The dust appears to have settled on the Hastilow affair so maybe we can begin to have a grown up debate about migration. Not since the debate on unemployment in the 1980’s have government statistics been so mistrusted.
The most recent official government estimates, crudely based on surveys of people arriving and leaving at our airports, show approximately 1,500 migrants arrived to live in the UK every day during 2005.
Now just admitting that can cause some political apoplexy, a definite case of the meaning of things lying not in the things themselves, but in our attitudes to them.
Our Government, naturally want it both ways; they want the benefits of large scale migration without acknowledging any costs or implications. Having failed miserably to increase UK productivity - output per worker, the way left to increase national output is to increase the labour force. For them the arrival of young workers into Britain is a testament to our “flexible” deregulated labour market as migrants go on to add vastly to GDP.
To employers too, relatively undemanding workers are also a good thing, especially if they require low levels of training and can be hired and fired as business demands require.
For the macro economy then this influx of new workers is an unequivocal good thing. I must admit as someone who has no children but who quite likes the idea of having a pension I too welcome these hard working young migrants.
That deregulation is of course less of a good thing when you find out that thousands of illegal migrants are employed by private security services.
When you look at the impact on the micro, the individual, level it begins to look less rosy. Large scale migration puts pressure on all public services, policing, hospitals, and schools but especially on scarce housing resources.
If you are stuck in a low paid job have poor skills and have now to compete with a young graduate, who probably speaks better English than you do, but who works for very low wages, is not an experience to make you feel welcoming.
It is not just at the bottom end of the labour market that competition for jobs with migrant workers is having an impact. England and Liverpool star Steven Gerrard has called for quotas in the Premiership to protect the national team.
And large scale migration is not the only challenge, globalisation, and huge technological change, can for many people be very disorientating. It is easy for the cosmopolitan elite to forget that most of Britain has been demographically stable for a long time; millions do not travel abroad, have no interest in or access to the internet, and do not see why they need to change.
It is understandable therefore that politicians will seek to articulate the concerns of many of these people. After all why else would the Prime Minister Gordon Brown, talk about “British jobs, for British workers” in his party conference speech?
But the data masks a huge amount of coming and going. Thousands of people are also leaving the country. Net around a 1000 people per day are leaving. Half of those leaving are British citizens heading for Australia, Spain and France to build what they see as better lives for themselves.
My guess is that many of those Eastern Europeans who have come to Britain may well too soon begin to return home as many are now returning to Ireland and India. So what is really interesting about these patterns of migration is that there is a huge churn in the numbers. At this point slightly more of those coming to Britain are staying than those leaving but it would be foolish to make tough proposals on immigration until we have better data and a better understanding of just what is going on.
Our weakness as a nation and what made Nigel Hastlows position so very difficult is that we cannot stop this roundabout and get off. The position we are in is that we need migrant workers to sustain the economy and large parts of our public services.
There is nothing to be proud of in having the NHS staffed by Doctors and Nurses recruited from the health services of developing countries. Nor is their anything to be proud of in having so few English players turning out for our premiership football teams.
But that is where we are. If we are to compete successfully in this global labour market for skills and talent then we need a fundamental long term shift in both the attitudes and the skills of our citizens.
For me this will have been achieved when a new Arsene Wenger selects eleven Englishmen to turn out for Arsenal in the Champions league. Now that may well be a long time in the future and will certainly require a process of better education, training, and skills acquisition but most importantly in motivation and attitude. Crude quotas and knee jerk reactions however will not make the process of facing up to our weaknesses and addressing them any easier.
Wednesday, 21 November 2007
Tuesday, 23 October 2007
Black Country Dialect II
I have been thinking about the revival in the Black Country dialect in the 1980's. Of course the theory is that it is a residue from before the Great Vowel Shift and its persistence is due to a sense of isolation, lack of social mobility and the small number of educational opportunities for what is a region of a million people.
After all Wolverhampton has had its City status for a very short time and a University for only a little while longer. Economically the sub-region was probably in economic decline from the end of the First World War. With larger scale industry developing in the North West, Birmingham and places like Coventry. The Black Country today is still a place of small firms and family owned businesses.
Well in the sixties and seventies the Black Country had been undergoing a marked change in its fortunes with high levels of development. With relatively progressive local authorities improving education and the communications of the place, an area notoriously difficult to get around.
Then came Mrs Thatcher and more importantly Geoffrey Howe, his budget put paid almost overnight to large swathes of Black Country industry. Much of which was admittedly fairly low in terms of skills, technology and therefore productivity. The scale of the disaster was such that the area is only now beginning to recover from the devastation that the almost total collapse of manufacturing had on the area.
Culturally this political polarisation lead to alternative comedy and punk rock. The Black Country was no exception to this but something else also happened. The culture fell back on itself. There was a renaissance in the Black Country variety show, The Black Country Night Out. It was almost as if we fell back on the old gags, monologues and songs to keep our spirits up.
This variety show, made local stars of Dolly Allen, "Hello, me luvers!" and Tommy Mundon, and others like the king of dialect doggerel, Harry Harrison, well known for his dialect verse in the Black Country Bugle and Jon Raven, folk singer and collector of traditional Black Country ballads.
I remember Dolly Allen telling the joke about the westkit or waistcoat in around 1987, forty years after it was mentioned in Ingram’s book about the North Midlands. She I have no doubt had never heard it from a book but was part of the oral tradition.
This variety show toured almost continually with various changes in personnel although the very dark days of that recession. A cheap way to go out and keep up your spirit and make you feel good about who you where and where you came from and about the resilience which had kept the place going. This was I think why the close social fabric held the place together through these dark days. Whether it has also held us back as times have change is another matter!
But I have no doubt that the dialect revival a badge of local pride was revived thanks to Mrs Thatcher.
After all Wolverhampton has had its City status for a very short time and a University for only a little while longer. Economically the sub-region was probably in economic decline from the end of the First World War. With larger scale industry developing in the North West, Birmingham and places like Coventry. The Black Country today is still a place of small firms and family owned businesses.
