Commercial property: * Prêt a Payer *, or Prêt-à-Fermer?

Closed door at Pret.  Image thanks to Wikipedia and Theworldgymnast1

This article is cross-posted from PRIME Economics 

The government wants us to return to our office workplaces in the cities.   The FT tells us:

“The government will [this] week launch a media campaign to encourage more employees back to their workplaces amid growing concern in Downing Street over the rising number of job losses at service businesses in city centres that are reeling from a lack of customers.  

And from Sky News (Aug 20):  

“Just one in six workers have gone back to work in cities this summer after companies and staff ignored government pleas to return, leaving economic activity deeply depressed and placing thousands of small businesses at risk of collapse….[W]orker footfall in Britain’s cities was just 17% of pre-lockdown levels in the first two weeks of August.”  

The Centre for Cities’ “High Streets Recovery Tracker” shows just how far below ‘normal’ some of our biggest cities still remained by mid-August, in terms of footfall and spend levels – with London at the foot of both tables (see table at end of this article).  

The concerns expressed are that a whole ecology of city centre businesses may be killed off: “Hospitality companies that thrive on footfall, and services such as hairdressers, dry cleaners and cobblers reliant on workers, could be devastated unless cities return to normal”, says Sky News.  

We can indeed worry about the future of so many small businesses – though it is not only small businesses that are affected.  On the contrary, in recent years our city centres have been increasingly colonised by the big chains providing blandly standardised products of greater or lesser quality – and they are also hard hit.

We read, for example, that “Sandwich chain Pret a Manger is to cut 3,000 jobs, or more than a third of its workforce, as part of a plan to save the business.” (BBC News, 27 August).    

Now the French adjective “prêt” means “ready”, as in Ready to Eat, or Ready to Wear (“Pret A Porter”).  But it also has a second meaning as a noun – that of “loan”.  

And we can be pret-ty sure that the government’s major concern for our cities is far more about this second meaning than about the downsizing of the sandwich-dispensing Pret and its like. 

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The Rogue Prorogation and the English-Scottish judicial divide

This is cross-posted from the PRIME Economics site, where it was first posted on 12 September 2019

Image:  Institution of the Court of Session by (Scottish King) James V in 1532, via Wikimedia

As the pressures and contradictions of no-deal Brexit threaten the unity of the United Kingdom, further fissures are to be seen through the prisms of judical reasoning, in which English and Scottish judges  view and interpet the world in utterly divergent ways.

The English High Court (which included the Lord Chief Justice and the Master of the Rolls) has curtly dismissed the claim that the Prime Minister’s decision to seek prorogation of Parliament, for the five week period so shortly before the current Brexit deadline, was unlawful.  By contrast, the Scottish Court of Session (hearing the case on appeal) has held that the advice was for an improper purpose and so  unlawful.  Both decisions are the subject of appeal to the UK Supreme Court, to be heard on 17th September.

We have now seen the full reasons of both the English High Court and of the Scottish Court of Session.  They relate to the same issues and set of facts – but the judicial approach and the outcomes completely diverge.

So what conclusions can we draw from the courts’ very different approaches?  

There are in essence two main legal issues.  The first is whether the case is “justiciable” at all, i.e. do the courts have any jurisdiction to intervene, even if satisfied that the Prime Minister’s decision to prorogue had no valid public interest reason? If the answer is no, that it is “non-justiciable”, then the motive - even if generally seen as improper - is by definition irrelevant.  The courts have no role to play.  In such a vew, it is purely a political matter.

The second issue only arises if the answer to the first is that a decision to prorogue (strictly, to advise the Queen to prorogue) is, at least in some circumstances, justiciable.  If so, then the courts can review the reasons for the decision and – if it considers them to be illegitimate, e.g. by undermining Parliamentary democracy – hold that the decision is unlawful, and overturn it.

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TV discussion “Eurozone Future: Is the eurozone really on the brink?”

On Wednesday (6th March) I was invited by TRT World TV channel to take part in their Roundtable discussion on the future of the euro and eurozone, hosted by David Foster.  My co-panellists were Valentina Romei of the FT, Vicky Pryce, Chief Economics Adviser at CEBR, and via skype from France, Philippe Waechter, Chief economist Ostrum Asset Management.  

