Brexit and the waning days of the United Kingdom

[Gups]

]

Well, of course. Why would a business no longer want to profit from something that people were okay letting go ahead?

They're not.
And the fossil fuel companies  know this so they're specifically promising it's temporary.

Then the licence to extract will be tempoarary. Not sure what the issue is here.

You trust this to be the case.
I don't.

Then that's on the govt, not the companies

[Admiral Yi]

They're not.
And the fossil fuel companies  know this so they're specifically promising it's temporary.

Do you have a link to this promise?

[Sheilbh]

Interesting in survey done by Survation - hope someone explores this - looks like the type of left-wing economic policies/issues people care about are different by age. It's almost a trope that well over 50% of Tory voters back nationalising x industry.

Turns out this may largely be a function of age. People over 50 are far more in favour of nationalisation and executive pay caps (which feels like an old school leftiness) than people under 50; by contrast people under 50 are far more in favour of unions and industrial action than the over 50s

I'm exactly where I should be given my age, which I suppose should be expected. Makes me wonder about that Brexit theory that what Brexit voters are nostalgic for is basically the brief period in the 60s-70s when Britain was becoming a more normal European country ("we were a real country once etc" ) and it's similar with their economic views? They generally vote Tory for other reasons but like state-mandated pay restraint and nationalisation which feels like a very of that era combo?

Also on interesting research - hope someone has the time and ability to look into this because it's really interesting too:

Leonardo Carella 🇺🇦
@leonardocarella
5h
Super-interesting within-sibling study by @elizabeth_sim0n on the effects of higher education on values, which finds a null effect, contra the small liberalising effects found in standard longitudinal studies.  https://onlinelibrary.wiley.com/doi/epdf/10.1111/1468-4446.12972
My belief is that political scientists should take selection effects seriously: the fact that some people are more likely to go to university is not an inconvenient to weed out in pursuit of causal identification. It's an interesting and consequential phenomenon by itself!
We know that *at best* educational experiences slightly increase an existing value divide between sub-groups. But it makes a HUGE difference that universities sort (causally, and strongly) these sub-groups into different labour market positions! It wasn't the case 40 years ago!
My fear is that our fetish for causal identification is leading us to miss the forest for the trees. In view of a growing political divide between education groups, the causal empiricist is immediately led to the question "does university cause a change in values?"
But perhaps the question to ask is a cause-of-effects one. The question is "to what extent are changing political divides due to the fact that 40+ years of educational expansion have sorted liberals into high-income positions and authoritarians into low-income positions?"

[Sheilbh]

Someone did one of those whether PMs did a good or bad job polls again:


Obviously the big issue is actually there's just huge "don't know" about most historic PMs. So excluding them the net good/bad gives a different picture:


Feels like there's a bit of recency bias going on here as the last 5 PMs are basically in order at the bottom - but I just love how well Anthony Eden and Douglas-Home are doing

Edit: Adding this - and the strong result for MacMillan, Wilson, Eden etc - as a data point to my theory of mid-century modern nostalgia.

[Valmy]

21% think Anthony Eden was a good PM? 

[Sheilbh]

Really interesting piece on "Trussonomics" in the Spectator:

Trussonomics: a beginner's guide
From magazine issue: 3 September 2022

When polls started to show Liz Truss miles ahead of Rishi Sunak in the Tory leadership contest, her team adopted a cautious campaign strategy. Why gamble on another interview with Nick Robinson when last time she had struggled to name a single economist who backed her economic plans? Eventually she landed on Professor Patrick Minford, an academic at Cardiff Business School and a bullish Brexiteer. Minford went on the record calling for interest rates to rise to 7 per cent, which Truss then had to defend and deflect.

But that moment in the Robinson interview, widely reported as a humiliation, turned out to be one of the most helpful points in her campaign. Within days, like-minded economists were grouping together to praise her tax-cutting agenda. She went from seemingly having no support for her economic vision to having the endorsement of established and respected economists. The phrase 'Trussonomics' was first used as a dig at the Foreign Secretary's eternal optimism and radical economic ideology. Now, since it's likely to be Britain's new economic strategy in the days to come, there are more serious attempts to work out what it might mean.

So far, the details have been a mystery even to her supporters because she's been running a closed campaign. 'There's an iron wall around the inner circle,' says one frustrated MP who is backing Truss. 'They don't want policy suggestions from us.' The big political and economic decisions have instead been hashed out by a small number of her advisers. But while MPs struggle to get their economic advice heard, outside advice is funnelling through. Minford, Gerard Lyons and Julian Jessop make up the trio of economists closest to the Truss campaign (although they are not officially part of the team).

All three men have long-standing Westminster connections. Lyons, the former chief economist at Standard Chartered Bank, offered up economic advice to Boris Johnson over the years. Minford is a forecaster who was on good terms with Margaret Thatcher. Jessop worked at the Treasury and in banking before he became chief economist for the Institute of Economic Affairs, the free-market thinktank, where he still acts as a fellow.

