M8 and key to the programme is the clearance of a large property in the middle of the estate. We watched it come down this morning from a hotel on the other side of the motorway.

It got me thinking about a lot of things, notably when and when not to demolish but also the realities and complexities of area regeneration, especially when you have a stake in it.

This is the third Scottish blow down of a multi I have witnessed as a board member or chair of the housing association. The other two were a few years back on the Ardler estate in Dundee. The Dundee case involved the transformation of an entire neighbourhood and the development of mixed tenure terraced and semi detached housing following a stock transfer and design competition for remaking the area. Not only has the Ardler been completely transformed physically, it is a great sight to behold, demand for its housing is now very high and voids are few and far between. Moreover, the owner-occupied segment works well.  While local residents do on occasion remark with some fondness about the multi storey flats, the new housing is extremely popular.

Anderston is a high amenity location with the housing originally split between council and the Scottish Special Housing Association (later Scottish Homes). Via Glasgow Housing Association, part of it is now managed by a local housing association. The rest was the last ever Scottish Homes stock transfer, sold to my association (Sanctuary Scotland) and was again organised as part of a regeneration programme to rebuild the homes of more than 440 tenants and RTB owners. In both Anderston and the Ardler there has been extensive local consultation on the form of redevelopment and this was intimately connected to the transfer ballots.

Anderston has several important features. One is that there is an effort being made to reinstate the original streetscape lost in the 1960s comprehensive development. Another has been the use of shared equity models to allow RTB owners to move into new homes in the redeveloped neighbourhood – an opportunity that they have now all taken up.

I was delighted that my mother was able to be present today and see the blow down. She grew up in St Vincent Street in Anderston between the wars and her parents were eventually forced to move as a result of the comprehensive redevelopment of the area in their retirement to a pretty dreadful interwar scheme in Yoker.

So should demolition be used as extensively as it is (particularly in Glasgow)? It is controversial and I have colleagues who are in general dead set against closing housing stock in a period of need and when socio-technically the properties have years of potential useful life ahead of them. It is also well-known that local politicians and community leaders can see symbolic political capital in the demolition of ‘notorious’ buildings (as was the case in my home town of Motherwell recently). These, of themselves, are not very convincing arguments though one can see how they can be seductive.

What are the issues? First, does the cost-benefit analysis that gives appraisal advice add up to a demolition and redevelopment decision, and, within that, does this take sufficient account of the interests and preferences of residents and the local community? Capital costs, expected life of the property, life time running costs, discount rates and many other factors have to be assessed as well as important intangibles. Of course, there may be straightforward financial reasons that make in some cases refurbishment and in others redevelopment impossible. Of course, the CBA may not stand up but it at least exposes the key assumptions and arguments.

Second, the loss of net social units is a material consideration i.e. where the redevelopment is mixed tenure, at lower density or reduced numbers. This does need to be put in a context of long term reduction in Glasgow’s high rise flats and disillusionment with what comprehensive redevelopment produced, as well as the city council’s and GHA’s long term plans to reduce provision overall over a now 30 year period. Some of this is really about gentrification and what goes in its place and the extent to which new and different households are able to earn capital gains from the regeneration at the expense of local residents being displaced  (as well as the controversy as to the necessity or sustainability of mixed tenure redevelopment).

It is worth saying however, third, that it is not necessarily the case that all of these high buildings are being removed. GHA have come up with an innovative affordable renting solution to an Ibrox multi-storey block and other buildings remain popular and successful across the city (e.g. Anniesland and London Road). Equally, agencies across the country are seeking to maximise the re-use of empty properties including offering homesteading packages.

As far as the high flats go – there is clearly nothing definite about their future (or lack of it). Where there are no technical problems and where residents are happy to live in such a way that seems eminently reasonable. We know well that it does not always work for young families, and that there may be inadequate or insufficient supporting community infrastructure, shops and services in some areas. But if people want to remain and to find solutions that do not involve demolition where it makes for a sustainable solution, fair enough. What has always seemed wrong to me is that professionals or local politicians determine what should happen without resident consultation or involvement in alternative solutions.

Clearly there can be technical reasons for demolition and replacement with new homes.  We should also be aware of the beneficial value of new supply. While there may be a debate about injecting mixed tenure into an area, it does seem to be stronger ground to argue that new high quality social housing does have a positive impact on residents and wider neighbourhoods – we have seen that very clearly in the Ardler and throughout the community-based movement in Glasgow.

