Revive a town without revitalising its rural hinterland? No way

Llandovery in Carmarthenshire is a victim of centralisation. Since the start of the millennium all the bank branches have closed, the Royal Mail sorting office shut, the county council decided to build a new comprehensive school 13 miles away and to transport the pupils there and back by bus. The Chamber of Commerce folded.

“How can we revive the town?” the county council wondered (after ignoring strong local opposition to its decision to close the senior school). Reports were commissioned. Recent ones include a ‘Llandovery Economic Growth Plan’ prepared by The Means, Llanelli, which appeared in draft in March 2021, and Severn Wye’s ‘Community Wealth Building in Llandovery’, which was finished the same month.

Reports must follow the brief drawn up by their commissioners, and so it is no surprise at all that they do not question the objective of economic growth. ‘Growth is good’ is conventional wisdom, after all.  

Severn Wye’s report includes interesting original research, including the finding that in the Llandovery area – defined as Llandovery, Llangadog, Cilycwm and Cynwyl Gaeo, covering the rural north-east of the county and with a combined population just over 7,450 — almost 40% of businesses are not looking to expand. This goes against the view that businesses are generally run by ambitious entrepreneurs who want to grow, grow, grow. Some do, but there are multiple reasons for setting up a business in a rural area, such as a means of earning enough money to live, or to augment a pension, or to provide more flexibility than a clock-on, clock-off job for those who have to combine work with caring.

Llandovery in its rural setting. The river Tywi flows north to south, and the Heart of Wales railway clips the western side of town. Photo from Google Earth

Over 90% of Carmarthenshire businesses have fewer than 10 employees, Severn Wye found. Their average turnover in the most recent reporting year was a little over £81,000 a year. In the Llandovery area, most businesses turned over less than £50,000. Not that there are a great many businesses within this area of 230 square miles: Severn Wye found 249, one for every 30 people.

Yet if you want to start a new rural business, unless it’s a tiny one run from your kitchen table, you have to grapple with planning regulations that preclude rural repopulation, or buildings for new rural enterprises, except for tightly defined exceptions in Wales such as One Planet Developments (OPDs) or Rural Enterprise Dwellings. The OPD policy, dating from 2010, allows a new dwelling in the countryside if it is the applicants’ only home, if their land can meet their minimum food, energy, income and waste treatment needs within five years, if there is a binding management plan, if all development is ultra-low carbon, and so on. Over the whole of Wales, only some four dozen individual smallholdings have received permission under the OPD regulations during the 10+ years of their existence.

Rural Enterprise Dwellings are also strictly controlled. The guidance document says:

“ Four specific circumstances are identified in TAN (Technical Advice Note) 6 relating to the provision of new rural enterprise dwellings:

· to meet the needs of established rural enterprises (including farms) where there is a functional need and a requirement for a full-time worker together with a prospect of long-term business financial sustainability;

 · to enable the transfer of control of farm enterprises to the next generation (second or further dwelling on a farm only);

· to meet the needs of additional workers on established farms where there is a functional need, and a requirement for an additional 0.5 or more of a full-time worker earning at least 50% of a farmworker’s salary (second or further dwelling on a farm only); and

· to meet the needs of new rural enterprises where there is a functional need and a requirement for a full-time worker.

(Welsh Government, Technical Advice Note 6, December 2011, section 2.13)

The final grounds for approval, referring to new rural enterprises, is difficult to meet because applicants cannot prove that their venture will be profitable. They must provide a full business plan, and even if the plan suggests a rosy outcome, any permission would normally be for a temporary dwelling, for three years only.

So it’s tough to persuade planners and planning committees to depart from the view that the countryside is a landscape to be protected from change, even if changes are desirable in the interests of soil improvement, habitat enrichment, crop diversification and enough people living in rural areas to support essential public services. Usually they cannot be persuaded, because they must follow the published Development Plan, which outside existing towns and villages mainly means No Development (unless a big developer comes along with promises to create dozens or hundreds of new jobs for the region).

The report from The Means is focused on Llandovery town, and suggests sustainable outdoor recreation, innovative events, a makers quarter for craft-persons, the re-establishment of Llandovery and District Chamber of Commerce (and/or the setting up of an Economic Growth Plan team), a cycling hub, digital hoardings and more, including a number of feasibility studies. The report’s authors see the surrounding countryside mainly as a tourism venue and possibly a source of renewable energy. They do not question the policy of ‘no rural development unless it’s BIG’ (they suggest £60,000 for a feasibility study into an outdoor adventure park). But then, they were justifiably sticking to the approved policies, and working within those.

Reviving a town, though, also means revitalising its hinterland, in the urgent contexts of reversing environmental damage amid an unstable climate, and of living simply and more harmoniously with the nature that is still around us. More opportunities for newcomers to live on the land should be part of our journey to a survivable future.

The Llandovery Economic Growth Plan, draft update March 2021, is from The Means and was commissioned by Carmarthenshire County Council. https://static1.squarespace.com/static/5dfb7aeaf844f40ff2c70391/t/6057eb81a79fe46cb99f64a0/1616374663453/CRTEGP_Llandovery_Draft+Economic+Growth+Plan+rev+9.pdf.

