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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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George Osborne to tell IMF that austerity U-turn would do damage

Category : Business

Chancellor is determined to resist pressure for greater boosts to growth in talks this week, arguing harm would outweigh benefits

George Osborne will warn the International Monetary Fund that a U-turn on the government’s budget plans would do more harm than good when officials from the Washington-based organisation arrive in London on Wednesday for two weeks of talks.

The Treasury intends to reject the IMF’s call for an easing in the pace of deficit reduction and will insist that any change in the strategy is both unnecessary and counterproductive. Alarmed at the flatlining of the British economy in 2011 and 2012, the IMF said last month it was time for Osborne to do more to boost economic growth and urged that he should rethink plans to cut the government’s structural budget deficit by 1% of national income in 2013-14.

The chancellor was stung by the criticism, which was seized upon by shadow chancellor Ed Balls as evidence the government had damaged the economy with an over-aggressive austerity approach.

Despite the government’s poor showing in last week’s local elections, Osborne has no intention of changing course but is keen to avoid a public call for a volte-face from the IMF, which initially was a strong supporter of the coalition’s approach to tackling the UK’s record peacetime budget deficit.

Treasury officials intend to show that any change to the strategy followed for the last three years would damage the government’s credibility in the financial markets and that the subsequent increase in long-term interest rates would outweigh any benefits from cutting taxes or increasing spending.

They will also say that the sluggishness of the UK economy in 2012 was a result of the drop in exports to the crisis-hit eurozone, rather than weak consumer spending.

The IMF has become more concerned about the health of the UK economy over the last year and has called for a rethink of fiscal policy – tax and spending – unless the pace of growth picked up. Olivier Blanchard, the IMF’s chief economist, embarrassed the chancellor last month when he singled out the UK as a country that had the scope to ease fiscal policy to boost growth. The chancellor was particularly irritated by Blanchard’s comment that the UK was “playing with fire” by refusing to change tack.

IMF officials are likely to point out in the discussions that the level of national output in the UK is still more than 2% below its peak five years after the recession began in early 2008. By contrast, the US and Germany have both more than recovered the ground lost in the slump.

Osborne’s team knew about Blanchard’s views but expected any concerns to be raised by the IMF in the Article IV discussions – the organisation’s annual economic health check on its 188 member states – that begin this week. IMF deputy managing director David Lipton will issue advice to the government on 22 May at the end of the discussions.

The Treasury will say that the economy is gradually on the mend and that the IMF’s anxiety about the weakness of growth has already been addressed in recent policy initiatives.

Osborne believes that the “help to buy” measures announced in the budget to stimulate the housing market, and last month’s decision to target lending to small and medium-sized businesses in a beefed-up Funding for Lending scheme, should be taken into account by the IMF before it calls for a budget volte-face. And it will insist that the loss of credibility suffered by the UK from changing course would outweigh any benefits from fine-tuning the government’s financial plans.

The Treasury will argue that budget plans are in line with the advice the IMF has been dispensing to rich countries following the deep slump of 2008-09: that there are other western nations doing a faster repair job on their public finances, despite even weaker growth; the IMF’s view about the need for a different approach is not shared by Brussels.

The European commissioner for economic and monetary affairs Olli Rehn said last week: “The level of public debt is projected to rise to close to 100% next year.

“There really is no case for a discretionary fiscal loosening in the UK. It is important the UK follows through with consistent consolidation of public finances to achieve a more sustainable fiscal position.”

From welfare to wages, women fight back against the uncaring market | Selma James

Category : Business

The welfare state is the latest victim of the market’s corruption of all it touches. Fighting like hell is the only option

It’s almost unbearable to wake up to a world in which the welfare state that has defended us from the worst excesses of the market is being destroyed. The only way to hold on to the last vestiges of entitlement, and even reverse defeats, is to fight like hell.

Bereaved but determined families pursuing those who neglected vulnerable patients in Staffordshire had to do a massive piece of organising before the deaths of hundreds were looked into. (Other suspect hospitals are emerging.)

Parents of children needing heart surgery organised against closure of the Leeds heart unit and won a court judgment. Then they had to struggle to prevent that judgment from being circumvented. But they did it.

Attacks on people with disabilities were unthinkable. Now suicides and premature deaths of sick and disabled people targeted by the work capability assessment and other cuts are described by campaigners as “genocide by the back door”.

Single-mother families and large families were protected. Now children in low-income families have become “extra“, targeted even before birth by adoption targets or, once born, by exclusion from schooling and social housing. Asbos and heavy sentences await the inevitable rebellion and protest, including against rising racism.

How did it get to be so threatening to so many?

When the women’s movement began in the 1970s, women were the carers. Working-class women also did waged jobs, but the wellbeing of children and others remained the primary concern. Women formed the movement not to eliminate caring but the dependence, isolation, servitude, invisibility and almost universal discrimination that a wage-dominated (ie male-dominated) society imposed on the unwaged carer.

The women’s movement faced a choice. It could embrace the market: careers for some and low-paid jobs for most. Or it could find another way to live: demanding that the work of reproducing the human race was recognised as central to all priorities. Getting wages from the state for this work, carers would help reshape all social relationships: reorganising work to incorporate men into caring and women into – everything.

