Monday, 10 February 2014

Are the UK floods Cameron’s Katrina?



There are three reasons why the government should be very worried about the political fallout from the unprecedented level of UK flooding.

1) When they came into office, they cut back substantially on funding flood prevention, when there was a clear need to increase spending. That is a simple fact, which no amount of playing with averages can avoid. The Guardian reported in June 2012 that “300 flood defence schemes across England have been left unbuilt due to government budget cuts.” (HT teekblog)

2) The reason why there was a need to increase spending on flood prevention was climate change. This was well understood by the relevant government agencies and departments, so it is no surprise that the Met Office should confirm the link. Yet the government is vulnerable on this because so many of its MPs are active or closet climate sceptics, including the minister in charge of the relevant department.

3) The government’s philosophy towards the public sector is to roll back or privatise. No doubt there are some areas where this makes sense, but in others it is undoubtedly causing distress and hardship. Yet those affected typically have little political voice, and so are not too visible. In addition, many in the government have encouraged the idea that recipients of the welfare state are either undeserving, or victims of a dependency culture. In contrast, flood victims are very visible, and a strategy of blaming the victims will not work politically.

So far the government’s attempts to avoid criticism have been remarkably successful. The strategy was clear - target the environment agency. Not those working on the ground, who were obviously working their socks off, but senior management at the agency, and in particular its chairman Chris Smith. The story was that the agency had been giving the government the wrong advice.

That strategy has been remarkably successful largely because the BBC has played along exactly as planned. At first it appeared, as Simon Jenkins says, to allow “the Somerset branch of the NFU to write its newscasts.” When it comes to the cuts, it is either ‘views on shape of the earth differ’ stuff, or just not talked about. Driving home today I listened to Radio 4’s 5pm news program which led with 20 minutes on the political ramifications of the floods, and the government’s spending cuts were not mentioned once! However as the rain keeps coming and the floods spread, that diversionary strategy will lose its power as the facts become more widely known. The Financial Times reports today that “The Environment Agency has had to endure “massive” cuts to its budget since the Cameron government came to power despite warning this would affect its ability to defend the country against flooding, the agency’s chairman said on Monday.” A month ago the Daily Telegraph reported “Officials working on flood risk management will be sacked as Environment Agency sheds about 15 per cent of its workforce to save money, potentially placing ability to cope with floods at risk”. Cuts on this scale are difficult to pass off as ‘efficiency savings’ when villages and regions are isolated by the floods.

As Alex Andreou notes, preventing flood damage and responding to emergencies “requires a well co-ordinated, firm, top-down response, and the spending of tax revenue to alleviate misery, on the strict basis of need rather than worthiness. At the same time, every ideological fibre in a neoliberal's soul must rebel.” Yet, as Rick points out, much of the danger from flooding comes from overwhelmed drains and sewers, and these are the responsibility of private water companies. These monopolies have received their fair share of criticism for not doing enough as they continue to make large profits.


Cuts in flood prevention are a small part of austerity, but there are close parallels with the macroeconomic case. Just as ministers might have hoped that benign weather would not reveal the folly of cutting back on flood prevention, they also hoped that the economic recovery that began in 2010 would continue, and not be derailed by events like the Euro crisis. In both cases they were not lucky. Just as some in government never believed in all this climate change stuff, others thought that this Keynesian idea that austerity might be a bad idea at the zero lower bound was fanciful. (Some, like George Osborne, appear to have thought both.) When these mistakes became evident it was, with the floods, the Environment Agency’s fault, and also the last government, while with the recession it was all down to those Goddamn Europeans, and of course the last government. Yet whereas the links between austerity and prolonged recessions may appear mysterious to many, the links between lack of flood prevention and flooding are all too obvious. And the real danger for the government is that perhaps others may begin to see these parallels.

25 comments:

  1. Well said, Sir, well said!

    By the way, if the Euro crisis was to blame for the UK's lack of growth, how come it didn't affect Germany the same way? I fear you may also be believing the Government rhetoric on this subject...

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  2. Well the Germans have a plunging Euro to cushion their oversized export sector. Perhaps when global lack of demand kills their export sector, or the Euro collapses and kills their banks, they will not be doing so well.

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  3. In any event I am pretty sure the point is that the government blaming the Eurozone crisis is an incorrect excuse aka lie.

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  4. When newspaper columnists have columns published under really stupid sensationalist headlines that a moment's reflection should tell you is ridiculous, their excuse is that they do not write them, a sub does,

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  5. If I remember rightly, the Coalition's austerity programme was begun in 2010 in the anticipation that if they cut first before other European countries they would reap some form of benefits in better growth: they did not anticipate other Euro countries cutting (let alone liquidity trap economics).

