Brexit and the waning days of the United Kingdom

[Sheilbh]

So what's the alternative spin? He's meddling in where people work because he misses the hustle and bustle of the city?

Positive spin: the concern isn't the offices but the "real" businesses (shops, cafes etc) with lots of low-paid workers who rely on providing services to offices.

My guess: the Treasury are very panicked about the state of the public finances and want to push us as close to normal as they possibly can. They've been hinting for months that the furlough scheme needs to end (probably by tapering) and people need to go back to work etc. And the Treasury is, probably, the most influential department so unless the PM overrules them on health grounds then they'll get their way.

[Josquius]

Is the pret chairman a tory? :p

It's amazing really how the pending awfulness of brexit beats all expectations.
Sure, corona couldn't really be helped, though you'd think a sane government would take that into account. But otherwise they've gone for the worst possible option on just about everything.
It's getting towards the time to start stockpiling isn't it. With a baby on the way and recent experiences I'm a bit worried about whether hospitals will have adequate supplies.

[Sheilbh]

Is the pret chairman a tory? :p

That 100% feels like someone who would be a Tory donor to Cameron but has subsequently drifted away.

It's amazing really how the pending awfulness of brexit beats all expectations.
Sure, corona couldn't really be helped, though you'd think a sane government would take that into account. But otherwise they've gone for the worst possible option on just about everything.

Yes although, given corona I think state aid is actually worth fighting on. I don't particularly care about fisheries and would happily align on environment, labour etc.

The EU has temporarily suspended some state aid rules but I think state aid is actually going to be the next big fight in Europe. Because the treaties are very strict on this and the Commission enforces it, so they got into a fight with Germany over buying a stake in Lufthansa. But given covid some member states have basically re-nationalised some industries (Italy have taken over Alitalia and Atalanta - the highways management which the Commission was very opposed to in 2015 after the Genoa bridge disaster) and I can see fights with the Commission over whether that's really what the suspension was for.

I also think some member states, especially Macron wants Europe to build up its strategic industries in things like PPE and pharma. But it's a bit like the fundamental issue at the heart of the Eurozone crisis. There's a tension between what member states want and need to do (to keep industries alive or to ensure there are European options) and fairly strict limits within the treaties themselves which are difficult to amend - especially without re-opening the treaties which no-one wants to do.

And from a purely UK perspective, we don't know and won't influence what the EU outcome is going to be, I think we do need to build up national champtions in areas like PPE which will require state aid of some sort and I think there's a risk that just as the EU possibly moves in a more interventionist direction we agree to not resile from the current position which is very much a sort of artifact of the "neo-liberal" vision of Europe. From what I've read the current UK government plans on this sound disastrous and just utterly designed to enable crony capitalism - I think I read that they basically don't want any "UK" state aid rules, rather they just divvy the money up between the governments of the four nations and it's up to them to use how they want. But that's sort of a separate issue.

I think I wouldn't have cared about state aid at all at the start of this year because I would have assumed we'd just stick with the neo-liberal approach of not allowing it, governments don't pick winners etc etc. But with covid I really think we need (both the UK and the EU) to ensure there are strategic industries in Europe or friendly states and not entirely reliant on China or competing with the US for the same stock.

[Tamas]

20-minute Covid test could be widely available 'over coming weeks and months', says Hancock

Another Wunderwaffen we will never see.

[Tamas]

Matt Hancock is being criticised this morning for his defence of the government's decision (or report decision - it has not been confirmed yet) to appoint the former Australian prime minister Tony Abbott as a UK trade envoy. (See 8.06am.) When it was put to him that Abbott was a misogynist and homophobe, Hancock implied this did not matter too much because he was a trade expert. But Abbott isn't - according to the Dmitry Grozoubinski - who is a former Australian trade negotiator.