For Lyons, now chief economic strategist at Netwealth, the decision to advise Truss's team has been a decade in the making. He first came across her soon after she entered parliament. He had read Britannia Unchained, a pamphlet published by the Free Enterprise Group of Tory MPs, and dispatched his researchers to find out who had written it. The answer came back: Liz Truss. He got in touch with her, and they remained in contact.

'The tax take is egregiously high,' says Lyons. 'We are the only G7 country to have tightened fiscal policy into a likely global downturn.' He sees Truss as the only politician willing to confront a failed high-tax consensus.

This is also what brought Jessop to Team Truss – he wants to tackle what he sees as a failed orthodoxy. 'The Treasury has been too quick to believe you need to start paying the debt down by raising taxes, both personal and corporate taxes,' he says. 'Far better to let the deficit take the strain.'

Isn't that a recipe for instant instability? Won't the markets punish Britain with far higher borrowing costs, as Sunak says? Jessop says the markets will recognise a strategy for higher growth and finance the transition. 'If tax cuts do mean more borrowing in the short term, I'm completely relaxed about that,' he says. 'I suspect the markets will be as well. If the consequence of this is a stronger economy and stronger public finances over the longer term, that's a positive outcome that markets will actually quite like.'


Kwasi Kwarteng introduces Liz Truss as she launches her leadership campaign, 14 July 2022 (Getty Images)

If Truss enters No. 10, it is probable she will work with a new chancellor (Kwasi Kwarteng is tipped for the role) to change the Treasury's fiscal rules to give the government more room to borrow. 'First of all, the rules will be a lot simpler,' says Jessop. 'At the moment we've got a complicated set of rules that cover a whole different range of variables and time-scales.'

Minford's first job in the Treasury was in 1971. He's seen fiscal frameworks come and go and argues that there's no point in following rules that suppress economic growth. 'We have policies in place which are raising taxation, that damaged growth in order to satisfy short-run borrowing constraints put forward by the Treasury.' And anyway, says Minford, such rules get quietly ignored, changed or dropped – which is what happened during the pandemic. The prime example, he says, was the government's 'lunatic proposal' to hike taxes 'just when we need taxes to be low in order to fuel a proper future growth rate'.

The three economists broadly agree that it's the long-term trajectory of the debt that matters, not short-term spikes in borrowing. 'The markets need to have a view that you want to keep the public finances in shape,' says Lyons. A decent rule, he says, is to 'reduce the ratio of debt to GDP over time'.

But this is just the first part of a three-pronged Trussonomics strategy: cut taxes, tackle double-digit inflation, then kick-start a stalled economy with some pro-growth reforms. So far, it's the second part of this plan that has turned the most heads, as Truss hasn't hidden the fact she blames much of the UK's inflation crisis on the Bank of England.

She has been raising questions about monetary policy, implying she thinks the Bank should increase interest rates. But since Truss and her economic advisers are adamant that there are no plans to renationalise the Bank, how exactly would she make central bankers play ball?

All three express similar frustration that the transfer of monetary policy from politicians to the Bank has, over the past 25 years, morphed into a ban on any criticism of the Bank's decisions. 'The Bank of England has clearly made some mistakes [during the pandemic] and it's perfectly reasonable to ask what went wrong,' insists Minford. The Bank's mandate after all – currently to target 2 per cent inflation – is set by the prime minister. Might that change? 'I don't think if you asked her now, she would give you an answer to that specific question,' says Lyons. Given that inflation has (to put it mildly) exceeded its 2 per cent target, he says there's a simple job to be done: 'Let's re-examine the [Bank's] remit to make sure it's fit for purpose.'

But the crux of Truss's plan is to create space for the Bank to be bolder. 'One of the reasons why the Bank of England hasn't raised interest rates as much as some people would like is because fiscal policy has been tightened,' says Jessop. 'Simply the fact that fiscal policy would be looser under Liz Truss means that there'd be more room for the Bank of England to raise interest rates.' This would be a long-overdue correction, says Minford, to the 'unnaturally low' interest rates that dominated the 2010s; 'a disastrous mistake', he says, which crushed productivity and was made worse by a lack of fiscal policy.

Speaking to Truss's most trusted economists, it's clear that their perspective on the deficit has shifted substantially over the past decade. The free-market narrative after the financial crash was that cheap borrowing – and Gordon Brown's spending splurge – had ruined the public finances and that austerity had not gone nearly far enough to get them in order. Now these same economists seem remarkably relaxed about climbing deficits and higher public debt. What's changed?

'When the facts change, your opinions change,' Jessop tells me. 'Ten years ago, I would have been much more conventional in my thinking that you need to get the budget deficit down as quickly as possible. But it's clear that isn't working. You need a more flexible approach focused on what really matters: the long-term sustainability of the public finances.'

'We've drifted into consensus, which is that you must never spend anything,' says Minford. 'The Conservative consensus has ricocheted from you can do anything you like under Macmillan; the Osborne version is you can't do anything at all.' This ruins any opportunity, he says, to achieve 'an optimal tax environment for growth', which is the only way to get 'long-run control of spending'.

