Month: October 2019

The EU Withdrawal Agreement Bill

I should forbear to comment on a piece of legislation which I’ve only skimmed through and can’t claim to understand, but the European Union (Withdrawal Agreement) Bill 2019-20 ascends dizzying heights of incomprehensibility. Every page is packed with cross-references to other clauses or legislation, and following the threads through the labyrinth would take me rather more than the three days the Commons is supposed to have for the whole process.

Some things are apparent, however.  There are going to be lots of problems and snags, and the government’s answer to most of the complexities is to say: leave it to the discretion of Ministers to sort them out.  (Where there are issues relating to devolution, the same trust doesn’t extend: the standard answer seems to be that Ministers will have to consent to anything that’s being proposed.)  There are liberal references to the steps that the Minister “considers appropriate”, and to the resolution of any “matters arising” from any issue – a phrase which is loose enough to mean that almost anything the government decides to do in those areas will be fair game.   There’s a clause, for example, about social security coordination, but what’s going to happen about pensions and medical treatment for UK citizens living in the EU?  As far as I can see, the answer is that there’ll be regulations passed on this as necessary: the responsible agency will  sort something out.

It follows that the Bill represents a major transfer of power to the government.  Did ‘take back control’ really mean ‘leave it all to HM Government’?  And even if one trusts this government, would the same apply if a different government came to power?  I think Parliament needs to consider whether this kind of blanket delegation to the executive is the sort of legislation they would ever want to pass.

Further note, 26th October:  There is a superb critical analysis of the Bill by barrister Anneli Howard.  She points in particular to

  • the Bill’s complex cross-referencing to other legislation
  • the extensive ‘Henry VIII’ powers being granted to ministers, and
  • the reduction in Parliamentary scrutiny that would follow from passage of the Bill in this form.

The pitfalls of comparative analysis: does the welfare state lead to wealth inequality?

A blog from the right-wing Cato Institute caught my eye.  It claims, on the basis of an article published last year, that poorer households have less personal wealth in countries with higher welfare state expenditure.  Apparently, this is because people in welfare states don’t need to provide for the same contingencies that others might have to.  The headline claims: “Welfare State Causes Wealth Inequality”.

The original article , by Fessler and Schürz, is complex and careful, and it’s capable of being interpreted in several ways.  The article is behind a paywall, so here’s a link to a slide show with key details.  Wealth holding is very strongly reflects the pattern of inheritance, and the people this most affects aren’t the poorest.   The authors explore a range of interpretations, most notably the apparent paradox that

social services provided by the state are substitutes for private wealth accumulation and partly explain observed differences in levels of household net wealth across European countries. …  This implies that an increase in welfare state spending goes along with an increase — rather than a decrease — of observed wealth inequality.

I’m not convinced that we can treat social expenditure as a unified element – the way countries treat pensions is not necessarily how they treat people with disabilities – and if there is a generative relationship, it’s not at all clear what affects what.  In my own published work, more generally, I’ve been critical of analysing country effects in this way.

The paper where I make the arguments is on open access here.  What matters is not the number of data points within the countries, because those points are interdependent, but the number of policy units (that is,  governments).   There just aren’t enough countries to be able to do this analysis sensibly, and this paper is no exception.  direction  Here is a graph from Fessler and  Schürz‘s paper, showing some of the key information.

The data in the article are based on 13 countries; this graph has eleven.  One of them is Luxembourg, a notorious outlier – not just because it’s small, but because it’s distinctive.  Remove Luxembourg from the analysis, and the line in the graph goes clearly and strongly in the opposite direction.  (That reversal of direction, which contrasts with the apparent pattern for people with less wealth, actually makes the findings more interesting.)

This doesn’t mean that the interpretation in the article is wrong.  The hypothesis is intriguing and plausible,  and it could still be true.  The problem is that we can’t tell.

A Nobel prize for using RCTs?

Economics as a discipline doesn’t always connect with the real world, but at least the Nobel laureates with an interest in development economics are working on something that matters.  The new laureates have apparently been selected on the basis of their ‘experimental’ approach.  I gave the subject a brief mention in my forthcoming book, The Poverty of Nations, but you’ll have to wait to next March before you can read it.  Here, as a spoiler, are the sentences in the typescript I gave over to their evidence on Randomised Control Trials.  The reference is to A Banerjee, E Duflo, 2011, Poor economics, published by Penguin.

Banerji and Duflo advocate a greater use of RCTs, but their own examples show cases where this fails. In one study they mention, it appeared that textbooks did not help education; that was misleading. In another, the evaluation was supposed to identify the influence of contraception on family size; it overlooked the importance for parental decisions of the  prospects of children surviving to adulthood. Experiments and RCTs work by screening out extraneous information; the gaps that are left are only to be expected.

 

On the stigma of council housing

A notice on Twitter, advertising a radio appearance, drew my attention to a paper published last year on the stigma of council housing by Tom Slater. The paper is here; there’s an earlier version, for those who can’t get past the paywall, here.  Slater claims to be paying attention to

“a term that was invented by journalists, subsequently amplified and canonised by think tanks and then converted into doxa by politicians: the sink estate. “

That’s not right.