Well in the sixties and seventies the Black Country had been undergoing a marked change in its fortunes with high levels of development. With relatively progressive local authorities improving education and the communications of the place, an area notoriously difficult to get around.
Then came Mrs Thatcher and more importantly Geoffrey Howe, his budget put paid almost overnight to large swathes of Black Country industry. Much of which was admittedly fairly low in terms of skills, technology and therefore productivity. The scale of the disaster was such that the area is only now beginning to recover from the devastation that the almost total collapse of manufacturing had on the area.
Culturally this political polarisation lead to alternative comedy and punk rock. The Black Country was no exception to this but something else also happened. The culture fell back on itself. There was a renaissance in the Black Country variety show, The Black Country Night Out. It was almost as if we fell back on the old gags, monologues and songs to keep our spirits up.
This variety show, made local stars of Dolly Allen, "Hello, me luvers!" and Tommy Mundon, and others like the king of dialect doggerel, Harry Harrison, well known for his dialect verse in the Black Country Bugle and Jon Raven, folk singer and collector of traditional Black Country ballads.
I remember Dolly Allen telling the joke about the westkit or waistcoat in around 1987, forty years after it was mentioned in Ingram’s book about the North Midlands. She I have no doubt had never heard it from a book but was part of the oral tradition.
This variety show toured almost continually with various changes in personnel although the very dark days of that recession. A cheap way to go out and keep up your spirit and make you feel good about who you where and where you came from and about the resilience which had kept the place going. This was I think why the close social fabric held the place together through these dark days. Whether it has also held us back as times have change is another matter!
But I have no doubt that the dialect revival a badge of local pride was revived thanks to Mrs Thatcher.
Friday, 19 October 2007
Yo cor spake roit!
I had the chance to do a lecture on the sociolinguistics of the Black Country.
Here are the materials I used to explain the place to people unfortunate enough not to know the plerce.
Basically the dialect of the Black Country seems to preserve the way people in England spoke before the great vowel shift!
The The Great Vowel Shift was a gradual process which began in Chaucer's time (early 15th Century) and was continuing through the time of Shakespeare (early 17th Century). Speakers of English gradually changed the parts of their mouth used to articulate the long vowels. Simply put, the articulation point moved upward in the mouth. The vowels, which began being pronounced at the top, could not be moved farther up (without poking into the nose); they became diphthongs1. The upshot has been that the Anglo-Saxons lived (like the Scottish still do) in a 'hoose', and the English live in a 'house'; the Anglo-Saxons (like the Scottish) milked a 'coo', and the English milk a 'cow'; an Anglo-Saxon had a 'gode' day and the English have a 'good' one; an Anglo-Saxon had 'feef' fingers on each hand and the English have 'five'; they wore 'boats' on their 'fate' while the English wear 'boots' on our 'feet'. The Great Vowel Shift is still continuing today in regional dialects; many speakers are now trying to move the topmost articulation points farther up, producing new diphthongs.
So we do genuinely spake Shakespeares english!
“There is nothing throughout the length and breadth of England to compare with the Black Country. It is unique. Much of its appearance is due to a man-made landscape created during the last two centuries, in a ruthless exploitation of its mineral riches. It is a separate and distinct area and not, as often supposed, an extension of Birmingham.”
Louise Wright, The Heart of England, Robert Hale, 1973.
“Iron, coal, limestone and clay, has made the Black Country what it is today.”
Richard Traves, Keeper of Industrial Archaeology Dudley Museum, 1977.
“You have to walk through the Black Country to feel its visual impact. For a start, some of is most fascinating places have no road: it is a region of continual surprises, hidden oddities, sudden, astonishing views. People who have not seen it for themselves will imagine that I am being absurdly romantic to say that it can be indescribably beautiful.”
Caroline Hillier, A Journey to the Heart of England, Paladin, 1978.
When Satan stood on Brierley Hill
And far around he gazed,
He said, ‘I never shall again,
At Hell’s flames be amazed.’
Traditional Ballad.
“I spent the better part of two days staring at this Black Country. The first day was fine and fairly bright. I went from Birmingham through Smethwick and Oldbury to Dudley, which seemed to me a fantastic place. You climb a hill, past innumerable grim works and unpleasant brick dwellings, and then suddenly a ridiculous terracotta music-hall comes into sight, perched on the steep roadside as if a giant had plucked it out of one of the neighbouring valleys and carelessly left it there; and above this music hall (its attraction that week was Parisian Follies) were the ruins of Dudley Castle. I climbed a steep little hillside, and then smoked a pipe or two sitting by the remains of the keep. The view from there is colossal. On the Dudley side, you look down and across the roofs and steeply mounting streets and pointing factory chimneys. It looked as if a great slab of Birmingham had been torn away and titled up there at an angle of forty-five degrees. The view from the other side, roughly I suppose to the north-east, was even more impressive. There was the Black Country unrolled before you like some smouldering carpet. You looked into an immense hollow of smoke and blurred buildings and factory chimneys. There seemed to be no end to it.”
J.B.Priestley, English Journey, William Heinemann, 1934.
“The walks of my childhood were treeless and smoke blighted: they lead me by black canals and among huge slag heaps where no grass could grow, where the sun rarely shone, where a man at night could read his newspaper by the glare of the blast furnaces, lividly reflected in the dense low sky. There was not much to choose in those days between the dingy town and the dingy landscape outside it, except the town abounded in stirring rough-and-independent speech, while the country showed hardly a sign of life and was apparently the habitation of an underground race.”
Henry Newbolt, Letter to the people of Bilston, 1927.