A change in post-crash thinking isn't the only disruption taking place. Much has been made of Truss's hints that her next Budget may not come with the now-traditional assessment from the Office for Budget Responsibility. Politically, it's not hard to see why she might want to drop it: the OBR (set up by Osborne in 2010) runs lots of forecasts. Its next report is likely to be so bleak as to overshadow any good news she may have in her Budget. She's all but certain to be accused of spin, trying to exaggerate the impact of tax cuts in tackling this winter's cost-of-living crisis.

But her economist backers aren't especially worried. Lyons says it's a question of priorities, not spin. The OBR needs time to evaluate the impact of various interventions, but Truss wants to move fast to have support ready for winter. 'The timing of the emergency Budget can't be constrained by whether the OBR has had time to do their forecast,' Lyons says. The OBR announced last week that it is operating an 'exceptionally accelerated timeline' to deliver a fiscal outlook in time for any announcement. But not even a catastrophic forecast from the independent body is likely to change Truss's policy agenda over the next few months. 'She has committed to cut taxes,' says Jessop. Come hell or high deficit forecasts, those cuts have to be delivered.

What will the tax cuts look like? Lyons points out what's already evident: reversing the corporation tax hikes, which were set to rise from 19 per cent to 25 per cent for the largest companies next year; scrapping the new National Insurance levy (but keeping the £13 billion uplift for health and social care); and a temporary freeze on green levies to help with energy bills.

Truss originally rejected more 'handouts' to help with bills this winter – insisting that support would be delivered the 'Conservative way' instead by 'lowering the tax burden' – but she has pivoted in recent weeks, preparing to add to the £15 billion package announced in May to provide direct support. Still, she wants to use tax cuts where she can, and is considering a 5 percentage point cut to VAT – a move which Jessop has called the 'nuclear option', though he says 'the scale of the crisis means everything should be on the table'. There's also the tricky political business of having to increase it again at some point: the cut would leave close to a £40 billion gap in the public finances and in the meantime would do nothing to help with the cost of food or children's clothes, both of which are exempt from VAT.

And what about the third factor of Trussonomics: going for growth? The OBR is famously sceptical about the effect of pro-growth reforms. Its critics point out it constantly underestimated how much the Cameron-era reforms would increase employment, for example. But the Tory party has its own problems with growth strategy, internally at odds over whether it should have an 'industrial strategy'. When Sajid Javid was business secretary, he said that the words 'industrial strategy' should never come out of Tory mouths. Theresa May went on to create an entire department around the concept. Truss's instincts are laissez-faire. 'What's reassuring is that she doesn't want to micromanage from the centre,' says Lyons. 'Therefore I don't think it's a case of saying: "This sector will grow and that sector will not grow." I think she quite sensibly will focus on incentives – particularly the incentives to innovate.'

One sector Truss has never been shy to criticise is the housing sector. An avid Yimby (Yes In My Backyard), she has been vocal about overhauling the planning system and building hundreds of thousands more homes. But Tories have consistently struggled to live up to their manifesto pledge to build 300,000 houses a year, and this is unlikely to change soon under Truss. 'There are some things that are probably too politically difficult to do now, ahead of the next election, until you've got a mandate,' admits Jessop. 'I would like her to go into the next general election with a manifesto that does include meaningful changes on things like planning reform and health finance. That may be too ambitious. It may be that it has to be in the manifesto after that.'

The question of 'health finance' will be tricky for the Tories. With the NHS already on track to make up 45 per cent of day-to-day government spending in the next few years, quite a few Tories talk about the need for big NHS reform, saying it will have to happen sooner or later.

Both Truss and Sunak took the subject off the table as soon as the leadership campaign began. Can spending ever be tamed while the NHS remains off limits? Lyons points out that when attitudes change, they change quickly. 'If one goes back to, say, the May 1979 Conservative party manifesto under Mrs Thatcher, it didn't even have the word "privatisation" in it... Suddenly by 1982, 1983, it was one of the buzzwords. That had not appeared in '79, but it occupied a very centre stage by the subsequent general election in '83... The fact that something might not be centre stage now [does] not imply it will not become more important in the future.'

One thought I can't escape when speaking to Truss's economic gurus is that part of the Trussonomics equation is still missing: to get debt down in the long term, surely public spending cuts are necessary. Yet Truss is pledging tens in billions of pounds of extra spending. She wants big rail projects and would renew the hugely expensive triple-lock on pensions. While she plans to scrap the National Insurance rise, she will keep the plan to subsidise care-home costs for wealthier pensioners – a policy David Cameron ruled out as unaffordable. And all this will come on top of her £50 billion tax cut pledges.

If Labour were proposing a similar borrow-and-spend agenda, wouldn't the Tories be shouting about magic money trees? The difference, says Minford, is the 'combination of policies' which Truss is putting forward. Truss is offering temporary spending packages with tax policies that spur growth, he says, while Labour usually combines more spending with higher taxes on businesses and 'the rich', with 'no real commitment to solvency'.

Alarm bells did sound for some when Truss's team proposed regional pay for public sector workers, only to drop the idea just hours after the outrage began. 'The important lesson from the regional pay board stuff was that you have to build up support and understanding for what that type of [policy] means over a number of years,' says British economist Ryan Bourne, who works at the Cato Institute in Washington DC. Bourne is not advising Truss's campaign, but he worked closely with her through the IEA's Free Enterprise Group and has stayed in touch with her since. 'From what I've heard from Liz in recent days,' he says, 'she's aware of that.'

