Category: Uncategorized

A clear statement about migration

I wrote this for Politico Europe, but they weren’t interested after much editing about. Apparently there were too many charts.

A clear statement about migration, says Theresa May of the vote for Brexit. The last thing you’ll find in the data is clarity. Or migration.

There has been a wealth of efforts to understand Brexit through data. But the most telling statistic in most of them is the R^2 value, the measure of how well a regression line fits the data. The higher the R^2, the more of the spread in your data you’ve managed to explain. Famously, although there is a faint correlation between some measures of migration and the vote, the R^2 value is pathetic – the data set is nothing but outliers.

It gets worse. Some analysts tried to save migration as an explanation by looking at the change in foreign-born population, rather than its level. This chart from The Economist is the classic statement. Perhaps the voters were shocked and bewildered by the speed of change, rather than its content, or something like that. Or maybe it’s a soft racist argument like Jacques Chirac’s Le bruit et l’odeur speech.


The problem is, again, the R^2 – without a very few extreme outliers, mostly very conservative small towns in the Fens with significant numbers of migrant farm workers, there wouldn’t be any effect at all, as Jo Mitchell points out here. You’ll notice they didn’t quote an R^2.

It gets still worse, though. Those outliers are dramatic, but they disappear when we control for the size of their population (from here). Small populations exaggerate all percentage changes; they show extremely high rates of immigration precisely because they have so few immigrants, and even if they voted Leave by a big margin, they had little impact on the contest because they have so few voters. We can deal with this by plotting votes rather than percentages – I’ve plotted the net Leave lead, i.e. Leave minus Remain, giving us each local authority’s contribution to the overall result.


As you can see, the Fenland outliers have vanished and so has the correlation. It makes sense; nobody ever won a general election in South Holland and the Deepings, a constituency that has been Conservative since 1922. Instead, a clutch of populous, Leave-leaning but contested, urban but not metropolitan districts emerge as the key battlegrounds. Dudley, for example, contributed 61,666 net Leave votes.

Let’s try something else. One argument – classically put by Daniel Davies in Vox – is that the problem is migration, but it’s internal migration. Post-industrial northern towns and the run-down seaside are emptying out as the young seek opportunity in the big city. It’s an elegant argument, with all the more emotional force because both Dan and I did just that ourselves. Unfortunately, the data doesn’t stand it up.


In fact, it’s the other way round, the correlation is quite strong, and the R^2 is at least less bad. This seems baffling; London is actually more populous now than it’s ever been, and deeply Remainy. Also, Cornwall is hardly the land of opportunity. The explanation may be age structure – young people flock into the big cities, retirees go the other way – but we’re already trying to save our hypothesis by fitting stories to an unconvincing data set. It needs a lot of nuance.

What about total population growth? Sorry, but that’s even less helpful.


We could try some other approach. The Right is convinced it’s all about immigration. The Left is convinced it was a massive protest vote about austerity. This is hard to test because there is no official data on total government spending by locality. Without it, we’d have to build our own private hell of cost-allocation problems. The Centre for Cities managed to create a snapshot for 2013-2014, but austerity is all about change in the fiscal stance. Also, a Keynesian would object that the allocation of the government deficit is what counts, so we’d need tax revenue data as well. And, anyway, it doesn’t tell us much.


There is, however, data for spending by local governments. A large fraction of the UK austerity programme consists of cuts to the Department for Communities and Local Government’s financing to town councils, so this ought to be a useful proxy for total spending.

We don’t find much correlation with the level of spending. But we do with the change from 2012-2016. Austerity, defined as the reduction in local government spending power, predicts about 20% of the variation in the net vote for Leave.


Another variable that does seem to have some predictive power is pay. The short-term change in median gross weekly earnings doesn’t seem to matter, but their level does, quite strongly. In fact, it’s better than austerity as a predictor; it’s the best one I found, with R^2 of 0.23. I ran the same analysis, using the Annual Survey of Hours and Earnings data set, for the 25th, 75th, and 90th percentiles of earners, but I didn’t find anything interesting.