“Black Country people are like their landscape, unbeautiful, unsentimental, with no time for the trimmings of life, but often a warm, if rough, hospitality hides behind the forbidding exterior. Black Country speech is hard for an outsider to understand. It contains inflexions no longer used in everyday English. I bin, thee bist, we bist, yo bin, they bin are declensions of the verb to be. Will becomes woon or woot and a is often sounded as o. Can you translate these? “We `day arf goo coming back in that theer chara.” “Poor owd Alf’s jed, let’s ‘ope ‘e’s gone were we think he ain’t.” Black Country humour is also characteristic, “What are you looking for , Ned?” a collier was asked by his friends . “I’ve lost me weskit,” Ned replied. “Why, y’ foo’ y’ gotten it on!” “Ah, so I have,” exclaimed Ned. Now if yo hadn’y tode me I’d a gone wiaht it.”
J,H.Ingram, North Midland Country, Batsford, 1947-8.
“But let me say before it has to go,
It’s the most lovely country that I know;
Clearer than Scafell Pike, my heart has stamped on
The view from Birmingham to Wolverhampton.
Tramlines and slagheaps, pieces of machinery,
That was, and still is my ideal scenery.”
W.H. Auden, from, A Letter to Lord Byron, Collected Longer Poems, Faber and Faber, 1968.
“Then we have the evidence of the Black Country dialect, which local historians stoutly maintain is basically Anglo-Saxon and not the refined ‘Kings English’ of the early universities. The dialect is hard for strangers to understand. …the dialect is more genuinely Old English than can be found elsewhere in England, and since Chaucer wrote the Canterbury Tales in the fourteenth century using a version of the Mercian dialect, Black Country readers can identify with parts of his writing because they speak or ‘spaken it’ The suffix ‘en’ is one example, for older Black Country people especially will talk ‘of gooin up the housen’. ‘Dun yo knowen who’s got old Ayli’s place?’ they might enquire, whilst ‘Just watch the folken all go by’ appears in an ancient rhyme. ‘Aferd’ for ‘Afraid’ and ‘keche’ for ‘catch, are other Chaucerian examples. …..No commentary on the Black Country would be complete without examples of the hundreds of dialect jokes frequently based, oddly enough, on death and funerals but not indicative of undue morbidity.”
Harold Parsons, The Black Country, Robert Hale, 1986.
Here are the materials I used to explain the place to people unfortunate enough not to know the plerce.
Basically the dialect of the Black Country seems to preserve the way people in England spoke before the great vowel shift!
The The Great Vowel Shift was a gradual process which began in Chaucer's time (early 15th Century) and was continuing through the time of Shakespeare (early 17th Century). Speakers of English gradually changed the parts of their mouth used to articulate the long vowels. Simply put, the articulation point moved upward in the mouth. The vowels, which began being pronounced at the top, could not be moved farther up (without poking into the nose); they became diphthongs1. The upshot has been that the Anglo-Saxons lived (like the Scottish still do) in a 'hoose', and the English live in a 'house'; the Anglo-Saxons (like the Scottish) milked a 'coo', and the English milk a 'cow'; an Anglo-Saxon had a 'gode' day and the English have a 'good' one; an Anglo-Saxon had 'feef' fingers on each hand and the English have 'five'; they wore 'boats' on their 'fate' while the English wear 'boots' on our 'feet'. The Great Vowel Shift is still continuing today in regional dialects; many speakers are now trying to move the topmost articulation points farther up, producing new diphthongs.
So we do genuinely spake Shakespeares english!
“There is nothing throughout the length and breadth of England to compare with the Black Country. It is unique. Much of its appearance is due to a man-made landscape created during the last two centuries, in a ruthless exploitation of its mineral riches. It is a separate and distinct area and not, as often supposed, an extension of Birmingham.”
Louise Wright, The Heart of England, Robert Hale, 1973.
“Iron, coal, limestone and clay, has made the Black Country what it is today.”
Richard Traves, Keeper of Industrial Archaeology Dudley Museum, 1977.
“You have to walk through the Black Country to feel its visual impact. For a start, some of is most fascinating places have no road: it is a region of continual surprises, hidden oddities, sudden, astonishing views. People who have not seen it for themselves will imagine that I am being absurdly romantic to say that it can be indescribably beautiful.”
Caroline Hillier, A Journey to the Heart of England, Paladin, 1978.
When Satan stood on Brierley Hill
And far around he gazed,
He said, ‘I never shall again,
At Hell’s flames be amazed.’
Traditional Ballad.
“I spent the better part of two days staring at this Black Country. The first day was fine and fairly bright. I went from Birmingham through Smethwick and Oldbury to Dudley, which seemed to me a fantastic place. You climb a hill, past innumerable grim works and unpleasant brick dwellings, and then suddenly a ridiculous terracotta music-hall comes into sight, perched on the steep roadside as if a giant had plucked it out of one of the neighbouring valleys and carelessly left it there; and above this music hall (its attraction that week was Parisian Follies) were the ruins of Dudley Castle. I climbed a steep little hillside, and then smoked a pipe or two sitting by the remains of the keep. The view from there is colossal. On the Dudley side, you look down and across the roofs and steeply mounting streets and pointing factory chimneys. It looked as if a great slab of Birmingham had been torn away and titled up there at an angle of forty-five degrees. The view from the other side, roughly I suppose to the north-east, was even more impressive. There was the Black Country unrolled before you like some smouldering carpet. You looked into an immense hollow of smoke and blurred buildings and factory chimneys. There seemed to be no end to it.”
J.B.Priestley, English Journey, William Heinemann, 1934.
“The walks of my childhood were treeless and smoke blighted: they lead me by black canals and among huge slag heaps where no grass could grow, where the sun rarely shone, where a man at night could read his newspaper by the glare of the blast furnaces, lividly reflected in the dense low sky. There was not much to choose in those days between the dingy town and the dingy landscape outside it, except the town abounded in stirring rough-and-independent speech, while the country showed hardly a sign of life and was apparently the habitation of an underground race.”
Henry Newbolt, Letter to the people of Bilston, 1927.