The U-turn over regional pay raises perhaps the most important question of all: does Truss buckle? Will her economic agenda survive the pressures of what this winter has in store? Not many Tories would say they can predict the next few months with any confidence, but they are bracing themselves for their toughest time in office yet.

'It's precisely because things are going badly that I think you need a radical shift,' says Jessop. Truss, he believes, has 'the vision to do things radically differently'. As the details of Trussonomics come to light, it's clear her entrance into No. 10 would close a chapter on Tory (and Treasury) economic orthodoxy. The next chapter is where we discover if her plans will do anything to fix the mess we're in.

Written byKate Andrews

Kate Andrews is economics editor of The Spectator

Also really interesting was I saw this via a Twitter thread by James Meadway, who was an advisor to Corbyn's Shadow Chancellor, John McDonnell, and one of the people thinking about left economic policy. I slightly wonder what Tory MPs will think of his take which isn't entirely negative:

James Meadway
@meadwaj
Interesting piece with 3 Truss-backing economists - Minford, Gerard Lyons & @julianHjessop. I don't share hooting & hollering from the centrists about Truss'  economic illiteracy or damage to the public finances and/or growth from her programme... 1/n
...What emerges here is something that looks a lot like "Tory MMT": that a big deficit won't matter for an economically sovereign country with deep, liquid capital markets bcos markets will understand the "pro-growth" (read:pro-profit) intentions of government... 2/n
3/n ...This is correct, at least to the point that a pro-big capital govt will be given a *lot* more leeway on defitcit and international position than a leftish government. This was (and is!) always, always the fatal error of the left MMT crowd: they didn't get the politics...
4/n ...And Britain's real relationship in the world. They didn't get the *priority* for deep, strucutrual reforms to the economy that could embed a left-reformist programme, instead majoring on moar spending, forget the deficit.
5/n ..What's striking about the Trussonomics offered here is that 3 econs spoken to *do* get that necessity of structural reforms, although their version of it is one I'd disagree with profoundly, and their strategy is the reverse of the left - first run deficit, *then* reforms..
6/n ...Worth stressing point: Treasury & outriders like @theIFS are major reason UK is in such an abysmal place: we are a country suffering from a massive institutional failure & a decade of austerity, pursued not by crazed ideologues but Sensible People, is massive part of that.
7/n ...So Jessop et al at identify structural problems & are willing to think about how to address. I don't agree on what needs to be done, but idea it is inherently ridiculous for a capitalist economy to be run in the manner they suggest is, alas, wishful thinking by liberals...
8/n ...Capitalism isn't moral. If you want to generate great deal of growth rapidly & you didn't care much about consequences - if, eg, you were v focused on getting to end 2024 before anything bad happened - then slashing taxes & allowing the deficit to balloon makes sense...
9/n ...& if you've also been watching declining wholesale price of natural gas in recent weeks you may reckon a few judicious words to retailers about passing that decline on to consumers, quickly, would get you somewhat off the hook over 22/23 w/out *too* much govt intervention.
10/n ...This would, incidentally, also start to reduce the incentive for the Bank of England to keep on pursuing interest rate rises, certainly not hitting the eg 7% that perhaps might have been floated previously as a possibility. Well done govt for avoiding *that*, I'm sure...
11/n ...So if your big plan for Truss was to push hard for rapid (unsustainable) growth over the next 18 months or so, setting yourself up for an election win at end 2024, this all make sense. Then you can enact the big juicy structural reforms you really want to push for...
12/n ...If, meanwhile, yr main opponent had been talking about how irresponsible this borrowing was & how you have no plan for growth, but you were overseeing an economy that was (1) growing quite rapidly and had (2) stable, perhaps even falling interest rates, so much the better
13/n ...Put all this together and it's a reaonsable smart way to get through the next c.2 years and then come back with the real plans for the economy at the next election - which Jessop actually suggests doing, I notice.
14/n ...It's risky, ofc, but then so is everything, & by ensuring your main opponents try to fight on terrain of technocratic "competence" whilst you get on w/ running massive deficit, doing some juicy handouts, and (if nec.) threatening the BoE, it's a route to winning. /ends.

The point on the IFS (and the OBR, IMF, OECD - perhaps all those other "experts from acronyms" that Gove said people were sick of) is true and fair. It's something I've been thinking of recently given Emily Maitlis' comments on BBC balance. But I think it is a problem in this country and it is at its strongest in the Treasury that there is a deep, to the bone 19th century liberal attitude that fundamentally the government and policy can't really do much about growth - what it can do is make sure the books balance. It's something I totally disagree with from a left-wing perspective and it sounds like Truss does from a right/neo-liberal one. But I alsoo think it has had a really deforming effect on our politics - for example I think that default assumption/attitude was a large part of our pre-crash light touch regulation and post-crash drive for austerity.

