Sprinklers: A Key Indicator of Economic and Social Wellbeing

I have rabbited on about sprinklers in buildings on several occasions in the past, most notably in the context of the Grenfell Tower disaster in Kensington. I do it today in the context of another issue that has surfaced in the media in the past 24 hours: namely the fact - as officially recorded - that fewer new schools are built with sprinkler systems than in past decades.

Sprinklers are devices to produce a heavy shower of water inside a building that is on fire, and if they are properly installed to a good design [and an appropriate specification of devices used] they massively reduce the risk of destruction of the contents of the building and of death and serious damage to people and animals. There are advanced techniques for drying-out water-damaged assets.

The aspect of the prevalent free-markets dogma that is most directly damaging to human beings is the reduction and removal of controls that prevent dangerous structures and situations from being permitted. There was an almost-golden age of safety in factories and public buildings, when the local fire brigade had the power to insist that safety systems like supplementary escape staircases and sprinkler systems had to be installed in a building before it was granted a 'fire certificate' that permitted a range of uses of the premises. Buildings with fire certificates were usually acceptable to be insured - with their contents, including liabilities to people and to other entities than the owner or operator of the building - but nevertheless the insurance companies employed their own Inspectors who could enter the premises and check that safety systems, including sprinklers, were appropriate and properly maintained and fully functional. That last sentence is important, because it is possible to have a well-designed system that is regularly inspected but which can be switched off [or the water turned off] by human oversight or negligence: or as part of the preparations for a fraudulent insurance claim for loss of goods kept in the building which were burned in a fire where the sprinklers 'failed to operate'.

The free marketeers have been dominant in the United Kingdom since the Labour government submitted to the International Monetary Fund [IMF] in 1976: in return for being allowed a loan which was intended to 'stabilise' the external value of the pound sterling during a period of extremely high inflation and 'industrial strife', the Callaghan government accepted [very reluctantly] the free-market dogma that the Thatcher regime was to embrace after their election victory in 1979. On that reckoning, the free markets dogmatists - the Econocracy - have dominated society and the economy for forty-one years [though I have pointed out several times that 364 then-practicing Economists signed a letter to the Times in 1982 rejecting the dogma that was to gain hegemony by 2002].

The period since the autumn of 1976 is exactly the period of Britain's absolute decline as a manufacturing country. We have wantonly destroyed coal mining, most steelmaking, large-scale commercial shipbuilding, our separate aircraft industry, the mass production of textiles and most of the armaments industry [including even the capacity to supply uniforms for a mass military]. The economy has grown because new industries have arisen in high technology such as pharmaceuticals and microprocessors, and in the games and the entertainments industries; due to the brilliance of British inventors, some of them in the university system. The balance of payments deficit has been mitigated by sales of much of the new intellectual property to aliens.

At least equally important for the growth of the economy has been the expansion of government and personal debt. Some of the government's debt has been hidden from the official balance sheet, for example in the PFI schemes by which schools and hospitals have been built and funded by businesses on the understanding that the government [or agencies including the NHS and local authorities and their semi-independent social housing departments] will pay for the use of those buildings when complete. Those charges will for decades to come be paid out of the users' annual budgets; and the debt that would otherwise be required to build them is not listed in the public accounts.

In order to pare bits of expenditure off the public accounts, both from the admitted debt for construction and from the the running costs of premises, devices like sprinklers have been made optional. Building operators - including providers of social housing and free schools and the trusts that manage [and profit from] 'academies' - are exempted from costly requirements such as installing and maintaining sprinklers. Thus the 'economic burden' of building and operating the facilities is reduced: and so is the safety and utility of the premises.

The extreme shabbiness of this policy has rightly been attacked by the Commissioner of the London Fire Brigade, Dany Cotton. Human lives - even those of children is school and in care - are at unnecessary risk: due to the implementation of policies directly derived from Econocratic dogma. Thus has Economics become directly and fundamentally inhumane.

People and Political Economy Versus Econocracy

Yesterday a Times leader-writer who frequently writes an Economics column for the paper recognised the Manchester action group that created the Post-Crash Economics Society, and the related movement that has spread around the world [as frequently mentioned in this blog]. He noted that a very few university teachers have cobbled-together courses that give an introduction to the different approaches to the subject that have been taken over the last couple of centuries; and that the vast majority of the established teaching cohort - the Econocracy - have adhered rigidly to the pseudo-mathematical formularies that are their only stock-in-trade. That stock is being demonstrated to be putrid. I was a university teacher, specialising in the History of Economics, for a couple of decades until 1988. During that time I assiduously researched the question of how Economics was taking an increasingly perverse approach to the world; and meanwhile my colleagues selected me to be Dean of the Faculty and eventually Pro-Vice-Chancellor, which I like to think indicates that I was taken seriously as a person.