Tony Abbott is a homophobe and a misogynist"

Health Sec @MattHancock: "He's also an expert on trade"

[Zanza]

About Michel Barnier and his political views on Brexit. Nothing surprising, but very clear stances:

At a news conference after the latest round at the end of August, he said he was "disappointed and concerned" because British negotiators had "not shown any willingness to move forward".

When I met with him a few days later, he said more bluntly that the negotiations were currently at a dead-end and that chances of a post-Brexit deal between the UK and the EU were now very slim.

"The British have an unrealistic attitude," he said. At the end of July, he gave his British counterpart David Frost a timetable: for a deal to be ratified by national and European parliaments by December 31, it has to be completed before the end of October. "It is very short."

In the public interview I conducted with him at the Medef (a major French business trade union) conference last week he was straightforward and very clear: "The mission I am given by the 27 member states is to protect the interests, businesses and citizens in the single market, which is our major asset in the current global competition.

"The single market is one of the rare reasons why president Trump and Xi Jinping respect us. It is an ecosystem that we have been building for 60 years – with the British.

"It is made of common standards, common regulation, common supervision – may be a bit excessive sometimes – common jurisdiction – the European Court of Justice. That is the single market. I can do many favours in these negotiations but the British must understand that we won't do any deal that would weaken the single market.

"If the British want to send us their products with no tariffs and no quotas, they must respect the rules of the game, a level playing field."

He identified what he considered a "bad tactic" of the part of the UK team. "The British used a tactic – and to me it is a bad tactic: postpone to the end the issues that matter most for the Europeans: One, fisheries; two, [a] supervision [structure to ensure enforcement]; and three, the level playing field. They didn't want to cope with them until now and they are the three issues that are currently stalled."

And what if they remain stalled? I asked. What would be the consequences of a no-deal?

"In any case, there will now be controls at the borders. But in case of a no-deal, we'll put tariffs and quotas on their products. And they will put tariffs and quotas on ours. That is why Brexit has no sense... Brexit is a lose-lose situation and we are in a situation of damage limitation anyhow. In four years, nobody has ever been able to show me the advantages of Brexit. Nobody."

Then how can you explain, I asked him, how Johnson, seemingly keeps acting against the interests of his own country?

"Boris Johnson has around him some people who have an ideological idea of what their country should be," he replied. Dominic Cummings, for instance, I asked?

"No comment... We have some people in France, too, who look at their country in a rear-view mirror with a kind of nostalgia."

He added, referring to a slide displayed to the audience during our interview which showed the future of the G8 countries: "We can't but realize that it is better to stand in solidarity than in solitude... In the world today, nobody's waiting for us. There are currently four European countries in the G8. Every four years, one is slipping out. In 2050, Germany will the only one to stay in. If we stay together in the EU, France remains, the UK is out.

"Without the EU, in the world as it is, we are screwed. If we are not together, in and with the single market as a common basis, we'll become inexorably the Americans' and Chinese' subcontractors. I haven't been involved in politics to be a subcontractor."

At the end of the interview, Barnier told an interesting story. Some day after the 2016 referendum, Nigel Farage asked to visit him at his office in Brussels.

"I welcomed him at some length," Barnier says, "and I asked him: 'Mr Farage, now that you won the referendum on Brexit, how do you see the future relations between the UK and the EU ?' Farage answered in a smile: 'But Mr Barnier, when Brexit happens, the EU will no longer exist!'"

At this point in our interview, Barnier turned to the audience. On his face, normally so calm, was passion. "Ladies and gentlemen," he declared solemnly, "we need to stay together to defend our interests in the world, without shame. Neither the Chinese, nor the Russians, nor the Americans have shame when defending theirs."

As a conclusion, he added: "Ladies and Gentlemen, you have to know: these people – not all the Brexiteers, not all those who voted Brexit, but these people – they want to destroy us.

"They want us to blow up from the inside. I tell you, as long as I have strength, we'll stand in their way. We won't yield an inch to those people. Never."

He received a standing ovation.

[The Brain]

But... the call from the German car manufacturers?

