State of Play – July 4

As I’ve not had time to pen many items espousing my barely literate opinions on politics, I thought I’d do a brief round-up of other people’s’. A sort of primer for people who don’t have time to get past the headlines.  I’d like to think there’s some interesting and useful stuff in there if you have 10 minutes. This may or may not turn into a regular feature. So welcome to the State of Play.

Economic Affairs


Bob Diamond Resigns But Will Barclays’ Rate-Fixing Scandal Lead to Prosecutions? (William Adams, TIME, 3 July 2012), The Real Cost of the Libor Scandal (Alex Andreou, New Statesman blog, 2 July 2012) and From Boom to Bezzle: This Banking Scandal Will Run and Run (Allister Heath, City AM, 29 June 2012)
On 27 June 2012, it was announced that Barclays had been fined £290 million for manipulating the Libor rates. This was

Bob Diamond
Bob Diamond

then followed, on 3 July 2012, by the resignation of Barclay’s chief executive, Bob Diamond, and affirmation that the House of Commons will be holding votes on the type of inquiry to be used to investigate the controversy. Citing research conducted by Which?, finding that 78 percent of people polled wished to see the bankers involved prosecuted, William Adams discusses whether criminal sanctions are actually possible: “legal experts say the SFO, which has the power to bring criminal charges, will find the task of prosecuting bankers incredibly difficult”. He asserts that this is due to the difficulties proving those involved had knowledge of their wrongdoing. Meanwhile, Alex Andreou considers the implications of the revelations for financial services, and suggests that it will now result in lenders being forced to overcharge to counter the risk of the Libor rate being unreliable: “that is the real cost of the Libor Scandal. Rendering the Libor rate unreliable, is like removing the bottom block from an enormous financial Jenga tower”. Finally, Allister Heath states: “this latest outburst of self-harm from the City is bound to hinder the recovery. It will make all of us poorer. It will prolong the crisis. It is very, very bad news”.

Economic Policy

Richard Layard Explains the Manifesto for Economic Sense (Richard Layard, London School of Economics blog, 28 June 2012)
Writing for the London School of Economics blog, Richard Layard promotes the publication of his Manifesto for Economic Sense and urges further signatories. Created in collaboration with Paul Krugman, the manifesto debates two of the arguments they deem central to current economic policy decisions. First, they consider the argument that government deficits will lead to high interest rates, and that austerity measures are necessary to encourage business confidence and investment. The authors assert that current analysis of the world economy discredits this claim, and that even Japan—with a government deficit at 200 percent of GDP—is maintaining low rates of interest. Instead, they believe “companies will only invest when they can foresee enough customers with enough income to spend. Austerity discourages investment”. And second, they confront the argument that “structural imbalances” are constraining output. They discredit this point also, stressing the high unemployment figures across all sectors point to a “general lack of spending and demand”. At the time of writing, the manifesto had received over 6,500 signatures.

Global Urbanisation

Urban World: Cities and the Rise of the Consuming Class (McKinsey Global Institute, June 2012)
Published by the McKinsey Global Institute, this report discusses the global expansion of cities and the “consuming classes”, and considers the potential impact this may have on the demand for buildings and infrastructure. The paper

Urbanisation in New York

claims the ongoing shift of the global economic balance towards Asia is occurring “at a speed and on a scale never before witnessed”. The authors state China’s economic transformation is happening at 100 times the pace of the United Kingdom’s original period of industrialisation. The report also suggests that in the period leading to 2025, the world’s top 600 cities will contribute to approximately 65 percent of the world’s economic growth, and that the cities that make up the “Emerging 440” (a list that includes Shanghai, São Paulo and Lagos) will account for around 47 percent of this growth. As such, the authors detail the importance of refining growth policies and business strategies to take best advantage of these changes, including the projected rise in annual household consumption—which the report puts at more than $20 trillion for the period up to 2025.

Home Affairs


Ed Miliband’s Philistinism (Max Wind-Cowie, Demos blog, June 2012) and Ed Miliband Gets it Wrong on Immigration (John Wight, Huffington Post, 23 June 2012)
Responding to Ed Miliband’s immigration speechon 22 June 2012, Max Wind-Cowie praises the Labour Party leader for


addressing those concerned about immigration, but feels the speech did not go far enough. Rather than just focusing on the economic impacts of immigration, the author argues Miliband should also have addressed some of the social concerns: “there was no mention of the rise in segregating and alienating customs such as the wearing of the Burqa. No mention of forced marriages, open homophobia or inter-community racism”. In a stance reflected by an open letter to the Labour Party published by Policy Network, Wind-Cowie asserts that Labour need to go further to fully appreciate the public’s wider concerns on immigration. However, John Wight reasons that it was “another ill conceived and ill advised intervention, which suggests either a political compass skewed to the right on both issues, or a concerted attempt to win support from a white working class which views its interests threatened by immigrants and the supposed alien cultural values they uphold”. Wight then goes on to analyse aspects of Miliband’s speech, and cites studies that he believes contradicts some of the assertions.

