State of Nature report

On Wednesday the latest 'State of Nature' report was published. It got good press on the Radio that morning - I listened as I prepared to leave for a Workshop in Germany. The message is hardly surprising - some species are expanding their range/recovering, but rather more are declining. The biggest declines, inevitably, are amongst invertebrates and plants, whilst the most prominent gains seem to be amongst vertebrates. Why should anybody be surprised?

The positive message?

On the plus side, we are still seeing the bounce-back from the effects of DDT on predatory birds. Coupled with a decline in persecution of raptors in some areas, this change in land management has to be welcomed. It is noteworthy, however, that the agricultural sector is highlighting the improvement as a significant reason for a decline in other species! And, of course there are lobbies to reverse the improvements - badger culls and buzzard culls are just two initiatives; calls for a cull of sparrowhawks is another! So, I guess as part of the new Conservative administration's programme we might well see measures to reverse the trend in wildlife recovery!

The other gains are not necessarily positive. In my experience, gains are happening amongst introduced species, some of which are pests and others are simply establishing as part of the background mesh of wildlife. Other gains are happening where species at the edge of range are improving their foothold as clime change affects the landscape. Whilst such improvements are to be welcomed, we should perhaps treat them with some caution.

there is always a 'but' ....

So, I will be accused of having a glass half empty! Well let that be so. I recall parts of the 'leadership' of my erstwhile employers saying 'I don't want to hear about problems I simply want the good news'. The same holds with the NFU response - the NGOs should have been crowing about successes and brushing the declines under the table.

Well, I for one hope that the NGOs will continue to highlight the problems. In my experience they lie primarily amongst the specialist species and paint a very worrying picture of wildlife's future. The State of Nature  report particularly highlights problems with invertebrates, which on the basis of my field experience I think is correct.

A balanced view of why?

The State of Nature report is actually reasonably balanced. It does highlight changing agricultural practice, but then it also highlights the role a changing climate can play. As always, there will be gains and losses, and different people will lay the blame primarily on one factor. Placing emphasis on a particular cause is an easy way out but it won't solve the problem.


Using the NFU argument, if raptor numbers are increasing we should expect to see a diminution of prey items. That is a good theory, but it starts to fall apart as one travels down the food chain. Perhaps a case could be developed to link declines in smaller birds and mammals to increased raptor numbers? But, I don't think the data are telling us this. The loss of a favourite blackbird from the bird table is a visible expression of nature red in tooth and claw, but it does not mean that there is a problem with raptors. Large-scale losses in farmland birds have not been accompanied by vast increases in sparrowhawk numbers. The scale of sparrowhawk increases would have had to have been much greater to have resulted in the scale of declines in farmland birds. Moreover, the declines in farmland birds started well before a significant increase in sparrowhawks was detectable.

It is invertebrates that are perhaps the best indicators. If the NFU argument was correct, then by rights we should be seen huge increases in invertebrate populations as bird predation diminishes with the decline in their numbers. Sadly, that is not the case. When did you last have to clear your windscreen of splatted insects? When did you last drive through clouds of moths on a balmy summer's evening? I don't remember the last time I saw large numbers of ghost swift moths over a grassland, yet there are plenty of grasslands and the site where I used to see them still exists.

So, I am sorry NFU, you cannot deflect the blame onto 'predators'. nor can you duck the issue by asking that we accentuate the positives and brush the bad news under the carpet.

But who is to blame?

I must depart from the accepted mantra is that the problem primarily lies with changing agriculture. I agree that this is a significant issue, but my instincts and experience suggest that other factors are at work too.

Extreme weather, especially major droughts and exceptionally warm winters, is possibly a far more important influence on our NATIVE wildlife. I would put to one side those at the extreme of range, whose fortune wax and wane with the climate. My feeling is that it is far more important to focus on species that are primarily associated with the equable Atlantic climate. Chilly winters and warm wet summers.

Short warm winters such as that of 2015/16 mean that species adapted to longer cold conditions will not be able to survive and will shift to their favoured climate envelope (more northerly and western). Meanwhile, those species that rely on wet conditions will fail if there are prolonged droughts. There have been several major droughts in the past 30 years, starting with 1976/77, followed by a similar event in the early 1990s and again in the mid-1990s, and then again in the early 2000s. Each time, the wetland assemblage took a hammering and as far as I can see parts of it have never recovered. Good indicators might be the craneflies and snail-killing flies, but the data just are not robust enough to work from. Hoverfly data certainly point to drought as an important factor.