Feminism largely chose the market. This enabled governments to demean rather than recognise caring. “Workless”, according to New Labour, mothers are now urged to “do the right thing” – go out to work irrespective of workload, childcare, the needs of those who depend on us.

Cuts in social services and public-sector jobs attack women – three-quarters of public employees. Government aims to push women into the private sector which pays – especially women – less and demands more. This lowers wages generally, imposing working conditions previously unthinkable. Already more families with adults in jobs are in poverty than families where adults are unemployed. When government says it wants “work to pay”, it means driving claimants below the lowest paid: from poverty to destitution, unable to refuse £1 or £2 an hour (many immigrants face this).

The market, which we are urged to love, honour and obey (Marx said it was a fetish), has corrupted all it touches, including the life of the planet. When recently a scientist warned of imminent destruction from climate change, we were told it would be “impractical” to try to stop it. Incredibly, the media did not gasp at this suicidal greed.

Many people say this is not the society they want to live in. But how can we confront all that needs changing?

First we must acknowledge the thousands already refusing hospital and library closures, cuts in benefits and legal aid, factory farming (concentration camps for animals), a poisonous food industry, toxic pharmaceuticals, media-police corruption, sale of playing fields, tax havens, warmongering, criminalisation of protest … Campaigns share one vital tenet: our entitlement to what we are struggling to reclaim.

Our problem is not only that we have allowed cuts – and perhaps the unkindest cut has been of the universality of child benefit, the money that recognises society’s responsibility for children. Our problem is that it has seemed foolish and impractical to dare to challenge the market when no major party is on our side.

With a three-way coalition against us, this has got to be a DIY job. On 1 May, International Workers’ Day, the Global Women’s Strike will launch the petition “Invest in a Caring Society: A living wage for mothers and other carers” – aiming to “redirect economic and social policies towards people and the planet and away from the uncaring market”. A challenge to the market by women, the carers, can only strengthen all those already fighting like hell.

George Osborne boosts funding for lending scheme before IMF visit

Category : Business

Chancellor to beef up £80bn loans scheme amid US calls for Britain to tone down austerity measures

George Osborne will announce an expansion of the Bank of England’s £80bn funding for lending scheme (FLS) ahead of a visit to Britain by the International Monetary Fund next month, as he seeks to head off calls for a softening of government austerity plans.

High-street banks are to be given added incentives to extend credit to small and medium-sized businesses in an expansion to the scheme, due in the next fortnight.

An IMF mission arrives in London for two weeks of talks on 8 May and Osborne plans to launch the beefed-up FLS in an attempt to persuade the fund that the coalition can boost growth without doing a U-turn on its deficit-reduction strategy. Discussions between the Treasury and the Bank have concluded that high-street lenders need further inducement to pass on the benefits of subsidised lending to companies.

The FLS was launched last August and offered subsidised credit to high street banks, provided they passed on the benefits to households and businesses. Figures so far have shown a pick-up in lending for mortgages but no increase in business lending. The Bank always envisaged that it would take time for loans to SMEs to increase, but minutes of the April meeting of its nine-strong monetary policy committee, released last week, signalled support for an expansion of the scheme.

With the business secretary, Vince Cable also pressing for action to help SMEs, Osborne has been keen for the Bank to increase the generosity of the FLS, but the need to target help to the corporate sector has been given added urgency by the imminent arrival of the IMF for its annual article IV consultation.

Last week, the IMF embarrassed the chancellor by urging a rethink of a tax and spending policy that will involve cutting Britain’s structural budget deficit by 1% of national output this year.

The fund has told the chancellor that it is worried about the weakness of demand in the UK and will be asking whether he has any alternatives to changes his budgetary stance.

The chancellor was stung by last week’s criticism from the fund. He argued that he had already taken steps in the budget to boost growth. He pointed out to Christine Lagarde, the fund’s managing director, during talks in Washington last week that the government had already adopted a flexible approach to austerity by pushing back the timetable by two years for debt to peak as a share of national output.

But the IMF is convinced that the UK is still operating well below its full potential. It is keen to discover in its talks next month why the economy has failed to respond to four years of unprecedented monetary stimulus. During this time bank rates have been pegged at 0.5% and the Bank has created £375bn of electronic money through its quantitative easing programme.

The fund believes that its rich-country members have generally been over-hasty in their aggressive approach to deficit reduction, and that less of the fiscal pain should have been front-loaded.On Saturday, a communique released at the end of a meeting of the IMF’s policymaking committee said that where country circumstances allowed, governments should avoid responding to weak growth with fresh attempts to cut deficits, focus on the underlying health of public finances once the effects of the ups and downs of the economic cycle were taken into account, and allow borrowing to rise if activity was depressed.

It added that monetary policy alone was not sufficient to produce a lasting global recovery, noting that a credible medium-term plan to improve the state of public finances together with structural reform were needed.

“Eventual exit from monetary expansion will need to be carefully managed and clearly communicated”, it said, reflecting widespread concerns in Washington last week that central banks faced a tricky task when the time came to raise interest rates and to sell the government bonds purchased under QE programmes.

Storm brews over energy price rises and HMRC appointment of npower chief

Category : Business

Energy price changes may see customers overpay by £55m a year, warns Which?, as MPs raise concerns over tax avoidance

Controversy around Britain’s energy industry will intensify on Monday amid revelations that the former head of a low-tax-paying power provider has been hired to help oversee HM Revenue and Customs (HMRC), and a warning that a new price regime demanded by the regulator, Ofgem, could still mean consumers paying £55m more a year than they should.

