The dangers of gun boat diplomacy
27th June 2021
Boris Johnson's current project in gunboat diplomacy (FT 23rd June) would seem a classic example of an incompetent government attempting to divert attention from its domestic failings (e.g. Brexit chaos, Covid death toll, etc) by international brinkmanship. A familiar example in recent decades was the Galtieri regime's invasion of the Falkland Islands.
By directing ships of the HMS Queen Elizabeth II Carrier Strike Group to sail provocatively into international hotspots such as the recent incursion close to Sebastopol in the Crimea, Johnson is imperilling both Royal Navy (and other navies') ships and sailors, and international peace.
As the taskforce wends its way through the Suez Canal and Indian Ocean toward the South China Sea, Johnson would do well to recall the fate of Force Z, one of the most tragic naval blunders of his hero, Sir Winston Churchill. Two of the Royal Navy's most powerful capital ships (HMS Prince of Wales and HMS Repulse) were despatched to Singapore in late 1941 to deter Japanese aggression. After the outbreak of hostilities, they were summarily sunk by Japanese aircraft with the loss of 840 RN personnel, the attack being one of the first examples of the deployment of the then relatively new technology of maritime aerial bombardment.
Although the Chinese or other potential threats would seem unlikely to use such tactics in the 2020's, today's new technologies (e.g. drone, satellite or electronic warfare) may deliver a similar shock, hopefully with less tragic consequences.
In short, the deployment is yet another examples of Johnson's chaotic decision making and has only downside.
Scientific powerhouse ambitions require political commitment
8th April 2021
Lord Patten bemoans the UK government's savage cuts to the science research budgets in post-Brexit Britain (FT 8th April, "UK funding cuts are a slap in the face for science"). Alas, this is but the latest manifestation of decades long neglect resulting from successive governments devoid of scientific competence (FT letters 5th Oct 2018 "UK politics is devoid of scientific thinking" et seq.)
To compound the blunder of such cuts, are the equally reckless commitments to highly speculative projects such as the OneWeb satellite system ($500m thus far) and the Advanced Research and Invention Agency, ARIA, (£800m) both management and activities of which remain undecided.
One simple step the current government could implement to improve the coherence and discipline of the UK science and technology activities would be the establishment of a Department of Science and Technology to be carved out of the spawling Department of Business, Energy and (now abandoned) Industrial Strategy.
UK university science can be excellent, but scientific powerhouse status in a world dominated by the much larger players such as China, the EU and the US will require a much greater political commitment than shown hitherto.
Aria out of tune with reality
28th February 2021
The inflated government rhetoric accompanying the launch of the proposed Advanced Research and Invention Agency (ARIA), (FT 19th February) shows just how far removed from reality current government policy has become. Britain is no longer a global science superpower, nor has been for many decades. Whilst it is justifiably proud of a relative abundance of world class universities, they in themselves do not constitute a superpower. In the most recent 2021 Bloomberg Innovation Index which accounts for other factors such as tech company density, productivity, manufacturing value add and R&D expenditures, the UK came 18th behind 11 other Western European countries, the US, Japan and China. Top were South Korea, Singapore, Switzerland and Germany.
Rather than yet another agency engaged in research in which the UK already excels, government might better focus on a wider industrial strategy. The fact that work on just such a strategy in the Department of Business, Energy and Industrial Strategy has recently been abandoned to be subsumed in a Treasury-led recovery programme (FT 9th February 2021) is scarcely encouraging.
In the US, incoming President Joe Biden has elevated the Director of Science and Technology Policy, to a cabinet position. In light of the UK cabinet's shortcomings in this vital sector, a similar move on this side of the pond looks compelling.
Voltaire enlightens today's coronavirus issues
21st February 2021
Jingoists on either side of the UK / EU spat over the coronavirus vaccines, as well as occidental supremacists considering origins of the disease, may do well to reflect on Voltaire's observations on England's leadership in western inoculation in the 17th century. From his eleventh Letter on England : I understand that the Chinese have had this custom for a hundred years.
The example of a nation that passes for the wisest and most strictly governed in the universe is a great thing in its favour.
Science Policy needs profile and discipline
20th February 2021
A new science agency (FT 1st Feb) could well add some much-needed discipline to the Government's strategy to develop the UK's position as a science superpower provided it is given sufficient priority in the government machine. Two of the risk-high/return initiatives announced so far seem to leave much to be desired.
The Government's investment in the OneWeb satellite operator, jointly with Bharti Global of India, (against the advice of the senior civil servant involved) followed the UK's expulsion for the EU's Galileo satellite positioning system. It is by no means clear how the OneWeb system will be particularly appropriate for UK operation (positioning or otherwise). Nor clear how a system based on US manufactured satellites launched on French rockets in Russia will contribute mightily to UK prosperity. What is clear, however, is that the main beneficiaries of the decision so far have been the shareholders of Bharti and its joint venture partner in India, Infosys.
A second example is the Government's announcement of the search for a site for the proposed nuclear-fusion based Spherical Tokomak for Energy Production (STEP) and an associated power station. This follows the UK's withdrawal from the International Thermo-nuclear Experimental Reactor (ITER) project at Cadarache, France, led by the EU in partnership with China, Japan, Korea, Russia, the United States. Whether an exceptional British project will be able to access the required expertise from ITER and so compete with more advanced national projects in China, Korea and the US remains to be seen.
Lack of discipline would seem the characterise both of these highly-speculative and open-ended commitments resulting from the UK's departure from the EU. Clearly Boris Johnson and his cabinet will be long gone by the time these expensive pigeons come home to roost. But what the Prime Minister can do now (following President Biden's recent initiative in the US with the OSTP) is to establish a UK Department for Science and Technology carved out of the sprawling Department for Business, Energy and Industrial Strategy to be led by a cabinet minister qualified and experienced enough to formulate and implement a strategy free from such haphazard undertakings.
