Abroad Thoughts From Home

Whenever I visit another capital city, be it Paris, Rome, wherever,
there is always a few hours when I get the feeling that something is
different. Something is strange.
Then you realise what it is. It is a normal working day, people are
going about their business. And there are not four or five people
within 18 inches of your face.
It is not normal, you know, this insane overcrowding we put up with in
London. Every single square foot of land built on, and costing an
obscene amount to buy or rent.
Every single piece of public transport full to capacity, and then
some. People queuing to queue to get on. Whole stations shut down
because the crowds are a threat to your safety.
Almost everyone goes around plugged into some device or other, to wall
off the sheer awfulness of what is going on around them.
No one else lives like this, in Amsterdam, Paris, Berlin or Rome, from
where we have just returned. You see very few people plugged into
their private space, because their surroundings are quite bearable.
This is the second thing you notice.
This is not normal, the way we live, but we have lived this way for so
long that we no longer realise this. Distance brings perspective.

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On Heathrow, And Skype

Time was, about a quarter of a century ago, that if I wanted to interview a captain of industry I got into a taxi, zipped across town and met him or her face to face. Today I use a telephone.

There are two reasons for this. One, the London streets are so clogged that it makes no sense to waste an hour or more travelling to and from such meetings. Second, like everyone else, my workload has expanded to a stage that, even were the roads clear, it still wouldn’t make any sense. Anyway, it is why they invented the telephone.

Now we are told that one of the reasons we need an extra runway at Heathrow, or Gatwick, or as some suggest both, is to allow a free flow of business visitors into the UK. To hold meetings. We are already building the massive Crossrail scheme to move them from their eyries in Canary Wharf to Heathrow easily.

Now we need to build more airport capacity in some of the most crowded real estate on the globe to facilitate such meetings, or the City/UK industry/tourism/life as we know it will become uncompetitive. Meanwhile turfing thousands out of their homes and making the lives of thousands more under the flight paths even more miserable.

This is even as business is increasingly being conducted via improved IT and telecoms connectivity on Skype and the like. We are busy building stables for more horses just as the internal combustion engine is being invented.

The best solution is Boris Island, shifting the whole shebang half-way towards the Netherlands and making the Dutch bear some of the pain. Except that, as we have learnt from Network Rail’s £38 billion five-year plan to drag the rail network out of the Victorian era, we don’t do big engineering projects.

We are too busy turning out graduates with degrees in marketing. Or media studies. Or golf course management. Engineering requires discipline and a degree of skill at mathematics and science, which does not come easily to the average school leaver. (As does medicine, except that this is much more lucrative. And we still don’t have enough doctors.)

So we have a shortage of skilled engineers. In a free market, this should stimulate higher wages and attract more students. Except see the above.

HS2 has no chance whatsoever, then. Thank God. And expect more airport capacity to arrive, given our knack for political vacillation, planning delays, nimbyism, project management screw-ups and IT incompetence, by about 2040. When it will probably be technologically obsolete.

On De Rothschild, And Transport

In one of the least appropriate interventions since Marie Antoinette opined on the relative merits of Mr Kipling cakes and a humble baguette, billionaire banker Sir Evelyn de Rothschild has been giving us his views on the London transport system.

Those views, as contained in the bankers’ house journal the Financial Times, can be summarised as the sheer frustration of trying to get his limo through streets packed out with other people.

Apparently without irony, he suggested that part of the problem is the large number of empty buses, and those “grinding their way pointlessly” around the 19,500 bus stops. He spotted six on the Strand once. (The reason buses are empty is that they are either heading to the end of their route or, on a road so relentlessly jam-packed as the Strand, everyone has got out and walked.)

He doesn’t like Boris bikes. (Me neither, but on safety grounds.) He doesn’t like road works. (Who does?) He thinks big lorries should only deliver at night. (Fair point.) He thinks there are too many private hire firms, rather than black cabs.