RWE npower was at the centre of a storm last week after admitting it had paid £2m, £3m and nothing in tax in the years 2009-2011, but now it transpires that Volker Beckers, its former boss, has been appointed as a non-executive director at the HMRC.

Ian Lavery MP, a member of the Commons Energy and Climate Change select committee, whose questioning led to npower’s admission, said: “(Chancellor) George Osborne has serious questions to answer about why he has appointed the boss of an energy firm which paid no corporation tax in the last three years, despite making £766m in profits, to the board of HMRC. HMRC has a bad enough record at stopping tax avoidance as it is.”

EDF*OFF, a group set up to campaign against the dominance of the big six suppliers, says the Beckers row is deeply embarrassing for the HMRC at a time when it is trying to rebuild public trust following the departure of former head, Dave Hartnett, after signing much-criticised sweetheart tax deals with Goldman Sachs and then joining HSBC.

Mark Williams of anti-austerity campaigners UK Uncut added: “It is no surprise the government loses billions of pounds to corporate tax dodgers every year when they hire those same tax dodgers to oversee tax inspectors. HMRC should be throwing the book at people like Volker, not hiring them.”

Npower, which faces a petition signed by more than 93,000 people calling on it to pay more tax, has consistently denied tax dodging and says the low tax payments result from the fact that the German-owned company has been investing billions of pounds in new gas and other power stations.

The Treasury has confirmed this can be legitimately written off against tax but independent tax specialists, such as Richard Murphy, have also questioned the necessity of some of the “interest payments” made by npower to its parent group RWE in Essen which also reduce the scale of npower’s taxable profits. Npower says this is a cheap way to borrow money.

The HMRC told the Guardian Beckers had been taken on under a public appointments process that involved rigorous vetting and disclosure of any conflicts of interest.

“Non-executive directors bring valuable external and commercial experience to HMRC. However, they are not responsible for the day-to-day management of HMRC, nor are they responsible for tax policy or for handling confidential individual or corporate taxpayer issues,” said a spokeswoman.

Meanwhile, analysis by Which?, the consumer group, reveals Ofgem’s proposals to overhaul energy tariffs may mean more than 3.4m households end up paying over the odds for their energy as they struggle to identify the cheapest energy tariffs. This could see consumers collectively paying up to £55m more than they need to on their bills.

Richard Lloyd, executive director at Which?, said: “These proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three-quarters of people being asked to compare prices that are not based on their energy usage.”

Which? is launching a digital campaign on Monday, asking consumers to come forward and pledge their support for single unit prices to simplify the tariffs.

UK households feel even worse off than last month, survey suggests

Category : Business

Markit household finance index slid lower in April, signalling household finances deteriorating faster than in March

Ahead of official figures on Thursday that will show whether the UK has slipped into a triple-dip recession comes a downbeat report into consumers’ finances.

British households felt worse off in April as they continued to struggle with rising prices and meagre pay growth, suggests a survey out on Monday from the financial information services company Markit.

Bringing a halt to what had been an improving trend so far this year, the Markit household finance index slid lower this month, signalling that household finances were deteriorating faster than in March.

The firm said the result largely reflected the combined effect of lower income and higher living costs for households.

“Triple dip or no triple dip, there has been little alleviation of the strain on households’ financial wellbeing so far this year. Moreover, with incomes failing to keep pace with living costs, household finance constraints are likely to act as a further drag on consumer spending over the months ahead,” said Markit’s senior economist Tim Moore.

In its first monthly fall this year, the household finance index dropped to 37.7, down from 39.3 in March and well below the 50-mark that separates improvement from deterioration. Four times as many households, or 32%, reported a worsening in their finances in April than those who saw an improvement.

Households were slightly less downbeat, however, about the outlook for the next 12 months. Economists are divided over whether official data on Thursday will show the UK economy shrank in the first quarter, marking a triple-dip recession. Capital Economics says the chances of a further drop in GDP are “pretty much 50/50″.

“Of course, whether the economy shrinks by a fraction or grows by a fraction is of little importance in the big picture. Barring a major surprise in this week’s GDP figures, the main point is that the recovery will still look depressingly dismal – especially now that the labour market is weakening,” said Vicky Redwood at Capital Economics.

Howard Archer, economist at IHS Global Insight, is forecasting marginal GDP growth of 0.1 to 0.2% but says the first quarter is hard to call.

“There is major uncertainty over the outlook given that March’s cold weather could have had a further dampening impact on economic activity after the snow in January took a toll,” he said.”It would be good for psychological/confidence reasons if the economy could dodge contraction in the first quarter and therefore avoid nasty and potentially damaging headlines about triple-dip recession.”

Osborne’s woes capped by damning verdict on housing policy

Category : Business

George Osborne also faces a jump in unemployment, another ratings downgrade and the IMF’s criticisms on austerity

George Osborne faces a fresh onslaught on his economic credibility this weekend, as the influential Treasury select committee publishes a damning report on his flagship budget housing policy, hours after Fitch became the latest credit ratings agency to strip the UK of its coveted AAA rating.