The Severn Wye report on Llandovery’s Community Wealth Building project took place from September 2020 to the end of March 2021. Severn Wye’s was one of 52 projects awarded funding by the Welsh Government’s Foundational Economy Challenge Fund and the organisation worked with partners: The Centre for Local Economic Strategies (CLES), The Bro Partnership and Liz Bickerton Consultancy. It aimed to explore a replicable community economic development model for small rural market towns and their hinterlands, recognising the contribution of and building on the foundational economy, with the potential to retain and recirculate that wealth in the community. https://severnwye.org.uk/wp-content/uploads/2021/04/Foundational-Economy-Llandovery-Final-Report-updated-chart.pdf.

See also A Small Farm Future by Chris Smaje, published by Chelsea Green, 2020.

PDR


Electric Fairy Tales

Staring at the display from the front passenger sea of a little green Renault Zoe electric car, I worried that we would not make our destination. Fifty miles possible, just over 50 miles to go, but no charging points on the hilly route, or even near to it. We just made it, but it was not exactly restful motoring.

New electric cars are uncommon around here. Partly it’s the purchase cost, from £15,000 upwards and a mainstream cost range of £25,000 to £35,000, much more for luxury models, and partly it’s the lack of charging points. There are no public ones within eight or nine miles. Not everyone can have a home charger, for example if they have no parking space at their home.

OK, electric cars don’t have fossil fuels in the tank, but their manufacture is just as polluting and carbon-dioxide-emitting as the production of conventional vehicles, so they are not allies in efforts to limit climate change, or even to improve our battered environment. Their batteries are at the centre of likely geopolitical tensions, as the rare earths they require – such as lithium, nickel, cobalt – are significantly under the control of China or under the ocean, to the alarm of organisations like Greenpeace. Mining a ton of rare earths on land generates 75 tons of acid waste and a ton of radioactive residues, according to the environmental website youmatter.world (September 25 2018).  


Traffic: switching to electric won’t solve pollution, or climate change.
Photo by Alexandr Podvalny on Pexels.com

Then, if electric cars replace petrol and diesel ones, will we have enough electricity to charge them up? The UK’s 33 million cars have an average annual mileage of about 10,000, according to statistica.com. Those cars would, if electric, require 99 terawatt hours of electricity. (One car uses about 30kWh per 100 miles, so 3,000 kWh for 10,000 miles, and 99 billion kWh for the UK car fleet, equating to 99 TWh, terawatt hours.)

The present electricity consumption of the UK, for all purposes, is just over 300 TWh. Therefore converting all cars to electric power could add 32.8%, almost a third, to national electricity use, when we have very little idea of how all that power could be generated cleanly, and without massive, expensive, infrastructure replacement programmes at least every quarter-century.

And we have considered only cars, not freight vehicles.

Currently electric cars have slightly lower running costs than petrol or diesel alternatives, but the difference is not that great. Carwow suggests that a 40 kWh recharge would be sufficient for 168 miles. At 17.5 pence per kWh, a reasonable level for 2021 according to gocompare.com, recharging a 40 kWh battery would cost £17. Petrol for 168 miles, in a vehicle returning 50 miles per gallon, would be £19.29 if the fuel cost £1.26 a litre. But of course many cars achieve less than 50 mpg.

The possible slight present advantage is nullified if an out-of-guarantee electric car battery has to be replaced. They cost a lot of money, say £5,000 in round figures for a smallish car, as well as causing environmental harm.

Electric cars are not the answer. There is no answer if we insist on consuming to the max. No, we have to travel less, freight fewer goods, live local lives, be frugal. And that is not what politicians want to tell us.

PDR


Wanted: Powerful Persuasion for One Planet Developments

by PDR

One Planet Developments (OPDs) were a great idea of the Labour-Plaid governments in Wales between 2007 and 2011. The plan was to enable people of modest means to buy land at its agricultural value, then submit an application to live and work on it. The caveats were and are huge, a whole racecourse of high hurdles to clear before being allowed to do anything at all, in the interests of a way of living that is sustainable within the resources of our one, small, planet. That is surely a laudable and very necessary aim, given that the UK, including Wales, is consuming Earth’s resources at nearly four times the sustainable rate. (See www.footprintnetwork.org for much more information.)

In the decade since 2010, when the Welsh Government published the criteria for OPDs in Technical Advice Note (TAN) 6, around three dozen One Planet Developments have received planning permission. They are essentially smallholdings, and their total area is unlikely much to exceed that of a single 400-acre dairy farm. Yet despite their tiny footprint on the land of Wales, there is powerful opposition to them from multiple quarters: from within local authorities, from people living near application sites, from commentators who see incomers as threats to existing communities. The fuss is out of all proportion to their scale.

To succeed, people who sink their resources into an OPD have to work like Trojans, count everything – all their inputs, all their outputs – to set against their calculations in their initial mandatory Management Plan, build their own house while they work, generate their own power, improve the soil and raise its fertility. As well as subsistence crops, they need to make enough money from their land to pay essentials like council tax. If they don’t achieve the prescribed level of self-sufficiency within five years, their planning permission can be revoked.  

If people buy land, improve it, meet the conditions to build a home on it, but then experience a major change in circumstances, such as long-term debilitating illness or injury that prevents them from working on the land, then they can sell to someone else who is willing to take on the same restrictions. We live in a capitalist society where profit is the name of the game, so it shouldn’t be a shock if an OPD goes on sale at an open-market smallholding price. After all, the OPD is likely to be in countryside with great views, and a unique, highly energy efficient home.

