‘The first of the UN’s Sustainable Development Goals is to end poverty in all its forms everywhere.’
from the introduction to a Policy Institute seminar on 10/9/24 at the Mansion House in London
Dismal weather has resulted in two iconic images this summer: the first, of Rishi Sunak making his ill-fated announcement for the recent UK General Election, and the second, of France welcoming the world to Paris for the 2024 Olympics. The consequences of these ill omens have been proved rather different: disastrous, so far as Sunak hoping for returning the Conservatives to power, but in Paris, followed by a return to glorious sunshine and a great celebration of global sport.
It's been a long hard economic winter too. Last week's token reduction of 0.25% in UK interest rates is very welcome, but real interest rate is still 3%, and the Bank of England is not optimistic about further reductions.
Political and economic activity have stretched much further into the summer holiday season than normal, but the UK Parliament has finally stepped down for its recess, although it probably doesn't feel much like that as the towns and cities of England erupt into street riots following the recent Southport atrocity.
Meanwhile, in the United States, the presidential campaign is in full swing, and the Paris Olympics will continue to concentrate attention on sport for the first half of August.
It's a short summer break this year.
However, the new academic year is also approaching fast. The news last weekend that there has been a substantial fall in the number of young people applying for university is the latest evidence of the damage inflicted by the Student Debt regime, on which we commented last week.
This does, of course, mean that there’s much more chance for a young person to be accepted at the university of their choice and for their chosen degree. Chief Executive of UCAS Jo Saxton said, ‘It is a really, really good year to be applying to university’.
University finances are also challenged by a fall in the number of overseas students: there was a 1.4% drop in the number of overseas students applying, the first fall in eight years. While UK students pay £9,250 per annum, foreign students can pay up to £35,000 per annum.
With the new academic year approaching fast, we can also expect detailed reports of school examination results. In the years approaching the pandemic, our commentaries analysed these in some detail in order to show the need for financial awareness to be included as an examination in its own right: hopefully this is something which will now be properly addressed by the new UK Government.
The Sunday Times has helpfully provided the key part of this analysis last weekend, showing how a record 100,000 young people took Maths ‘A’ level this summer: an 11.4% increase on 2023. Since the only examination provision for general financial awareness at present is via Maths, it demonstrates the importance of the subject in the search for career opportunities — something that run-of-the-mill university degrees are failing to achieve.
So, compared to the average summer ‘silly season’, there's a lot of action and instability to grab our attention this year: and that's without commenting on the continuous stream of violence which continues to infect the Middle East and Ukraine.
In these circumstances we can, perhaps, understand why the Bank of England Monetary Policy Committee was split 5:4 in reaching its decision for even that small reduction of 0.25% in interest rates. Some of them point to inflation in services, which might reflect the fact that there's not enough professional capacity and competition in these fields.
However, their cautious stance also reflects the extent to which a wholesale shift in the economic paradigm is underway: with protectionism replacing free trade, with a much higher cost of servicing public debt replacing near zero interest rates, and with monetary stimulus requiring replacement by fiscal stimulus (which itself is restricted by excess public debt). Add to all these the worry about the geopolitical tail risks, and you can see why central banks are reluctant to take their foot off the brake pedal.
The fact is, we need a new consensus on the necessity to live in peace with each other: restorative justice rather than resorting to threats and violence, and a new appreciation of global interdependence and governance. We need to remember that the migration which is fuelling the riots on our streets is the result of poverty and despair in their home countries, and we need to do more to address that.
If we're lucky we may yet get a few weeks of summer calm, during which it would be helpful to consider this broader perspective. Some people who are doing just that will be preparing for a morning seminar on 10th September, entitled ‘A world without poverty’, at the Mansion House in London. Unfortunately I will not able to be there due to other commitments but if the event, organised by King’s College London and the Policy Institute, accepts the need to find a more egalitarian form of capitalism, we could start to see an answer to many of our current problems.
Gavin Oldham OBE
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