Rethinking ARPA
16 November 2020
The departure of Dominic Cummings from No.10 Downing Street provides the opportunity of rethinking his putative second pet project, an Advanced Research Projects Agency. Bearing in mind that the UK already has a plethora of such agencies in the Department for Business, Energy and Industrial Strategy (e.g. the Science and Technology Facilities Council), the MOD (e.g. Defence Science and Technology Laboratory) and elsewhere (e.g. GCHQ), it is not obvious that the UK needs yet another such agency.
What the UK does require urgently is senior representation of science and technology at cabinet level, particularly following the demotion of the post of science minister to parliamentary undersecretary status in the most recent reorganisation. A Department of Science and Technology would, with appropriate leadership, provide some desperately needed scientific input to cabinet discussions, the absence of which is so obvious in the Government's shambolic management of the Covid crisis and a range of other issues ranging from the problematic Oneweb satellite project to the crucial HMRC Customs Declaration System.
With Brexit Britain now resigned from the major EU programs and facing hugely better resourced competition from US and China, the government should signal its highest commitment to this major engine of economic growth.
Election economics : Domestic irrelevance, international significance
09 November 2020
Despite the sound and the fury of the recent US presidential election, the total equity returns under Democrat and Republican presidents, measured over a century of data, are effectively identical (i.e. 7.3% vs 7.4% pa respectively). Similar figures obtain for the UK between Labour and Conservative governments. So whatever else the outcome of such elections, (and in as much as stock market total returns are a reasonable reflection of the underlying economies), it's not the economy.
However, of greater significance is the effect of election results on the relative international comparisons of national GDP data. Under the Trump administration (2016 - 2020), the United States became some 16.3% less great compared with its main rival, China, a diminution that may be expected to widen still further due to the USA's relative mishandling of the Covid pandemic. Similarly, in the UK over the same period under the pro-Brexit Conservative governments, the UK has declined by some 21.5% relative to the now-competitor EU-ex-UK, also likely to widen still further due to both Covid and Brexit mismanagement.
The incoming Biden administration in the USA will have the opportunity to change economic and social policies for the better, even if China's long-term ascendency seems unstoppable. In the absence of changes in the UK, continuation of the current precipitate decline, by 2024, would amount to no less than a national tragedy.
A Wealth Tax is hiding in plain sight
18 October 2020
Much is being made of a putative wealth tax as means of funding the UK's mounting Covid spending crisis (FT Money 17th / 18th Oct.) now given greater urgency by the recent downgrading of UK's debt rating (Moody's 16th Oct). However, the contentious issues of introducing a new tax ignore a ready-made solution hiding in plain sight within the existing system.
The UK housing stock of some 23m households has a current market value of c. £7.4trn. Of these households, 64% are owner occupied (of which households another 63% feature an HRP (Household Reference Person) in retirement). The average tenure of owner occupation is some 18 years. Taking the movement in UK house price index over this period of some 200% implies a current unrealised capital gain of some £3trn. Removal of the historic, but arguably anomalous, CGT exemption on primary residences would therefore imply potential tax receipts of £750bn. Spread over 18years would raise c. £40 bn pa.
Clearly all the number above are based on averages and the actual amount raised could be tuned by exemption bans and differential rates. But, also clearly, the means exists within the current system of making a step change in meeting the Covid financing challenge.
This step would fall squarely in the category of taxing windfall gains as the property price inflation owes little to home improvements and a very great deal to the epochal fall in interest rates. The step would add little further burden to the less well-off renters or the younger generation. Also this step would have little effect on either consumption, production or investment and so have little impact on the UK's badly needed, eventual recovery.
Britain needs to address its lack of tech champions
02 October 2020
If science and technology are to drive the UK’s industrial strategy (Report, September 28), business secretary Alok Sharma’s white paper in preparation will have to address one glaring problem. The UK, as currently reflected by the FTSE 100 index, has next to no presence in the key growth area of information technology. This is in contrast to the US, where IT comprises 22 per cent of the S&P. IT comprises 11 per cent of Japan’s main index and 6 per cent for Europe ex-UK, against a world average of 17 per cent.
This key shortfall has resulted in the FTSE being the worst performing of the world’s major indices over five years (effectively since the Brexit vote) and in the year to date (since the Covid-19 pandemic).
While UK universities and research institutes are of world-class stature, it is all the more problematic that there is no corporate vehicle to deliver the benefits to the UK and export markets.
The laissez-faire policies of successive governments and instances of egregious management failings have brought the UK to this sorry state.
Clearly it is simply not possible to conjure FTSE 100 companies from thin air. But standing idly by while one obvious candidate, Arm, is swapped between foreign owners is tantamount to neglect of the national interest.
Without an intervention of unusual determination, the UK will continue to suffer its current underperformance relative to international peers.?
An IT renaissance is key to UK's industrial strategy
30 September 2020
If science and technology are to drive the UK's industrial strategy (FT Sept 27th), Alok Sharma's white paper in preparation will have to address one glaring problem. The UK, as currently reflected by the FTSE 100 index has next to no presence in the key growth area of information technology. This is in contrast to the USA where IT comprises 22% of the S&P, 11% in Japan and 6% Europe ex UK, (world average 17%). This key shortfall has resulted in the FTSE being the worst performing of the world's major indices over 5 years (effectively since the Brexit vote) and year to date (since the Covid pandemic).
As it is the IT sector which will provide the benefits of its newer manifestations such as artificial intelligence and quantum computing, it is clearly of key national importance and security that the UK has a substantial presence in the field. And whilst UK universities and research institutes are of world class stature, it is all the more problematic that there is no corporate vehicle to deliver the benefits to the UK and export markets.
The laissez faire policies of successive governments, and instances of egregious management failings have brought the UK to this sorry state.
Clearly it is simply not possible to conjure FTSE 100 companies from thin air. But stand idly by whist whilst one obvious candidate, ARM, is swapped between foreign owners is tantamount to neglect of national interest. Failing an intervention of unusual determination, the UK will continue to suffer its current underperformance relative to international peers.