Capping a grim week for the chancellor, in which the International Monetary Fund urged him to rethink his austerity plans and the latest official figures showed a jump in unemployment, MPs accuse him of failing to answer 19 key questions about the Help to Buy scheme, aimed at helping first-time buyers.

“It is by no means clear that a scheme whose primary outcome may be to support house prices will ultimately be in the interests of first-time buyers,” the MPs say.

They warn that the chancellor’s package of measures to boost the property market could instead stoke a housing bubble and leave taxpayers exposed to a future downturn in prices.

Andrew Tyrie, the Tory MP who chairs the committee, said: “The government’s Help to Buy scheme is very much work in progress. It may have a number of unintended consequences.”

The committee’s report, published on Saturday, is a fresh blow for Osborne, after Fitch followed rival agency Moody’s in reducing the UK’s credit rating to AA+.

The chancellor had made retaining the coveted AAA badge a key gauge of his credibility, but Fitch said that its decision reflected sickly growth and the worse than expected state of the public finances.

“The downgrade of the UK’s sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch’s medium-term projections for UK budget deficits and government debt,” it said.

Of the major ratings agencies, only Standard & Poors now describes the UK as an AAA country.

Speaking in Washington, the chancellor adopted a defiant tone, signalling his determination to face down calls from the IMF to soften his deficit reduction strategy and insisting that his approach to putting the public finances in order was both “credible and flexible”.

Asked whether he would accept the advice of the report that will be published by the IMF after a team visits the UK next month, Osborne said: “It depends whether I agree with the advice.”

The chancellor’s bold attempt to get the housing market moving, by offering interest-free loans worth up to 20% of the price of a property and taxpayer-backed mortgage guarantees, was the centrepiece of last month’s budget.

But Saturday’s report from the Treasury select committee cautions that the new measures give the Treasury “a financial interest in maintaining house prices to limit the losses to the taxpayer”, which could make the housing support measures permanent.

If mortgage lenders got tough on borrowers, the report adds, repossessions could rise, leading to a sharp fall in prices, so that “the Treasury could end up facing large losses on those mortgages it has guaranteed”.

The MPs’ strongly worded report will stir memories at the Treasury of last year’s “omnishambles” budget, when the chancellor was forced to reverse a series of key policies, including the controversial “pasty tax” and a cap on tax relief for charitable donations, after vocal public criticism.

Cathy Jamieson, the shadow Treasury minister, said: “At the end of a week when unemployment rose and the IMF warned Britain needs a plan B, this damning report is another damaging blow to George Osborne.

“We will only tackle the housing crisis and help first-time buyers if we have a major programme of affordable house building.”

The select committee finds there is no evidence that Osborne’s housing plans would help to boost the construction of much-needed new homes. “If the government’s priority was housing supply, its housing measures should have concentrated there,” the report says.

Several City economists have also expressed scepticism about the chancellor’s mortgage measures. Danny Gabay, of consultancy Fathom, accused the chancellor of encouraging households to take on even more debt, exposing them to the risk of a housing downturn.

“Square the circle: ‘excessive government debt, bad; excessive private sector debt, good,’” he said, calling Osborne’s policies “the most naked, cynical attempt to engender a housing-based boom, built on yet more debt”.

Asked whether his housing subsidies risked inflating a new bubble, the chancellor said: “I don’t agree. This is a period of real weakness in the housing market. The risks of a housing bubble are pretty nonexistent.”

He insisted he was trying to tackle the “abnormally high cost of mortgages and the very high deposits being asked of people”.

The chancellor said the Bank of England would have the power to end the scheme if it had concerns that it might create a housing boom.

“This is a time-limited scheme and I have given the key to its continued operation to the Bank of England financial policy committee. It can turn the key off in the next parliament,” he said.

But the select committee expressed concerns that exercising this power would be “a distraction or burdensome” for the fledgling body, which could face intense pressure from hard-pressed homebuyers to continue taxpayer support.

Instead, MPs argued, there was a strong case for the final decision on ending the scheme to rest with politicians.

Despite two years in which the economy has moved sideways, the chancellor said he did not feel under threat politically.

“I don’t see anybody coming up with a political alternative,” he said. “I remain focused on delivering what I said I

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George Osborne’s tears draw Tory jeers – but will it help chancellor’s image?

Category : Business

Osborne was seen to be shedding a tear at Thatcher’s funeral, which prompted unkind remarks from some of his own party

In the space of a few minutes, the world was given a rare glimpse of a more complex side to George Osborne when the chancellor shed a tear during Lady Thatcher’s funeral.

Tory MPs, who regard Osborne as aloof and little too grand for their tastes, privately joked that the chancellor was showing his pain after it was announced yesterday that unemployment increased by 70,000 in the three months to the end of February.

But the chancellor suggested he cried for the simple reason that he found the service at St Paul’s Cathedral immensely touching. “A moving, almost overwhelming day,” the chancellor tweeted shortly after leaving the cathedral.

Osborne appeared emotional at Thatcher’s funeral after the Rt Rev Richard Chartres, the bishop of London, had said “our hearts go out” to Thatcher’s children, Mark and Carol, and the rest of their family.

He then blinked repeatedly, apparently fighting tears, as Chartres related a story about how a young boy wrote to Thatcher asking if she had ever done wrong. Osborne managed a brief smile before shedding a tear, prompting a mini-Twitter storm.