Permission refused: the field near Meidrim, Carmarthenshire, where Neil Moyse and Kelly Mitchell wanted to start a One Planet market garden. Photo from Google Earth.

Under current conditions, the chances of the OPD experiment persisting for more than a generation seem slight. Smallholdings will be sold on the open market as their owners age, become infirm, or cannot produce the specified minimum of 65% of their basic needs from their land. There are no signs that it is becoming easier to obtain planning permission, in fact the opposite. In March 2021, Carmarthenshire County Council’s Planning Department refused permission to Neil Moyse and Kelly Mitchell, experienced gardeners, for an OPD market garden near Meidrim, west of Carmarthen, on land sloping down to the Afon Cynin and containing a pond. The reason for refusal included this:

“The proposal is not supported by sufficient information to demonstrate that the development would meet the One Planet Development criteria. Planning Policy Wales defines One Planet Development as development that, through its low impact, either enhances or does not significantly diminish environmental quality. The suitability of the site was questioned at pre-application stage and those concerns for the development of an OPD in this location are sustained. For this reason the proposal constitutes an unjustified form of development in a countryside location.”

All rather vague.  In fact and in contrast, Natural Resources Wales said: “We have no objection to the proposed development as submitted and provide the following advice” [listed in the consultation response]. The Planning Ecologist detailed work to be undertaken for the development to proceed. A Fellow of the Royal Society of Arts, Dai Davies, wrote:

“I have, over the last 15 years, served on various Welsh Government panels and boards concerned with economic development and regeneration. As a consequence I have developed a keen interest in localised supply chains and the principles of the foundation economy which is now being championed in government.

“I have known the two applicants for the last three years during which time they have helped and advised me on the creation of a woodland garden and wildflower meadow at my home. They are impressively knowledgeable and hard working and are already making a success of their niche horticultural business.”

There were several other letters of support, including from Somerset organic market gardening guru Charles Dowding. But there were also objections from local people worried about consequences such as possible traffic, construction of buildings on the site, and whether the applicant would run out of money, which in the end had greater influence over the decision. These worries could apply to virtually any development, and if they are going to win out, it means that new OPDs will be rarer than hens’ teeth.

If that happens, we lose valuable exemplars of how to live lightly on the land.


Hard Up Nation

by PDR

I was lucky. Lots of job opportunities when I graduated, and a defined-benefit (final salary) pension. So much tougher for the debt-burdened 20- and 30-somethings of today, who may not be able to accumulate enough to fund a retirement. Why is the Westminster government not showing more concern? Who will pay taxes in what is looking like a future of insecure, low-wage work? Does it matter?

For it not to matter, change in the global financial network would have to be revolutionary, not a popular word in Westminster!

Yet in the interests of social cohesion, it is surely vital to halt the impoverishment of a good third of the UK population. I am not arguing for much more cash to buy stuff, but for more dignity – decent energy-efficient housing, enough nutritious food, time for leisure and interesting hobbies, dependable public services for all.

Financial lives are tough for millions in the UK — and getting tougher.

Financial Lives 2020

The story told in the ‘Financial Lives 2020’ survey from the Financial Conduct Authority, published on February 11th 2021, is alarmingly different. In October 2020 almost four in 10 – 38% — of all adults in the UK were not feeling financially stable. They experienced one or other, or all of these:

  • Expectation of struggle to make ends meet.
  • Higher levels of debt.
  • Worry about being unable to pay domestic bills, mortgage, rent, or interest on loans, in the next six months.

There are huge differences by age: over six in 10, 61%, of young adults aged 18 to 24 felt financially unstable, and 55% of the 25 to 34s, down to 11% of over-75s, who would nearly all have at least a basic pension.

Property prices are far too important in the financial mix, to the detriment of young people. Mortgage-payers depend on the value of their home going up and up, for a fall could see them in negative equity. No less than 20%, one fifth, of all mortgagees have an outstanding home loan exceeding four times their annual income, according to the survey. Even among the 65-74-year-olds with mortgages, 19% of them owed over four times their yearly income.

But for high numbers of young adults, of course, low incomes and high property prices mean that owning their own home is an impossible dream.

Scant reward for saving

Saving is unrewarding, given the near-zero interest rates offered in 2021, and indeed most people have little to squirrel away. The survey reports that between 41% and 49% of adults have less than £5,000 in ‘investible assets’, which are cash, savings accounts, shares, bonds and similar products.

More than half, 53%, of over-18s in the UK had at least one ‘characteristic of vulnerability’ in October 2020, during the havoc of Coronavirus. This covers poor health, or experience of a negative life event (such as a family death, or losing their job), and 20% were not highly capable of managing their financial affairs in the new digital world.

The survey report is reinforced by figures from Her Majesty’s Revenue and Customs (HMRC). This is older data, as the most recent figures for incomes are for 2017-18, when the median pre-tax income for all 31.2 million UK taxpayers was £24,400. Now 31.2 million is a lot of taxpayers, but the 2018 population was 66.3 million and if we exclude under-18s, few of whom pay income tax, the figure was 52.4 million people, so about 21.2 million adults had incomes too low to be liable to tax.