Government Changes to the Family Migration Rules MRN E-briefing (Migrants’ Rights Network, June 2012)
This e-briefing, by the Migrants’ Rights Network, considers the potential impact of the government’s announced changes to family migration rules. Analysing the three “key changes” in turn, the paper first discusses the imposition of an income requirement of £18,600 for people wishing to sponsor a partner to come to the UK. Migrants’ Rights Network fear this change will disadvantage certain groups more than others, such as women (“who are paid, on average, 15.5 percent less than men in the UK”) and those from particular ethnic minority communities. Second, they turn to the extension of the “probationary period” (to five years) before a partner can apply to settle in the UK. This, they believe, will “rather than achieving the government’s goal of reducing ‘sham’ marriages, have the overall effect of increasing the insecurity of all families seeking to settle in the UK”. And finally, the authors consider the stated intention to introduce guidelines on the application of article 8 of the European Convention on Human Rights in immigration cases. The organisation questions whether the result of this change will result in rule-making that favours political interest, rather than public interest.

Vulnerable Defendants

Fair Access to Justice? Support for Vulnerable Defendants in the Criminal Courts (Jenny Talbot, Prison Reform Trust, June 2012)
Introducing her paper on vulnerable defendants in the criminal courts system, Jenny Talbot claims that “high numbers of defendants have particular support needs which, if left unmet, can affect their ability to participate effectively in court

Prison Bars
Prison Bars

proceedings and compromise their right to a fair trial”. In support of this claim, she highlights research suggesting: over 60 percent of “children that offend” have communication difficulties; around a quarter of “children that offend” have an IQ of less than 70; and 75 percent of adult prisoners have a dual diagnosis (“mental health problems combined with alcohol or drug misuse”). In her recommendations to improve proceedings, Talbot talks of the need to end the inequitable treatment of vulnerable witnesses and vulnerable defendants. In particular, she calls for the need for all intermediaries—whoever they represent—to be subject to the same regulatory standards and quality assurance. The author also calls for all those involved in the criminal process (eg legal practitioners, members of the jury, judges, etc) to receive better information and training on health or behavioural matters that may affect a defendant’s performance in court.


Science and Politics

The Lunatic Fringe (Mark Henderson, Prospect, 20 June 2012)
Claiming that only one MP “is a professional research scientist”, Mark Henderson suggests that science is not properly appreciated within the field of politics, and may often lead to poor policy making. For instance, the author argues that the Human Tissue Act 2004 resulted in burdensome bureaucracy (“once the charity Cancer Research UK has funded a trial, it takes an average of 621 days before the first patient is treated”), and that government health policy is often based upon questionable evidence. Also, Henderson queries whether the impact on the UK’s scientific community was fully considered when implementing recent changes to immigration caps: “to allocate scarce visas on the basis of salary might work for business, but not for universities that rarely pay postdoctoral researchers much more than £35,000”. In his conclusion, the author calls for trained scientists to get more involved in politics; both through their presence as MPs, and as members of the public.


Gas Fracking
Fracking Consequences

Fracking Protesters Lay Siege to Cuadrilla Drill Rig (Frack Off, 18 June 2012) and Shale Gas Extraction in the UK: A Review of Hydraulic Fracturing (Royal Academy of Engineering, June 2012)
On 18 June 2012, it was reported that protesters have been obstructing efforts by Cuadrilla Resources to begin hydraulic fracturing (also known as “fracking”) in Lancashire. One of the protesters, representing a group entitled Frack Off, expresses her concern over the proposed scale of hydraulic fracturing, and claims Cuadrilla Resources wants to drill 800 wells in Lancashire alone: “if this goes ahead, we will witness the total industrialisation of the British countryside and the destruction of the land and water on which we depend”. She then calls for increased exploration of alternative energy sources, and argues hydraulic fracturing does not represent an energy efficient solution. However, in their recent report, the Royal Academy of Engineering downplay concerns linked to the process: “the health, safety and environmental risks associated with hydraulic fracturing to extract shale gas can be managed effectively in the UK as long as operational best practices are implemented and enforced through regulation”. The organisation then outlines a number of recommendations to manage potential issues such as: groundwater contamination; induced seismicity; potential gas leakages; levels of water usage; and the growth of the industry.

Hit the Gas: How to Get the Anaerobic Digestion Sector Moving (Thomas Brooks and Quentin Maxwell-Jackson, CentreForum, July 2012)
Creating headlines for its recommendation to ban food from landfill, this paper urges the government to take more action to promote the expansion of anaerobic digestion—as was pledged in the Coalition Agreement. The authors believe the process, which involves breaking down organic materials to create biofuels and fertiliser, could be increased by 800 percent by 2020, and would then be able to power upwards of 2.5 million homes. Listing some of the benefits of anaerobic digestion, Brooks and Maxwell-Jackson highlight its potential to fuel Heavy Goods Vehicles, the possible reduction in food waste and the fact that—as it generates gas—its results can be held in storage. However, in order to facilitate such an expansion, the authors believe the government also need to take a number of steps to better support the industry, such as reducing regulatory burdens and promoting purpose grown crops.

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