An industrial strategy based on organic growth of existing smaller companies and start-ups will take a generation to come to fruition.
US-China trade war in the Covid era will require revision of national interests
22 September 2020
Dame DeAnne Julius (FT 16th September) encourages the adoption of Schumpeterian policy of creative destruction to counter the unanticipated destructive effect of the Covid 19 pandemic. Professor Leipziger ( FT letters 22nd Sept) argues an admixture of Keynes to counter the dominance of the now dominant global digital behemoths. At the same time, the escalating US/China trade war suggests the revision of existing laissez-faire policies of the global free trade era.
In the case of the UK, the destruction has been comprehensive. Even pre-Covid, successive governments' policies did not prevent the near annihilation of the UK IT industry (e.g. ICL, GEC-Marconi, etc), telecommmunications ( e.g. Cable and Wireless, Inmarsat, etc) and semiconductors (e.g. ARM (?), Imagination, etc). The Covid pandemic adds, at the very least, aviation, retail and hospitality sectors to the list. The current Government's seemingly random investment policy gives little evidence of heeding either Schumpeter's or Keynes' ideas. The massive c £80bn investment in HS2 is into a 19th mode of transport for pre-Covid commuting behaviour. The initial £500m investment into the troubled One-Web satellite project is a very long shot at turning a lame duck into a swan. The trumpeted £800m projected for a future focused ARPA (at just 1%the investment in HS2) is no doubt welcome - but at best a meagre supplement to academic and industrial research already in progress and must necessarily draw on the same talent pool.
Difficult as it must be in these pandemic times ex EU programmes, this Government really does need to articulate a joined-up approach enumerating a policy for prioritising initiatives, hopefully drawing on, and in partnership with, the very substantial investment resources in both the corporate and financial sectors.
One key initiative in the Government's gift might be to encourage a transformational boost to management skills (which have delivered such a disastrous outcome over the last half-century). Another would be to ensure a more stable, beneficial tax and competition environment which encourages entrepreneurial investment for the long-term to improve on the current most-likely option of sale to a foreigner bidder (there remaining precious few UK acquirors).
Finally, in the event of the possible sale of a company of obvious strategic national interest ( e.g. currently, ARM), Government should not be squeamish in rejecting offers not in the national interest nor imposing conditions relating to employment, future investment and local governance.
Scottish Independence will not be decided by rational economics
30 August 2020
Recent considerations of the prospects for Scottish independence on the basis of rational economic arguments ( Challenges mount on the road towards Scottish independence, FT 27th August) ignore the painful lessons from UK elections and the Brexit referendum of recent years. As now well documented ( e.g. The Road to Somewhere by David Goodhart; Democracy for Sale by Peter Geoghegan), lies and half-truths sprayed out in a billion or so Facebook adverts to a few million (as what are now characterised as C2,D, E class) Somewheres will easily trump any more difficult rational arguments, as the wider UK is now counting to its substantial, and rising, cost.
Elections and referenda can now longer be contested on traditional grounds, as forthcoming votes, Scottish independence perhaps included, are likely to demonstrate. Proponents of popular democracy can not only hope, but also act, to encourage voters to understand what is put in front of them.
Letter: Dismantling Whitehall ‘blob’ is not a solution
02 July 2020
The observations of Oxford university’s Professor Karthik Ramanna (“Governments and specialist advisers must get along better”, Opinion, June 29) concerning the interplay between government generalists and specialist advisers might usefully be put in a wider context.
Generalists would usually be understood as having a working knowledge across a wide range of disciplines, both humanities, social sciences and the hard sciences, whereas political generalists have become synonymous with the lack of any appreciation in the STEM subjects, business or commerce.
Amateur politicians pursuing ideological policies not supported by the majority of their electorates have often led to disastrous regimes. Boris Johnson’s government falls exactly into this category as illustrated already in its mismanagement of both Brexit and, more fatally, the Covid-19 crisis.
Imminent challenges in national security, Chinese-US rivalries in telecommunications and nuclear industries, space policy, public procurement in defence, health and infrastructure would seem tall orders for the current roll-call of half-educated ministers.
The trumpeted dismantling of the Whitehall blob (Report, June 30) will only further increase the economic risks attached to these issues, as illustrated by the continuing fall in sterling and the underperformance of UK equity markets.
Among the Oxford faculties, Prof Ramanna will have an interesting challenge to bring the two cultures into a more effective unity.
When Generalists are half-educated
30 June 2020
Oxford University's Professor Ramanna's observation of the interplay between government generalists and specialist advisors (FT 29th June, Governments and specialist advisors must get along better) might usefully be put in a wider context.Generalists would usually be understood as having a working knowledge across a wide range of disciplines, both humanities, social sciences and the hard sciences, whereas political generalists have become synonymous with the lack of any appreciation in the STEM subjects, business or commerce. Rather than qualifying as generalists, the are better regarded as simply half-educated.Amateur politicians pursuing idealogical policies not supported by the majority of their electorates have often led to disastrous regimes such as National Socialism or Communism. Boris Johnson's Government falls exactly into this category as illustrated already in its mismanagement of both Brexit and, more fatally, Covid-19 crises.Imminent challenges in national security, Chinese/US counter- influences in telecommunications and nuclear industries, space policy, public procurement in defence, health and infrastructure would seem tall orders for the current roll call of half-educated ministers. The trumpeted dismantling of the Whitehall blob (FT 30th June) will only further increase the economic risks matched to these issues, as illustrated by the continuing fall in sterling and underperformance of the UK markets.Among the Oxford faculties, Professor Ramanna will have an interesting challenge to bring the Two Cultures into a more effective unity.