Missing middle

A median income of £24,400 means that half of taxpayers had a lower income than this, and half had more. It is not a figure that would cover food, housing, utilities, clothing, a holiday, all the expenses of modern life, and leave anything much over for saving. Indeed, median pre-tax incomes for under-30s were under £23,000 overall, slightly more (£23,700) for men aged 25-29 but less (£21,800) for women. There is no longer much of a ‘middle’. In 2017-18, 95% of taxpayers had a pre-tax income of under £76,800. The median income of the next 4% was £175,000. Those above this, in the highest-earning 1% (of taxpayers, not people), had stratospheric incomes compared with the vast majority of the population, but their median is excluded from the table (no. 3.1 in HMRC’s series on personal incomes).

In such an unequal society, and one becoming more unequal by the year even before the disaster of Coronavirus, how will it be possible to achieve the change to sustainable communities where everyone can feel secure, valuable and included?  

Is it possible at all?


Dasgupta Biodiversity Review’s Impossible Task

Terms of Reference were Contradictory

“Here we go again”, I thought on first glancing at the Dasgupta Review on The Economics of Biodiversity, “still placing humanity above the natural world, instead of being part of it”. Phrases like ‘natural capital accounting’, ‘standardisation of data and modelling approaches’ and ‘supra-national institutional arrangements’ did not augur well for the new philosophical approaches that I believe need to be taken.

The review, led by Professor Sir Partha Dasgupta, Frank Ramsey Professor Emeritus of Economics at the University of Cambridge, was published on February 2nd. It has elicited many responses, including an 18-page document of ‘Reactions’ that the Westminster government released on the same day. ‘Reactions’ has comments from business and third-sector leaders. This is one, from Professor Gretchen C. Daily, Bing Professor of Environmental Science, Stanford University and Co-Founder and Faculty Director, The Natural Capital Project:

“All people – living in ancient or modern times, in luxury or destitution, in mega-cities or vast hinterlands – depend intimately and utterly on nature. Through the microbiome inhabiting our body, the nature in local parks and farms, and exotic forests and underwater realms across the world, we are all deeply embedded within the web of life. This extremely subtle and extensive net of relationships sustains and fulfils us, providing the material basics of nutrition, health, and security to ethereal senses of attachment, beauty, and spirit. The Dasgupta Review comes at a historical precipice, with human activity driving the collapse of nature and the future course of all known life. Through brilliant synthesis of knowledge, the Review lays bare the urgent situation today, its underlying causes, the risks and costs of failing to address them, and the pathways to a future world in which people and nature thrive.”

True. We know what the problems are. We are much less sure about solutions that could be both effective and acceptable to the world’s richer inhabitants, who stand to lose most from a more equitable distribution of the fewer resources available to us if biodiversity and ecosystem collapse is to be slowed.

Reading the terms of reference set for the review, I understood the dominance of the language of conventional economics and accountancy within it. This was what the Westminster government wanted.

The terms of reference include setting the review purpose to “assess the economic benefits of biodiversity globally, assess the economic costs and risks of biodiversity loss, and identify a range of actions that can simultaneously enhance biodiversity and deliver economic prosperity”. There appears no doubt that prevention of ecological breakdown and delivery of economic prosperity are compatible, a perspective amplified in three key questions for the review to consider:

  • How biodiversity supports sustainable economic growth;
  • The implications of further biodiversity loss for the prospects of economic growth over the coming decades, taking into account the interaction with  other aspects of environmental degradation, including climate change; and
  • The impact, effectiveness and efficiency of existing national and international actions and arrangements to limit and reverse the loss of biodiversity and their impact on economic growth [my emphases]

The “simultaneous goals” of the review are to advise on “enhancing biodiversity” and “delivering sustainable economic growth”. No question here whether both are possible.

Given these constraining terms of reference, the review goes as far as it can. The final chapter, ‘Options for Change’, says this:

“The extent to which we have collectively degraded the biosphere has created extreme risks and uncertainties, endangered our economies and livelihoods, and given rise to existential risks for humanity.” (p.485)

Our inadequate response is “a sign of the failure of contemporary conceptions of economic possibilities to acknowledge that we are embedded in Nature, we are not external to it”. (p.485) So, clearly, the review acknowledges that humanity is just a part of the natural world.

The “options for change” are “geared towards three broad, interconnected transitions, requiring humanity to (i) ensure that our demands on Nature do not exceed its supply, and that we increase Nature’s supply relative to its current level; (ii) change our measures of economic success to help to guide us on a more sustainable path and (iii) transform our institutions and systems – in particular our finance and education systems – to enable these changes and sustain them for future generations”. (p.486)

Indeed so. But how?

The review proposes (p.487) “…quantity restrictions, informed by science and supported by legislation, will help to correct the externalities pervasive in our engagements with Nature”. (‘Externalities’ are damaging but uncounted repercussions of economic transactions, such as ocean pollution, rain forest felling, removal of finite resources, and man-made climate change.)  

Can we both reverse a catastrophic loss of biodiversity and continue to grow economies?

‘Quantity restrictions’ can also mean ‘lower consumption’, but maybe sounds rather less harsh.