So, it looks like the immigration story is a bust. The internal migration one might be saved with a lot more nuance, and you know what they say about nuance? And a pretty direct leftwing story about austerity and poverty seems to work better than anything else. Until you actually look at poverty itself. The standard measure of poverty in Britain is the government’s Index of Multiple Deprivation, which sums up a gaggle of social evils as a handy score.

This is interesting because the IMD tells us what happened after the welfare state did its thing – it’s a measure of poverty and inequality after redistribution, while the ASHE is a measure of income as determined by the market, before taxes and transfer payments. And the IMD doesn’t seem to show any correlation at all.


Now this is interesting. A major economic and political orthodoxy throughout the world since the late 1980s has been that economic change, however jarring, is basically healthy because the winners can compensate the losers through the tax and transfer system. This doctrine was the source of legitimacy for the whole free-trade agenda – NAFTA in the States, Single Market completion and the Eurozone in Europe. And now it’s breaking down. Transfers don’t buy legitimacy, and maybe they never did.

For the UK, there’s an important and difficult problem here. The UK doesn’t do regional policy well, but redistribution of income between regions does happen to a very significant extent. Leaving aside the rows about the Barnett formula and Scottish oil, let’s just remember that 30% of all taxes paid in the UK are paid by Londoners, who make up 13% of the population. How much more are you going to ask them for?

Part of the problem is that redistribution must be done, but it must also be seen to be done, like justice. The UK, very unusually among federations, doesn’t really have an explicit political process to determine how government spending is divvied up. There’s no equivalent of a Länderfinanzausgleich. Therefore, it’s hardly surprising nobody thinks they have any control over it.

This also suggests another way economic unions fail. It’s a commonplace that the Eurozone is troubled because it lacks both a big discretionary budget and full labour mobility, unlike the United States or Germany. Therefore, bits of it can end up with an inappropriate real exchange rate and high unemployment for an indefinite period of time. But the UK doesn’t have any language barriers, and it does have a big federal budget. You could say the same for the US. However, bits of it still seem to end up stuck in a low-income equilibrium for decades.

Perhaps that internal migration hypothesis deserves another look? Perhaps, without explicit and forceful regional policy, some places just empty out? And does that remind anyone of Donald Trump?

A Brexit charts tip

Picking up on a tip from Jo Mitchell’s excellent post here, I replotted the data in the previous post using the Leave lead in votes, rather than percentage terms. This is, of course, appropriate because referendums aren’t counted in terms of parliamentary constituencies. Also, this means that tiny outlier constituencies – looking at you, South Holland and the Deepings – aren’t overrepresented relative to places like, well, Birmingham.

A couple of interesting things result. For a start, the R^2 value doubles to a whole 0.21! I win at data! Secondly, putting the Fenland outliers back in their box tells us something interesting and important, which is that austerity-battered northern and midland cities contributed hundreds of thousands of net Leave votes. Not only was winning in Boston, Lincolnshire probably impossible, it couldn’t possibly have helped in the light of relative failure in the West Midlands. There are lots of people in Birmingham. Labour’s Midlands problem is a thing.

Screenshot from 2016-07-28 22:39:52

Pulling London out of this doesn’t help much. R^2 nudges up by a hair. It further confirms, though, that you should stop obsessing about tiny places that voted weirdly, and worry about big ones that voted kind of normally but for the wrong side.

Screenshot from 2016-07-28 22:52:48

In that way, the Breferendum was far more like a parliamentary election than it seemed. Where it was decided, austerity does actually seem to have mattered quite a bit.

Something cheerful to take your mind off it

I spent Wobbly Weekend 2: The Wobbling, in part, going through the effects of a deceased relative. I guess it was the right weekend for it; it wasn’t going to depress me any more. Anyway, we found this envelope of briefing documents, dated 1963 at the earliest. A reminder, I think, that things could be a lot worse, although God knows how today’s political elite would have coped with the Cold War.

Peggy vs the Bomb

Context is here.

I didn’t know that the WRVS, at the time joined at the hip to the then Civil Defence system, set out to brief three million women, i.e. 20% or the titular one in five of the female population, with the standard Glasstone Effects of Nuclear Weapons spiel and basic advice (some of it not so basic) on protection against flash, blast, fire, and fallout.