15th May 2020
The Lex column analysis (FT 12th May) of the role of big tech in the performance of the NASDAQ and S&P 500 indices can be used to draw some interesting policy implications for the UK. The fact that the tech component of both is very similar (i.e. the FAANGS) together with the five year index performances ( NASDAQ +80% , S&P 500 +40%) allows us to see that over the period, tech has approximately doubled (15% cagr) whilst the non-tech component of both has remained flat (i.e. zero growth on average in the non-tech sectors).The disappointing underperformance over the period of the overwhelmingly non-tech FTSE 100, (-15%) is due mainly to the de-rating of the FTSE since the Brexit referendum of 2016, (see graphic). This de-rating is likely to accelerate due to, inter alia, the continued threat of a no-deal Brexit.Were the present government to consider it desirable to improve the performance of the UK, the policy implications are clear. First to make clear that achievement of a mutually beneficial Brexit agreement takes precedence over rigid adherence to an increasingly unfeasible timetable. Second, in the current welter of public spending, to ensure full participation in EU research and technology development programmes and UK-specific projects on the scale, say, of HS2 instead of that of the proposed ARPA. Third, in light of the decades of disastrous UK management outcomes, to boost the role of UK business schools to the world-class status of our best universities.
Letter: Coronavirus is a chance to catalyse real change
08 May 2020
The unhappy coincidence of the UK’s 75th anniversary of VE Day with the award of Europe’s wooden spoon for the management of the coronavirus pandemic (FT.com, May 7) suggests a connection between the two.
As one of the few European nations not to have suffered the traumas of occupation, destruction or defeat, the UK had no need to renew its society, institutions or industries. At least one result of this has been the perpetuation, and indeed recent rejuvenation, of the infamous English class system currently personified by a government dominated by cookie-cutter individuals from the public schools and Oxbridge. Another result has been the careless disdain for business, management and scientific skills leading to the extinction of vast swaths of industries and what was most recently exhibited in the UK’s response to the pandemic.
Consequences of this current crisis may hopefully catalyse changes in attitudes and rethinking of policies now due more than ever. Examples of the latter — Brexit and its timetable, and HS2, to name but two.
Not too soon to Heed Lessons from the COVID Crisis
24 April 2019The erratic and lacklustre performance of Boris Johnson's Brexit administration in response to the current Covid-19 pandemic (How politics thwarted UK's response to the Covid-19, Philip Stephens, FT 24th April) is a chronic illustration of the scientific shortcomings of recent governments, previously highlighted in these pages (FT 11 May, 5 October 2018).
Politicians elected on boasts of disdain for expert opinion ironically now rely on precisely that, yet lack the necessary skills to interpret or implement it properly. Although the short-term may require continuation of a Churchillian buggering on, the new Covid World will require the necessity of heeding the lessons currently being so bitterly learned.
For instance, the near unanimous expert advice on the dangers of adhering rigidly to a wholly unrealistic Brexit timetable, challenging even before the Covid-related mayhem, is simply courting further chaos. In another instance, the politically motivated decision to invest £80bn in marginal improvements to a 19th century technology (HS2) compared with just just 1 percent of that sum on 21st technologies at ARPA and similar now seems a very dubious allocation, even before the gargantuan financial strain of the Covid crisis.
Clearly the new-normal Covid World will require the rethinking of most issues in business and society at large. We can only do what we can to ensure that this UK government of generally well-meaning but variously gifted amateurs have the capacity to absorb what they are being told.
09 December 2019
A Royal Succession can Only Amplify Brexit's Disruption of the Union
23 November 2019
Joy Lo Dico's suggestion of a referendum on the monarchy ('The Crown', the prince and the end of monarchy, FT 23rd November) is eminently in keeping with Hobbes' contract theory governing relations between ruler and ruled. So it may well be appropriate to revisit this after the intervening four centuries, particularly so as a royal household and estate of imperial proportions may no longer be suitable for a mid-sized island nation.
But her suggestion ignores one factor likely to have a greater effect on the UK than even Brexit. The certainty of a royal succession, occurring quite possibly during the possibly extended resolution of the Brexit chaos, may change the country beyond recognition. For instance, no-one under the age of 70 can have any memory of the nation before the current monarch's reign.
Although Queen Elizabeth is held in greatest respect both in the UK and internationally, it is not necessarily the case that such respect will automatically transfer to her successors. It is difficult to imagine that a republican-minded citizen of Northern Ireland or a European-inclined young Scot would pay the same homage to the impending era of English public schoolboys.
A more prosaic observation is that risk premia attached to UK assets are likely to increase relative to more stable peers ( e.g. the EU, Japan and the USA).
Red Alert for UK Broadband
21 November 2019
Labour's proposed re-nationalisation of BT's Openreach and free distribution of broadband services ( What Labour’s broadband giveaway means for the telecom sector, FT 20th November) worsens the already critical state of the industry.
Brexit's Relative Wealth Paradox
19th October 2019
With the Brexit process focused overwhelmingly on on the Irish broader question, scant attention has been paid to its effect of UK domestic economics.
Since the Brexit referendum, sterling has depreciated c.15 % against the dollar, whilst the Morgan Stanley World Index has appreciated c. 30%. A UK household owing a property valued at the UK average house price of £245,000, with say a similar amount of sterling denominated savings will have seen no appreciable change in its sterling net worth. Whereas a metropolitan household, say based in Greater London owning a property valued at c.£470,000, with a similar amount of savings invested in the MS World Index will have seen their sterling net worth appreciate by 25%. Clearly, the wealthier the household, the greater the gain over the national average.
The paradox is clear. The more modest household generally deemed to be more typical of the leave vote, voted to suffer its relative impoverishment, whilst the metropolitan household deemed more typical of the remain vote, voted against its relative enrichment.
At least two conclusions seem clear. First, UK politicians seem to have ignored totally the economic interests of their constituents. Second, the UK chose, by a narrow margin, to leave the path of enlightened economic self interest and to stray into that of dogma.
Brexit's Threat to UK science
12th October 2019
Anjana Ahuja's opinion of the vulnerability of British science (FT Opinion 11th October 2019, "British science in jeopardy despite Nobel Prize wins") illustrates recent concerns expressed on the paucity of scientific and technological competence of recent UK governments (FT letters, October 5th 2018) resulting in the disastrous collapse and disappearance of the major UK technology companies over the last three decades (FT letters, May11th 2018).