Other measures proposed include “[t]echnological innovations” which can “contribute enormously to reducing our footprint”. Genetically modified crops, vertical farming, and meat analogues are among the examples given. Plant-based diets are advocated because “it would be possible to feed the world’s present population with as little as 50% of current agricultural land”. (p.489)

Environmental taxes, accounting for the use of ‘natural capital’, and more controversially ‘family planning’ (contraception) are all suggested.

But how to organise these measures globally? Even if all world leaders signed up, would their populations accept ‘quantity restrictions’ rapidly enough to slow the rate of biodiversity and ecosystem collapse, let alone reverse them?

The review argues that the financial system would “shift its lending and credit activities towards the protection of Nature if consumers signal their distaste for investments that are rapacious in the use of Nature’s goods and services”. (p.494)

Given the acquisitive history of humanity, can this happen quickly enough to make a real difference? The consumerist mindset is entrenched and the global economy is built on resource extraction. The Dasgupta Review, which in its terms of reference was asked to reconcile ecosystem protection with continuing economic growth, cannot show conclusively that both are possible, because in the circumstances of today’s economic and governance structures, they are not.  

The Dasgupta Review is online at The Economics of Biodiversity: The Dasgupta Review (publishing.service.gov.uk)

PDR


Henry George and the Campaign to Tax Land

Modern ideas about taxing land are not so modern after all, but old ideas resurfacing.

Take Land Value Tax. Now, many people will know this, but I did not. There is a movement called Georgism, after the 19th century American economist Henry George. Born in Philadelphia in September 1839, his works include the blockbuster multi-million seller Progress and Poverty, published in 1879. In Republican red US states today he could well be labelled abusively as a communist, so far towards individualism has much popular opinion swung, or been persuaded to swing.

Henry George, 1839-1897. Photo from Wikipedia

The 19th century saw massive wealth disparities on both sides of the Atlantic. In the States, Henry George argued that rents for land should be socialized by taxing it. He wrote in Progress and Poverty that “I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent.”  *

He also proposed that utilities should be publicly owned and not operated for profit. A debate between Henry George and Margaret Thatcher, had they lived at the same time, would have been explosive. It was Mrs Thatcher who ushered in the Great Privatisation of the United Kingdom, encouraging the public to buy small shareholdings in the hope of making them mini-capitalists. Here is Wikipedia’s extensive list of UK privatisations in the 1980s:

It was too much for former Conservative prime minister Harold Macmillan to stomach. In a speech on November 8th 1985 Macmillan, resident in 10 Downing Street from 1957 to 1963, castigated the policy as “selling off the family silver”, i.e. a step on the descent to Carey Steet. The ‘nation of shareholders’ never happened, as many who took part eagerly in the privatisations sold their shares soon afterwards. It was an intermediated transfer from the public to private institutions. (At least, there were intermediaries, unlike later incipient scandals of direct transfers from government funds to businesses with Party connections, as with certain pandemic contracts for personal protective equipment.)

Henry George’s ideas have been out of popular fashion in his native USA more or less since he died in 1897, reflecting hostility to taxation and the view that socialism is unfair to hard-working rugged individualists. Could he be coming back into fashion? There is an active Henry George Foundation, based in London, https://www.henrygeorgefoundation.org/. The foundation publishes the journal Land and Liberty, which aims to “explore how our common wealth should be used – and to demonstrate that this is the key to building the bridge of sustainability between private life, the public sector and our resources – between the individual, the community and the environment. It aims to put the laws of nature and people at the heart of economics.” Land and Liberty can be viewed on the foundation’s website – do take a look. The foundation is on Twitter as well, @henrygeorgeuk.

* George, Henry (1879). Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of WealthVIII. New York: Robert Schalkenbach Foundation. ISBN 0-914016-60-1

PDR


Gross Income Inequalities Shame Britain

The shock of understanding that a huge multinational group treats children from hard-up families as a profit opportunity is awful, but not a surprise. That’s what capitalism does, especially  when profits elsewhere are thin on the ground.

Social media has been awash with photos of meagre, barely edible parcels meant to provide ten days of packed lunches for children who normally receive free meals when their schools are open.

Widely circulated photo of a week’s worth of packed lunches, sourced from Chartwells, for one child. Source: Twitter

One of the suppliers has been identified as Chartwells, a division within Compass Group plc.

Compass, which claims 10% of the £220 billion global food services market, had a disappointing year in 2020, substantially due to Corona virus, and shareholders did not receive a dividend. Operating profit fell 82% to £294 million in the year to September 30th. Post-tax profit of £135 million was 88% below the previous year. In May the group raised £2 billion in new equity, but still ended the year with net debt exceeding £3 billion, not a brilliant prospect for shareholders, four of whom owned almost 25% of the group at end-September 2020: BlackRock Inc, 9.99%; Artisan Partners Ltd Partnership, 5.01%; Invesco Ltd, 4.95%; and Massachusetts Financial Services Co, 4.60%.

Chief executive Dominic Blakemore noted in the group’s report for the year to September 30th that: “In response to the pandemic, we are innovating and evolving our operating model. By innovating and adapting our offer and operations to the ‘new normal’, this will allow us to reduce costs and increase our flexibility, so that we can provide our clients and consumers an exciting offer that is delivered safely and provides great value”.

Lower costs and increased flexibility. The workforce has to be more flexible and to be pooled “across sectors to better accommodate volume volatility on site”. Lean and mean. But becoming leaner and meaner cannot continue indefinitely.