But they did, and the strategy they pursued was pretty interesting – startlingly similar to a classic Alinskyite community-organising campaign, getting opinion leaders, serial volunteers, and people respected in the community (and my Auntie Peggy was all three if she was anything) to take the training course and then spread the message horizontally through their social networks. You wonder what the In campaign might have looked like if we’d adopted that strategy.

Also, I rather like the serif typography – very different to Calvert & Kinnear’s Transport/Rail Alphabet work, although the two are contemporaries. Obviously you wouldn’t expect women to go without serifs, not even in the event of nuclear war!

Leave: the biggest 419 e-mail ever

What worries me about the referendum is the trust. Every poll I can think of shows people on the Leave side claiming they trust no-one.

At the same time, Nigel Farage says smoking is just the best for your health and the official Vote Leave campaign issues maps suggesting Iraq and Syria are candidates for accession to the European Union, talks about the finances of the EU without counting the rebate Margaret Thatcher secured, and suggests we all need to be more like Albania.

I can see it – drive my cigarette boat over the Adriatic in a 500 horsepower blitz of seawash, slash some clown who lacked respect and toss his carcass in the harbour, dance like a wild peasant youth with a dark beauty – but I’m not seeing Michael Gove and Iain Duncan Smith keeping up.

There’s a reason why they come out with so much bullshit. There’s also a reason why they come out with so many outright lies. A couple of years back, people at Microsoft’s research lab were trying to work out why spam is so obvious. We’ve all wondered how anyone believes the Nigerian prince and his money are on the other end of the wire, or why anyone bothers trying to sell us drugs that are free on the NHS. The Microsoft researchers realised something important.

Even a leopard needs to sleep. Predators only have so many hours in the day, so they have to pick the prey that gives them the best chance of a feed. Spammers are looking for suckers, but you can’t pick those by looking at their e-mail address. The more time you waste on someone who’ll get wise, the less money you’re making and the more likely you are to get shopped to the police.

What you can do, though, is scare off all the other people. If you make your scam so excessive, so shameless, an outrageous camp striptease of a scam…well, you don’t need to worry about picking your marks any more, because the only people you’re talking to are the ones who weren’t paying attention. All the others have gone. It’s a kind of negative marketing – the point isn’t to get people in, it’s to put them off.

That’s where all this bullshit is coming from. The Leave campaign is the most fully realised exercise in negative marketing yet. The whole point is to show that they’re going to lie flat out to your face. It has to be obvious. They think you’re an idiot, a sucker, a bag of money on legs. You should see it as an insult to your intelligence.

In case you’ve wondered, there’s a reason why every Remain campaign message seems to come from people who define themselves by something they do, from scientists and trade unionists to midwives and skateboarders. We want you to think about what you do best, and act with the generosity of confidence. They want you baffled and scared by what you believe is your own mediocrity. Nothing else could put such a bunch of dullards in charge.

Let’s not be the country where 50% plus 1 vote chooses the Angus Steakhouse option.

Software is not a painting.

Two exhibitions on Saturday: Calder at the Tate and Big Bang Data at Somerset House.

There was something I didn’t like about both. Calder’s curators are apparently convinced that none of the motorised works can be allowed to run in case something terrible happens. Weirdly, they don’t draw the matching conclusion and weld the mobiles solid to stop them moving. But that’s a proper artwork and the other is a mere engineering artefact.

If it was, though, preservation by operation is exactly what would be advised. The National Museum of Computing folk will be more than delighted to fire up a 1940s computer and demonstrate it. People preserve whole, flying De Havilland Mosquitos by operation. Surely we could look after a hobbyist electric motor and some simple belt drives. But instead, a lot of them are hung against a wall as if they were paintings, so you can’t even reason about how they would move if they were allowed to.

Over at Big Bang Data, there’s a related problem. A lot of the projects on view are pretty crap if you can’t interact with them. A lot of the ones you can interact with are broken, or just agonisingly slow. The issue here is that the kind of data visualisation projects they want to treat as artworks just aren’t. They are tools, or games, or journalistic projects. As tools or indeed as games, they are closer to dance than painting; what happens, happens afresh at every performance. In this case, it is the user who interprets the original work. How are you meant to exhibit a tool for deliberative budgeting developed by Podemos’ geek wing without demonstrating it?