Her report of the current government's initiatives in this area threaten more of the same. The ministers and advisor quoted bring no relevant qualifications or expertise to the issues. The piecemeal initiatives in areas ranging from fusion science to AI to life sciences betray a lack of any overall strategy. The idea of an additional advanced research projects agency ignores the existing panel of expert research councils and the overarching guidance of the world's leading organisation in this field, the Royal Society.
This bluster of activity may be attempting to disguise the fact that the near uniform opinion of all existing expert bodies, including the UK's clutch of world-leading universities, is that the interests of UK science and technology would be best served by remaining in the EU and continuing participation in its programmes of which the UK is currently a significant net beneficiary. The dangers of ignoring of such experts is well illustrated by past regimes such as revolutionary France, communist Russia and Nazi Germany.
Whatever the short term outcome of the Brexit fiasco, a re-enlightenment of government and a revision of education policy would seem to be necessary steps to a revitalisation of UK science and technology.
UK start-ups begin to look vulnerable
27 August 2019
Ian Walmsley celebrates the UK’s undoubted success in the field of quantum computing (“The race in quantum computing is not a zero-sum game”, August 21). His comments might usefully be qualified by an appreciation of the realpolitik of scientific capitalism.
The fact is that there are now several major corporations in the US and Asia with market values in the range of $500bn-$1tn and with hundreds of billions in deployable cash resource.
As illustrated by Alphabet’s acquisition of the UK’s DeepMind, these and others can simply buy any promising start-up as an option on future success. With that goes the subjugation of the target company’s intellectual property to the rules of the acquiring company’s legal regime — and also power over corporate policies ranging from employment law to taxation.
The UK’s burgeoning ecosystem of start-ups in the field of quantum computing and many others (for example artificial intelligence and fusion science) may simply act as a glorified shopping mall for much bigger international companies, with the myriad consequences in all the areas indicated above.
The Brexit catastrophe, no-deal or not, will remove the UK from one feasible response to these issues: pan-EU initiatives of a scale that would challenge even the biggest of global behemoths. With a government devoid of an appreciation of these issues, and mired in the swamp of a constitutional crisis, the UK is arguably now at its most vulnerable, even before Halloween.
Quantum computing as canary in coalmine
23 August 2019
Ian Walmsley's celebration of the UK's undoubted success in the field of quantum computing (FT Opinion, Global efforts in quantum computing are not a zero sum game, FT August 20th 2019) might usefully be qualified by an appreciation of the realpolitik of scientific capitalism.
Heed the Advice of Successful companies
07 August 2019
We read that BT’s newly appointed chief executive Philip Jansen was granted an interview with British prime minister Boris Johnson to plead for special treatment to ensure the most rapid rollout of full fibre broadband services in the UK (“BT presents full fibre strategy to Downing Street”, August 3).
Downing Street, Ofcom and other interested parties may observe that the BT share price is currently languishing at the level of privatisation some 35 years ago, successive BT Group managements having achieved shareholder value destruction on a monumental scale.
Its most recent faux pas was to diversify into pay television services at the expense of ignoring its basic network infrastructure, instead touting its copper based “G.fast” technology as an alternative to fibre broadband.
Downing Street, Ofcom and others may do better to heed the advice of more successful companies in the sector.
Brexit as National Socialism
10 July 2019
Gideon Rachman draws parallels between Brexit and the rise of National Socialism in the Germany of the 1930s, (How to learn lessons from the 1930s, FT 23rd July). His case is reinforced by the observation that the same number of voters (17m representing 38% of the electorate) supported Brexit in the UK in 2016 as supported the National Socialists in the German Federal election of 1933. Clearly, in both cases, the 17m had no idea what they were actually voting for.
The Biology of Tory Politics
01 April 2019
Camilla Cavendish's informed survey of the challenges to be faced by the next Tory leader (FT, 30th March) omitted the incestuous nature of the field. Biology teaches us that restricted gene pools which lead to inbreeding can often lead to perverted outcomes in the evolution of species. The Spanish Hapsburg monarchs of the 17th century are a famous example. UK politics in the opening decades of the 21st may be another.
The current Brexit fiasco arose as result of the then prime minister, David Cameron (Eton, Oxford) and his chancellor, George Osborne ( Eton, Oxford) succumbing to the blandishments of the Eurosceptic Tories such as Boris Johnson (Eton, Oxford) and Jacob Rees-Mogg (Eton, Oxford) to hold the 2016 referendum. The rest, as they say, is current affairs. Furthermore attempts to resolve the crisis by the de facto deputy prime minister David Lidington ( not Eton, Oxford) and Sir Oliver Letwin ( Eton, Cambridge) have scarcely widened the pool.The disastrous state of affairs is the culmination of two decades of abysmal decisions (e.g. the Iraq war, Brexit) in the upper reaches of British politics by Tony Blair ( Oxford, Law), David Cameron (Oxford, PPE )and Theresa May ( Oxford, Geography), Oxford's baleful hegemony being broken only by Gordon Brown (Glasgow) clearing up the financial mess of the Blair years.Promising more of the same, the leading candidates to succeed May include Michael Gove (Oxford, English), Jeremy Hunt (Oxford, PPE), Boris Johnson (Oxford, Classics) and Dominic Raab ( Oxford, Law).Time to change the UK political gene pool perhaps?
Brexit fervour threatens strife akin to Stuart era
March 21 2019
Speaker John Bercow’s reference to parliamentary precedent set in 1604 takes us, arguably, to the heart of the Brexit crisis (March 20). Clearly the crisis is not about rational economic arguments; the UK is already demonstrably significantly worse off. Nor is it about foreign, defence or trade issues, in none of which is there any pretence that the prospect post-Brexit is any better than the pre-Brexit status quo. It is about religion.
