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Responding to Change

There is an analogy, often used in business books on the management of change, about a frog in a pan of water. It was said if a frog jumped into a pan of hot water it would immediately jump out. However, if a frog was in a pan of cold water which was slowly heated the frog would fail to react to the change and eventually die.

The lesson for businesses was they must constantly respond to changes in the external environment, even if, initially they appeared minor. Not sure what science this was based on and whether any frogs were hurt in the discovery of this weakness.

The Uxbridge and Ruislip by-election has been cast as a referendum on the Mayor of London’s proposal to extend the Ultra Low Emission Zone into the constituency. The surprise win by the Conservative candidate triggered a significant rethink by both the Conservatives and Labour on their prioritisation of climate change as an issue. The Tories seeing it as a potential wedge issue for the coming general election. Labour concerned it might gain traction with hard pressed voters tried to run with the hare and the hounds.

It is worth remembering the majority secured by the Conservatives in this “referendum” was less than two percent of the 46% of voters who turned out. Of course they have a track record for taking simple majorities as decisive for matters with far reaching and potentially damaging consequences, eg. Brexit.

Positioning himself as the friend of the motorist Rishi Sunak doubled down on the wedge issue by issuing 100 new licences for exploration of the North sea for new gas and oil reserves on 31 July. Sir Kier Starmer confirmed that if he becomes Prime Minister he will not revoke those licences.

It makes one wonder when political elites will wake and smell the smoke. On the very day of the by-election the international news was about a dangerous heatwave in Europe, and unprecedented, out of control, forest fires raging across Canada.

A key role of political leaders is they should lead. They should be assessing the scale and nature of future threats and preparing the public for them. Explaining what needs to be done now to prevent catastrophe tomorrow. And with climate change the pan is already very hot. It is time to jump. To move to a war footing to address the problem that looms ever larger.

The most sensible response to the implications of the Uxbridge by-election came from the former Tory Environment Minister, John Selwyn Gummer, now Lord Debden, and until recently Chairman of the UK’s Independent Committee on Climate Change.

Lord Debden has spoken frequently of the need for politicians of all parties to face up to the hard decisions that have to be made to tackle climate change effectively. In relation to the issue of ultra low emission proposals he talked about balancing these with much more aggressive approaches to taxing private jet and helicopter fuel. This would raise revenue from those who are: a) generating the most C02 emissions and, b) most able to pay the tax thus inserting some sense of fairness currently notable by its absence.

Responding to change is vital for individuals, companies, nations and civilisations, (oh and frogs it would seem). The importance of responding should not be diluted by the extended time frame over which change happens. It is clear the problem of climate change has been building for more than a hundred years. The process and its implications were clearly understood in the 1980’s. Vested interests have sown doubt since then but now the climate crisis is not coming. It is here.

The pan is coming to the boil. The question is, are we going to jump?

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Ministerial Code

In the latest twist in the £800k loan to Boris Johnson the complexities of the relationships between Mr Johnson the PM, Mr Sharp the Chairman of the BBC, Mr Blyth the lender of the money and Mr Simon Case the Cabinet Secretary continues to make the news. Much of the focus seems to be on the issue of the relationship between Mr Johnson and Mr Sharp and whether the latter got his job because of his having some involvement in linking the PM to the loan provider/guarantor.

However there appears to be another interesting element to this story revealed in the BBC’s coverage on line. In the article the BBC report the advice given to Prime Minister Johnson that, “…he could take out the loan – without declaring it – as long as his guarantor Mr Blyth had no “business or personal interests in the UK” beyond his family ties.” Not certain but this would appear to be the advice from the Cabinet Secretary.

Does this mean the Prime Minister would not have to declare a loan or loan guarantee provided by President Putin, or Xi Jin Ping, or Kim Jong Un? Of course they all may have laundered money through London at some point so they might actually be caught! However, if one puts aside the more far fetched group of lenders is there not a prima facie pubic interest case about knowing if the Prime Minister of the country has been provided with a very substantial loan whoever it is from?

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Zahawi Tax – Cabinet Defence

Mr Gove was interviewed by Nic Robinson this morning on the Today Programme about the tax affairs of Mr Zahawi. Mr Gove’s characteristically carefully worded response was clear, stating his “firm understanding” was that Mr Zahawi had “paid all his taxes”. He went on to say”People paying their tax is not a story. People not paying their tax is a story.” This soundbite has all the marks of an agreed cabinet line on the issue. We will see in the course of the next few days.

Nic’s original question was about whether the public have a right to know if senior cabinet members are not paying their taxes? Mr Gove’s response begs a couple of questions.

Firstly, if Mr Zahawi has made a payment to resolve a dispute with HMRC then he clearly had not paid all his taxes at the appropriate time. Should the public have had a right to know at that point? And was this the case when he was appointed to the post of Chancellor

Secondly, there is a matter of intent. We can agree that people paying their taxes is not a story, and, that people not paying their taxes is a story. However, what about people trying not to pay their taxes but being found out? Is that a story? Particularly if the people involved are senior members of the cabinet, indeed have been, albeit briefly, Chancellor of the Exchequer. Should they not be like Ceasar’s wife, above suspicion.

This has real real political jeopardy for the government. Public sector workers up and down the country are being told one of the reasons their pay demands cannot be met is because the public finances are so weak. In other words the level of income from taxes is not meeting the levels of public expenditure. This position would be much less the case if there were not all manner of techniques whereby those on the largest incomes were able to manipulate their liabilities through opaque tax regimes.

At the very least this story undermines the moral authority of the government’s arguments with public sector workers whose tax affairs are dealt with via Pay as You Earn (PAYE) where the scope for getting into dispute with HMRC is very limited.

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China’s population falls in historic shift | Financial Times

First decline in 60 years set to have long-term consequences for domestic and global economies

Source: China’s population falls in historic shift | Financial Times

 

 

 

Northern Comment Editor – The implications of this for China are enormous but the impact on the rest of the world may be way beyond significant. The implications were explored by Goodhart and Pradham in their fascinating book The Great Democratic Reversal previously reviewed in Northern Comment.