At no stage, unbelievably, does our banker address what most people see as the main problem with the capital’s transport, the obscenely overcrowded and unreliable suburban mainline and Tube services. Perhaps he has never been on one.

De Rothschild’s de haut en bas musings on transport, as viewed apparently from the rear windows of his limo, immediately generated derisive comment on the FT site. Some even wondered if this was an attempt by this old Harrovian to make Boris Johnson, the old Etonian mayor, look rather less posh and out of touch. Too cunning, I fear.

As it happens, I have a proposal that might suit both de Rothschild and most of the travelling public. Ban private cars from the centre of London. Better still, allow them in but increase the congestion charge to, what shall we say, £5,000 a day. That way bankers who can afford it can contribute appropriately. The merely wealthy can take a cab. The rest of us can get back onto those empty buses.

On Property, And Youth

I was talking to someone the other day who has made a great deal of money out of the London property market. The problem with taking a view on London property is that, whenever it seems prices can go no higher, they do anyway. I once likened calling the top of the market to being a greyhound chasing an electronic rabbit – however fast you run, the rabbit stays ahead.

His conclusion, and I see no reason to disagree, was that prices would continue to rise. The drivers behind that – the arrival of money from overseas trying to find a safe haven and a source of income, and sheer demographics and a rising population – are still in place.

He also detected a cultural shift away from buying a home and towards renting among the young. They are more mobile in their jobs, and less keen to tie themselves down in one location. A few years ago, he said, there was a degree of shame, or at least unease, over still renting. Now, as with our Continental counterparts, renting is seen as more socially acceptable.

The figures bear this out. The proportion of the population owning their homes is down to a level last seen when Mrs Thatcher was still PM.

This has been the most significant inter-generational transfer of wealth in living memory, and one of the least noticed. Previous transfers have tended to be downwards, the younger generation being better off than the one before it.  The process has gone into reverse.

Up until 2000, and those trying to get a foot on the ladder today may find this difficult to believe, the state actually funded part of your mortgage, by giving you tax relief on the interest you paid, which in the early years was most of your monthly repayment.

This was abolished by Gordon Brown in 2000 as a “middle class perk”. God forbid we should encourage people to own their own properties, and enter the middle classes. Thatcher is generally reckoned to have sold off the country’s council stock because people who own their homes were seen as more likely to vote Tory. Labour was never averse to a bit of social gerrymandering either, in the other direction.

We have loaded university leavers with tens of thousands of pounds of loans, we have removed tax incentives from owning homes. More recently, the current Government has engaged in a bout of cynical electioneering by issuing bonds offering 4 per cent interest, far better than you get on deposit in the bank, but only to the over-65s who are more likely, again, to vote Tory.

This was entirely unnecessary, because that sort of income is freely available on the stock market. It is also another example of generational wealth transfer, because those bonds offer a higher rate of interest than the Government can borrow at. The public finances, that is, you and me, who are probably not eligible for the bonds, must make up the difference out of taxes.

My impression is that only a few of the young have taken all this on board. They don’t tend to vote as much as us oldies. When they appreciate how they have been robbed by a bunch of already wealthy baby boomers, they have a right to become very angry. There is, as of now, no party they can vote for which offers a platform to put that right. One day there might be. They have one in Greece, after all.

On Anti-Social Housing

Several weeks ago a block of flats in Abbey Wood, a modest part of south east London, went up for sale. The development is convenient for the new Crossrail scheme, which would make commuting easy into Canary Wharf, the City or the West End.

Oh, and it is advertised as a “fully private block with no social housing” which means, to put it less politely, that occupiers are unlikely to have to rub shoulders much with the local plebs.

Neither you nor I can buy the flats, though, not without taking a flight to Hong Kong and the Mandarin Hotel there, which is where they are being marketed. They are not for Londoners; they are for rich overseas, probably Chinese, investors, who will use the scheme as a way of getting their money out of their slowing economy and into a bolt-hole in London.