This means, however, that it damn well better work. Instead, a lot of them were very clearly taken to the point of a demo and some screenshots, and no further. They ended up, therefore, nailed to a gallery wall, and neither optimised to the point of being acceptable as tools or games, or taken up and used to pursue a story as journalism.

I wonder if there is a question of grant-making here. If the funder pays out when something like a painting is delivered, that’s what they will get, and the artist will already be working on the next pitch a while before the demo is finished or rather “finished”.

Finally, in a show full of teenagers gagging for Snowden, what was the app that drew the most attention and engagement? FixMyStreet, operational for nine years so far, attributed to the late style works of the Master of Cambridge, Chris Lightfoot, and his students Anna Powell Smith and Matthew Somerville. People clustered around it with real enthusiasm.

#ischanging: the KEEP CALM of the future 2010s revival

Has anyone else noticed all the signs of change? Of course, it’s terrible. None of us is getting any younger.

That isn’t quite what I mean, though. I mean signs, signage, graphic design in the public realm. There are a hell of a lot around that say something like X – it could be benefits, refuse collection, Tate Modern – “is changing”. Bam. Full stop, an end stop heavy enough to bury any possible conversation. #ischanging pisses me off. I have the impression they appeared around 2011-2012, and I don’t think this is a coincidence. I think they will be a visual icon of the Cameron years, rather like KEEP CALM AND CARRY ON is for the Second World War.

So, these are signs. What is signified? Nothing much; after all they never say how it is changing, or what about it is changing, or why it is changing, or why I should care, or what I should do?

You could compare the platonic ideal of a public information campaign, the British government’s AIDS ads. That told you that you should be scared, why you should care, that some people were especially endangered but everyone was affected, and what you should do about it. It was complete in itself, fully utilising both the reach and the richness of television.

On the other hand, #ischanging doesn’t tell you why you should care, what is changing, or what you should do about it. It’s just visual noise, getting in the way. In that sense, it’s very close to the terrorist alert levels of the Bush years, or indeed the UK one that’s always on Black Special. You are asked to be vaguely anxious, but you aren’t informed of anything, and there are no actions-on the alert that need doing.


KEEP CALM, of course, was meant to do the opposite; inspire confidence in a context where everyone knew damn well what they should be doing and wouldn’t need telling they needed to care. Interestingly, it was also explicitly a message from the Government, issued nationally in the same format. #ischanging drips out from a thousand councils and quangos, vastly diverse in design, united in the refusal of responsibility.

Why do they do this? Well, there’s such a thing as a performative speech act. The public authorities that put up #ischanging signs usually have a legal duty to inform the public, and sometimes also to consult us. Once they go up, the duty to inform is discharged although no information has actually been communicated. The sign is a placeholder for actual content. This is handy when the changes are so complicated they defy summary, so controversial any actual discussion would get out of hand, or just so damn depressing because if something #ischanging you bet #ischanging for the worse.

And once you’ve had your chance to realise it means you and you’ve got to burrow into some awful pile of PDFs, well, it’s your fault isn’t it? You were informed and it’s your responsibility. Tough.

Paxman is Ziggy Stardust.

This BBC interview between Jeremy Paxman and David Bowie has gone viral, and with good reason. Partly this is because Bowie’s remarks about the Internet were prophetic and funny. But it is also fascinating for what it shows us about Paxman.

It is only too obvious that Paxman knew nothing, literally nothing, of what he was saying. Everything he says is comically wrong, and in the same silly-clever soft reactionary way that betrays he hadn’t thought about it much. At best, he had memorised some talking points – Bowie: reinvention, the Internet: just another delivery mechanism, or tiresome kids spraffing off – at worst he just responded to keywords. In fact, there is a moment in the video where he seems to falter and glances downwards, as if he was referring to a crib sheet. He has nothing constructive to offer, and nothing destructive that wasn’t glib cliché even in 2000.