The Stuart era starting in 1603 saw the consolidation of the protestant monarchy after regicide, civil war and abdication and culminated with the country Tories demanding an end to Marlborough’s European campaigns against the leading Catholic nation of the day, France. Fast forward three centuries and it is the same country Tories (no prizes for guessing who) who are demanding an end to the UK membership of the EU, the modern stand-in for the Catholic Church.
There historical parallels end.Whereas in the 17th century Britain emerged as the world power on the back of conquest, commerce and science, the 21st century sees the US and China seemingly unassailable in that position.
What Brexit proposes is to swap the position of primus inter pares of the largest trading bloc on Earth, with that of an unaligned middle-ranking nation hurtling toward vassal status in respect of both the EU and the US. What seems clear also is that the current uncertainty will not be resolved any time soon. The Stuart era lasted over a century. In short, in the closing years of the second Elizabethan age, the Brexiters propose to deliver the UK back to the condition of England at the end of the first.
BT: A Far Worse Case than GlaxoSmithKline
09 December 2018
Neil Collins asks "is there another big UK company that has been half as disappointing as Glaxo SmtihKline" (FT, On London, December 8/9) citing that fact its shares have gone nowhere in 6 years.
Brexiteers Technology Blindness can Only Damage the UK
05 December 2018
The UK, together with most other countries, is about to undertake an extensive investment programme (mounting, in the UK, to ten of billions) in the next generation of 5G wireless and fibre broadband equipment necessary to enable truly fast internet connectivity for applications variously described as the Internet of Things, Smart Cities etc. which will pervade all aspects of business and private life for the coming decades.
With Brexit's political issues in stalemate, and its practical consequences all but unknown, to rush into any vote, parliamentary or peoples', seems utter folly.
Brexit Fiasco is Already Damaging UK Science and Technology
03 December 2018
Sam Gyimah's resignation from the post of universities and science minister (FT, November 30th) citing the UK's crash out of the European Galileo satellite positioning system (Galilext?) and his associated dire predictions of future such predicaments, is a prime example of the dangers signalled previously in these pages ( FT letters, May 11th). What is more, the government response of going it alone in this and other similar situations ( Euratom, EU research frameworks etc) offer also examples of the scientific naivety of recent ministerial judgements also signalled in these pages (FT letters October 5th) which have led to the near collapse of the commercial British technology sector over the past three decades (e.g. the IT and telecom equipment sectors, software, semiconductors, etc).
Whatever the exit from the current Brexit quagmire, future governments might usefully consider the inclusion of more relevant experience at ministerial level rather than the continued reliance on essentially amateur political bravado.
The Numerology of Brexit
19 November 2018
The recent editorial (FT 19th Nov. Nothing to celebrate for the EU in UK's exit plight) citing Boris Johnson's comparison of the EU with Nazi Germany bears further scrutiny. The Brexiters proud boast that the 17.4m pro-Brexit votes (37.4% of the electorate) expresses the will of the people exhibits an uncanny parallel to the 17.3m pro-Nazi votes (38.9% of the electorate) recorded in the German federal election of March 1933.
Such large numbers of people can be very, very wrong. Like the German voters of 1933, Brexit voters of 2016 can have had no idea of what they were voting for, as exhibited by the resignations of most senior ministers tasked with delivering the Brexit process, to say nothing of the utter chaos this vote has engendered.
Also the 17.4m is a false expression of the will of the people. A more accurate number would be the 1.3m difference between the Pro-Brexit and Remain votes. This margin of just 3.9pc of votes cast (2.8% of the electorate ) seems a perilously slim margin for such a momentous decision. What is more this margin will already been eroded by the higher death rate amongst the older pro-Brexit voters and the increase in the younger pro-Remain cohort of younger voters. The likely result of this is that by the time Brexit is delivered, the majority of the electorate will be in opposition to the policy.
Finally, the fact that now both remain and many pro-Brexit voters clearly express dissatisfaction with the Brexit deal actually negotiated suggests that a government attempt to railroad the deal through both parliamentary and public opinion would seem anti-democratic in the extreme: another echo of Nazi policies following that earlier election.
Now that the existing electorate has a clear view of what the Brexit proposal actually is, the case for a second referendum is overwhelming.
UK Defence Procurement Blunders would Benefit from a More Scientific Approach
07 November 2018
The current parlous state of the UK defence procurement budget (MoD faces budget shortfall, spending watchdog warns, FT 6th Nov) illustrates yet again the consequences of ill-disciplined, unscientific decision making at the highest levels of government, an issue explored previously in these pages (FT letters, 11th May and 5th October). After decades of disastrous projects, the latest examples of which would include today's magnificently useless aircraft carriers HMS Queen Elizabeth 2 and The Prince of Wales, currently lacking not only their complement of wildly expensive US F-35 aircraft, but also any fleet capable of protecting them, the time has come to rethink how such procurement is managed.
A first step would involve revising the match of defence requirements with programmes. Currently too many programmes are fighting the last war. Mega-carriers and Dreadnought nuclear deterrent submarines are of little use in meeting today's threats of terrorism, cyber warfare and low level conflicts in unstable regions.
Next a review of programme delivery would reveal quite how inept is the MoD process. Compare, for instance, the results of the MoD's efforts with the largely on-time and on-cost delivery of considerably more complex technological projects such as the Large Hadron Collider at CERN, a huge, multi-national project managed by scientists in the absence of politicians. One approach may be for the MoD to follow the example of the Treasury in delegating the task of setting interest rates to the expert Monetary Policy Committee. Delegating defence procurement decisions to an expert independent body, free from the influences of pork-barrel politics and ministerial vanities, could scarcely fail to improve on the current shambles.
When in a hole, stop digging! Serious consideration of such alternative approaches should be given before the next round major decisions pending.