The stigma of council housing is long-standing.  It dates back at least to the people rehoused from slum clearance in the 1930s (disreputable areas had been identified before that, but  they weren’t council estates).  Many council developments were designed deliberately to be held at a distance from respectable housing: that is the subject of The Cutteslowe Walls, published in 1958 (the walls were built in 1934).  To take another example, the primary school I went to in Newcastle had different entrances for kids from the council estate and private estate.  Tucker’s 1966 book , Honourable estates, outlined the problems.

Within that system, however, some council tenancies were always seen as worse than others.  Harry Simpson, a former director of housing in the 1960s, commented that “ghettoes developed because councils, when allocating accommodation, graded families according to their deserts instead of their needs”.  In the 1970s, the leading text on housing management, Macey and Baker, advised agencies to rate the type of accommodation a person should receive by their personal suitability, including cleanliness and tidiness; that was how things were done when I started  letting houses in Hartlepool, where prospective tenants were rated on such things and got a house that matched their rating.   (I was carpeted at the time for writing an internal memo which said that this was leading to a concentration of people with problems in undesirable areas; later I included a comment on grading in my first report for Shelter in 1983.)   Macey and Baker did, at least, reject the idea of segregating ‘problem families’ deliberately.  I have the 1973 edition:

“All these problem families exhibit one common factor, namely, their inability to cope …. in some few instances, one or both of the parents may be physically well and of average intelligence, but of a type which the ordinary man in the street would classify as ‘bone idle’.  … (but) it is difficult to believe that such a background of coercion, coupled with the fact that the families are thrown into association with other sub-standard families, is likely to be a good atmosphere in which to raise any family’s standard …”

Bad areas were variously known as ‘difficult to let’, ‘ghettos’, or (in a 1975 Scottish report) ‘depressed schemes’.  ‘Ghetto’ estates were seen “as a form of punishment, a device for disciplining and the social control of tenants”.   So the term “sink estates” was not a new, or a particularly influential, invention; it was just another way of referring to a widely observed set of problems.

Poverty is killing babies in England

An article in the British Medical Journal shows a clear and strong relationship between the increasing number of deaths of children under 1 and the distribution of poverty in England.  The authors write:

The sustained and unprecedented rise in infant mortality in England from 2014 to 2017 was not experienced evenly across the population. In the most deprived local authorities, the previously declining trend in infant mortality reversed and mortality rose, leading to an additional 24 infant deaths per 100 000 live births per year …  There was no significant change from the pre-existing trend in the most affluent local authorities.  …  Overall from 2014 to 2017, there were a total of 572 excess infant deaths …   The findings suggest that about a third of the increases in infant mortality between 2014 and 2017 can be attributed to rising child poverty.

This is a conservative estimate, because the figures are area-based, not individual; the association with poverty might be much stronger.

This is what the UN Special Rapporteur had to say about poverty in Britain:

14 million people live in poverty, and 1.5 million experienced destitution in 2017 …. Food banks have proliferated; homelessness and rough sleeping have increased greatly; tens of thousands of poor families must live in accommodation far from their schools, jobs and community networks; life expectancy is falling for certain groups; and the legal aid system has been decimated. … Following drastic changes in government economic policy beginning in 2010, the two preceding decades of progress in tackling child and pensioner poverty have begun to unravel and poverty is again on the rise. Relative child poverty rates are expected to increase by 7 per cent between 2015 and 2021 and overall child poverty rates to reach close to 40 per cent.  For almost one in every two children to be poor in twenty-first century Britain would not just be a disgrace, but a social calamity and an economic disaster rolled into one.

The increase in poverty is the result of deliberate policy.  That policy is killing people.

Brexit: there are two parties to any relationship breakdown

There is no prospect of a deal being agreed between Britain and the EU before 31 October; any deal has to be agreed by the UK Parliament, the Council and the European Parliament, and there simply isn’t time.  That leaves only two options: delay or no deal.

It is easy to see the faults of the British governments, but the failures of EU diplomacy are just as strong.  The British position has been arrived at through a series of blunders:

  • giving notice without even having developed a negotiating position;
  • treating the negotiation as a question of government prerogative, rather than something subject to parliamentary scrutiny;
  • failing to engage all interested parties, and especially the political opposition;
  • establishing ‘red lines’ on immigration and trade relationships that were not part of or integral to the referendum decision
  • after the rejection of the proposed withdrawal agreement, failing to develop any other position for several months.

The problems created by the European Union, however, are no less important.  They include

  • specifying a two-stage process, when there was no time in the negotiating period to cover both stages;
  • insisting, in consequence, on a ‘backstop’ arrangement which could only have been removed by the resolution of the second stage;
  • treating the Withdrawal Agreement as if was a treaty that had been agreed, after it had been manifestly rejected;
  • refusing, despite its treaty obligations, to provide a position on the future relationship;
  • refusing to consider any arrangement when trading with the UK as a third party, that would not apply to all goods and services  – anything else was dismissed as ‘cherry picking’, when selection is in the nature of all negotiated settlements; and
  • failing to take any action relating to its declared priority – or ‘red line’ – of protecting European citizens.

The result is a shambles.  Neither party can hope to come out of this with any of the outcomes they wanted to achieve.