Of course, this doesn’t mean for a moment that he is going to drop the Manningham-Buller Bullying-Manner act. What this shows us is that the Paxman persona has about as much to do with reality as Ziggy Stardust. His confidence isn’t drawn from mastery of his brief, but rather, from out of his backside. It is a style trope, a performance of scepticism, rationality, and authority rather than the real things. We are seeing a confrontation, or better, a collaboration between two great performers, rather in the way that rodeo judges give points to both the bull and the rider.

But the authentic fake here is Paxman. Bowie’s remarks during the interview about the way the Internet would transform the nature of celebrity and the relationship between the audience and the artist were of course right, but his manner is even more so. He is very obviously fascinated by the project, irrationally certain it was going to work, and willing to burn money by the sack. Paxman is a television personality, Bowie has become a geek, over-enthusiastic, obsessive, hyper-informed.

And of course this is the future we’re swimming in. Nothing gets across better than hyper-engagement and obsessive enthusiasm, for good or ill. Cool detachment is out, has been for a decade. Of course you can always fake this, but then authenticity is always a style trope. Who better to make the point?

Really, Leeds?

If this Yorkshire Evening Post piece is at all accurate, Leeds RLFC is in the stone age and deeply irresponsible.

The former Gold Coast Titans rake was knocked out twice in Rhinos’ Boxing Day defeat by Wakefield Trinity Wildcats and did not feature after the 35th minute.

But the hooker insisted there is no long-lasting damage and said he is delighted to have got a first taste of English rugby under his belt.

Falloon had to go off after two minutes and again late in the first half, but was given the all-clear following checks by Rhinos’ medical staff.

“I am all right,” he said. “My head was a little bit funny after the game, but I’ll be okay – it’s only concussion!”

“Only” concussion? No long-lasting damage? We know very well these days that it’s not “only”, it very much does do “long-lasting damage”, and the absolute worst is getting more knocks without recovering fully. Shontayne Hape‘s experience is required reading here.

Other People’s Yachts: Churchill and his Money, or Lack of It

So, over Christmas I’ve been reading David Lough’s No More Champagne: Churchill and his Money. I can’t really recommend this book enough. Financial biography or rather biography by finance is a genre, I think, with quite a bit of potential. Money talks, but it rarely lies.

Lough points out that Churchill’s switchback from the Tories, to the Liberals, and back to the Tories can be situated in terms of his personal finances. Having started out in the party of the landed interest, he switched to the party of the entrepreneur and the professional when he started to earn serious money with his writing. Having finally acquired land, he switched back to the Tories.

I would add that the Tories of 1925 weren’t the same party they were in 1905. British politics was reorganising itself around the central drama of labour and capital, and the Tories were emerging as a general-purpose business lobby. However, they didn’t quite shake off the dukes, and hence you get Churchill’s 1925 budget with its curious combination of a tax policy designed to favour entrepreneurs and hit rentiers, and a return to the gold standard designed to do the opposite. WSC was either a squire trying to be a self-made man, or the other way around, and it’s no surprise his policy ended up being incoherent.

From an even more olympian perspective, No More Champagne is what the breakdown of Piketty’s r>g looks like at the micro-level. Patrimonal capitalism requires both that r>g, so that the standard of living of the rich keeps ahead of the rest, and that r is high enough in real terms that the rich as a group can save enough of their income to replace capital drawn down for unexpected expenses (woodworm in the east wing) and to constitute the capital of any increase in the rich population.

If these constraints are not satisfied, we might expect to see various solutions. One would be to import more capital, classically by marrying an American heiress. Another would be to restrain g by adopting a deflationary macroeconomic policy, for example, by going back on gold. Yet another would be to reach for yield, taking more risks in a bid to increase r, for example by plunging on risky start-up investments. And a final option would be to reduce spending and lead a less extravagant lifestyle, for instance, by opening the big house to the public.

The Churchills, famously, are a case of option a) going badly wrong, as the heiress turned out not to be that well-off. Churchill’s 1925 budget could be read as option b) in action, although he was usually so skint that this was a bit of a remote concept. He resisted d) like he resisted the Germans – this was a guy who decided to drink champagne only five times a week in order to save money. What about c), then?

John Wasik’s Keynes as an Investor points out that JMK was a modern investment manager before his time, using value investing, the equity premium, and concentrated portfolios before these strategies were officially invented. A hypothetical “Churchill as an Investor” paper would basically be excellent advice on how not to manage money.