My feeling is that climate change is a very significant factor, but that we should not lose sight of the other big concern: loss of the fabric of the countryside as hedgerows and ditches are cleared and field sizes have been vastly increased. Loss of mixed farms and concentration on bigger areas of just a few crops cannot be positive. Landscape heterogeneity is a major factor in the overall abundance of wildlife, but the loss of unusual habitats such as seepages, log jams, wet soils and semi-permanent water bodies is equally significant.

So, NFU, I cannot let you off the hook, but the problems are much broader and these were properly discussed in the State of Nature report.

It seems I must blame Golf for my lack of work overseas!

Oh what fun! I find it really amusing to hear Dr Liam Fox's views on what is wrong with British Industry! It strikes me that he completely fails to understand what drives industry. Perhaps the following would be a useful insight for him as to why I am not chasing business deals in the Far East:

There may be opportunities in some parts of the Far East, but there are some obvious impediments to progress by smaller businesses:

• Lack of contacts
• Cost of travel
•  The need for visas
• Lack of language skills
• Lack of a clear understanding of what might be marketable
• Why should developing nations use overseas specialists when they have their own specialists in up-and-coming universities.

I am part of the UK service industry, which a massive part of UK exports but is dismissed as irrelevant by the Brexiteers - all they seem to see as UK industry is widget-makers. Unfortunately, I also work in a business area where most of Government spending is wrapped up in call-off contracts with the biggest consultancies. As such there is precious little chance of making a solid income, let alone one where there is sufficient money to invest in speculative travel to suitable venues. I get innumerable invitations to conferences in China, Thailand and goodness knows where else, but I simply cannot afford the costs - one needs a strong income to support speculative travel. Therefore, I am sorry to say that I won't be contributing more to the UK export drive.

My main overseas market is/was northern Europe - which is fast slipping away from me as Brexit makes it less likely that my services will be wanted - who in Europe will want a consultant from a country that has stuck two fingers up at them and the legislation that I specialise in?

So, wake up Brexiteers - you have destroyed one market for the UK service industry and have placed your faith in doing business in parts of the world where their labour costs are lower. Whilst they may speak English we don't have a clue what they are saying - we are very definitely on the back foot. So, maybe a few parts of business do put more emphasis on their golf handicap but I suspect those businesses that can secure overseas markets have already done so. The service industry best placed to secure these markets is already there - American-owned giants with British outposts. I saw no evidence presented by Brexiteers of any market research that really showed that there was this gaping market for British goods.

Me thinks this is the start of the chickens coming home to roost.

So the Lemmings have jumped off the cliff

I am not surprised by the result this morning; nor am I too surprised by the crash in the Pound. According to the Brext camp this was not going to happen!

I wonder what else of the warnings made by the remain team will come true? I hope the most serious do not, but suspect that they will. A run on the Pound may well precipitate a rise in interest rates. If, as Standard and Poor have said, the UK's AAA rating is lost, then that too indicates that rates will have to rise. Meanwhile, a 10% drop in the Pound must mean an increase in prices, especially of fuel and imported commodities and food. Likewise, other imported goods will rise in price

So, at last, inflation will start to re-emerge as an economic shadow. For the saver reliant on interest rates to provide an income that may well be no bad thing, but for home owners with big mortgages that is a real shadow on the horizon. If rates rise significantly there is quite a serious risk of a rise in mortgage defaults and a decline in house prices. Maybe such a decline would be a good thing, but the economy is frightfully closely linked to house prices, so I think the chances of us avoiding another recession in the near future are diminishing.

As Sir John Major commented just a couple of days ago, a Brexit vote will mean that the chickens will come home to roost for those in the leave camp who so rubbished Remain's economic concerns. I cannot see how David Cameron can continue as PM, especially given the calls for George Osborne's head. Both Cameron and Osborne subscribed to the same economic predictions and Cameron can hardly sack Osborne and keep his reputation for being a man of principle - blaming the cook when the butler has spiked the curry is not the done thing!

Well, I guess those of us with business interests linked to European legislation had best look for an alternative job. As things stand, I think my company will have to fold in the next 18 months; who in China or India will want my services?

At last a sensible man!

Andrew Tyrie's article in The Times today hit the spot for me. At last there was an analysis that was not filled with the hot air of Brexit or the open goals created by the Remain campaign. It was measured and sensible. Of course Brexit will rubbish it because his conclusion was in favour of  'Remain', but there is no escaping the fact that the Brexit camp have told a pack of lies in all sorts of places; from mis-quoting figures on the UK contribution, to spreading fear about an imminent influx of Turkish immigrants. Brexit talk 'project fear' but I think the same or worse charges can be levelled at them.