“Black Country people are like their landscape, unbeautiful, unsentimental, with no time for the trimmings of life, but often a warm, if rough, hospitality hides behind the forbidding exterior. Black Country speech is hard for an outsider to understand. It contains inflexions no longer used in everyday English. I bin, thee bist, we bist, yo bin, they bin are declensions of the verb to be. Will becomes woon or woot and a is often sounded as o. Can you translate these? “We `day arf goo coming back in that theer chara.” “Poor owd Alf’s jed, let’s ‘ope ‘e’s gone were we think he ain’t.” Black Country humour is also characteristic, “What are you looking for , Ned?” a collier was asked by his friends . “I’ve lost me weskit,” Ned replied. “Why, y’ foo’ y’ gotten it on!” “Ah, so I have,” exclaimed Ned. Now if yo hadn’y tode me I’d a gone wiaht it.”
J,H.Ingram, North Midland Country, Batsford, 1947-8.
“But let me say before it has to go,
It’s the most lovely country that I know;
Clearer than Scafell Pike, my heart has stamped on
The view from Birmingham to Wolverhampton.
Tramlines and slagheaps, pieces of machinery,
That was, and still is my ideal scenery.”
W.H. Auden, from, A Letter to Lord Byron, Collected Longer Poems, Faber and Faber, 1968.
“Then we have the evidence of the Black Country dialect, which local historians stoutly maintain is basically Anglo-Saxon and not the refined ‘Kings English’ of the early universities. The dialect is hard for strangers to understand. …the dialect is more genuinely Old English than can be found elsewhere in England, and since Chaucer wrote the Canterbury Tales in the fourteenth century using a version of the Mercian dialect, Black Country readers can identify with parts of his writing because they speak or ‘spaken it’ The suffix ‘en’ is one example, for older Black Country people especially will talk ‘of gooin up the housen’. ‘Dun yo knowen who’s got old Ayli’s place?’ they might enquire, whilst ‘Just watch the folken all go by’ appears in an ancient rhyme. ‘Aferd’ for ‘Afraid’ and ‘keche’ for ‘catch, are other Chaucerian examples. …..No commentary on the Black Country would be complete without examples of the hundreds of dialect jokes frequently based, oddly enough, on death and funerals but not indicative of undue morbidity.”
Harold Parsons, The Black Country, Robert Hale, 1986.
Monday, 24 September 2007
No Longer a Wonderful Life at Northern Rock
So the Bank of England has had to effectively nationalise the mortgage bank Northern Rock to save it. A “run on a bank” what an old fashioned phenomenon. We have seen the astonishing sight of thousands of customers queuing to get their money out of a bank something not seen for generations. This means that as a “brand” Northern Rock will almost certainly disappear and an institution that has served the North East well will vanish into some global conglomerate.
To me there are two sets of greedy people here who have destroyed a valuable North Eastern Institution firstly the “customers”. This institution was not so long ago a safe and boring building society doing dull things like providing mortgages for its members and dull but predictable returns on the savings of another (or sometimes the same) set of members.
Many of those panicking to get their life savings out of the Northern Rock today had earlier sold their membership in the Building Society to become shareholders in the new bank. Freed from the constraints of “building society-dom” the “management” of the new Bank has been, to say the least, innovative in generating profits for its shareholders.
Mervyn King at the Bank of England it seems to me tried to explain the rules of the private sector to the Rocks and its customers ie that this is a private business and private businesses from time to time go bust; that is a fact of life. Whatever form of regulation we employ some businesses will always go bust. Asking a private business to behave like a public institution is like asking a cat to be a dog.
Of course the sight of a private business going bust was too much for the political class and they bounced the bank into a bail out. Not the policy, of course, if the business had been going bust out of sight or happened to be in the “old economy”, of say manufacturing or mining or agriculture, you know the ones that actually produce things. Gordon Brown the architect of the current deregulated financial services infrastructure wants the current state of affairs to continue as long as possible or at least past the next election.
The second issue is the business model the management employed. This was to give mortgages to almost anyone who passed through their doors and to raise the cash to fund these mortgages from the wholesale money market. There is no doubt that the new Bank played the globalisation game very well. They sourced cash where it was cheap and resold it in the UK where it is, contrary to the protestations of our Chancellor of the Exchequer, expensive. UK interests rates being amongst the highest in the developed world.
Nothing wrong with this - unless you are trying to balance the nation’s books. This is what Tesco do with underpants or vegetables: exploiting the opening out of the global economy and the strong pound to buy cheap and sell expensive. For Northern Rock this was fine until August 9th. The surpluses in the Middle East and Russia from high oil prices and in China from its huge trade surplus could be happily recycled through complex financial instruments to buy houses in the USA or here in the UK.
This was always going to end in tears cheap “tic” from overseas was never going to last for ever. If an individual constantly borrows to fund their current expenditure their bank manager would not be too impressed. We, following the US, have been using cheap credit, not to invest in productive capacity or new products but to fund current expenditure.
The amount we save in Britain is pathetic, we have had fifteen years of continuous economic growth, but instead of using this to build up our industries and to create a product base of goods and services the world wants to buy, we have simply gone shopping. The only thing we have built is a £1.3 trillion mountain of personal debt. It is no good saying, as I heard the Director General of the CBI say on that the radio, that 80% of this is secured against housing.
Houses simply keep some of us dry and give us somewhere to sleep. They do not do anything else they are sometimes stores of wealth but they do not create it; they are not businesses, they produce no products, no exports, and no real wealth. What Northern Rock and other mortgage banks are actually doing is disastrous for the long-term health of our economy.
The old building societies may have been dull but they recycled money in the localities they served. The old Northern Rock raised money in the North East and invested it in the North East. Like the Building and Loan Association in Bedford Falls in Frank Capra's classic film, It’s a Wonderful Life.
Mortgage holders and savers were to a large extent sheltered from the global economy. And when in the film there was a run on the Savings and Loan Association, Jimmy Stewart as George Bailey could stand on the counter and tell each saver who their money had been lent to make a new home.
