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.

Insurers, the Fire Service and the Grenfell Tower Tragedy

Not many years ago, the local Fire Brigade would have been needed to certify the arrangements for controlling the risk of fire in the Grenfell Tower, Kensington; as they were for all such buildings. Since the millennium, governments of all parties have slackened the regulations and the Fire Brigade has no statutory role in fire protection. Whether or not the London Fire Brigade was aware of the innate vice in the sort of cladding that was recently applied to the Tower is a moot point, because the brigade was no required to verify the suitability of the material.

The local authority [as the ultimate owner of the structure] and the management company did what was minimally necessary to comply with safety law: which was thereby shown to be grossly inadequate.

In parallel with the slackening of standards for fire certification of structures, so insurers made economies [thus keeping down the cost of policies] by becoming much less interventionist in regard to the structures they insured. Half a century ago, an early stage in the career of any promising recruit to the insurance industry included a period - usually a few years - serving as an Inspector. By sending inspectors to make announced and unannounced checks on the buildings and the processes that they insured, the insurer could be reasonably satisfied that the conditions applied to the policy were being met. Thus the subject of the insurance was compliant with the law on structural soundness, health and safety and any special regulations relating to what the building or the machinery was used for. More recently insurers have shunted the burden of verification to the insured, who simply "warrants" that the conditions of the policy, including legal requirements, are fully met.

 If, in such circumstances, a George Osborne heavily influenced by the Econocrats come into power, the fire brigade and the insurer have no direct influence in the operational decisions taken by the occupant of a building [such as a housing management company].

On a national scale, admonished and applauded by the Econocracy, young George pursued his historic mission to eradicate the deficit on the national accounts: by imposing austerity. The only other way to remove a deficit of the size of the British budget deficit in 2010 would have been by a massive scheme of investment to kick-start economic growth: which was ideological anathema to the Econocracy. The coalition government in which George was loosed upon the economy deliberately decided on the austerity policy, as a whole government of Conservative and Liberal Democrats. Thus they were - entirely unintentionally - responsible for the impact of austerity on the Grenfell Tower. Combine that with the previous Labour government's decision to reduce the cost of the fire service by removing their role in building certification, and a diabolical cocktail of governmental failure was served up to the residents of Grenfell and [apparently] dozens of other towers.

Little local people all went along with the flow, and some may be faced by charges of personal liability; but the real chain of high command that was responsible for the tragedy is unambiguously clear.