[Sheilbh]

So despite my pleading for the people (like me) who don't have access to a garden I saw some people on Twitter chatting about a New Yorker article which mentioned that 8 out of 10 people in the UK live in a home with a private garden. Then someone shared this (slightly old) article and the ONS statistics below which, to my non-driving, urban mind are mind-blowing - I sort of always lived in a house in Liverpool and most people I know do and obviously almost everyone lived in a house in the Highlands when I lived there but I just don't think I'd realised how rare and weird my lifestyle is:

The simple solution to UK's housing problem – apartments
Apartments are cheaper to heat, have better views and use land more efficiently
Alexander Tziamalis
Saturday 28 April 2018 16:19

The UK population is growing by more than 500,000 people every year but only about half the homes required are built. I believe there is one key reason behind the UK housing problem: a lack of apartment living. But it's possible to change this.

I'm originally from Greece and one thing that has struck me about the UK is that British people dream of living in houses. As this chart shows, just 14 per cent of British people live in apartments. This is one of the lowest percentages in Europe. In Germany the figure is 57 per cent, in Spain it is 66 per cent, and the Euro area average is 48 per cent.

There are many peculiarities about this obsession. Flats are cheaper to heat, have better views and – in Europe at least – are safer. Houses on the other hand have higher maintenance costs and peeping neighbours. Importantly, even low-rise apartments should be more affordable to build than the same number of houses. They also use land more efficiently.

Low-density housing is simply not sustainable in the long term in a country with the same population as France but less than half its land. Stay on this path and sooner or later the green belt around cities will have to go. Add a few more decades and National Parks will be lost, too.

The UK housing situation has also had a disastrous impact on the UK economy. UK household debt is one of the highest in the world. The big bulk of all this debt goes towards mortgages for overpriced accommodation. This mountain of private debt can be partly attributed to the limited supply of accommodation in the UK and poses a fundamental burden on the country's economy.

Overstretched with debt, households face the prospect of muted wage growth due to Brexit in combination with rising borrowing costs – a typical mortgage interest rate now stands at 1.5 per cent. The average historical rate is more than 6%. A population overburdened with debt is also more likely to save less and study for fewer years – both chronic weaknesses of the UK economy compared to other developed countries.

Good reasons

The UK needs a strong supply of homes for its growing population and, for environmental reasons alone, a large percentage of these should be apartments. Yet a lot of British people will, rightly, frown at this assertion.

There are good reasons for the British aversion to apartments. Most flats in the UK are not suitable for happy living, especially not for families. There are myriad grave issues, including basic failures in fire safety, crime, noise, dystopian design, and a lack of community feeling. Many places with lots of flats have become synonymous with poverty.

In contrast, in continental Europe, it is much easier to find apartments with high ceilings, solid walls, nice features and safe communal areas for children to play in. The mistakes of the UK past are repeated in the present as well: newly built apartments in the UK are characteristically low quality. They lack storage space and are getting smaller and smaller. The average home built in the UK is 76 square metres compared to 137 square metres in Denmark.

There is a vicious cycle behind the UK housing problem. Badly made apartments make families avoid them, which in turn makes companies construct apartments unsuitable for families, and the situation gets worse. It results in a housing market that tries to expand horizontally with houses, rather than vertically, even if that's more difficult, more expensive and less sustainable environmentally.

Making apartments attractive

The UK may lack vast amounts of land for expansion but it is blessed with advanced technology, dynamic entrepreneurship and large amounts of capital for investment. Playing to the country's strengths can lead to the construction of high quality, spacious, family-friendly apartments that people would be proud to live in. And the toolbox of behavioural economics can help us in that.

To start with, apartments need to become truly desirable for families and be perceived as such. The materials used, internal and social spaces that are built, the functionality and design all need to meet much higher standards. And planning permission should not be granted otherwise.

UK policymakers even need to improve the legal aspect of apartment living: existing owners could have a say in the selection of their neighbours as they do in the US. And real processes against antisocial behaviour and greedy landlords should be set in place. Here, Britain could follow Germany's lead, a place so effective at protecting tenants' rights that most Germans prefer to rent rather than buy their properties.