Well Northern Rock, or more precisely the Northern Counties Building Society since 1860 and the Rock Building Society since 1865 before they merged to form Northern Rock in 1965, had been doing just this for almost a century and a half.
What the new Bank has been doing however is siphoning money out of the North East to give it to people across the other side of the world, whilst with their lax lending rules contributing to the inflation in house prices.
Just as the Banks who were funding the sub prime sector in the US have gone on strike, so have the banks that were funding Northern Rock’s huge expansion in the mortgages it gives. It created one in five of Britain’s mortgages in the first half of the year. That appears unlikely to continue in the second half. Who will now go to them for a mortgage?
This management team have destroyed a Northern Institution. I doubt if the new owners of this mortgage debt will be so keen to identify with the North East and support North East Sport, charities and the arts as they will have little need to attract savers from that part of the world after all only a quarter of their borrowing came from individual savers whio are now somewhat few and far between.
Unlike in the film the savers will not be able in this case to sve the bank we as a nation simply do not save enough. We are a nation living on credit and it has just been turned off.
Norther Rock are not alone in this model of lending, other mortgage banks like the Alliance and Leicester and Bradford and Bingley are also exposed, although not to the same extent as Northern Rock but they will all be affected by the increase in interest rates for inter-bank lending. There is bound to be some knock-on effect into the housing market with mortgages getting harder to come by.
Some slow down in the rate of UK House price inflation is certainly welcome, but with so much of our economy tied up in housing this could have a serious impact. Also were does this leave the great success story of the UK’s financial services sector? This past weeks global TV pictures haven’t done its reputation much good and the North East has lost a true champion that survived the Boer War two world wars and the depression and great crash but could not survive contemporary greed .
To me there are two sets of greedy people here who have destroyed a valuable North Eastern Institution firstly the “customers”. This institution was not so long ago a safe and boring building society doing dull things like providing mortgages for its members and dull but predictable returns on the savings of another (or sometimes the same) set of members.
Many of those panicking to get their life savings out of the Northern Rock today had earlier sold their membership in the Building Society to become shareholders in the new bank. Freed from the constraints of “building society-dom” the “management” of the new Bank has been, to say the least, innovative in generating profits for its shareholders.
Mervyn King at the Bank of England it seems to me tried to explain the rules of the private sector to the Rocks and its customers ie that this is a private business and private businesses from time to time go bust; that is a fact of life. Whatever form of regulation we employ some businesses will always go bust. Asking a private business to behave like a public institution is like asking a cat to be a dog.
Of course the sight of a private business going bust was too much for the political class and they bounced the bank into a bail out. Not the policy, of course, if the business had been going bust out of sight or happened to be in the “old economy”, of say manufacturing or mining or agriculture, you know the ones that actually produce things. Gordon Brown the architect of the current deregulated financial services infrastructure wants the current state of affairs to continue as long as possible or at least past the next election.
The second issue is the business model the management employed. This was to give mortgages to almost anyone who passed through their doors and to raise the cash to fund these mortgages from the wholesale money market. There is no doubt that the new Bank played the globalisation game very well. They sourced cash where it was cheap and resold it in the UK where it is, contrary to the protestations of our Chancellor of the Exchequer, expensive. UK interests rates being amongst the highest in the developed world.
Nothing wrong with this - unless you are trying to balance the nation’s books. This is what Tesco do with underpants or vegetables: exploiting the opening out of the global economy and the strong pound to buy cheap and sell expensive. For Northern Rock this was fine until August 9th. The surpluses in the Middle East and Russia from high oil prices and in China from its huge trade surplus could be happily recycled through complex financial instruments to buy houses in the USA or here in the UK.
This was always going to end in tears cheap “tic” from overseas was never going to last for ever. If an individual constantly borrows to fund their current expenditure their bank manager would not be too impressed. We, following the US, have been using cheap credit, not to invest in productive capacity or new products but to fund current expenditure.
The amount we save in Britain is pathetic, we have had fifteen years of continuous economic growth, but instead of using this to build up our industries and to create a product base of goods and services the world wants to buy, we have simply gone shopping. The only thing we have built is a £1.3 trillion mountain of personal debt. It is no good saying, as I heard the Director General of the CBI say on that the radio, that 80% of this is secured against housing.
Houses simply keep some of us dry and give us somewhere to sleep. They do not do anything else they are sometimes stores of wealth but they do not create it; they are not businesses, they produce no products, no exports, and no real wealth. What Northern Rock and other mortgage banks are actually doing is disastrous for the long-term health of our economy.
The old building societies may have been dull but they recycled money in the localities they served. The old Northern Rock raised money in the North East and invested it in the North East. Like the Building and Loan Association in Bedford Falls in Frank Capra's classic film, It’s a Wonderful Life.
Mortgage holders and savers were to a large extent sheltered from the global economy. And when in the film there was a run on the Savings and Loan Association, Jimmy Stewart as George Bailey could stand on the counter and tell each saver who their money had been lent to make a new home.
Well Northern Rock, or more precisely the Northern Counties Building Society since 1860 and the Rock Building Society since 1865 before they merged to form Northern Rock in 1965, had been doing just this for almost a century and a half.
What the new Bank has been doing however is siphoning money out of the North East to give it to people across the other side of the world, whilst with their lax lending rules contributing to the inflation in house prices.
Just as the Banks who were funding the sub prime sector in the US have gone on strike, so have the banks that were funding Northern Rock’s huge expansion in the mortgages it gives. It created one in five of Britain’s mortgages in the first half of the year. That appears unlikely to continue in the second half. Who will now go to them for a mortgage?
This management team have destroyed a Northern Institution. I doubt if the new owners of this mortgage debt will be so keen to identify with the North East and support North East Sport, charities and the arts as they will have little need to attract savers from that part of the world after all only a quarter of their borrowing came from individual savers whio are now somewhat few and far between.
Unlike in the film the savers will not be able in this case to sve the bank we as a nation simply do not save enough. We are a nation living on credit and it has just been turned off.
