Declining Britain: Again!

On a BBC News programme yesterday, I heard the UK defined as 'the world's sixth-largest economy'.  I had been used to us being described as the fifth-largest, and had not seen any report of a new league table that relegated us; but that did not surprise me: I can't monitor everything, and we have become adept at burying bad news [as an unscrupulous civil servant suggested on 9/11].

It is no surprise to recognise that we will sometime be reduced to seventh, tenth and even  - ultimately - twentieth unless policy is radically changed. As the superb Anthony Hilton pointed out in last night's Evening Standard, Mrs May's speech on Monday to the CBI Conference took her [and her government] no further forward on important issues; The 'industrial strategy' is yet to be be unveiled: but it is expected to be much less radical than had been expected in the first year of the May regime. There is no indication of the potential shape of a Transitional Agreement with the European Union after March 2019; to the obvious consternation of managers of large and small businesses in all sectors of the economy. The headbanging advocates of Britain being set adrift to sink - alone, alongside only Ecuador - in the cold waters of the WTO Rules, remain powerful in the government - to the extent that the Brexiteers are demanding that Priti Patel [who includes hard opposition to EU membership, or even close co-operation within the European Economic Area, to the stupidities that made her departure from government inevitable] must be replaced by someone with similar views.

Hilton points out that even the triumphant new-technology companies that now dominate the US stock market - Microsoft, Google, Apple etc - benefit from hugely from research that was done in state-funded laboratories decades ago. This observation does not belittle the originality and drive of those who have carried these concept into intellectual property which can then be marketed to millions of enthusiastic customers: they have - and deserve - their billions of dollars. But it does lead to the painful admission that the UK has no comparable corporation under British ownership; even though the country continues to be hugely generative of both deep concepts and and innovative applications of the highest thought. I have rabbited-on endlessly about the small British firms that have been created to implement such ideas, that have been unable to accumulate the finances necessary to support their voracious needs as they pass through the stages of implementation to the ability to deliver a final product to the market, and thus succumb to foreign ownership. In a few conspicuous cases, opportunist buyers have agreed - for the time being - to keep the company HQ and laboratories in the UK, but they can renege on that at any time; and the intellectual property - the all-important ik - is free for them to exploit anywhere, anytime.

A serious Industrial Strategy would provide finance for such emergent companies - or divisions of existing companies - in sufficient quantity and on sufficiently loose terms to allow developments to reach the global market in good time: recognising that not all the guesses can be correct. There will be losers as well as winners [though history shows that losers often have attributes that can be developed in different directions and circumstances to become successful themselves]. Even the sixth-richest country must be able to afford the few billions that would be involved [which the government could borrow on extremely favourable terms, against all historical comparisons].

The UK is also being criticised, deservedly, for its constant reductions in the size, efficiency and capability of the armed forces. One of the regular themes of this blog has been the symbiosis - over many centuries - of money spent on research for defensive weaponry and dividends later gained from the civil exploitation of those technologies, This is precisely the time when the country should be searching for new, super-effective weapons systems, communications and defence capabilities: in which the UK has led for almost a millennium.

Behind all these thoughts lies the need for investment - especially by the state, in combination with people with ideas - to bring new concepts, new materials and new processes into being. They can only be objectified by manufacturing, and it is through innovation in manufacturing that the productivity of the economy can be increased. Factories that produce highly-desired output [regardless of whether the buyer is the armed forces or the mass market] can make significant profits because the customers are prepared to support the exclusivity of the producer firm's ik, part of the profit can be reinvested in new concepts and processes, thus the productiveness of the firm is increased, which means that the average output per employee - the productivity - of the enterprise can be raised and the economy can grow substantially.

This virtuous circle cannot be achieved without individual entrepreneurship [both inside and outside companies] and the active, continuous support of the government. The cretinous Economics that has stressed free-enterprise and free markets with minimum state input has fostered the disastrous decline into which the British economy has been locked for more than a generation.

I will carry on blogging as a small voice for reason.

Fire, Tragedy and Prevention

The national news media have overplayed the awful tragedy that happened this week in Kensington. Both the BBC and ITV News have overconcentrated on this item, at the national level; and consequently even the catastrophic failure of the Prime Minister to cope with the election result from the previous week has been grossly under-reported. I am not advocating that that fire and its consequences should be ignored or trivialised; but [as a Lancastrian] I am sure that if the fire had happened in Glasgow or Liverpool it would have taken up less of the national news: though the local media would have performed the wonderful community service that has been available in London.

The greatest honour in my life is that I have twice been able to serve as Master of the Worshipful Company of Firefighters, and I have also been a Trustee of the Firefighters Memorial at the south side of St Paul's cathedral for a quarter of a century. Thus I have had the privilege of knowing many firefighting professionals, as well as my fellow-insurers and others who have an interest in fire prevention, fire protection and mitigating the consequences of fire. The response of the London Fire Brigade to the Kensington disaster was absolutely exemplary.

It is far too early to make any definite statement on the reasons why the fire spread so rapidly through the Grenfell Tower: but it was obvious that it spread outside the main structure, as well as within the building. People living in such blocks all over the country urgently need reassurance; and reference to the history and traditions of the fire service and the insurance industry can help a lot here.

Coincidentally, yesterday's piece by the Master of Economic Commentators, Anthony Hilton of the Evening Standard, dealt with a paper from the  recent conference of the Association of Risk and Insurance Managers in Industry and Commerce in which the authors argue that the insurance companies are missing the key fact of the modern economy. This is that around 80% of the recognisable risks that face modern firms are not the traditionally insurable risks of fire, flood and other sources of material damage. He is right to draw attention to that area, and I will refer to it soon: but today I just want to say a very little about the fire tragedy, which is [or should be] absolutely centrally in the insured tradition.

There is a massive history of factory fires in Britain, which have tended especially to occur in times of recession. Hence the early insurance companies insisted on making their own inspections of premises before they would insure them: and making regular sport-check inspections thereafter. The two essential aspects that the inspectors looked for were that the type of structure was entirely suitable for the activities that were to take place within it, and that fire precautions - specifically including sprinklers - were installed and functional.

Whether or not they were traditionally insured, the high-rise blocks of the post-war years had rigorous fire protection measures. The flats within the buildings were each constructed to contain a fire for at least half an hour, before it could spread to other units [known as 'compartmentalisation'] and the external structure had to be absolutely free of flammable materials. it was also imperative that fire escapes were equally free of flammable components.

It was tragically obvious that the cladding of the Grenfell Tower did flare up spectacularly; and that there were no sprinklers in the building.

Regardless of the aesthetic impact, all potentially-flammable materials should be removed from the exterior of high-rise buildings; and sprinklers should be installed - in the first instance, in circulation areas - immediately. Osbornian austerity is [no doubt] partly responsible for the enhanced fire risk in some buildings; and Osbornian austerity must be abandoned to ensure the funding for the necessary works now.