Meanwhile, the financial markets are already getting the jitters. The Pound is down to April levels and levels of uncertainty about the UK economy are rising. That means that whatever happens on June 23rd, the economy is being affected by fears of Brexit. We can only speculate what will happen when a concern becomes a reality. A Sterling crash will of course mean that lots of British holidaymakers will pay a lot more for their 'sun, sand and Sangria', but also that perhaps our tourist industry will get a boost and guest house rates will rise so that Brits cannot afford them! A double whammy!

For me, the more worrying issue is the impact of a dip in share prices will have on people's pension schemes. For those in the 55-65 bracket there are good grounds to be very worried. If you have a money purchase scheme expect your investments to yield a much lower return and therefore any pension to be substantially lower. If you are below 40, pile the money in now as there is a chance you will do better than you might otherwise have done (in 25-30 years time).

It does not stop there. We have already seen the impact of a deficit in the pension scheme and its effect on the future of a business. The 'British Steel' situation is salutary, whilst the BHS debacle should send a shockwave through remaining pension schemes with significant deficits and a lack of a decent commitment to a recovery plan. If your scheme is a defined benefits scheme that has not closed, expect it to close to new entrants in the very near future - big holes in such schemes mean that action has to be taken and one start of the process is to close to new entrants.

Of course, to use James Dyson's words I am speaking 'cobblers' if you subscribe to the Brixit argument. Maybe my message is 'project fear'; but I challenge the Brexiteers to resolve a basic problem: almost all economists and commentators expect Brexit to result in a substantial economic shock to the British and possibly the World economy. That will have an impact on current employment, on short-term investment and on the status of pension schemes. By way of an example, I have shares in 'Good Energy' who are floating a rights issue at the moment - do I invest or should I be wary in the face of Brexit and a change in leadership from climate change receptive to climate change deniers? I am wavering but am certain that I will not make any investment at the level I might otherwise have done. My brother goes one stage further and will not invest.

The Brexit camp has brushed over such issues in a most cavalier manner but it cannot surely ignore the economic facts of life when economies shrink: there is less money in the exchequer, less money invested and fewer jobs created. There WILL be a short- to medium-term impact after Brexit and some of that impact WILL have long-term consequences for people approaching their pension. Forget the question of whether the Government pension will continue to be pegged to inflation; private pensions will not be pegged in quite the same way - they are linked to real-time economic performance. We cannot be sure how any future Government will deal with a hole in the budget, but if it is the right wing of the Conservative Party you can bet that they will be prepared to consider what they argue is unthinkable - there will have to be cuts somewhere as they will not raise taxes.

So, my question to the Brexit camp - will you be using the savings from Brexit to supplement those who lose out when their pension pot drops because UK share prices trip up? I'll bet there won't be enough in the kitty after all their rash promises have been fulfilled.

Lies, obfuscation and threats

Who was it on Question Time this week who railed against the messages given by both sides in the EU referendum debate? I think it was the Green Party panellist. I found myself (for once) agreeing with the views of a Green Party speaker on this bit of the issue. Frankly, I find the whole approach of the 'Leave' campaign appalling.

Every time somebody from the UK says anything that has any traction it is rubbished - from John Major to Mark Carney. According to the 'Leave' group these people don't have a clue and by the way they speak it seems they also dismiss the right of legitimate speakers to profess a view. At times I start to think that their behaviour is nothing short of bully-boy tactics. Attitudes towards President Oboma also highlighted some distasteful attitudes (not least Boris Johnson's reference to his Kenyan origins).

For me, the clincher was when ITV chose to field Nigel Farage against David Cameron. The response from 'a senior member' of the 'Leave' campaign was to warn that 'there will be consequences' for ITV. That is nothing short of a threat 'do what we say or we'll come after you when we have power'. I note that the leader in question was not named.

This is all very ugly, and to me provides a clear warning against voting to leave. I won't deny that there are aspects of the EU that I don't particularly like. Indeed, on some days I might be persuaded to vote leave. BUT, the one thing I think is clear is that if we vote to leave, there will be political turmoil.

David Cameron's position will be untenable. Those in the 'Leave' camp who say that they would want DC to stay on to lead negotiations are overlooking (or recognising) the fact that once we have voted to leave there will be huge expectations from the electorate on what the leave deal will look like. Privately, a good many know that the hype that is promoted about a UK-specific trade deal is highly unlikely to be realised and that 'negotiations' will be protracted and messy. They then need a fall-guy and David Cameron is being set up for that too. So, I would urge David Cameron to resign immediately if the country votes to leave.