The food parcels for children receiving free school meals appear extremely lean and mean, and illustrate the gulf between brochure rhetoric and experienced reality. Mr Blakemore stated in the Compass annual report that “In Education, our expertise in nutrition means we are able to provide delicious food that supports learning at every stage of the education journey”.

There’s a big gap between ‘we are able’ and ‘we always do’.

Inadequate lunch packs have damaged Chartwells’ public image. Source: Twitter

Chartwells has a website — “Here To Help!” — asking “Are you looking for school meal options through lockdown?”

A number of ‘packages’ are listed, including Option A, daily packed lunch, costing £2.30. This is supposed to contain:

  • 1 ‘Deli sandwich’, either cheese, tuna, chicken or halal chicken
  • 1 portion of fresh fruit
  • 1 portion of ‘crudities’ – 50g cucumber, 50g peppers, 50g carrots
  • 1 snack – yoghurt, custard pot, dried fruit, jelly, malt loaf or ‘strawberry YoYo bear’.  

Option B is a food parcel for two weeks, costing £23, and supposedly containing

  • 1 loaf (not likely to be palatable after two weeks)
  • 2 of 200g blocks of cheese, type unspecified
  • 1 kilo of wholemeal pasta
  • 4 tins of chopped tomatoes
  • 2 tins of tuna chunks in brine
  • 16 vegetable portions – carrots, potatoes, sweet potatoes, lettuce, tomato, cucumber.
  • 14 fruit portions – 6 apples, 4 bananas and 4 oranges
  • 9 “healthy snacks”

Perhaps there should be a TV cookery show inviting chefs to whip up two-weeks’ worth of delicious meals from these ingredients (which I could buy from a supermarket for less than £15, if selecting the basic lines).

To add further insult, Compass put out a news release before Christmas 2020, saying:

“Chartwells, have recently joined the Marcus Rashford Child Poverty task force which is campaigning to expand holiday food provision for the children who need it the most. Over the Christmas period, we know that many children around the UK may go hungry and so we want to help as part of #CompassChristmas, to ensure that we can feed as many hungry tummies as possible with our Christmas Food Hampers.” The release went on to solicit donations towards the £20 cost of each hamper, either the full cost or a contribution.

Chartwells responded to the Twitter futore with this statement. Vicky Ford MP is actually Parliamentary Under-Secretary, not a Permanent Secretary (who would be a civil servant, not a politician)

Compass Group’s top brass are most unlikely to need donated food. They are exceedingly well rewarded for their efforts to serve shareholders. Even in the dreadful year 2019-20 Dominic Blakemore was rewarded with £1.162 million. In 2018-19 it was a great deal more, £4.659 million. (And Gary Green, head of US operations, received even more still, about £1.569 million in 2019-20 and £6.031 million the year before, converted into sterling from US dollars.) It’s all in the annual report, a delight for people interested in financial architectures, the plethora of available accounting measures, and the wide spread of resulting figures.

The total costs of employing the 548,143 persons in the Compass Group, including the directors and senior managers, were £9.975 billion. This is an average cost per employee, including salary, of £18,197.81.

Some of those at the lower end of Compass’s income scale may be eligible for free school meals for their own children. Low-paid households receiving Universal Credit are eligible, as are those receiving many other welfare benefits. Across England and Wales in 2020, more than 1.63 million children were known to be elegible for free school meals. Almost one schoolchild in every five.

A revenue opportunity for Compass Group, and all the other companies in the market, is a warning that the newly Brexited group of nations is afflicted by endemic low pay that erodes children’s chances from the moment they are born.

PDR


Welsh Government Plans for Future Agricultural Support are a Huge Challenge for Rural Communities

The Welsh Government’s new White Paper on agriculture post-Brexit is strong on ideals for farming to deliver ‘public goods’ in the form of benefits such as cleaner air, vegetation to delay water run-off and store carbon, higher water quality, more biodiversity, and improved soil quality.

According to the Agriculture (Wales) White Paper published on December 16th, there will be no continuation of the Basic Payment Scheme (BPS), which subsidises farms according to their size in qualifying hectares (one hectare is 2.47 acres). Welsh farmers are heavily dependent on the BPS. The Welsh Government’s own data (Farm Incomes in Wales, April 2018 to March 2019, published in December 2019) shows that annually around 20% of farms are making an overall loss even with subsidies, and over half would make a loss without subsidy and diversification – over 60% in 2018-19, the most recent year for which data is available.

As yet there is no clear information on the amounts to be invested in the proposed new Sustainable Farming Scheme, to replace the existing system – which can remain broadly in place (but with less cash) until the end of 2024, five years after Brexit – and the Welsh Government admits there is still much work to do on the structure, mechanics and future evaluation of the new support system. The plan is to introduce the Agriculture Bill, detailing the Sustainable Farming Scheme, in summer 2022.

Welsh agriculture and rural communities have benefited from about £337 million a year in support from the European Union. That is equivalent to £6,370 for each of the 52,900 farmers and farm workers in Wales. The subsidies have been life support for Welsh farming. There is as yet no clue whether the Welsh Government will replicate this level of funding. If the budget is lower, it is arguable that the 20% of farmers who make a loss despite receiving subsidies, and many of the additional 40% who need subsidies and non-farming income streams to break even, would risk severe financial distress trying to reorient their businesses quickly to the desired sustainability model.