[Tamas]

So far, the details have been a mystery even to her supporters because she's been running a closed campaign

Here we go again, assuming that they are quiet because they have some super-secret elaborate deeply believed plan.

No. She doesn't have any past winning the Tory election and making sure she can continue to project Thatcher until the next national election.

[Sheilbh]

Here we go again, assuming that they are quiet because they have some super-secret elaborate deeply believed plan.

No. She doesn't have any past winning the Tory election and making sure she can continue to project Thatcher until the next national election.

Winning the next election is normally step one in doing anything even if Labour tends to forget it

Also I feel like tax cuts and structural reform isn't entirely contradictory with projecting Thatcher.

Isn't your complaint basically just about the discourse? They've made pretty seismic policy decisions on more or less everything over the last 12 years - surely at some point that reality needs engaging with and not treated as just an exercise in discourse and media management?

They might not have beliefs or a super-secret plan (I think part of Tory success is that they don't - and those things aren't necessarily compliments), but they've been doing things. Cameron, May and Johnson clearly had different visions and ideas of the state which was reflected in the policy decisions they made which shaped where we are now. Truss will too, if she becomes PM, and like Meadway I wonder if it's a more coherent path to victory than we assume. I still think a tough winter and cost of living will move things decisively in Labour's favour (I see that for the first time since 2008 Labour are ahead of the Tories on economic competence) - but I also still worry Labour doesn't yet have a coherent narrative of its own policies or any real ideas for growth beyond technocratic competence (plus their very good policy on capital spend on energy transition - which Truss may nick) which is wildly inadequate.

Edit: Also I just think it's interesting that a Corbynite thinker is one who is giving one of the more positive assessments for this article and it's ideas. Think you can interpret that in many ways and would love to know what the Tory backbenchers think.

[Tamas]

You are missing my point entirely, I am not talking about the Tories decade in power I am talking about "Trusseconomics"

There is a wall of text analysis of Truss' economic policies, based on the premise that the reason for near-absolute radio silence on those policies is that they exist, not  the far more likely reason of they not existing.

It's the same exact crap I have seen with Johnson, where the more he mixed vague with grandiose, the harder people  worked to create the imagined substance behind all the BS.

[Sheilbh]

You are missing my point entirely, I am not talking about the Tories decade in power I am talking about "Trusseconomics"

There is a wall of text analysis of Truss' economic policies, based on the premise that the reason for near-absolute radio silence on those policies is that they exist, not  the far more likely reason of they not existing.

She's made a lot of hostages to fortune in terms of policy commitments. If anything there's been the opposite of radio silence - none of that article is different from her public statements on what she'll do economically. I think you can accuse Truss - who's made (by Labour's counting) £30 billion worth of promises - of lots of things, not having policies is not one of them.

There is radio silence on cost of living but she does keep saying she'll do something. The reason for that is that whatever she proposes is going to be politically unpopular with Tory members.

The point there is that there's no point asking MPs about them because she's relying on advisers, beyond her closest allies like Kwarteng. That's why the article is with three Truss supporters and advisers (though not, I don't think, in the inner circle).

It's the same exact crap I have seen with Johnson, where the more he mixed vague with grandiose, the harder people  worked to create the imagined substance behind all the BS.

But I don't think that's true. He made the vague, grandiose statement about levelling up as his big idea (and it's a good one). That was reported. The media then spent the next year framing everything else in terms of how does it fit into levelling up and whether there was any substance to it or not. Generally they kept concluding there wasn't or, if there was, that it didn't really fit together and it might not be enough.

They weren't creating imagined substance (not least because he's PM so there is substance whether you like it or not - decisions are taken, budgets are approved etc) but reporting how he described his agenda and then measuring actual spending and policy decisions against it. Surely that's how reporting on policy works? What else where they supposed to do?

Edit: And, as I say, I actually think the most interesting thing is the semi-positive response from an economics policy wonk associated with the Corbyn policy and their read on how it would work economically and politically. I think there's a few conclusions to draw from that though maybe the wrong ones?

[Josquius]

Interesting in survey done by Survation - hope someone explores this - looks like the type of left-wing economic policies/issues people care about are different by age. It's almost a trope that well over 50% of Tory voters back nationalising x industry.

Turns out this may largely be a function of age. People over 50 are far more in favour of nationalisation and executive pay caps (which feels like an old school leftiness) than people under 50; by contrast people under 50 are far more in favour of unions and industrial action than the over 50s

I'm exactly where I should be given my age, which I suppose should be expected. Makes me wonder about that Brexit theory that what Brexit voters are nostalgic for is basically the brief period in the 60s-70s when Britain was becoming a more normal European country ("we were a real country once etc" ) and it's similar with their economic views? They generally vote Tory for other reasons but like state-mandated pay restraint and nationalisation which feels like a very of that era combo?