The UK also needs to boost the supply of quality apartments. Economic incentives for companies to build them, public investment and legal changes should work in tandem to achieve this. Tax cuts or even direct subsidies to quality developments, tax breaks on housing bonds, the wider use of construction bonds and relaxing planning permission that controls city skylines would all help.

Public investment in infrastructure and particularly transport can also nudge private sector investment, the key behind Europe's economic success after World War II.

In an environment of limited supply, investment in property is a zero-sum game between households and investors: the landlord gets a property, the people lose it. But policies that channel people's capital and entrepreneurship towards industry – in this case, construction – and not against each other can help the whole country prosper.

Alexander Tziamalis is a Senior Lecturer in Economics (Associate Professor) at Sheffield Hallam University, This article was originally published on The Conversation (conversation.com)

I don't have anywhere near a deposit to buy a flat but I've always searched speculatively for flats near me - and what he says is true. I don't look at new builds because I don't trust them and think they're probably going to be crap and tiny. But I have no issue with the old council block (and I live in one of those typical South London 1930s council blocks - still owned by the council) because I've been in enough to know that generally the quality of the flats themselves is pretty good, even if the shared spaces are awful. But I wouldn't go near any of the new builds round me.

There is a large racial and class divide on this which you can see here:
https://www.ons.gov.uk/economy/environmentalaccounts/articles/oneineightbritishhouseholdshasnogarden/2020-05-14

Slightly disagree with his point about debt because the entire point of buying a house is that it's where you live but also an asset that you can then sell/downsize when you're older and I also always wonder about saving figures because I'm not sure if they include pensions where I think we are (weirdly) pretty good thanks to mandatory minimum pension pots. But generally it is just quite surprising to me

[garbon]

What was the point on peeping neighbors? That seemed like a random comment.

[Josquius]

I agree with that article. I've been saying the same for years, since my time in Amsterdam.
The big problem in the UK is a lack of small single person flats being built which forces strangers into house shares, giving them an inferior quality of life and pricing out families.

The big problem is the way we went all in for mid 20th century design trends with horrible high rises, which are actually no better for use of space than the terraces they replaced. We have never really gotten into the more sensible mid rise pattern that dominates elsewhere.

It's interesting how obsessed we are with houses really, even in those who just concrete over the garden. It's always quite interesting in Sweden and the like that even despite all the space in even small 10k people towns there's vast numbers of apartment blocks.

[Tamas]

Yes Tyr everyone is doing high rises except Britain, Britain has one of the worst statistics on living area property prices etc, so obviously the problem are high rises :p

[Josquius]

Everyone isn't doing high rises though. The most efficient use of space which you most commonly find in Europe is mid rises.

[The Brain]

Longhouses work well in Sweden, but then part of the population is always off raiding.

[garbon]

https://www.theguardian.com/business/2020/sep/04/pret-offers-monthly-subscription-to-boost-post-covid-pandemic-sales

Pret offers five coffees a day for £20 a month in move to boost sales

Pret a Manger is to launch a monthly subscription service offering up to five drinks a day in a bid to get customers back to stores following a sales slump due to the pandemic.

The chain, which last week cut almost 2,900 employees as UK high streets remain mostly deserted, is launching the YourPret Barista service. It will allow customers to buy up to five drinks a day for a month on a £20 subscription.

The offer, which could add up to 150 drinks a month, will cover all barista-made coffees as well as teas, hot chocolates, smoothies and frappe drinks.

The chain said the subscription, which will launch next Tuesday, will be free to subscribers for the first month.

...

Interesting article about steps they are taking to diversify, including changing menu for food delivery as well as launching their branded coffees at Waitrose/on Ocado.

[Tamas]

Business model of make espresso, dilute with water, flavour with half a bucket of sugar, sell for 4 pounds not working anymore.