Churchill’s basic financial problem was that he couldn’t buy. He was actually very sharp on the sell-side of the table, ruthlessly negotiating with publishers, editors, and film-makers to squeeze the last penny out of his copyrights. He rarely sold a piece once, but rather recycled it into a book and the book into a serial and then sold the film rights. He only once turned down an advance, and learned the lesson. He always started prices high. He offered one of his numerous literary agents – he kept several and made them compete – a 15% commission but only on the sum over and above what he was already getting.

On the buy side, though, he bought too much stuff, and paid too much for it.

If it was a share, he would run after tips on high-risk small cap companies – Canadian oil & gas was a favourite, still a notoriously wild market even today. He traded far too often. He made hamfisted attempts to time the market. He levered up and borrowed hugely on margin. He sometimes day-traded the NYSE. He tended to chase his losses, and to bail out of his winners too early. He was a terrible markets groupie who liked to hang out with brokers and convinced himself he knew what he was doing. Having lost a fortune in the crash of 1929, he repeatedly went bargain hunting in US retail and utilities chains, the big speculative stocks of the day, and lost even more until the senior partner of his brokers, Vickers, Da Costa, personally asked him to stop trading. Even that only stopped him for three months.

Having (like Keynes) called the US recovery, he bungled the execution (unlike Keynes), binning the turkey before it really got started and then jumping back in, just in time for the Fed to take the punch away. This got his Vickers, Da Costa account suspended a second time.

In short, he did every damn thing you are advised against, and lost hilarious amounts of money. After he got rich, he had another crack at those Canadian resources small caps in the 1950s and whadda ya know? He lost another boatload of cash. He didn’t even manage to use his political connections to rip people off by insider-trading – when he was minister of munitions in 1917, you’d think he’d have had better things to do than load up on three smokeless coal startups, all of which went down the plughole quick smart.

In fact, he tried all the ways rich men find to lose money, except yachting and mistresses. He fell in love with houses, and fell out with architects. He got a private pilot’s licence, one of the very first. He spent far too much on clothes, sports, cigars, and booze. He went in for rich guy farming, which gave him another classic, a losing business to feed. It was probably fortunate for us all that he tended to get himself invited aboard other people’s yachts rather than buying one himself, as tht would certainly have led to bankruptcy and disgrace.

And then there was the casino gambling. He regularly lost six-figure sums, and was obsessed enough that on one holiday in the south of France, he stopped the taxi on the way to the station going home to dive into the casino for a final roll of the dice. No shortage of cash ever stopped him, and neither did his wife’s horror at the habit.

Ironically, the only Churchillian investments that ever washed their faces were racehorses. When I saw this coming up the page I felt a surge of horror-fascination. How much would he lose, and in what baroque and terrible way? But actually he managed to make a substantial profit. Perhaps, as a polo-playing and fox-hunting cavalry officer, he actually knew something about horses, which he certainly didn’t about Canadian oil exploration.

Other than horses, the only other time he bought something without losing his shirt was in March, 1941, when he bought back his copyrights from his bankrupt publisher, who in the meantime had sold them to another publisher without actually owning them. That paid off enormously in the long run, and in fact continues to pay off for his heirs out to 2037. But he only went through with it because Brendan Bracken, whose role as unofficial business manager expanded as Churchill’s income did, insisted.

Money also illuminates his inner life. The Black Dog struck in 1937-8, when he was savaged by margin calls in the hundreds of thousands of pounds on his appallingly ill-thought-out share portfolio, pursued by the Inland Revenue, enormously overdrawn at his bank, writing 2000 words a day or more for fear that his publisher would reclaim the long-spent advance on Marlborough: His Life and Times. Of course he was depressed.

That he made it to 1940 without going bankrupt reflects great credit on his financial advisers, notably William Bernau, his bank manager and insurance broker at Cox’s and then Lloyds for two decades until the stress finally caught up with him, Cecil Vickers and WSC’s brother Jack Churchill at Vickers & Da Costa, his Lloyds tax adviser Geoff Mason, and his lawyer Anthony Moir.