Also on interesting research - hope someone has the time and ability to look into this because it's really interesting too:

Leonardo Carella 🇺🇦
@leonardocarella
5h
Super-interesting within-sibling study by @elizabeth_sim0n on the effects of higher education on values, which finds a null effect, contra the small liberalising effects found in standard longitudinal studies.  https://onlinelibrary.wiley.com/doi/epdf/10.1111/1468-4446.12972
My belief is that political scientists should take selection effects seriously: the fact that some people are more likely to go to university is not an inconvenient to weed out in pursuit of causal identification. It's an interesting and consequential phenomenon by itself!
We know that *at best* educational experiences slightly increase an existing value divide between sub-groups. But it makes a HUGE difference that universities sort (causally, and strongly) these sub-groups into different labour market positions! It wasn't the case 40 years ago!
My fear is that our fetish for causal identification is leading us to miss the forest for the trees. In view of a growing political divide between education groups, the causal empiricist is immediately led to the question "does university cause a change in values?"
But perhaps the question to ask is a cause-of-effects one. The question is "to what extent are changing political divides due to the fact that 40+ years of educational expansion have sorted liberals into high-income positions and authoritarians into low-income positions?"

I don't know, one study vs. a myriad others that shows education does have an impact.
I'd go with education being big leftwards push given the evidence, and that this comes in spite of university students disproportionately coming from backgrounds that would more naturally see them tories.
The data of university graduates tending left so flies in the face of my experience with actual students in my first year of uni (after that I pretty much ignored most Brits at uni and found international friends).

The big factor I'd say is less authoritarian and liberal, and more holistic vs. atomistic thinking. If you're the kind of person who does think big picture rather than about immediate pay offs, then you're more likely to give time to education, and also less likely to be attracted by conservatism.
This would always be an issue traditionally, but these days if you want to go to uni you can go to uni, there is little barrier to entry if just going to a university is the only thing that matters.

[Sheilbh]

I don't know, one study vs. a myriad others that shows education does have an impact.

Oh it does - I think his point is there's a myriad of studies that show a small move. There's evidence education moves people to liberal and away from authoritarian, just not by much.

This one which looks at siblings doesn't find much difference, which suggests that perhaps the big difference is in the factors/personality of people choosing university rather than the small shift that happens at university.

I'd go with education being big leftwards push given the evidence, and that this comes in spite of university students disproportionately coming from backgrounds that would more naturally see them tories.

Of course there's the material factor too which I think drives the young/old political split (and I wonder how much of that is education based from a generation of, say, 10-20% graduates to one of 50% graduates). Older people have assets to protect, are more likely to not have housing costs and have fixed incomes with more insulation from recent tax rises; young people can't save enough to form household, get some capital of their own and recent tax rises (especially when taken with new loans) disproportionately hits them.

The data of university graduates tending left so flies in the face of my experience with actual students in my first year of uni (after that I pretty much ignored most Brits at uni and found international friends).

There was a recent poll with 3% support for the Tories among 18-24 year olds so I think your experience might have been a bit exceptional in that

There were definite Tories (although almost certainly they'd describe themselves as "socially liberal, economically conservative"/Cameroon/BoJo style Tories who subsequently moved to Clapham) at my university but not many that I actually met/knew. One or two who have subsequently changed their views

Although I think part of that is a separate type of pre-sorting. I think there were one or two halls that were absolutely full of public school people in Barbours - coming from outside I had no idea they were like that, but obviously they all knew so all applied for those halls. I imagine I'd have met more Tories that way. As it turned out I didn't apply for them because they were a bit out of town and I only applied to city centre halls.

[Sheilbh]

Unsurprisingly I totally agree with the Economist editorial on building more - and it's why I think there's capacity for a bit of a supply side revolution for whoever wants it. I feel this is a bit like the 'place of greater strife', either we do something delicately now or violently later:

Why Britain cannot build enough of anything
The problem is bad rules, not bad people
Sep 1st 2022

Duncan sandys, a Conservative minister in the 1950s and 1960s, has two reasons to be remembered. The first is that he was the "headless man" being fellated by the Duchess of Argyll in a Polaroid photo, which emerged in divorce proceedings so vicious that they were turned into a bbc One drama earlier this year.

The second reason is less salacious. In 1955 Sandys issued a circular that fundamentally changed Britain. It implored local councils to forbid building on the edge of cities in order "a) to check the further growth of a large built-up area; b) to prevent neighbouring towns from merging into one another; or c) to preserve the special character of a town". The authorities had tried to restrict urban growth since the reign of Elizabeth I. Now they could.

Today all four nations of the United Kingdom have green belts. About 13% of England is so designated, including the surroundings of every major city. The girdle that encloses London is three times the size of the capital. A stroll through it takes in scrubland, pony paddocks and petrol stations. In "The Blunders of our Governments", a book by Anthony King and Ivor Crewe, the policy is held up as a rare example of legislation achieving exactly what was intended.

The green belts do their jobs well, pushing development into the rural areas between them (see maps). Indeed, most parts of the planning system work as intended. Councillors retain democratic control over the planning system. Environmental watchdogs enforce their mandates fiercely. Stringent rules protect bats, squirrels and rare fungi. Courts ensure that procedures are followed to the letter. But the system as a whole is a failure. Britain cannot build.