Norther Rock are not alone in this model of lending, other mortgage banks like the Alliance and Leicester and Bradford and Bingley are also exposed, although not to the same extent as Northern Rock but they will all be affected by the increase in interest rates for inter-bank lending. There is bound to be some knock-on effect into the housing market with mortgages getting harder to come by.
Some slow down in the rate of UK House price inflation is certainly welcome, but with so much of our economy tied up in housing this could have a serious impact. Also were does this leave the great success story of the UK’s financial services sector? This past weeks global TV pictures haven’t done its reputation much good and the North East has lost a true champion that survived the Boer War two world wars and the depression and great crash but could not survive contemporary greed .
Thursday, 16 August 2007
Steam Train Blues
With the August Bank Holiday almost here many of us would normally be heading for Kidderminster or Bridgnorth to indulge ourselves in a bit of nostalgia with a trip back in time along the Severn Valley Railway. There is no doubt that just seeing a steam engine at work lifts the sprits.
There is probably something deeply Freudian going on here. It can’t just be nostalgia for the days when all railways were steam hauled and children stood on the embankments waving as they went past, as they did so successfully in the Railway Children.
That would not explain the joy that modern children (of all ages) get from seeing steam when their only experience is a DVD of the ubiquitous Thomas. No, there is something about steam engines.
They seem to be alive and it’s not just with Thomas that we indulge in this anthropomorphism. All steam locomotives seem to have an element of humanity about them. They need a lot of fuel before they do any work, once they start they huff and puff about it, often stopping for a drink. I am sure we can all think of people with these characteristics.
Steam trains have been running up and down the Severn Valley since
February 1862. The line originally to carried a lot of freight; as there was china from Coalport, limestone from Wenlock, firebricks and tiles from Broseley, iron from Coalbrookdale, carpets from Bridgnorth and coal from Alveley and Highley. The line carried passengers too but I am sure in carrying over 200,000 people annually in recent years the line carries more passengers today between Bridgnorth and Kidderminster than were ever carried when the line was part of the national network.
Movement on the original line ceased in 1963 by which time most of the industry that had supported the line had disappeared and the valley, rather than being a centre of industry, was reverting to the natural beauty it had always possessed.
There is something deeply evocative about the country railway. The sunlit platform, birdsong and then, as Edward Thomas wrote so memorably, “The steam hissed. Someone cleared his throat. No one left and no one came. On the bare platform. What I saw was Adelstrop – only the name”.
Well for Adelstrop read Arley, Highley or Hampton Load, what could be better than to run steam trains through this wonderful landscape?
The story that followed was a bit like that wonderful Ealing comedy the Titfield Thunderbolt except these people were in deadly earnest and their efforts at re-opening the line took many years of effort.
The story of the early years of the railway was full of characters like, Keith Beddoes who called the original Save the Railway meeting at the Coopers Arms in Kidderminster on 6th July 1965, and the MP, Sir Gerald Nabbaro who went on to chair the holding company.
They struggled against enormous odds for almost twenty years determined to create the railway we know and love today. Now the Severn Valley Railway is one of the most important tourist draws in the region. Thousands travel on the trains and thousands more come just to watch the steam over those blue remembered hills.
That was until this summer’s rain. Who would have thought that a summer shower would damage the line in 45 places, nine of them seriously, washing away sections of the track and undermining the track-bed causing some £2million worth of damage?
Today the railway is facing the greatest crisis in its long history. Over the years thousands of volunteers have kept this symbol of our industrial past alive lets us hope that, like John Garth who in 1965 gave the first five pounds to set the Save the Severn Valley Railway fund in motion, lots more five pounds will flow into the new fund that has been set up to rebuild this severely damaged railway.
For me the railway cannot return to normal running soon enough – it always will be the ideal way to spend a British Bank Holiday.
Whilst I never fail to enjoy my trips on the railway (or the first class real ale at the station bars at either end) I have always felt slightly disappointed that it only went as far as Bridgnorth. Nothing against Bridgnorth its market, cliff top walk with funicular and splendid views mean it is like a seaside promenade for Black Country folk.
Once the railway is back on its feet my dream is that they keep the fundraising going to raise sufficient cash to extend the line into the Ironbridge Gorge. The industrial legacy of the Gorge has made it a World Heritage Site but recreating the railway as part of the Gorge would add enormously to its tourist value. Imagine being able to arrive at the Ironbridge by steam-hauled train - now that would be a sight!
The Flood Damage Appeal can be reached at, The Severn Valley Railway, The Railway Station, Bewdley, DY12 1BG. Or go to: www.svr.co.uk/appeal
Friday, 10 August 2007
Happy Birthday India!
August the fifteenth 1947 is a date that will be forever in the memory of the people of the Indian sub-continent. It was the date when India was partitioned. Partition does not sound too bad a concept. But in the case of India it forced people to choose, tearing asunder thousands of years of integration to rip families and communities apart. It triggered one of the largest migrations in world history some five million people took to the road leading to terrible violence with the death of some half a million people.
So when later on this year this year the 60th year of independence of India and Pakistan is celebrated it will be tempered by the cost. Partition continues to divide the great states of Bengal and the Punjab and there is still the running sore of Kashmir. Today many of these divisions are still represented in the communities here in the Midlands. Many modern young people find it hard to believe when you look at the scale of India, a continent within itself with a population almost three times the European Union, that it was once ruled from a small island on the North West coast of Europe.
Despite that painful birth today India is on the move its economy is turning in consistent annual growth rates of eight and nine per cent. No mean feat in a country of over a billion people. The reforms of successive governments have at last begun to unleash the vast talent of India’s people. Sure there are problems, as any country would face undergoing an economic revolution, multiplied by the shear scale of the country. But the fact that they have been able to retain their secular democratic state during this revolutionary process is a great achievement.