That leaves us with a real dilemma. It means that the bullies will be in power, and frankly this campaign has convinced me that there are some very unpalatable elements within the 'Leave' campaign. Nigel Farage may be considered toxic by the leadership, but parts of that leadership are to my mind just as toxic.

So, is there a risk to European stability if we vote leave? Well, I think one could construct a plausible scenario where we vote to leave, the bullies get into power and the UK becomes isolationist because it cannot get its way. Would that stretch as far as armed conflict? Probably not in the short-term, but I think there are very severe tensions developing in Europe that could well have resulted in war in the past. Today, the political environment of the EU almost certainly stops such a problem, but there are frightening parallels between the World today and the World in the 1930s (especially bearing in mind Vladimir Putin's track record in the Ukraine).

I fear that the 'Leave' campaign are not being at all honest with the electorate. Or, if they do honestly believe what they say, they are terribly naive. Either way, those are not the qualities one looks for in politicians. My instincts are that it is time for a new centrist party to emerge; one that embraces the best of the centre-left and centre-right. Time for the resurrection of the Social Democrats.

Out of Europe - the solution for small businesses?

A fascinating interview with Priti Patel this morning on 'Today' (Radio 4).

We are told that leaving the EU would lift the yoke of EU legislation on small businesses that have no leverage in Europe. When challenged, she managed to talk about packaging 'silly labelling' requirements in relation to such products as food and water.

By all accounts small businesses would benefit from the lifting of such costs. BUT, how are the 'Out' campaign going to discriminate between small and large businesses? Are there going to be two rules, one for small businesses and one for large? And, what about the cut-off point? One minute you are a small business subject to one set of rules; the next minute you have grown and are a large business, subject to a different set of rules?

Of course we would not travel this route - we would have a unified approach that benefits big and small businesses alike. I cannot imagine the leaders of the 'out' campaign taking no notice of lobbying from big business. So, lets be clear, this is nothing about small businesses - it is about big business and its dislike of regulation. We have seen far too much of their contempt for regulation over the years. Recent revelations about Volkeswagon are just the tip of the iceberg!

So, why do we have regulations? The 'out' campaign would have you believe that industry is as pure as the driven snow and it is just the meddling Eurocrats who want to control people's lives. What a load of tosh! We have regulation because a problem is identified. Then we have more regulation because of lack of compliance with earlier rules. It goes on and we see rafts of legislation. The answer is not to strip away the legislation but to take a cold hard look at the reasons for regulation and revise it - but do it at a European level so there is a level playing field.

'Out' campaigners will tell me I'm wrong and don't know what I am talking about! Well, I run a small business and I can say that the only problems I have with Europe arise because of the actions of big business such as Google, Starbucks etc. European VAT rules are a pain but can be dealt with. My biggest gripe comes from the UK's own procurement system.

When I started my business I found procurement rules in Natural England, the MMO and the EA all effectively excluded small businesses. To name a few:

·         Requirement for a minimum of £5m Public Liability Insurance, even for jobs worth a few thousand pounds. That ruled me out - when I started I was quoted £3,500 for this - way above what I could afford - so I was effectively excluded from bidding for work.

·         Requirement for a minimum turnover of £120k pa (the MMO) meant that as a start-up business I could never bid for small jobs that were exactly the sort of thing that I had comprehensive experience! Of course not being able to secure such contracts meant that I would never get to reach turnover requirements. Needless to say I don't bother looking at the MMO as a possible client.

·         Framework contracts for small jobs. The EA was totally wrapped up with framework contracts - even now I never see any jobs that I can bid for. I did get involved in bidding for a number of contracts (with a bigger consultancy). They are a big task and can take up many weeks work, with no guarantee of work at the end. Even if you win the bidding process you then have to go into mini-competitions and put in more work for a few thousand pounds. And, in some cases you get on the framework and never get any work.

Now, procurement people will say that I just have an axe to grind. Maybe - perhaps I am just a lousy businessman! The model I developed was to offer competitive rates to Government Agencies. Most of the small jobs that they need doing could be done on single tender. But of course that is not possible for a variety of reasons - risks of nepotism, lack of competition etc. Fair enough - that brings in a raft of processes that add to costs. If you are a one-man band then three weeks bidding and not getting work means that there is no money coming in (I had one summer where I spent 20 weeks writing bids and getting no work - because I was not big enough to have the right insurance, environment policy, health and safety policy etc).