UK Politics is devoid of scientific thinking
05 October 2018
Rupert Pennant-Rea’s laudable if somewhat belated interest in science (“ Why I am studying science for the first time at the age of 70”, October 3) echoes previous comments on this issue ( Letters, May 11), to which might usefully be added further food for thought and, hopefully, action. In quoting C P Snow’s Reith lectures of 1959 on The Two Cultures, Mr Pennant-Rea highlights the current parlous state of British politics. The recent humanities-led approach to government is based on arguments supporting positions of belief in the absence of evidence (such as Brexit is good). In contrast previous scientific-led approaches have been based on logical analysis (quantitative where possible) based on demonstrable evidence. The last scientist in senior government in the UK was, of course, Margaret Thatcher, who would now be recognised by many as having taken calculated risks and decisive actions (for example union reforms, the Falklands conflict and so on). Since 1990 UK politics has been devoid of scientific thought and instead has been dominated by the products of the humanities faculties. A detailed look at the current and recent cabinets reveals a near complete dearth of scientific appreciation, leading to most decidedly uncalculated risks taken in the almost complete absence of evidence (for example the Iraq war and Brexit). It is difficult to imagine any of the current generation of politicians making significant change in the short term. But modern China has shown what can be accomplished in a generation. One first step to consider might be for leading universities to demand a good A-level in mathematics or other Stem subject (science, technology or engineering) as an entrance requirement for all degrees to winnow out what is already an over-crowded system.
Business Loathing of Supercilious Politicians
13 September 2018
Dominic Raab, the Brexit Secretary, ( Raab urges business to stop blaming Brexit as 'easy excuse') may care to reflect that, as yet another Oxford lawyer in Government, with no discernible direct experience in business or commerce, quite how loathed the current Government is becoming amongst the businesses and individuals who fund it.
Combined with the then Foreign Secretary's ( Boris Johnson, likewise devoid of any appreciable business or commercial experience) reported exhotation to "F**k Business" both the impression and the reality is that the current Government is willfully slaughtering its golden goose.
The damage has been done. Years of competitive edge have been lost and more will be. The opportunity cost is already enormous and will grow further. The United Kingdom is no longer viewed as a reliable trading partner amongst major partners such as France, Germany and Japan. Government attempts to offer China or Africa as substitutes are simply farcical.
Brexit looks for all the world like today's economic Suez which, like the actual crisis, will mark a permanent diminution of the United Kingdom's standing.
Challenges Faced by the UK Digital Economy
06 August 2018
Philip Hammond clearly recognises there is work to be done in improving Britain's performance in the digital economy in forming an expert panel chaired by the distinguished American Professor Jason Forman, (Competition can help Britain's digital economy thrive, 2nd August). His article neatly summarises the challenges the panel will face.
He is of course right to highlight the success of the British physicist, Tim Berners-Lee, in creating the WorldWide Web at CERN, the European laboratory for nuclear research. However a sobering reflection is that no British companies went on to create value from www of anything like the scale of the US FAANGS or their international peers.
Next, the panel may want to consider that the last major competitive review of UK industry in this field following Margaret Thatcher's election in 1979 led, over the following few decades to the complete annihilation of the UK technology industry, to the current state of affairs in which there are simply no investable companies to compete on either the domestic or international stage.
Finally, the panel may want to consider the gross disparity in the cost of capital faced by UK companies compared with international competitors at a time when R&D costs and infrastructure investment will need to escalate continuously over succeeding generations of technology.
At a time when Brexit is threatening to increase this same cost of capital and to exclude British enterprises from ranges of European collaborative programs, the panel will face a situation considerably more problematic than 1979.
How Scientific Ignorance Led to the Iraq War, Brexit and Will to other Future Disasters
29 July 2018
Competence in science (taken to include technology, engineering, mathematics and the life sciences) is a basic necessity of the modern age. For individuals it informs us of the greatest cultural and practical developments of our times, for institutions (be they companies or governments) it is necessary to function.
This competence confers three attributes. First a knowledge of the subject matter in hand (e.g. from cosmology to genomics). Second, the power of logical thinking, often enriched, sometimes led, by mathematics (allowing a proper assessment of risk). Third, an understanding of reproducible evidence, obtained by experiment or observation.
In contrast to logical thinking, stands subjective conviction, sometimes supported by quasi legal sophistry. An example of this was Blair's decision to join in the invasion of Iraq. In contrast to reproducible evidence stands false news (think Iraq again and the absence of WMD and the subsequent tide of untruths from Flight MH70 to Novichok poisonings).
Britain in the late twentieth century (in fact, since Newton) generally benefited from scientific competence in many spheres; government and the armed forces, business and academia. Two major prime ministers led the way. Sir Winston Churchill, although not a scientist himself, took a keen interest and was well informed by friends and colleagues such as H. G. Wells and Frederick Lindemann. Margaret Thatcher was a trained chemist (as is Angel Merkel).
Alas Britain, along with many other countries in the twenty first century, is suffering from the abolition of scientific thinking in government. The Iraq war was launched with no clear thinking, no evidence and no appreciation of risk. Brexit offers the same tragic pattern. It arose from a careless prime minister with no appreciation of risk and a cabal of Brexiteers peddling unsubstantiated claims. By no means do we need a cabinet comprised of physicists, but to have a cabinet (and shadow cabinet and parliament in general) utterly devoid of scientific thinking and practice is courting disaster. Worse still, to have the very same politicians deriding the advice of the experts in these fields (aviation and space science, nuclear power, public health, cybersecurity, etc) is populist insanity.
If uncorrected, this state of affairs will lead to future disasters such as the continuing disappearance of British industry, the acceleration of problems in the NHS as the Baby Boomer Bulge passes into old age, Britain's looming energy crisis, and eventually, the dissolution of the UK (into the Kingdom of England and Wales, a United Ireland and Independent Scotland).
Arguably the damage has already been done by this generation and it will take a set of different priorities and policies to be adopted by the next generation to correct. One simple step would be for leading universities to demand mathematics (or a similar STEM subject) at A level as a basic condition for entry, similarly for entry to professional careers. Another would be for scientists to adopt a more aggressive participation in political issues to put some sense into policy.