It is worth remembering even all these years after partition that the Muslim population of India is greater than the total population of Pakistan. And despite the fact that Britain was responsible for the disaster that was partition there is still tremendous goodwill towards Britain. As well as the railway network we left them something else that helps to unite India, the lingua-franca of the modern global economy - English.
Today there are more people speaking English in India than the entire population of the United States. Listening to the great Sunil Gavasker, one of India’s greatest ever cricketers, on Test Match Special it’s a bit chastening to hear that he speaks better English than I do. This is not just true of the best Indian sports people it also true of India’s leaders in business and politics. Hardly surprising when you think of the competition they face to get to the top in such a vast nation.
The best of India are very good indeed their top people are fantastically articulate, have a global view and are very well educated. Not always characteristics that our leading politicians and business people have. This is way beyond our everyday perception of who and what Indian’s are. Yes they run the Curry House on the High Street, but they are also many of our best medical consultants. Yes India has some of the world’s poorest people but it also has some of the richest.
Sixty is a time of maturity and it is time that the relationship between Britain and India became more mature. Today it is India that is the superpower and we need to have a different relationship with this great nation. India is a land of opportunity and the challenges it faces in accommodating economic growth and the social and cultural changes that will come in its train will bring great opportunities. Many people and businesses here in Birmingham and the West Midlands have special links with India which offer us a chance to exploit these new opportunities but only if we drop the patronising tone of the past and enter into a modern relationship with the new India.
Multicultural Birmingham is a great Indian City. We need a set of new institutions to celebrate our partnership with the new India. As the former colonial power they know more about us than we know about them. There is no doubt that Indian style is having a big effect on British fashion and design. How about a new gallery for contemporary Indian art including a cinema complex for Indian movies? How about a new joint venture between a major Indian University and one of Birmingham’s universities’s to create an Institute dedicated to Anglo-Indian understanding? Giving us greater insight into modern Indian politics, culture, law and business.
As a post-industrial City Birmingham seems to be looking for a new purpose - well there will not be a single purpose - there will be many but one of them could and should be as a gateway to India.
After all we have already adopted their cuisine. More popadoms anyone?
So when later on this year this year the 60th year of independence of India and Pakistan is celebrated it will be tempered by the cost. Partition continues to divide the great states of Bengal and the Punjab and there is still the running sore of Kashmir. Today many of these divisions are still represented in the communities here in the Midlands. Many modern young people find it hard to believe when you look at the scale of India, a continent within itself with a population almost three times the European Union, that it was once ruled from a small island on the North West coast of Europe.
Despite that painful birth today India is on the move its economy is turning in consistent annual growth rates of eight and nine per cent. No mean feat in a country of over a billion people. The reforms of successive governments have at last begun to unleash the vast talent of India’s people. Sure there are problems, as any country would face undergoing an economic revolution, multiplied by the shear scale of the country. But the fact that they have been able to retain their secular democratic state during this revolutionary process is a great achievement.
It is worth remembering even all these years after partition that the Muslim population of India is greater than the total population of Pakistan. And despite the fact that Britain was responsible for the disaster that was partition there is still tremendous goodwill towards Britain. As well as the railway network we left them something else that helps to unite India, the lingua-franca of the modern global economy - English.
Today there are more people speaking English in India than the entire population of the United States. Listening to the great Sunil Gavasker, one of India’s greatest ever cricketers, on Test Match Special it’s a bit chastening to hear that he speaks better English than I do. This is not just true of the best Indian sports people it also true of India’s leaders in business and politics. Hardly surprising when you think of the competition they face to get to the top in such a vast nation.
The best of India are very good indeed their top people are fantastically articulate, have a global view and are very well educated. Not always characteristics that our leading politicians and business people have. This is way beyond our everyday perception of who and what Indian’s are. Yes they run the Curry House on the High Street, but they are also many of our best medical consultants. Yes India has some of the world’s poorest people but it also has some of the richest.
Sixty is a time of maturity and it is time that the relationship between Britain and India became more mature. Today it is India that is the superpower and we need to have a different relationship with this great nation. India is a land of opportunity and the challenges it faces in accommodating economic growth and the social and cultural changes that will come in its train will bring great opportunities. Many people and businesses here in Birmingham and the West Midlands have special links with India which offer us a chance to exploit these new opportunities but only if we drop the patronising tone of the past and enter into a modern relationship with the new India.
Multicultural Birmingham is a great Indian City. We need a set of new institutions to celebrate our partnership with the new India. As the former colonial power they know more about us than we know about them. There is no doubt that Indian style is having a big effect on British fashion and design. How about a new gallery for contemporary Indian art including a cinema complex for Indian movies? How about a new joint venture between a major Indian University and one of Birmingham’s universities’s to create an Institute dedicated to Anglo-Indian understanding? Giving us greater insight into modern Indian politics, culture, law and business.
As a post-industrial City Birmingham seems to be looking for a new purpose - well there will not be a single purpose - there will be many but one of them could and should be as a gateway to India.
After all we have already adopted their cuisine. More popadoms anyone?
Wednesday, 8 August 2007
Keeping the Midlands Moving
It is rare for the West Midlands to agree about anything. The capital can usually ignore us because rather than hear one voice they hear a cacophony. Yet almost everyone in Birmingham and the West Midlands seems to agree that traffic congestion is endangering the economy. All of our modes of transport are bursting at the seams. Look at the M42, M6 or New Street Station.
There is simply no spare capacity on any of our modes of transport. That is why there is such chaos when there is the slightest disruption to traffic at peak times.
We have been investing in our infrastructure. But after fifteen years of continuous economic growth we have not invested as quickly as the traffic has grown. So despite the M6 toll and other road improvements and huge investment in the West Coast mainline the infrastructure is getting worn out faster than we are replacing it. And as for increasing capacity forget it.
Gerry Blackett CEO of Birmingham Chamber recently indicated how with a relatively modest spend we can eliminate some of the key pinch-points in our transport networks. But the existing networks do not reflect the needs of the present economy. Key major routes say Birmingham to Southampton or Birmingham to Lowestoft do not have sensible rail routes for containers.