Chagos Islands - International Court of Justice rules that UK breached duty to decolonize

Image with acknowledgment to wikipedia

Amidst all the current political gloom, one ray of light.  Today (Monday), the International Court of Justice (ICJ) - by a majority of 13 judges to 1 (the lone dissenter being the US judge) - held, in an advisory ruling, that the UK is and has been in breach of its duties under international law, through its failure to decolonize the Chagos Islands.  The Islands, in the middle of the Indian Ocean, had been deliberately split away from their historic link to Mauritius at the time of, and as a condition of, Mauritius’ independence.  They were turned into a new colony known as the British Indian Ocean Territories, or B.I.O.T.  The inhabitants were forcibly evicted, and the main island, Diego Garcia, was leased to the USA to be a major US nuclear base. The US military are still there.

The General Assembly of the United Nations had referred the case, but the UK govenment, while being legally represented, had declined to accept the ICJ’s  jurisdiction to make a binding decision.  So we need to wait to see how the UK government reacts (badly is my guess).

The key passage of the judges’ Opinion is this:

174. The Court concludes that, as a result of the Chagos Archipelago’s unlawful detachment and its incorporation into a new colony, known as the BIOT, the process of decolonization of Mauritius was not lawfully completed when Mauritius acceded to independence in 1968.

I am very happy that at last, a firm step has been taken towards bringing justice to the Chagos Islanders, as well as to Mauritius.  But I’m also pleased at a personal and professoinal level because, way back in 1982/3, I was active in researching and raising the legal issues. I gave a paper on the issue to a conference in Delhi, in September 1982, on “Indian Ocean - Zone of Peace”, organised by the Indian Association of Lawyers and the International Association of Democratic Lawyers (IADL).  (Not least of my memories of that conference is a reception at her residence hosted by Prime Minister Indira Ghandi; within a few weeks, she was assassinated).  

My paper was published by the IADL in 1983 in their Review of Contemporary Law.  I take the liberty of republishing it here, not least so that it does not get totally lost in a digital age.  But I also think my legal arguments, 36 years ago, were fully in accord with the ICJ’s reasoning today.  And I also drew a brief comparison with the UK government’s legal approach to the Falkland Island issues in international law - so very,very different from its treatment of the same number of non-white, strategically inconvenient residents of the Chagos Islands whose fate it was to be evicted by the British government itself.

So here goes…

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Why it would be democratically absurd not to allow Article 50 notice of intention to be withdrawn

Now that the Advocate-General has given his opinion that a Member State of the EU may unilaterally withdraw its notification of ‘intention’ to withdraw, given under Article 50 of the Treaty on European Union, we await next week’s actual decision by the European Court of Justice.

I am of course pleased, though not at all surprised, that A-G Campos Sanchez reached the same view as I’ve long held on revocability, and which I first set out just a week after the Referendum on the PRIME economics website.  In my post “A democratic strategy for the EU negotiations“, I proposed a procedural route towards possible Brexit which might finally lead to a second Referendum, if Parliament considered the government’s deal to be seriously damaging, or if no deal was reached.  This assumed that the Article 50 notice could be withdrawn, and cited a House of Lords EU Committee report from May 2016 to this effect.  

(For avoidance of doubt, in this post I take it as self-evident that the change of intention must be genuine, clearly expressed through the relevant constitutional forms, and not used for tactical purposes.)

But having now read the A-G’s opinion, which I agree with in almost all respects, I feel that he has not given specific potential examples of why his interpretation is so necessary, and why moreover the European Commission and Council argument that revocation requires the unanimous agreement of the Member States via the Council would (if upheld by the Court) be dangerous.

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Legal services for the poor - from the Tumbl’in café (1971) to today’s austerity-driven tumbledown

The present government has (taking over from the already damaging work of the Coalition) virtually destroyed our legal aid system, one of the hallmarks of a civilised society.  The Justice Department’s budget has been cut by 25% in real terms over the last few years - much of it legal aid, but also affecting the quality of justice overall.  Which used to be one of the UK’s strong points.  We’re back to the bad old days of the profession too - when to be a barrister you needed to have a wealthy family to see you through the early years.  When legal aid was there, it not only offered better and fairer justice, but enabled people from different backgrounds to work and survive financially as barristers.  

And then there were the law centres, which developed as a next necessary step in the 1970s - and which I was closely involved in for many years, starting as a co-founder of the Brent Community Law Centre, along with Jack Dromey, Patrick Lefevre, Jamie Ritchie.  