Ironic that as technology is posited as the solution to so many of the World's problems, its origins are being ignored.
BT and the National Interest
29 May 2018
BT's recently highlighted current problems (Patterson puts on brave face as BT's woes mount, FT, 11th May ) come as no surprise to shareholders who have suffered chronic underperformance of their investment over the last three years, and last three decades.
Now, however, BT's problems have become more of a national issue. Even before Brexit, the UK's growth has slumped to the bottom of the G7 league. Furthermore, its ability to invest in two of the main engines of future growth, broadband fibre connectivity and 5G wireless technology are greatly limited by BT's acutely overextended balance sheet.
The solution has been apparent for the last 30 years. At the dawn of the cellular age, the then Racal Electronics plc, under the leadership of the late Sir Ernest Harrison, spun out what was to become Vodafone whose independent access to the capital markets allowed it to become, arguably, the most successful new operator in Europe.
This same option is now open to BT in the spin out of Openreach, given increasing investor interest in broadband investments (BT attracts investor interest in Openreach, FT, 25th May). Alternatively the rest of BT ( EE in particular) could be spun out from Openreach to the same effect.
Time perhaps for BT's incoming senior management to override BT's unitary diehards in both shareholder and national interests?
Ignorance of science has led UK to dire future
May 11 2018
Janan Ganesh asks the familiar and evermore pressing question “Why is ignorance of science acceptable in polite company? ( FT Friday 5th May ) Whilst the answers to this may be a complicated mix of cultural and socio-economic reasons, the consequences of it are simple, demonstrable and disastrous.
After the last five decades of this ignorance, even disdain, amongst the government and professional cadres, the UK can no longer offer a single investable technology company amongst the world's leading 500 companies and precious few examples amongst the next 500 ( pace pharma and aerospace). For a nation boasting generations of titans from Newton to Hawking, from Faraday to Turing, controlling one of the World's largest piles of capital in the City of London, this sate of affairs simply beggars belief.
The future looks worse.
The openly declared disdain of experts trumpeted by the Brexiteer community endangers the one shining example of UK excellence, academic science. Brexit's proposed restrictions on the free flow of academics and students, the diminution of the UK's participation in European programmes and the reduced access to international funding can serve only to reduce the UK's success in the field.
Brexiteers who fret over the UK's "vassall status" miss the fact that we have already arrived at that state across vast swathes of technology, media and business where the UK is a product and price taker not maker.
The wider world can be looking on only in stunned silence as the UK votes to resign from the modern age.
British Science and Technology: First Catastrophe, now Brexit
09 May 2018
Janan Ganesh asks the familiar and evermore pressing question “Why is ignorance of science acceptable in polite company? ( FT Friday 5th May ) Whilst the answers to this may be a complicated mix of cultural and socio-economic reasons, the consequences of it are simple, demonstrable and disastrous.
After the last five decades of this ignorance, even disdain, amongst the government and professional cadres, the UK can no longer offer a single investable technology company amongst the world's leading 500 companies and precious few examples amongst the next 500 ( pace pharma and aerospace). For a nation boasting generations of titans from Newton to Hawking, from Faraday to Turing, controlling one of the World's largest piles of capital in the City of London, this sate of affairs simply beggars belief.
The future looks worse.
The openly declared disdain of experts trumpeted by the Brexiteer community endangers the one shining example of UK excellence, academic science. Brexit's proposed restrictions on the free flow of academics and students, the diminution of the UK's participation in European programmes and the reduced access to international funding can serve only to reduce the UK's success in the field.
Brexiteers who fret over the UK's "vassall status" miss the fact that we have already arrived at that state across vast swathes of technology, media and business where the UK is a product and price taker not maker.
The wider world can be looking on only in stunned silence as the UK votes to resign from the modern age.
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UK Broadband: Shambles and Solution
20 March 2018
It is now commonly accepted that broadband internet access is the third fundamental utility alongside power and water. Moreover, of the three, it is the one most vital to generating future economic growth. So recent developments in the UK are troubling. First, various Ofcom (and other) surveys of the consumer market has revealed a deep dissatisfaction with the dominant supplier, BT. Secondly, Ofcom’s review of the wholesale market revealed extensive abuse by BT of its wholesale customers. Thirdly, the UK ranks consistently in lowest quartile of leading nations in the penetration of optic fibre to the premises (FTTP), generally regarded as the gold standard for future broadband deployments.
Brexit's Benefits to its privileged perpetrators
19 October 2017
The Rather bizarre - analysis of Jacob Rees-Mogg's performance as a fund manager 10 - 15 years ago (Brexits champion's political star rises higher than his fund performance, FT Mon 16th October) scores hardly a point against the noxious Brexit process now underway, (even if shambolically).
More telling might have been the observation that Brexit, far from being a mass movement, arose from a spat between highly privileged Tory Public Schoolboys pursuing their own self interests. Led, amongst others, by Boris Johnson (Eton, Oxford) and Jacob Rees-Mogg (Eton, Oxford) supported by John Redwood (Kent College, Oxford), the Brexiteers out maneuvered their more careless peers, Prime Minister David Cameron (Eton, Oxford) and Chancellor George Osborne (Eton, Oxford).
The result instantly boosted the sterling wealth of this group and their kind, (having business interests in and so invested in largely dollar denominated indices, including, effectively, the FTSE) in contrast to their supporters, largely older and less well-qualified, with assets more concentrated in sterling (house equity, bank and building society deposits and National Savings). The younger under 30s, with fewer assets, despite voting overwhelmingly remain, find themselves even more relatively impoverished and with diminished career prospects.
The current parliamentary opposition seems disinclined to give voice to these disadvantaged groups let alone opposing the increasingly manifest debacle of Brexit. Such lack of representation has in the past often had very ugly consequences. Hence the importance of centrists of all parties uniting to jam the brakes on this road to catastrophe.
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