Providing Churchill with financial services must have been exhausting, risky, but eventually rewarding – he must have paid enormous amounts of interest over the years, seeing as he was sometimes continuously overdrawn for a decade at a time.

Similarly, Vickers & Da Costa can only have racked up a ton of commissions from all those trades, as well as interest on brokers’ loans, and the Churchill order-flow was so lucrative for their counterparties that surely someone made it worth their while. His long trip to North America in 1928-9 can be read as a long con – at every step of the way, he stayed with stockbrokers or investment bankers, and at every step of the way, he made terrible investments. Bernard Baruch, especially, comes out of this badly, and his stock tips worst of all.

On the other side of the account goes the lost sleep over the question of whether he would ever pay up. His trade creditors had it even tougher, as he tended to treat bills as an alternative source of liquidity. Some went unpaid for five years on the trot. He owed six-figure sums to his tailor, saddler, and wine merchant, although he did make regular payments on account so there was some cash coming in. The longest delinquent account was actually to Grunebaum & Co, cigar importers.

Lloyds eventually cracked on the 18th of June, 1940, as Charles de Gaulle made his momentous broadcast on the BBC, called in the overdraft, and gave Churchill twelve days to find the cash. It’s fair to say their fiduciary commitment to shareholder value was above and beyond. What’s more astonishing is that he found it, almost a million in today’s money. Partly he borrowed from a mate, the co-owner of the Economist Sir Henry Strakosch. He also badgered his publisher to hurry up with a large royalty cheque. As a result, on the 21st, he not only made nice with the bank manager, but also paid dozens of old bills.

One way to look at his finances is as an exercise in cash-flow management of the kind summed up in Adam Kotsko’s classic financial advice for graduate students, the art of being broke. Churchill as a Grad Student isn’t actually that far wrong – we’re talking about someone with no cash and lifestyle expectations way above his income, but who has substantial long-term earnings potential. Like Kotsko, he got by through ruthlessly prioritising those payments that had to be made now, in full, and in cash, and letting the others ride, as well as always maximising the committed but undrawn credit available.

He behaved similarly with the Inland Revenue and frequently used his political status to work out on them, although the Revenue countered by threatening embarrassing public hearings. In 1942, within weeks of the vote of no confidence, he was willing to make three hours’ time to meet his tax adviser. He claimed that the money he got from a series of articles wasn’t royalties, but actually a capital sale of the copyright that just happened to be divided up in tranches, not just once but twice. He retired as an author for tax purposes on three separate occasions, and claimed to have written his best or at least most enjoyable book, My Early Life, purely in order to pay a tax bill.

In the end, one important lesson from this book is that perhaps standards of public integrity and financial probity have actually improved.

In 1923, Churchill accepted a £250,000 fee to lobby on behalf of Shell Oil. He used this money to underwrite part of a major bond issue by Daily Mail & General Trust, a newspaper that also published him and an obvious source of political influence, in exchange for a 2% commission. Vickers, Da Costa called in a favour with DM&GT’s merchant bank to hold a chunk of the business back for him, after Churchill had Shell send the cheque to his brother Jack’s home address for secrecy’s sake. Jack, of course, had just made partner at Vickers, Da Costa, no doubt in part because he brought Winston’s account with him from Grenfell’s and it wasn’t yet obvious what a mess he was going to be. Churchill collected on the transaction, went to stay with the Duke of Westminster in Mimizan, and proceeded to lose the lot at the casino in Biarritz.

I doubt you’d get away with that now.

Why the floods mean you should support my politics

I imagine we’re going to be in for quite a few of these, so let’s get in quick. As Daniel Davies allegedly wrote:

Many people will use this terrible tragedy as an excuse to put through a political agenda other than my own. This tawdry abuse of human suffering for political gain sickens me to the core of my being. Those people who have different political views from me ought to be ashamed of themselves for thinking of cheap partisan point-scoring at a time like this. In any case, what this tragedy really shows us is that, so far from putting into practice political views other than my own, it is precisely my political agenda which ought to be advanced.

Indeed. With that beautiful thought in our minds, let’s proceed. As well as property, I hope the River Aire will have swept away some illusions. The first illusion is of course that we can just go on treating floods and water as a minor news event to be managed through the technology of public relations, this being one of the great unspoken cross-party dogmas.