We drew a bit on the US experience of Neighbourhood Law Centres in deprived urban areas, and in 1969, the first UK NLC was set up in North Kensington’s Golborne Road (see image below: Peter Kandler at the back looking cool in suit and tie, James Saunders and David Martin  - front right males - were the solicitors, not to forget Pam Ditton prior to her return to Australia).

For our decision (c.1970) to set up a Law Centre in Brent, we had given ourselves a radical mission to work in close partnership with, and under the direction of, the working class and community organisations in the borough - trade union branches (of which there were still many active ones in the borough, whose industry had not yet been trashed), tenants associations, and from an early stage, the Community Relations Council.  We saw ourselves as using law as a lever for wider social change, not simply as service providers.

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How Polanyi best explains Trump, Brexit and the over-reach of economic liberalism

This article by Jeremy Smith is cross-posted from the PRIME Economics website, first posted 31st December 2017. 

It’s good to see the latest (21 December) New York Review of Books give space to a review – by Robert Kuttner of American Prospect– of a biography of “Karl Polanyi: a Life on the Left” by Gareth Dale.  For as we have been arguing for a long time, it was Polanyi who better than any other historian / analyst got to the heart of the contradictions of free market globalised liberalism, and saw that it was such economic liberalism, pushed too far, that is likely to lead to authoritarian, or even fascist, outcomes.

As Kuttner puts it,

“Global capitalism has escaped the bounds of the postwar mixed economy that had reconciled dynamism with security through the regulation of finance, the empowerment of labor, a welfare state, and elements of public ownership”.

The outcome is extreme inequality and instability.  However, as Kuttner reminds,

“We have been here before. During the period between the two world wars, free-market liberals governing Britain, France, and the US tried to restore the pre–World War I laissez-faire system. They resurrected the gold standard and put war debts and reparations ahead of economic recovery. It was an era of free trade and rampant speculation, with no controls on private capital. The result was a decade of economic insecurity ending in depression, a weakening of parliamentary democracy, and fascist backlash. Right up until the German election of July 1932, when the Nazis became the largest party in the Reichstag, the pre-Hitler governing coalition was practicing the economic austerity commended by Germany’s creditors.”

It was these extremist policies of free market liberalism that Polanyi dissected in his most famous work, “The Great Transformation”, published in 1944.  

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Trampling on the Grapes of Rothko

We were in the riverside room of a nice restaurant (named something like Mango Mango) in Hoi An, a touristic town in central Vietnam, with family.  The river had overflowed its banks and was gently lapping at the doorstep. I took a photo (above) - alas not quite straight enough - because I liked the colour contrast of bright wall and murky mud brown river.

I then imagined myself as a great modern artist, in the style of Mark Rothko or monochromists such as Yves Klein.. and using the walls, plastic table coverings and napkins, created my gallery. Here are my major canvases…

First, a study in Red and Yellow

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How to care for that Money Tree

In last night’s BBC TV Question Time, Theresa May was asked by a nurse whether it was “fair” that her payslip from 2009 reflected the same that she is getting today - 8 years on.  Our Leader answered that the government had had to make “hard choices”, which of course meant reducing corporation tax as a priority over low paid essential service workers.  But Ms May added, “there isn’t a magic money tree that suddenly provides everything that people want”.  I am sure that this explanation of governmental choice of policy-making gives great comfort to Ms May’s questioner and all her colleagues…

Many tweeters and bloggers have rushed to point out that there are indeed many money trees around - but they tend under recent governments to provide their fruit for the rich, not the less well off. (@Chunky Mark - the self-defined Artist Taxi Driver - has provided the noisiest, most linguistically profane and funniest “explanation” to date).

Take the billions that were found in an instant to rescue the banks - without even imposing conditions to ensure they work in the public interest.  

The National Audit Office Report of July 2011 summarised it neatly:

The size of the support

4. The total outstanding support explicitly pledged to the banks as at 31 March 2011 is £456.33 billion (Figure 1), down from £612.58 billion as at 31 March 2010, and from a peak of some £1.162 trillion. The total outstanding support is 31 per cent of Gross Domestic Product as at March 2011.

5. Of the total support, £123.93 billion was provided in the form of loans or share
purchases, which required a transfer of cash from the Government to the banks
(Figure 3). A further £332.40 billion relates to guarantees and other forms of contingent liability where the Government will only provide cash if certain events arise (Figure 2).

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