In total, about 10% of gdp is spent on building, compared with a g7 average of 12%. England has 434 dwellings per 1,000 people, whereas France has 590, according to the oecd, a club of mostly rich countries. There is little slack in the market. In France, about 8% of dwellings are vacant at any one time. In England, the rate is barely 1%. Britain also struggles to build reservoirs and (despite boasts from successive prime ministers) nuclear power stations. With almost 500,000 people, Leeds is the largest city in Europe without a mass transit system. What has gone wrong?

The problem starts with the Town and Country Planning Act, which nationalised the right to build on land. Where once owners could do almost as they pleased, after its passage in 1947, local councils controlled what was built where. They have never relinquished that power. The planning system has more in common with an old eastern European command economy than a functioning market, argues Anthony Breach of Centre for Cities, a think-tank. "We do not have a planning system, we have a rationing system," he says.

Even when councils approve development, other outfits can stop it. Natural England was created in 2006 with the aim of protecting flora and fauna. After a European Court of Justice ruling in 2018, it was tasked with ensuring "nutrient neutrality", meaning any development could not increase phosphate or nitrate pollution in rivers. Natural England came up with a blunt solution: building could not go ahead unless developers could prove it would not lead to an increase in nutrient levels, a stipulation that few could provide.

The result was a near total freeze on house-building. Local politicians and developers, who had spent years in painful negotiations, were caught out. In total, about 14% of England's land faced extra restrictions. One industry group argues that 120,000 houses were affected, or 40% of Britain's annual housing target. Liz Truss, the likely next prime minister, has promised to scrap the requirement, but details are scant.

Newts present as many problems as nutrients. Anyone who harms a great crested newt while building can be jailed for up to six months. Bats are a nightmare for anyone renovating or developing (enterprising nimbys sometimes install bat boxes in order to attract them to a potential site). Protected under law, it is a crime to harm a bat or destroy its roost. A full report, which involves ecologists scouring a property with bat-hunting microphones plugged into iPhones, can cost £5,000 ($5,800).

If a roost must be destroyed, a like-for-like replacement must be installed. hs2, a railway line, was forced to build a £40m bat tunnel to stop the creatures being squished; its route is lined with bat-houses, which are large enough for humans. For developers, the rules are an expensive annoyance. For bats, however, the legislation has been a success. Numbers of the common pipistrelle have almost doubled since records began in 1999.

Some schemes do not survive contact with environmental objections. A planned nuclear power station in north Wales was rejected by the planning inspectorate in 2019 partly on the ground that it might affect a local population of terns. Inspectors ruled that "it cannot be demonstrated beyond reasonable scientific doubt that the tern colony would not abandon Cemlyn Bay". That the terns had existed next to a previous nuclear power station was little defence. Inspectors also worried about the effect construction would have on the dominance of the Welsh language.

Even small housing estates now require reams of impact assessments and consultations. A planning application used to involve a single thick folder, says Paul Smith, the managing director of Strategic Land Group, which helps customers win planning permission. Now it is a thicket of pdfs, often running to thousands of pages.

For a development of 350 houses in Staffordshire, a developer had to provide a statement of community involvement, a topographical survey, an archaeological report, an ecology appraisal, a newt survey, a bat survey, a barn owl survey, a geotechnical investigation to determine if the ground was contaminated, a landscape and visual impact assessment, a tree survey, a development framework plan, a transport statement, a design and access statement, a noise assessment, an air quality assessment, a flood risk assessment, a health impact assessment and an education impacts report. These are individually justifiable, yet collectively intolerable.

See you in court

Make an error, however, and a legal challenge will follow. Anyone affected by a decision and able to afford a judicial review can challenge a planning decision. For a group of motivated, well-off nimbys, whipping together £20,000 for a review is easy enough. In Bethnal Green, in east London, a mulberry tree blocked the conversion of a Victorian hospital into 291 flats. Dame Judi Dench, an actor, was roped in to support the tree, which was so frail it required support from a post haphazardly nailed onto one of its branches.

After a campaign, the mulberry was in 2018 designated a veteran tree, which gives it special legal rights. (The number of signatories to save the tree matched the then population of Bethnal Green.) Although the developer had proposed moving the plant, a judge ruled that the council had not properly considered the danger that it might not survive: "A policy was misinterpreted; a material consideration was ignored." The site sits derelict today.

Councils behave rationally when it comes to development. They levy no income tax or sales tax, and cannot even fund all their operations from property taxes, known as council tax. In all, local government imposes taxes worth less than 2% of gdp, according to the oecd. So more development does not equal much more money for better services. But it does equal more complaints. Councillors often enjoy majorities of just a few dozen votes. A well-organised campaign can replace an entire council, as happened in Uttlesford, in Essex. The result is that local councils are "a bottleneck on national economic growth", argues a joint paper by the Centre for Cities and the Resolution Foundation.

The government in Westminster can usually override local objections. "When the state decides to act, it has unlimited power," says Andrew Adonis, a Labour peer, who oversaw the introduction of hs2. Projects such as hybrid bills allow the government to bypass the planning system, turning Parliament into a kind of planning committee. The process is so arduous that sitting on the committee is often a form of punishment from the whips who enforce party discipline. But the benefit is that courts do not challenge primary legislation. Judicial review claims bounced off hs2 like stones off a tank.