So, I remain a small business, on its knees and just hoping I can survive long enough to draw my pension (when I will become a great deal better off). Is this down to the EU?  Well, there might be some EU rules concerning procurement but I suspect the vast majority of the problems is that Government is not capable of devising practices that do not discriminate against small businesses. What they fail to recognise is that specialists can be secured at lower rates if using small companies, but those rates are only low because they do not have the vast superstructure of bidding, insurance and policy production that can be afforded by big consultancies who charge much higher rates (mine are less than half those of a comparably skilled person in one of the bigger consultancies).

These issues are of course a total irrelevance now, as there is no money in Defra and its family; so I am working on the position that what little income I derived from these clients is over. By the time better times emerge I will be gone from the scene or too much of an anachronism to be of any use! Perhaps though, my successors will fare better if somebody looks at the issues and takes action?

So, Priti Patel and the 'Out' campaign, how are you going to help me grow my business when we have left the EU? I have found doing business in Europe a great deal less painful than doing it in the UK - single tender rules way above UK rules, no call for excessive insurance, no requirement for screeds of company policies, and a recognition of the need to buy the right skills for the job and not the right rules for the job.

Treasury economic model of Brexit - can we trust the modellers?

The release of Treasury figures for the projected impact of Brexit on the British economy have inevitably been dismissed as rubbish by the 'Outers'. In some ways they might be right. My limited experience of economic forecasting is based on ten years dealing with projections of growth in demand for port capacity. I was left less than convinced about the models!

Whilst dealing with Dibden Bay, I asked the modellers working for ABP why the projected demand forecasts for container capacity were continuously upwards; surely they must reach an asymptote? The response was that this is how growth had largely developed since the introduction of the 'container' and there was no reason to suppose that this would change in the foreseeable future. Like a fool, I failed to ask the more searching questions about the impact of major recessions or other shocks to the country's economy. I remember thinking 'but what about recessions' but decided that they had better experience than me and that my questions would be naive. I was wrong (I have been on many occasions!).

Rolling on 15 years, Dibden Bay has not been built and the port of Southampton is now handling about double what it did in the late 1990s using reconfigured existing quaysides. Conversely, the port of Felixstowe has grown with the development of what was called 'Felixstowe South' at the time - and it needs new berth configuration to handle today's 'mega ships'. London Gateway, often considered to be a white elephant by those in the know, has been partially completed but whenever I visit that part of the world it seems to be largely without ships (things are improving I understand).

Meanwhile, Bathside Bay has not been built; nor has Bristol Riverside Terminal. All of this capacity was consented on the grounds of need and on the basis of economic projections that forecast a huge rise in demand between now and 2030. Those forecasts start to look a bit optimistic now! I never quite believed them, but I did believe the basic economic model that almost nobody would build a major container terminal unless the economic case was sitting at the end of their nose. So, it really did not matter if consent was granted - nothing would happen if the money did not stack up.

Of course my thesis is somewhat flawed because there are long-term investments such as London Gateway by Sovereign Wealth Funds that throw spanners in the works. But, my basic economic model is right. Conversely, the forecasts of container capacity are clearly well off the mark. They have parallels with the projections the SNP made for oil revenues (I'll bet a fair few Scots are quietly relieved that they did not leave the protective economic umbrella of England even if they don't like us and are fearful of Brexit).

So, where does this leave the Treasury figures? Well, I don't believe them! Nor do I subscribe to the views of the 'Outers' who argue that things will be much more rosy. The one thing that we can be sure of is that all commentators seem to be in agreement that Brexit will cause a dip in economic growth (in other words a recession). That in turn will trigger a need for more cost savings by Government. It may also trigger the departure of some economic migrants and those recent arrivals who are fearful of being marooned in the UK! It may also trigger the return of some Expats - who of course will then place a different burden on society as they are largely an aging population with health care needs and limited economic productivity.

This is a theme that needs to be explored in greater detail. Savings on our contributions to the EU will clearly be something to be considered - I shall look at these in due course.

Today's question for the 'Outers' is: 

 If the Treasury model is fanciful, please give me some hard evidence that your model is right. I don't recall seeing any costed model - just an awful lot of hot air saying that we will be able to make much more by having the freedom to trade elsewhere. The 'out' model has parallels with the Scottish oil model and the port demand forecasts of the late 1990s and early 2000s.