I don’t want to get into architectural debates. For me the key issues are financial and economic on the one hand and, from within the set of feasible solutions, making sure that residents have real control over decisions made in their name and have a voice in design solutions that follow. Obviously, that has not always been the case but equally ruling out any demolition or saying it always makes sense cannot be right. In my pragmatic way I would suggest that these are and should be decisions based on the views of those who matter, the underlying economics, what is really sustainable and making sure there is a proper debate around the competing visions for the future of neighbourhoods in question.

Banking Misbehaviour: Then and Now

“The opinion expressed by bank managers is that a more reckless course of gambling with other people’s money was never pursued by any body of managers or Directors and that such engagements as these could never have been entered into had there not been either the weakest or most wilful sanction of these four firms, coupled with a negligent system of supervision which is hardly short of criminal”.

This is not a quote from the Banking Commission and is not a judgment on RBS, Lloyds, the FSA, etc. It is actually a quote from the New York Times (October 3, 1878) and refers to the collapse of the City of Glasgow Bank the day before – until Northern Rock, the biggest and most serious banking disaster in the UK¹. However, the parallels are fascinating and since I am writing a paper for a conference about housing in Glasgow in the late 19^th century I thought I might share some of the story².

The urban context of the city around the time when the bank collapsed was a high density, overcrowded city of often dreadful insanitary and unhealthy tenements. Glasgow housed more than a million souls by 1912 and endured regular, endemic economic volatility. The main sectors driving the economy were mineral extraction, textiles, chemicals, engineering and, of course, shipbuilding. The city was a ‘walking’ city prior to the later introduction of the tram so people lived in the shadow of where they worked. Duncan Maclennan and Andy Gibb (in their 1988 paper Glasgow: no mean city to miles better) indicate that population grew every decade of the 19^th century by at least 10%. The economy relied on waves of large- scale rural migration from Ireland and from the Highlands.

Jobs and housing oscillated widely with changes in international (British empire) markets. Writers like Alexander Cairncross suggested large swings in occupancy rates, rents and investment. Indeed, the collapse of the Bank in 1878 pre-empted a decadal long collapse in housing investment. At the same time both an officially sanctioned improvement trust and the municipal corporation were demolishing thousands of the worst units and putting tin badges on properties setting maximum occupancy levels in an unsuccessful attempt to regulate away overcrowding.

The City of Glasgow Bank had 133 branches and was heavily exposed to speculative investment in North America, India and Australasia. When it collapsed it had liabilities of  £12.4 million and assets of only £7.4 million. The Bank’s owners had unlimited liability (1500 were bankrupted including families, businesses and specific ventures associated with lending from the bank). There was no formal statutory external audit of banks in these days and, according to Rosenblum, it later transpired that there had been gross management errors, large loans made on dodgy security and that speculative investments had been made in order to make up for bank losses already incurred (with falsified balance sheets and profit and loss accounts).

The Bank collapse had a series of enduring repercussions. The banking sector moved rapidly to limited liability as the predominant form of corporate governance. It also led to the adopting of the convention for commercial banks to apply prudent capital ratios to underpin the sector’s viability. It also led to law to guarantee external auditing of statutory accounts. And, in an echo of the contemporary post GFC debate, the Directors were tried in the High Court in Edinburgh. They were found guilty: two served full 18 month sentences and five other Directors served 8 month sentences (also without any remission).  The media and the chattering classes in had a field day as several of the Directors were worthies in the ‘wee Free’ Church³.

Was the fraud and base financial criminality associated with the 1878 collapse (and in the cruel setting of unlimited liability) comparable to the moral hazards and behaviour of our generation’s banks? Is excessive risk taking, gambling or rate-rigging as bad, worse or not in the same league? These seem to me to be qualitatively different but price-fixing does and should attract the large fines that do from time to time get levied. A second matter is whether we might see similar extent of fundamental reform as followed 1878. Probably not – and the worry that regulatory reform prepares for the last battle rather than the next war is, I think, a real concern. Periodic large-scale booms and busts in financial systems have regularly recurred over the last 150 years and beyond. Perhaps the best we can hope for is the mitigation of their effects and stronger incentives to reduce investor and banker animal spirits. But people have been saying this since at least 1878.

Notes:

1. Rosenblum, L (1933) ‘The Failure of the City of Glasgow Bank’, The Accounting Review, Vol.8 (4), pp.285-91.
2. Gibb, K (2013) ‘Speculation, sub-division, banking fraud and enlightened self-interest: an alternative account of the making of the contemporary Glasgow housing system’, incomplete paper in progress for ISA RC43 Conference ‘At home in the housing market’, University of Amsterdam, July 2013.
3. Guy McCrone wrote a trilogy of novels (Wax Fruit, published by Pan) about a 19^th century middle class Glasgow family directly affected by the Bank collapse.