The flats will be rented out, for an extortionate sum, to those same Londoners who are unable to buy them, and those rents will be yet another barrier to their getting their own feet on the housing ladder.

This is a proper free market in action. Or the inevitable result of globalisation. Or utter madness. I favour the last. We learn that London will grow to a city of ten million in due course, because of an influx of people from overseas, which will mean an even greater housing shortage, pushing prices even higher and ensuring even more of the local population will be priced out of the market. Already about a third of new build in the capital is for “investment”.

Meanwhile the pressure on services like schools, health and transport will increase.

People I speak to in the property world tell me that those overseas investors are now looking outside London, and outside residential property, for those bolt-holes to stash their wealth. We face the prospect of the sort of housing chaos that has afflicted London and the south east spreading to any other part of the country that is remotely habitable.

Anyone sane can see this cannot go on. The Tories seem unconcerned – indeed, Boris Johnson seems to regard the amount of foreign cash, much of it of dubious provenance, flooding to the capital as a source of pride. Labour and the LibDems’ main contribution to the debate is to fine people who already happen to live in houses above a certain size or which have risen in value because of the crazy London housing spiral. The money will not go to new social housing, but to the NHS, all part of the unending and boring bickering between the parties ahead of the election on the subject.

Other nations seem rather good at keeping their hands on essential assets and infrastructure – the French, for example. We sell off everything, railways, utilities, airports, whatever, to any old  bunch of rich, greedy foreigners with no commitment to them or their customers and then wonder why those essential services don’t work that well.

I wonder how many votes there are in a policy of London for the Londoners, and everyone else gets to pay a whopping surcharge for the privilege of buying here?

On London, And Behavioural Sink

I have been out of London, for longer or shorter periods, three times in the past couple of months. Every time I am struck how generally pleasant, courteous and cheerful most people who live outside the capital are. Each time I have returned I have been met, within hours, with acts of gratuitous unpleasantness and aggression from complete strangers.

In addition, twice over the past week or so, I have been sitting on a crowded Tube train and an obviously pregnant woman has boarded. In each case, the row of seated twenty-somethings have ignored the woman and left her to stand. In each case it has been me, twice their age, who has had to get up.

I can say with absolute certainty that, had this happened on a bus, say, in any of the three places outside London I have visited, the woman would have got a seat immediately. Any number of people would have got up. In London, they don’t.

(In one instance, one of those who remained seated was wearing full soccer kit and had obviously been from, or was going to, a game. He could hardly plead lack of fitness.)

I have been wondering why this is. In 1962 a piece of research appeared in the Scientific American which coined the phrase “behavioural sink”. Rats were placed in a cage and their number was steadily increased. Above a given population density, their behaviour deteriorated.

They displayed symptoms of stress, violence, hostility, parental incompetence and other aberrant behaviour, including cannibalism and frequent miscarriages. They were either frenetically overactive, or they retreated into a state of pathological withdrawal, only emerging to eat and drink when others were not around.

Remind you of anywhere? Apart from the cannibalism, that is. So far. (Irony alert.) Much was made at the time of the read-across to what were seen as our overcrowded cities, because rats’ social behaviour is quite like our own. Those cities are now much more overcrowded.

Everyone in London has in most public places someone else a few inches away, in their face, invading their personal space. People respond with aggression – “MOVE DOWN THE CARRIAGE!” “STOP PUSHING ME!” Or, like my encounter on a bus on returning to the capital, the complete stranger who snarled at me because I didn’t get out of the way quickly enough.

We read that, by 2030, the population of London will have grown by another two million. That isn’t that far off. Go back the same space of time and you are in 1998. The Lewinsky affair. The Northern Ireland peace agreement. Sixteen years is not a long time.

So in 16 years, for every four people now on the streets of London, there will be five. It is almost impossible, passing through one of the city’s busiest transport terminuses at rush hour, to imagine what it will look like. Where will they all live? Will we even be able to walk down the street?

Behavioural sink.