His tears contrasted with David Cameron, who smiled for a longer period during the bishop’s story and showed no other emotions at that stage. The prime minister has a better public image than the chancellor but lacks his humour and warmth in private.

The chancellor, whose father-in-law, Lord Howell of Guildford, was in Thatcher’s first cabinet, admitted last week in a Times article that he had little personal connection with the late prime minister. But he did recall taking his young son to meet Thatcher for tea. Howell, a Foreign Office minister for two years of Cameron’s government, also attended the funeral.

But Conservatives lined up to mock the chancellor. One said: “Perhaps George had just read what Oscar Wilde said of Little Nell.” Wilde reputedly said of Nell’s death in Dickens’ novel The Old Curiosity Shop: “One would have to have a heart of stone to read the death of little Nell without dissolving into tears … of laughter.”

Osborne has been under huge immense political pressure after admitting that he will fail to meet his two main fiscal targets – eliminating the fiscal deficit by the next election and ensuring that debt is falling as a share of GDP by 2016.

As the Tories’ main political strategist, Osborne knows he risks becoming a major liability for the party before the general election in 2015. He gave another display of unease this month in front of a group of workers at the main Morrisons distribution centre for the south of England in Sittingbourne, Kent.

But some argue that the tears may soften Osborne’s image. Andrew Lilico, former chief economist of the centre-right Policy Exchange thinktank, tweeted: “Shame on all of you that are mocking Osborne for crying at a funeral. Do you never cry yourselves?”

Regulator surprised no bank bosses face charges over financial crisis

Category : Business

Andrew Bailey, head of Prudential Regulation Authority, says it’s odd action taken only against people lower down in failed banks

Britain’s most senior banking regulator has questioned why none of the bosses of the country’s failed banks have been formally charged over their roles in the financial crisis. Andrew Bailey, head of the new banking regulator, the Prudential Regulation Authority, said: “It is more than odd that action has been taken against people lower down in institutions, but no action has been taken at the top.”

At a conference debating how to rebuild trust in Britain’s scandal-hit banks, Bailey said it was a “source of surprise” that no senior bank directors have been disqualified. He pointed out that the secretary of state sought the disqualification of Barings Bank for their roles in failing to adequately supervise Nick Leeson.

Chuka Umunna, the shadow business secretary, said bankers caught trying to play the system in order to line their own pockets should be “thrown into jail”.

He said it “cannot be right” that benefit cheats who fiddle the system for a couple of hundred pounds are thrown into jail while “those who seek to rig the financial system and receive hundreds of thousands of pounds as a result never seem to suffer the same fate”.

In an impassioned speech at the Future of Financial Services summit in Canary Wharf on Monday, Umunna said the City would not be able to rebuild trust with society “until custodial sentences are imposed on those guilty of criminal wrongdoing in your sector”.

He said the “prospect of jail for gross wrongdoing” was one of the best ways to affect cultural change in Britain’s scandal-hit banks.

No bankers have been jailed in connection with the Libor rate-fixing scandal, but the Serious Fraud Office (SFO) has launched a criminal investigation and arrested three men. In the US, two former UBS employees have been charged.

Umunna acknowledged that politicians were hardly in the best position to lecture others on trust and morals. “We are less popular than you and we learned the hard way after the expenses scandal, when we had to get our house in order,” he said. “But at least the people saw politicians brought to book – with some of our number serving jail time for their wrongdoing.”

He also attacked Barclays for trying to sneak out news that it paid its bosses bonuses of £39.5m on budget day. Umunna said it “sent all the wrong messages”.

Ashok Vaswani, boss of retail and business banking at Barclays, who was also at the debate, admitted that the timing of the release was “a mistake”.

Labour will on Tuesday resume its push for changes to banking reforms going through parliament, calling for stronger immunities for whistleblowers.

In Tuesday’s parliamentary debate, Labour will table amendments to the bill to protect whistlebowers as well bolster protection for customers of savings schemes such as Farepak, which collapsed in 2006.

Labour will also produced figures showing that the government’s levy on balance sheets has brought in £2bn of revenue less than originally forecast.

Chris Leslie, a shadow Treasury minister, also intends to call for a full licensing review of bankers. “If a GP or a barrister was involved in serious misconduct, they would have to answer to the BMA or Bar Council ethical practice committees and could lose their licence – and so we also need similar processes for those who break financial regulations too,” Leslie said.

Jeremy Grantham on how to feed the world and why he invests in oil | Leo Hickman

Category : Business

The co-founder of investment group GMO on what books he’s reading and why he wants to fund ‘avant garde’ farming

Yesterday, I posted part one of the transcript from my Saturday Guardian interview with Jeremy Grantham, the environmental philanthropist and the legendary fund manager. Here’s part two…

Jeremy Grantham on what first led him to engage with environmental issues:

It started [in the mid-1990s] with a visit to the Amazon and to Borneo with the kids. And without thinking about it you start talking about the logs along the side of the river and the lack of mature forests in Borneo. We were on family trips and happened to do a couple of tropical forests back to back. I’m sure that played a role, but we didn’t treat it as an epiphany. I would argue that one of our children got there first. While we were environmentalists, but low key, one of my sons happened to get a job which saw him end up in a dry tropical forest in Paraguay for five years and then off into the forestry business. Shortly behind that, we [his investment company GMO] began to follow that interest in forestry. We started our own forestry operation 15 years ago [at GMO] because our interest in forestry and of our realisation that land is so important. Forests were mispriced and were an attractive investment. My interest in forestry at that point was entirely commercial and then it began to morph into a decent investment, plus, “look how important these forests are to maintain fresh water, carbon sequestration, etc”…
I picked up none of that [James Hansen's 1988 testimony before Congress on climate change and the 1992 Rio Earth Summit]. No. Absolutely not. I was following along afterwards [once the foundation launched in 1997] asking the big NGOs where was the leverage for the birds flying through Costa Rica and Panama. Let’s put our money there. Where were the hotspots? The climate question wasn’t there for me at that time. Now it is at least half of the focus for the foundation. And in the other half it brushes up against climate all the time. We are late arrivals to all this and I have nothing but admirations to those who beat me to the punch by a few decades.

On why his environmental interests moved beyond habitat conservation:

I was a moderate environmentalist 10-15 years ago. But then I started to get embroiled in resources and that [the rise in price of] oil was the first paradigm shift that we’d ever come across in an important asset class, and nothing is more important than oil. I realised that the price of oil had changed forever and is not going back to the old $15 a barrel. There had been a majorly important shift. That led us to asking the question, why only oil? Why not every finite resource? And so we ended up about four years ago saying, “watch out, we seem to be running out of things”. Two years ago, we did a very detailed paper which took on a life of its own and helped to put these issues onto institutional agenda items, I think. That led me to the realisation, by looking at the data, that between population growth and China gobbling up the world that the world had changed – and dangerously so – and hidden under that that oil and food were the two most dangerous components and within that [the availability of] phosphorous was perhaps the most dangerous long-term issue of all. Digging into the phosphate problem, you realised that it can be handled, but only if the great majority of the world is fed via sustainable farming which means nurturing the soil and having it once again full of micro-organisms. If you kill them every year with herbicides and pesticides then you’re dealing basically with sand. You’ve got to restore and renew the ability to grow by re-applying all the nutrients in very big, expensive doses every year. This is in contrast to well-nurtured soil. There’s a 30-year patch in Pennsylvania at the Rodale Institute where they’ve never put on any phosphorous at all and they are getting productivity equal to regular farming up the road.
We arrived at all this just by looking at the numbers and the more I did the more I became concerned that we were already deep into a food crisis. Arab Spring countries were already getting throttled a bit by rising price of energy and food. They don’t spend 8-10% of their budget on these, they spend 40%. So when that starts to double on you, you can see how quickly why people take to the streets. And that’s where we are. The rich countries are really not that concerned and their casual behaviour is only serving to push up the price which is not that big a deal to them, certainly not the movers and shakers who make all the money. But it’s a terrible deal for the poor half of the world and a disaster for the poorest 10% or so. That’s the world we’re in and it could lead to country after country being destabilised.
It has forced me to go back and read all the classics. On my iPad I think I have 40 or so books now. I recommend a book by a scholar who summarises all these works back to Gibbon’s Decline and Fall of the Roman Empire. It’s called Immoderate Greatness: Why Civilisations Fail by William Ophuls. And then there’s perhaps my favourite book of a more detailed type which is called Dirt: The Erosion of Civilisation [by David R Montgomery]. That’s a really good read. Then there’s Collapse by Jared Diamond, which seems to have done quite well and is reasonable. A lot of details are queried by the experts in the field, but I thought it was fine. Then there are books on peak oil and shortages of raw materials. Books on the whole package of long-term growth on a finite planet, going back to the Limits to Growth and a book by one of the co-authors that looks at the next 40 years. That’s called 2052 [by Jorgen Randers]. And so on and so forth.

On the strengths and weaknesses of capitalism:

Capitalism does millions of things better than the alternatives. It balances supply and demand in an elegant way that central planning has never come close to. However, it is totally ill-equipped to deal with a small handful of issues. Unfortunately, today, they are the issues that are absolutely central to our long-term wellbeing and even survival. It doesn’t think long-term very well because of high discount rate structure. If you’re a typical corporation anything lying out 30 years literally doesn’t matter. Or, as I like to say: QED, your grandchildren have no value. And they usually act as if that was true, even though I’m sure they are actually very kind to their grandchildren.
My favourite story is about the contract between the farmer and the devil. The devil says, “sign this contract and I’ll triple your farm’s profits”. But there are 25 footnotes, as there always is with the devil. Footnote 22 says that 1% of your soil will be eroded each year, which is actually horrifyingly close to the real average over the past 50 years. The farmer signs and makes a fortune on a 40-year contract. And his son then signs up for the next 40-year contract and makes a fortune. And his son then signs up for the third and final contract. He still does very well, and in the final 20 years the family has accumulated enormous wealth, but the soil has gone. It’s the same story for all his neighbouring farms and everyone is out of business. My sick joke is that at least he will die a rich farmer when all the starving hordes arrive from the city.
Every graduate who took Econ 101 would probably sign that contract. There is no single theory that is used in economics that considers the finite nature of resources. It’s shocking. But not as shocking as the pathetic waste of space over the last 50 years given to “rational expectations“, which allows a whole generation of bankers and central bankers to believe that the market is efficient. None of it applies to the real world, or to messy human beings, many of whom are a little crooked when they have to be. It’s been a disaster and a complete waste of time. It has been remarked before that modern economics is belief in a perpetual motion machine. Capital and labour, but no mention of energy. Without energy the whole thing grinds to a halt and the whole theory is demonstrated to be totally false. I’m late in the game at recognising this. One of my new heroes is an economist called Kenneth Boulding who, at 22, got a paper into Keynes‘s journal. At the age of about 50 he realised that economics was not taking its job seriously, that it was not interested in utility, in real serious improvement in the world, but that it was increasingly interested in new, elegant mathematical theories designed to get career advancement, over usefulness. He said the only people who believe you can have compound growth in a finite world are either mad men or economists. He also said: “Mathematics has brought rigor to economics. Unfortunately, it also brought mortis.”