It is equally absurd that all road traffic from Manchester to Bristol has so long to look at Bescot Stadium as it leaves the M6 to join the M5 that it has become a prime advertising site. Similarly the main road from Dublin to the Hook of Holland has to go around two small islands as it leaves the M6 to try and gain access to the A14. I am sure we all have our own favourite absurdities in the transport network and this is before we get into trams or airports.
The Seven West Midlands Councils and Centro have sent the Government their wish list with a £4.6 billion price tag. A bit steep when you think we currently get only £90 million a year for the whole region for major transport projects.
For a change it seems we know what we want. But we are kidding ourselves if we think the Government is going to pay for it.
The fact is we need an income stream that reflects the growth in the economy. It must be clear to everyone by now that our politicians are not going to ask the wider electorate to vote for higher taxes to pay for better transport systems. The Centro bill shows they can be very expensive and there is already the £3.5 billion to widen parts of the M6. The electorate have good reason to distrust politicians the temptation to rob long term spending on infrastructure for short term spending on more eye catching things is very difficult to resist.
So the real question is, if not from HMG, where is the money to come from?
The fact that the recently announced improvements to our rail network are mainly to be paid for by passengers is a clear signal. The user is going to have to pay.
We must look again at road pricing. Some argue that vehicles are already paying enough tax for using the roads and that any system would be a tax too far. Or that we should wait for a national system – the cost of such a system will I fear out strip our ability to implement it.
The challenge we have I think is to decide what the issue is we are seeking to tackle. Do we wish to increase the capacity of our networks or do we want to choke off some demand for movement by price?
The fear for many who hear about road pricing is all they hear is the latter. Many people cannot afford to live where they work and to further punish them by increasing their already excessive transport costs does not seem fair. But this is the uncomfortable truth road pricing has to do a bit of both, increase capacity and change behaviour. For a tax to relieve congestion - it has to be high enough to change what people do and there is no doubt if there is no pain there is no gain. It will hurt those less able to pay and also will hurt disproportionately those businesses that have to deliver into the congested areas.
The real choice we have is unplanned rationing by congestion which has a cost but does not generate any revenue. Or to attempt to raise revenue from congestion with road pricing which at least offers a new revenue stream for capacity improvements. And surely we can come up with varying the charges for essential deliveries or for essential workers.
We will never be able to have enough capacity to satisfy the demand if everyone decides to go to the same place at the same time but we can get nearer to matching demand with supply and thereby not choke off the economy.
If we do not do this the gap between the transport systems we need and what we have will get wider and wider and with it the attraction of the region as a place to invest, work, visit or live.
There is simply no spare capacity on any of our modes of transport. That is why there is such chaos when there is the slightest disruption to traffic at peak times.
We have been investing in our infrastructure. But after fifteen years of continuous economic growth we have not invested as quickly as the traffic has grown. So despite the M6 toll and other road improvements and huge investment in the West Coast mainline the infrastructure is getting worn out faster than we are replacing it. And as for increasing capacity forget it.
Gerry Blackett CEO of Birmingham Chamber recently indicated how with a relatively modest spend we can eliminate some of the key pinch-points in our transport networks. But the existing networks do not reflect the needs of the present economy. Key major routes say Birmingham to Southampton or Birmingham to Lowestoft do not have sensible rail routes for containers.
It is equally absurd that all road traffic from Manchester to Bristol has so long to look at Bescot Stadium as it leaves the M6 to join the M5 that it has become a prime advertising site. Similarly the main road from Dublin to the Hook of Holland has to go around two small islands as it leaves the M6 to try and gain access to the A14. I am sure we all have our own favourite absurdities in the transport network and this is before we get into trams or airports.
The Seven West Midlands Councils and Centro have sent the Government their wish list with a £4.6 billion price tag. A bit steep when you think we currently get only £90 million a year for the whole region for major transport projects.
For a change it seems we know what we want. But we are kidding ourselves if we think the Government is going to pay for it.
The fact is we need an income stream that reflects the growth in the economy. It must be clear to everyone by now that our politicians are not going to ask the wider electorate to vote for higher taxes to pay for better transport systems. The Centro bill shows they can be very expensive and there is already the £3.5 billion to widen parts of the M6. The electorate have good reason to distrust politicians the temptation to rob long term spending on infrastructure for short term spending on more eye catching things is very difficult to resist.
So the real question is, if not from HMG, where is the money to come from?
The fact that the recently announced improvements to our rail network are mainly to be paid for by passengers is a clear signal. The user is going to have to pay.
We must look again at road pricing. Some argue that vehicles are already paying enough tax for using the roads and that any system would be a tax too far. Or that we should wait for a national system – the cost of such a system will I fear out strip our ability to implement it.
The challenge we have I think is to decide what the issue is we are seeking to tackle. Do we wish to increase the capacity of our networks or do we want to choke off some demand for movement by price?
The fear for many who hear about road pricing is all they hear is the latter. Many people cannot afford to live where they work and to further punish them by increasing their already excessive transport costs does not seem fair. But this is the uncomfortable truth road pricing has to do a bit of both, increase capacity and change behaviour. For a tax to relieve congestion - it has to be high enough to change what people do and there is no doubt if there is no pain there is no gain. It will hurt those less able to pay and also will hurt disproportionately those businesses that have to deliver into the congested areas.
The real choice we have is unplanned rationing by congestion which has a cost but does not generate any revenue. Or to attempt to raise revenue from congestion with road pricing which at least offers a new revenue stream for capacity improvements. And surely we can come up with varying the charges for essential deliveries or for essential workers.
We will never be able to have enough capacity to satisfy the demand if everyone decides to go to the same place at the same time but we can get nearer to matching demand with supply and thereby not choke off the economy.
If we do not do this the gap between the transport systems we need and what we have will get wider and wider and with it the attraction of the region as a place to invest, work, visit or live.
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