The Welsh Government’s aims include increasing tree cover, raising production of arable crops, fruit and vegetables, improving soils, habitats, and biological diversity, and strengthening local supply chains so that more Welsh produce finds its way to Welsh consumers. Other priorities include protecting Welsh language and culture. More than four in 10, 43%, of people living and working on farms in Wales are Welsh-speaking,  a higher proportion than in any other occupation, and therefore severe financial distress in rural communities would imperil the language.

Much of Wales is hard to farm, and farmers have depended on EU subsidies. But post-Brexit everything changes. Photo near Llandovery, Carmarthenshire.

The aim of public money for the public benefit of a cleaner, healthier environment is logical and necessary, but food needs to be central to the mission too. The White Paper suggests that taking produce off the market, in the case of exceptional volatility or glut, would be the method of supporting food production. This ‘intervention’ is a standard EU practice and is unlikely to compensate for the loss of basic payments.

The White Paper also proposes a reduction in the complexity of regulation, with the creation of one set of minimum standards, including for animal health and welfare; substantial changes to the enforcement of regulations to make penalties more proportionate to the misdemeanour, and a switch from criminal to civil proceedings for offenders outside the BPS, who have been treated differently from those in receipt of EU funds. Monitoring of compliance would be ongoing, making maximum use of data from satellites, and barriers to data sharing would need to be removed (perhaps raising concerns about privacy). There would be a new dispute resolution scheme for farmers with tenancies under the Agricultural Holding Act 1986, whose landlords might not agree to actions required to qualify for support under the Sustainable Farming Scheme.

Advice would be a big part of the new world for farmers. There would be an initial sustainability assessment for every applicant for support, and then advice on how to provide the improvements needed for greater resilience to climate change and other environmental emergencies such as soil erosion and degradation. That’s a large requirement for advice, but not yet guidance on who is going to provide it, and at what cost to the public purse.

The environmental aims of the White Paper are very welcome, but such a rapid reshaping of financial support for agriculture is a huge challenge facing both Wales’ farmers and the bureaucracies that will have to help them leap over the new hurdles.

Here is a link to the full White Paper. The consultation on it closes at 23.59 on March 25th 2021.

PDR


Wales Clobbered by Westminster’s Cuts in Farming Support Cash

A horrible suspicion has rooted in my mind that the agricultural rationale for Brexit was to make the UK, including Wales, dependent on ‘food’ from the USA.

Who really wants chicken doused with chlorine? Cereals containing residues of the herbicide glyphosate (i.e. Roundup)? Foods containing antibiotics, growth hormones, pesticides? Not many people would freely choose these, I guess. Farmers use them to cut costs (in the short term, just don’t think about long-term damage to habitats and ecological diversity!) so they can ‘compete’ for sales to the big food processors and retailers. It’s the scruffy back door of capitalism, where the rubbish bins are, and through which food is offered to the public at prices affordable to those on low wages, the low wages that enable the owners of the system to shovel more and more money into their private possessions and to influence, control, politics.

This year I have been struck by news pictures from the USA, showing colossal queues of motorists waiting for groceries from food banks. They don’t appear able to afford even cheapened ‘food’. Why are they driving cars then? you may ask. The USA’s widely spaced suburbs mean that without vehicles, residents would not be able to access work, shops, or anything much else apart from their immediate neighbours. And of course petrol is ludicrously cheap there, about 50p a litre at the pumps in 2020, cheaper than milk at about 54p a litre.

Economies collapse when populations are so impoverished that they lack ‘effective demand’. Before the Civil War in the USA, the rebel states wanting to keep slavery were handicapped by complexes of superiority, and by weak economies resulting from slaves’ lack of resources to demand anything at all. Before the war, in 1857, Hinton Rowan Helper laid all this out in his The Impending Crisis of the South (available as a e-book from the excellent Project Gutenberg).

We may no longer accept slavery, but in the USA and the UK we live in unequal societies, where food banks have become essential for those with low and uncertain incomes. That’s the inevitable result of cut, cut, cut.

Now this philosophy is clobbering the UK’s farmers as they face the UK’s exit from the European Union. The EU’s Common Agricultural Policy was designed to protect small farms so they could continue to produce high quality food, and form large enough populations for essential services to remain in rural areas.

Caerhys, St Davids, is a community supported agriculture scheme in which the farm produces foodstuffs for subscribers in the locality. This photo was taken there in 2012, in the early days of the scheme.

Looking specifically at Wales, which has 9% of the UK’s land but 18% of its permanent pasture and 28% of its sheep, the draconian cuts in farm support, revealed in Chancellor Rishi Sunak’s Spending Review on November 25th, seem destined to lead to bankruptcies. A no-deal Brexit would impose tariffs of 12.8% plus significant amounts per 100 kilos ranging from €167.50 to €311.80, according to the Agriculture and Horticulture Development Board (AHDB).  About 32% of lamb from Wales is exported to the EU, much of it from farms kept operational only with subsidy support. As subsidies are cut, and the cost of exporting rises, farmers are caught between a rock and a very hard place.

The Farmers’ Union of Wales calculates that for 2021-22, the budget for farm support and rural development will be £242 million compared with the £337 million that the Westminster government had previously promised. This is a cut of 28.2%.