By 1988 it was clear that common sense and Economics were becoming implacably opposed. The Thatcherites were busily destroying industry, blinded by the mantras of open competition and monetarism that undermined the traditional support from the state budget for the economy [which was repaid as economic growth produced the tax revenue that increased the state's capacity to spend on infrastructure developments, research and product development, and popular welfare]. So I bailed out of academic life, into one of the great support organisations that underpin the skills on which the City of London depends for its unique depth of resources which constantly renew its role as the world's leading financial centre. I have continued to watch the consolidation of Thatcherism into 'austerity', which in turn gives the government the ludicrous notion that state spending [on almost anything] is a 'bad thing'.

There are, of course, the glaring exceptions: of which the most conspicuous are HS2 and Hinckley Point, where the state is in for tens of billions of pounds of useless and unwanted spending. Otherwise, spending by the state is a bad thing: especially on peoples' welfare.

Today's News on the BBC is headed by the facts disclosed in a report on tower blocks that has become critical in the light of the Grenfell Tower tragedy. Sixty-eight per cent of the tower blocks in the UK have only one staircase, almost 40 per cent have some form of cladding [of which a yet-to-be determined proportion are flammable], and only two per cent have sprinkler systems. Sprinklers have been proven as a valid means of quenching fires, and thus preventing their spread, for centuries. When Britain had extensive factories and warehouses, the insurance companies employed inspectors who had the right of entry to premises to check that the sprinklers were installed and operational: if they were not, the insurance was immediately cancelled. Factory Inspectors also had to duty to check on the effectiveness of spinkler systems, and could close units that were non-compliant; and in most local authority areas buildings were only licensed for use if certified as compliant with local specifications by the Fire Brigade. The present shoddy government have made it as clear as they clarify anything - which is not very far - that they will expect local authorities to use their own resources, to the extent of using up all their reserves to begin to introduce measures to address the fire hazard in the blocks that they control.

The Econocracy supports the government line: state spending, bad. Occupiers should pay competitive prices for their flats; and if they want safety measures built in they must pay more for that assurance. If their earnings or benefits or pensions will not cover the higher rents, they must move their homes; or get better jobs. For myriad reasons, such as access to schools and hospitals, proximity to relatives who need or provide care, lack of skills or lack of drive, millions of people cannot get better jobs or pay higher rents. The Econocracy has no patience with such people: they clog up the system and prevent the 'model' from functioning as they think it should, in all its clockwork simplicity. 

We need a new Political Economy, that takes account of people as they are, and has their development and the welfare as its highest goals. The housing situation - with hundreds of thousands of households outside the tower blocks effectively homeless - is a perfect example of the Econocrats' model economy not working: because it is utterly out of kilter with the realities of human existence.

British Bananas

The media have made fewer references to 'banana republics' in recent years than they used to do, and I wonder whether this is because Britain itself is taking on more of the character of such a state as the imperial past fades from memory.

Popular reaction to Mrs May since the fire in Kensington justly reflects the anger and incomprehension that her deadpan, delayed response to the incident has stimulated. It is notable that the 'victims' of the incident are almost all immigrants: I have just seen reports of two white British occupants of the Grenfell Tower, both elderly people of the sort who are left behind when the rest of the originally-indigenous population remove themselves as a block or a district becomes a focus for migrant settlement. To put it simply [albeit crudely] less-potent, mostly alien people were dumped in that building; and treated accordingly. The building was cladded to improve its appearance in proximity to multi-million-pound properties; but at the risk that was summarised in this blog yesterday. Mrs May is learning - all-too-slowly - that a sop of £5 million is received as an insult.

It is tragic that the mostly-immigrant people who have lost everything in the fire simply do not understand - and now they will not accept - that it takes many months to identify charred fragments of bones as people rather than dogs or cats, and then to attempt DNA analysis of the human remains. Of course, most of the dead who are yet to be found will be identified within a few weeks, from their location in the building and because their bodies will have been less completely consumed in the flames that the extreme cases mentioned in the previous sentence. In the vacuum, a head of steam is being stimulated: by genuine grief and anger, and by agitators who are gathering from the whole of the home counties. The government is so gloriously inept in its responses, in the face of glib repetition of carefully adapted Marxist slogans by Messers McDonnell and Corbyn, that control of the situation is moving away from them.

At the very least, there needs to be an immediate national programme to remove all flammable panels from tall buildings, which will leave a massive mess of ugly exteriors which will need to be patched to make them temporarily weatherproof. Simultaneously, sprinklers must be installed; at first in circulation areas: and the doors of supposedly-compartmentalised flats need to be validated as fire resistant, or replaced. Such a programme needs to be effected in a very tight time frame: not more than two years; after which the residual eyesores will have to be refurbished properly and safely. That will be a ten-year programme, and its cost will necessarily override Osbornian austerity. Thus it will make necessary a massive release of funding, both by the government and within the private sector, to drive forward the real economic growth that is required to make such schemes affordable from future national income. The many dozens of references in this blog to the need for productiveness to enhance productivity show the only way towards achieving this.

Hundreds of thousands of people have been put at increased risk as a consequence of cheapened cosmetic processes undertaken by cash-strapped local authorities and spun-off housing management companies who have been constrained by capped council tax revenues and diminished government grants. The whole direction of policy since the fake 'prosperity' promoted b the Thatcher regime must be reversed: though not down the dark alley to which Corbyn and McDonnell are pointing us.

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.