On whether there’s any conflict in him (via GMO and/or his foundation) investing in oil and gas companies?

The first point is that each fund we have at GMO – maybe 80 or so – is run by its own team. I don’t think that money management can easily have too many rules coming down from the top. Our first responsibility is to make money for our clients. I’m happy to write them letters trying to persuade them to do this, that and the other, but if they choose not to, that is their choice, not ours. We should just be a conduit for the client’s decision on ethics. They will usually sign up for a strategy for which quite a lot of institutions have the same portfolio. My job as the quarterly-letter writer is to try and influence the game a bit, but it has to be done in a firm like ours at the top level. The solitary factor that might appear to be an exception is that we are getting close to the decision [at GMO] not to carry coal stocks and anything that has a material amount of tarsands. We have a resource fund which, of course, has stuff in the ground. It owns oil and gas companies, but it does not own coal companies or tarsands enterprises. I have written in Fortune magazine that those extreme, dangerous, carbon-intensive and polluting resources run the very substantial risk of being stranded assets because, on one hand, I think the progress of solar and wind is moving faster than most investors realise and, on the other, I expect the continuous rise in the price of hydrocarbons as we continue to move through the cheap stuff and move on to the more expensive stuff in terms of getting it out of the ground. And I don’t think that if you put billions of dollars into a new tarsands project that you will see a decent return on it. It will be underpriced by solar, wind and other alternatives which are moving at considerable speed. And point two is they will slap a carbon tax on coal and tarsands which increasingly countries here and there will do – and, eventually, the US in the hopefully not-too-distant future – and that will be a death blow. If all this doesn’t make these investments unprofitable, they will be very lucky. The probability of them running into trouble is too high for me to take that risk as an investor. If you look at the damage and you adopt a practical triage attitude, what you realise quickly is that every barrel of good, old-fashioned, relatively cheap oil will be pumped, as will every cubic foot of old-fashioned, low-cost natural gas. The real damage to the environment is the massive reserves of coal and tarsands, and elaborate, high-cost secondary/tertiary recovery of oil and gas. That’s where the battle will be fought out and, frankly, that’s going to turn out to be 60%-70% of the potential damage to the planet and we, with a bit of luck, can adjust to a world that uses up its conventional oil and gas if we behave well and drag that period out into the distant future. A lot of it will be used as chemical feedstock which is a higher and better use than using those precious resources as a fuel. Fracking enters the grey area. It’s not old-fashioned natural gas that desires to burst to the top under its own free will. You have to torture it out of solid rock and that takes extra energy and extra pollution, and so on. That’s why it is a grey-area fuel and that runs some risk of eventually becoming too high cost…
The [Grantham] foundation can invest in anything it wants. It would be nice to make lots of money [for the foundation]. I believe there are certain forms of sustainable farming that will indeed perform well in the stock market and as an investment. This is not the money that we give out as grants each year. This is the principle behind it. So it’s good to have some influence on both ends. [At GMO] we don’t aim to have more than 10-15% in farms and forestry. The funds we run for clients are, to a certain degree, neutral on ethical issues. If there is a demand from the client – which I hope there will be – to have more green and sustainable funds, I hope GMO will do it one day. But in the meantime, with my foundation, I am the client, so it is entirely my right to set our own ethical standards. For the record, for the foundation I also approve the purchase of oil companies. I just won’t buy coal and tarsands, for the reasons I’ve given. I reserve the right at a later date to say that one or two oil companies are simply too badly behaved. I haven’t done that yet, partly because I don’t have the required information.
It also involves different interpretations of effectiveness and propaganda. I have an honest disagreement with Bill McKibben. Our foundation helps fund his efforts and I have great admiration for him. But I have argued with him that there’s probably more juice to be had by going to the campuses and getting the students to stamp their feet that the college endowment should get rid of all their coal and tarsands investments because they can do that.
For the record, we need oil. If we took oil away tomorrow, civilisation ends. We all starve. It’s a little impractical and idealistic [to abandon oil immediately], perhaps. Now I understand there are other big issues, such as what does it take to concentrate the mind of a student and get them enthusiastic. In the long run, the carbon equation that Bill McKibben has gloriously helped to popularise in Rolling Stone is in front of everyone’s nose. We’ve got five times the amount of carbon reserves to cook our goose. The question is what can we get away with and what sends the biggest signal. My thinking is that, if we could get dozens and dozens of colleges and foundations to sign up to getting rid of coal and tarsands, we’re attacking something that is doable at the portfolio level – the college is not going to feel that is a tremendous encumbrance for them to optimise their return – but it represents 60-70% of the whole climate problem. By my reckoning, it’s a very focused and efficient strategy. And when everything has been disposed of and there’s a groupthink on the issue it’s a very powerful statement to send rattling round the world. Coal and tarsands are not even 1% of a typical portfolio. Oil and gas, as one of the biggest industries out there, is huge, but coal and tarsands is negligible. Far better to nail that and send a very powerful signal. And why wouldn’t the colleges sign up because it’s very good business. I love the idea when you have an environmental argument backed by a good economic argument. I would like to concentrate my efforts in those areas. I understand the principle entirely of not interfering [with a fund manager's decision-making], but I wouldn’t dream of doing that unless I believed the pay-off was very large and the penalty for doing nothing was very high. I think there is a wonderful case for a prestigious, leading university to have their endowment officially to take into account the long-term effect on the environment – not blanket forbidding this, that and the other, but just taken into account in a sensible way.
There are other advantages, too. Rather like the corporations who have become quite green and project that image, the people who have signed up for a job have broadened a bit and as they build that image it has become a commercial advantage. It might be that only 10-20% of the graduating population of the top students are interested in the long-term wellbeing of the planet, but it’s a measurable number and it’s getting bigger and it’s enough to be commercially interesting. If you are losing 20% of the brightest students because you have an undesirable image then you had better start to change it. This is one of the soft underbellies of the capitalist system and it’s one way that they are impacted by, let’s call it, good behaviour and sustainability in the broadest sense. It would also apply to students applying for college.