The Welsh Government’s release ‘Farm Incomes in Wales, April 2018 to March 2019’ reported that “In each year around 20 per cent of the farms are making an overall loss with a subsidy, and over half would make a loss without subsidy and diversification”. When farmers receive less financial support and have to pay new painful tariffs on exports to the EU, how long are banks going to remain sympathetic?

The Farmers’ Union of Wales president, Glyn Roberts, says: “Direct payments [mainly for each hectare of a farm business] make up around 80% of average Welsh farm incomes. The significant impacts such a cut in funding will have on Welsh farms, agricultural businesses and rural communities are clear, and these will come at a time when the industry is already anticipating major problems due to non-tariff barriers, unfair competition from sub-standard imports and the possibility of massive EU tariff barriers in the event of a no-deal Brexit.”

Wales has 5% of the UK’s population but 10% of the farmland and 16% of the farms. Farming communities are the backbone of Welsh language and culture, which Westminster’s wrecking ball would weaken, perhaps fatally.

Upland Wales, already a water store for English cities, suffered from the blanket planting of non-native conifers, especially in the 1960s and 70s, resulting in damaging habitat loss and in acidification. Maybe the Westminster government is thinking of Wales as a source of water, timber, and wind- and water-power for England – if so, rather an extractive colonial mindset.

The Chancellor’s swingeing attack on farmers in Wales does not allow much time for adaptation, but that could be part of the plan. To fight back, farmers need to sell direct, or at the very least shorten supply chains so that they can keep a higher proportion of the end selling price.

New mixed family farms, often small and prioritising soil improvement and rich habitats, are also part of the answer, a topic to which Chris Smaje has devoted one new book, and Colin Tudge is devoting another. If mixed family-run farms are part of community supported agriculture, like the Caerhys scheme in St Davids, Pembrokeshire, farmers are helped to stay on the land and communities have a source of fresh food, in both cases improving their resilience — and their independence from unreliable politicians. If money circulates within communities, instead of leaving for the City of London and probably a variety of tax havens, local demand is also protected.

PDR

Chris Smaje’s book is A Small Farm Future, published by Chelse Green in 2020.Colin Tudge’s book is The Great Rethink: a 21st Century Renaissance, to come from Pari Publishing in January 2021.


Less Now, or Nothing Later

Is it really such a hard choice?

Consume less – or in future risk consuming nothing at all. The message is so unpalatable that politicians tend to deny it or bury it. Our whole economic system depends on larger and larger numbers, the adding up of the values of all transactions purportedly to show that economies are ‘growing’. No matter that serious consequences, the uncounted ‘externalities’, such as soil loss, ocean acidification, plastic pollution, greenhouse gas emissions, and  resource depletion, are excluded from the sums! (Although cleaning up polluted sites, rebuilding after floods and other disasters, the drugs trade and even prostitution are included as they can be counted or at least estimated in national accounts.)

New York, home to 8.4 million people, faces an underwater future — as do coastal cities around the world. Photo source: Unsplash

Only the reality of data demonstrating climate change, and of the terrifying experiences of those at the sharp end of weather disasters, forced reluctant governments to show they are doing ‘something’ to slow down – or apparently slow down – damaging emissions that are making the Earth’s climates hotter and therefore more unstable and unpredictable, and are melting ice so fast that coastal zones, where most people live, will often be under water.

The US Geological Survey (USGS) estimates that if every glacier melted, sea levels would rise about 230 feet. Goodbye London, New York, Kolkata, Shanghai and waterside cities, towns, villages and hamlets around the world. Clearly President Trump, aficionado of oceanside Florida, does not pay attention to USGS. Where will the displaced go? To where other people are already living, or more probably trying to subsist.

To stand any chance of avoiding the worst aspects of this scenario, we have to plan economic contraction in countries like UK. If we do not plan, the outcome is worse and economies crash anyway.

Paul Mobbs, author of the 2005 book Energy Beyond Oil, has concluded that we in affluent nations have been living beyond our energy resources for so long that we have to consume far, far less.  Nuclear won’t save us. Hydrogen won’t. Electricity generated from ‘renewables’ won’t.

Problem is that this prospect does not fit into the window frame of permissible thought.  That frame is very narrow.

As Paul Mobbs writes in ‘Britain’s Energy and Climate Crisis’ (fraw.org.uk/weird, issue 3 2020):

“For many trapped within consumer culture, this conclusion [to cut consumption] is dismissed as ‘negative’. It offers no hope of preserving the affluent modern lifestyle as part of solving climate change – which is why the popular political debate ignores this reality.”

The consequences of dramatic downshifting are colossal. Two new books and one older one reviewed on this site here, here and here, address aspects of the issue, especially the necessity to protect soils and farm in what we might call an old-fashioned way, using rotations, cover crops and enough livestock to supply manure.

Jobs in wholesaling and retailing, in road transport, customer services, in selling complex financial products, in tourism and hospitality, would be among those to shrink, given the declining amounts of energy available. What a shame that the UK, unlike Norway, squandered the revenues from North Sea Oil and did not build up a sovereign wealth fund to ease the transition to a post-consumer society.  

PDR

Energy Beyond Oil by Paul Mobbs was published by Matador in 2005, ISBN 1 905237 00 6