Even when the government acts, it is often cautious. A plan to turn a quarry in Kent into a settlement of 15,000 homes was one of the most ambitious schemes, when announced by George Osborne, the then-chancellor, in 2014. Yet it is around a seventh of the size of Milton Keynes, a maligned but highly successful new town begun in the 1960s.

Larger schemes, such as a push for a million homes stretching between Oxford and Cambridge, with a new railway and motorway linking them, have been ditched due to local opposition. "We were a bit out of puff," admits a cabinet minister. Greg Smith, a Tory mp, had already put up with hs2 slicing through his constituency, and it seemed unfair to subject him to more building. In Britain, pork barrel politics works in reverse, with mps keen to keep things out of their constituencies.

As a result, Britain's most productive region is shackled. Burgeoning life-sciences firms fight for scarce lab and office space while world-class researchers live in cramped, expensive homes. The average house price in Oxford, £474,000, is about 12 times average incomes. Given the opposition of local councils and local mps to housebuilding, though, it can hardly be said to be against voters' will.

Britain is rare in that the Treasury functions as both a finance ministry, keeping a close eye on spending, and an economic ministry, investing for the future. Thriftiness tends to trump investment. "[The Treasury] can add up but they can't multiply" as Diane Coyle, an economist, puts it. It shackles big infrastructure projects, balking at upfront costs even if there are large returns later on.

The result is false economies. hs2, a £100bn project to connect London to Birmingham and then Manchester, Sheffield and Leeds, was intended mostly to add capacity to Britain's crowded railways, not (despite the name) to speed journeys up. The government recently cut the eastern leg of the scheme to save money. That it was the most beneficial part of the scheme—the eastern leg to Leeds and Sheffield had a benefit-to-cost ratio of nearly 5.6:1, compared with 2.6:1 on the western leg between London, Birmingham and Manchester—was overlooked. Joseph Bazalgette, the Victorian responsible for London's sewer system, is said to have argued that: "We're only going to do this once and there's always the unforeseen". Now, the opposite principle applies.

Political capital is less fungible than the financial kind. When it comes to building things in Britain, there is usually no alternative scheme ready to go. If a big project is scrapped, the political capital spent on forcing through its approval cannot be instantly reallocated. The slow process of winning support at a local and national level must start anew. In the meantime, nothing is built.

And Westminster can be capricious. In 2022, after years of argument, Transport for London won permission to build 351 flats on land it owned at Cockfosters Underground station. Grant Shapps, the transport secretary, blocked the development because it removed too many car parking spaces. The Leeds Supertram Act was passed in 1993. Three decades later, Leeds possesses no tram, super or not, as a series of governments refused to fund the project. In 2016 the government rejected a proposal for a trolleybus, in part because it did not think the route would reduce inequality within the city.

Scepticism among nimbys is often justified. Post-war town planners botched city centres, bulldozing through objections. Birmingham's Victorian centre was carved up to make way for ring roads that still throttle the city. London narrowly avoided a similar fate. New developments, such as Nine Elms, manage to be expensive while looking cheap. Outside big cities, development is often limited to boxy housing estates, which are notorious for poor building quality. A Welsh property surveyor has amassed 560,000 followers on TikTok by angrily taking viewers through snags in newbuilds. ("Check out what this absolute melt has done with this hinge," he almost screams in one video. "That is absolutely ridiculous.")

In Oxfordshire a group of residents have spent almost a quarter of a century fighting attempts to build a reservoir. The Environment Agency and a public inquiry sided with the residents over Thames Water. The objectors are shrewd, motivated and well-versed in water regulation. The chairman of the Group Against Reservoir Development (gard) is a retired nuclear scientist; his predecessor was a brigadier. But after a summer of drought, in which Thames Water had to implement a hosepipe ban, the victory rings a little hollow.

Efforts are being made to convert the unbelievers. New planning legislation offers residents the chance to propose their own development and, in effect, approve it themselves via street votes. The government is trying to improve design standards, hoping that beautiful buildings will attract less opposition. Those who put up with infrastructure, whether wind turbines or a reservoir, may benefit from free energy or water bills under one scheme floated by ministers.

Officials are also toying with a net-zero trump card. Projects deemed crucial to making Britain emissions neutral by 2050 would be able to ride roughshod over many obstacles. At the moment policy aimed at protecting the environment hinders projects that should help the climate. The government protects flora and fauna because voters want it; circumventing such rules can only be done in the name of the environment, runs the logic.

Building is binary, however. If something is built, those who oppose it will be unhappy; if it is scrapped they will be delighted. There is little incentive to meet halfway, or to accept a payoff. "This is not some sort of poker game where we demand huge compensation," said Derek Stork, who chairs the reservoir-killing gard. Britain cannot build. But that is just the way voters want it.

Edit: One for Tamas on the bats, who I'm glad to hear are doing well

[Valmy]

I like the little holes in the greenbelts. Like some village just got stranded in there, forever trapped unable to expand and eternally isolated.

So I guess you just need to go underground and Britons can live like mole people.

[Sheilbh]

So I guess you just need to go underground and Britons can live like mole people.

It was always going to end up there I suppose