It’s like that enormous coal-fired power station was trying to tell us something!
As long as I can remember, there has been endless official concern, reports beyond number, constant chin-stroking, but bugger all action. until it rains a bit. Then politicians appear in high-visibility jackets, as do token numbers of soldiers. Eventually the water ebbs away and so does the media interest. Now, surely, we’ve had a teachable moment: Leeds and Manchester flooded on the same day.

I wouldn’t sign any cheques on that, though.

The second illusion is that the devolution offer to West Yorkshire is at all useful. Very simply, it wouldn’t give Yorkshire the budget or the authority to reinstate the planned Leeds flood defence scheme. If you can’t have different policies to those selected by Whitehall, you don’t have devolution in any meaningful way. The only reason to want it is to set different priorities, and you can’t do this without a substantial capital budget. This has so far been a vague and theoretical issue. It is now as concrete as…concrete. Ask what we might have done differently, and there’s your answer.

As I pointed out here, the current proposals offer the devolution of responsibility without the devolution of power. Don’t kid yourself that we wouldn’t now be seeing the prime minister touring the North with George Osborne, blaming the disaster on one-party Labour councils and their crazy overspending. This leads me to the third illusion.

The third illusion is that the devolution offer is right in terms of geography and of politics. The water didn’t come from Leeds and is not going to end up in Leeds, nor did it come from a Leeds City Region.

Water does not care about trying to cut this or that party’s voters in or out. Instead, it defines the landscape that later defines us, in its own way. Yorkshire’s historical boundaries to the North and South are rivers. To the west, the boundary is roughly the watershed, and to the east it is of course the sea. Within this space, water flows from the moors down through the steep, narrow southern Dales, creating the heads of water that powered early industry and that filled the canals of later industry, through the cities, and down the Ouse across its floodplain, the Vale of York, to the sea. Yorkshire is roughly the River Ouse catchment area, give or take the upper Ribble.

It follows that you can’t solve a Yorkshire-wide problem in Leeds, and indeed that’s why we had a Yorkshire water authority and now have a privatised Yorkshire water company. This really ought to be obvious from that alone.

But, aren’t the Yorkshire-wide proposals rather weak? Perhaps. We have some relevant experience here, though. This was a criticism of the Welsh and Scottish assemblies and of the Greater London Authority when they were created. It was also a criticism of the Northern Irish assembly when it was created. All the devolved authorities have gained in power and authority with time. The mayor of London started out without even having any authority over the Tube, but has progressively taken over more and more power, and has even gained a veto over the commissioner of the Met. None of them has ever handed powers back to the central government.

This is, I think, because they are comprehensible, they cover the essential geography, they are elected, and they started with significant powers.

The mayor of London is mayor, of London, and his area of responsibility matches very well what is commonly called London. You can always niggle about boundaries, which are inevitably imperfect, but there is nothing grossly silly about the GLA’s. Similarly, the Scottish, Welsh, and Northern Irish authorities do what it says on the tin. No city regions there.

These authorities also draw legitimacy from the fact they are elected. In a sense, each election is not just a choice of parties or individuals, it is also a referendum on the institution’s existence. Therefore, with each electoral cycle, the devolved authorities have become stronger, more legitimate, and better established. To get the ball rolling, though, they needed to have a minimum of substance, enough to make a palpable difference. For London, it was enough to give Ken Livingstone the buses and the congestion charge.

We can compare the various regional entities – partnerships, assemblies, government offices – which have never lasted. Without comprehensible identity, democratic legitimacy, or significant powers, they have just been afterthoughts.

You might say that a city region solution could progressively take over more territory, in the same way that a Yorkshire-wide one could take on more powers. But there is no precedent for this, and it could as well lose it as gain it. The central government frequently chops up local government boundaries. But as I say, all the other devolved governments have only ever gained more powers, while local governments have as often lost territory as gained it.

And remember:

Please, I ask you as fellow human beings, vote for the political party which I support, and ask your legislators to support policies endorsed by me, as a matter of urgency.

It would be a fitting memorial.