    Then Osborne switched to Plan B, which was to cut back on the cuts until after 2015 general election.

    Setting up quangos to take difficult decisions on the government's behalf and then blaming them for problems that occur nominally under their auspices has never worked politically: the government of the day always gets the blame in the end.

    It seems the issue of welfare spending on flood prevention could be important.

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  6. I believe the EU and Environment Agency need to be challenged on this. http://hat4uk.wordpress.com/

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  7. A very interesting and insightful perspective. Thank you.

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  8. Maybe people don't talk about the cuts because they can't see them in the accounts?

    http://a0768b4a8a31e106d8b0-50dc802554eb38a24458b98ff72d550b.r19.cf3.rackcdn.com/LIT_8472_6b598a.pdf

    2010/11 was down, but otherwise it's been business as usual, and expected to go up over the next couple of years.

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  9. I feel a bit dirty saying it, but it has to be said. It's ironic to see the well-off in Surrey complaining about the inevitable impact of the move towards the small government that they've been voting for.

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  10. I voted DC in, but you are spot on. Climate scientists have predicted climate change induced increased precipitation due to ocean evaporation for years. The fact this disaster has affected the very 'home counties' people who voted for him will be very good in swinging climate sceptics around. I'm hoping an oil exec's home has been flooded, without loss of life of course. A bit like the Dick Cheney character at the end of The Day After Tomorrow film who admits (after the fact) that he/they got it wrong.

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  11. Flooding is a consequence of rain. We've had a lot of it. More than any winter in living memory. In fact this is probably a 1 in 150 year event. What could have been done to prevent damage from this flood? Levees all along the Thames? Great concrete barriers all around Datchet? No, the truth is it's not just about money - it's about an interlocking set of sacrifices that we're simply not willing to make to defend ourselves against a 1 in 150 year event.

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    1. But global warming is causing such events to be happen more frequently.

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  12. «many in the government have encouraged the idea that recipients of the welfare state are either undeserving, or victims of a dependency culture. In contrast, flood victims are very visible, and a strategy of blaming the victims will not work politically.»

    Something that affects the South East middle classes, the ladies (and sometimes lords) of the mini-manors, and their all-important house valuations as collateral, and especially around the time the UKIP is set to split the tory vote, is far, far more important than keeping unemployed or disabled people, especially Notherners, in the luxury (cadillacs, t-bone steaks, --- sorry wrong country -- huge mansions with many empty bedrooms, handouts much larger than average family wages, ...) to which
    they feel entitled.

    Besides the fall in collateral valuations consequent to the floods in some of the most high-valuation areas of the country may substantially further impair the fiction that UK banks are no longer bankrupt.

    «ironic to see the well-off in Surrey complaining about the inevitable impact of the move towards the small government that they've been voting for»

    But conservatives/reactionaries never really mean it when they say "small government". That is code for "less redistribution from productive high income makers to parasitic low income takers", because they think that in the current era the main role of government is to redistribute downwards.

    If the government were to adopt a progressive redistribution policy, from exploitative lazy workers to value-adding property rentiers, then they would be delighted to see a bigger government, as GWBush achieved in the USA, by spending more on property and business friendly parts of the budget, from security to lower taxes.

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  13. «Flooding is a consequence of rain. We've had a lot of it.»

    Exactly like fire is a consequence of heat! :-)

    «More than any winter in living memory. In fact this is probably a 1 in 150 year event.»

    Exactly like financial companies needing a massive bailout! :-)

    Isn't it amazing that 1-in-150 years events happen with regularity every 10-20 years? We must be really unlucky! :-)

    And even if they were 1-in-150 year events, what do you think flood defenses are for? To protect against normal water levels or against 1-in-150 year events?

    Consider flood prone areas like the Netherlands and the Po Valley; they have immense earthworks built over the centuries precisely to avoid the consequences of 150-year events. But they are areas where happy-go-lucky speculation causes enough horror that even idiots would rather err on better-safer-than-sorry.

    But what is difference between the floods we seen in the South East and the Netherlands or the Po Valley? It is that in the latter there is no alternative to building in flood plains: the whole place is a flood plain.

    In the South East instead clever speculators buy land in flood areas because it is cheaper than in dry areas, build on that and sell to either stupid or hypocritical aspiring ladies (and sometimes lords) of the mini-manor, who are driven by the certainty of massive tax-free profits, and when the floods happen as since time immemorial every 10-20 years they pretend utter astonishment and demand massive handouts from the government because being deserving, highly productive property speculators they are entitled to them.

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  14. «many in the government have encouraged the idea that recipients of the welfare state are either undeserving, or victims of a dependency culture.»

    I guess that this was not meant to be ironic, but it is: because by far the biggest recipients of the welfare state have been the financial services industry who got apocalyptic (and there is a good chance that this will prove nearly literal) supplies of free or nearly free funds, and their endorsers, the petty property speculators who have expected and received tax-free capital gains of £12,000/year over a small terrace house, and low low low interest rates to cash them in with remortgages.

    And it is easy to see the financial services industry as being quite undeserving as they destroy capital over the cycle, and the petty rentiers as utterly depends on the handouts they receive, because without those remortgages as per my previous quotes GDP growth would not have happened for 25 years. But surely not victims...

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  15. «Just as ministers might have hoped that benign weather would not reveal the folly of cutting back on flood prevention,»

    Our blog author does not mention this because of brevity, but this is such a *well established strategy* in the financial sector that it has even got its own nicknames: "capital decimation partners" or "pucking up nickels in front of a steamroller".

    It is an illustration of what I call Blissex's second principle of business: that every non-trivial fraud is a variant of under-depreciation (and almost always viceversa). Same for Right-To-Buy, or for buying cheap floodplain land for property speculation, for example.

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  16. Great stuff, but it's shameful that the media has mostly ignored this, entirely blamed Lord Smith (does anybody even know the CEO's name?) and it's left to economics blog to do the job and report this stuff.

    Why does nobody want to cover this? Hopefully they are just saving it for another day. At the minute all newscasters seem to be a bit giddy in their wellies, enjoying their time in the countryside like children on a school trip.

    As soon as Cameron said today in his press conference that "money is no object" when it comes to repairing the damage the media should have been asking hard questions about funding at the EA and the austerity strategy. They all seem fixated on whether Lord Smith will be sacked or if Patterson and Pickles have fallen out. Utterly tedious Westminster gossip.

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  17. «Why does nobody want to cover this?»

    Because they would offending their readers by pointing out that they speculated on property in floodplains, and then voting for cutting public investment! Surely not a good strategy to keep those readers as customers. The main marketing strategy of the media is pandering.

    Their customers would rather be told that they are innocent deserving victims of bad luck and the incompetence of one bad apple.

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    1. Because the private media is owned by and/or depend on ad revenue from the very rich.

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  18. «Flooding is a consequence of rain. We've had a lot of it.»
    «In the South East instead clever speculators buy land in flood areas because it is cheaper than in dry areas,»

    To point out the obvious: in the photograph at the top of this blog post it is stunningly obvious that there are indeed plenty of high, dry areas nearby.
    But let's blame the rain... :-)

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  19. "But conservatives/reactionaries never really mean it when they say "small government"."

    Oh, entirely. It's well documented that opposition to "benefits" is actually opposition to "benefits that I don't benefit from", with a wilful blindness to the middle class benefits that they are getting, for example pension tax relief.

    In the same manner, you get more obvious cherry-picking from the right, who profess a belief in small government, but they're always in favour of large government when it comes to protecting their property rights, etc.

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  20. "2010/11 was down, but otherwise it's been business as usual, and expected to go up over the next couple of years."

    Yes indeed. But one quite unnecessary year of cuts (approx. £100m) is quite bad enough.

    Though of course it can't be blamed for much of the damage.

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  21. And today the BBC Today have an old Thatcherite Lord Lawson climate change denial man along side a climate scientist: no Green politician who is not a London based Neo-Liberal , no younger person, no debate say between a West country LibDeM or a Labour person about what their plans are for the UK's future spending on holding back the rapid changes to our climate ( indeed experts are saying its arrived quicker than thought.

    Could you imagine Denmark, Sweden, Holland, France or Germany inviting onto their flagship news programme an old Right Wing politician from the 1980s; this is not an ageist rant its the BBC's elitism and deference to the old powerful clique who exercise so much London based influence. The idea of a Green person in the studio common in Europe but so, so unlikely in the BBC. Channel 4 news reflects the UK BBC reflects- well we know.

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  22. Peter Oborne in the Telegraph.
    "Yes, the floods are awful, but we must keep a sense of proportion".
    {http://www.telegraph.co.uk/topics/weather/10633669/Yes-the-floods-are-awful-but-we-must-keep-a-sense-of-proportion.html}

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  23. Good to see that this is getting some airtime e.g. this morning's headline in Guardian placing the blame squarely on ideological austerity

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