On good, long-term investments:

My view of food leads me to believe that a spectacular investment is in farm land and in forestry. Or, if you prefer it, land. They don’t make any more of it, as they say. Fifteen years ago we started a forestry division [at GMO] because I had fallen in love with land and trees and because I realised it was a mispriced asset class. We have done extremely well in that sector outperforming the benchmark for 15 years. I think farm land is a terrific investment area. But that doesn’t mean that some mid-western land isn’t ahead of itself because of recent grain prices. It’s a very inefficient asset class and every farm is different, but you can hunt around the edge, and outside America, and you can find a decent return in an equity market that is becoming, in the US at least, rather overpriced. If you were to buy a farm, and I would be urging any buyer to think in terms of the sustainability of the farming technique, but here again our farming portfolio is relatively green but it’s not by any means limiting itself to sustainable or organic farming. My foundation, on the other hand, is at the early stages of what I hope to be a long and interesting experiment of investing in this kind of more avant garde sustainable farming. As we discover useful information and potentially profitably information we will pass it on to our GMO unit for the clients’ benefit.

On where he plans to take his foundation next:

We’ve recently become very aware of the fact that as our knowledge base accumulates so rapidly, our learning curve is so steep, that the point of maximum sensitivity is shifting so we are quite grateful that we can’t commit all our resources on one project. Now we’re beginning to think, perhaps, we should cool it for a year or two, because our learning curve is so steep, and wait to see. But if I had a magic wand it would be energy storage. Secondly, alternative energy, in general. And, perhaps, co-equally, farming and looking ahead to the next problem of how do we move the world to sustainable farming.
We could go to a couple of leading farm research universities and ask what does it take to beef up the programme and to train organic farmers and to publicise it so that every young man or woman with an urge to think about this can go and get a good training. They don’t really exist, by the way. The three people on the planet who do exist might write in and protest, but it’s insignificant, a rounding error compared to the training in “Big Ag”. One could have quite an effect, such is the small base. Research into organic farming – there’s been fairly minimal research into the intermediate crops that you can put on between the cash crops. They flower two weeks too late, or early, to be convenient.
One of things we tried to do last year, but failed because we couldn’t buy a farm, was to scale up the efforts of the very best organic system which had only taken place on very small plots. We were going to buy enough land to offer a project where they would have 350 acres each, maybe three of them, and would have three years to work out which system was best. We wanted to see how close to Big Ag you could get in productivity. In half-acre lots they can get to parity. Could you do that with 350 acres? And they used far less of the expensive in-puts and increasingly less as the years go by. And as the price of fertiliser and fuel rises that becomes more and more commercial, so it will be pushing in favour of sustainable farming and it will continue to push until its fully commercial. But in the meantime, it would be nice to save 5-10 years along that road by doing trials. We would like to be able to start doing a few things like that that will save a few years when it matters…
We’re moving quite fast on various types of highly improved organic farming, upgrades to land, sequestered carbon, doubling of cattle capabilities, re-considering marginal land that had been degraded. It might not fall with organic certification standards, but it takes those principles and concentrates on developing sustainable methods of food production…
We [at the foundation] also want to project the argument for sensible behaviour in a world where the news media is full of anti-science nonsense. Heartbreakingly, the Guardian is an island amid remarkably bad British coverage of the environment, much worse, on average, than in the US. The newspaper industry [in the UK] has covered itself in shit when it comes to environmental reporting, except the Guardian. The TV is much worse in America than the UK, though. An accident of history.

On genetically modified food:

I can tell you where I stand today [on GM crops] and I will have to tell you again next year. That’s part of the reason why we want to do these trials to find out exactly what you can do in terms of sustainability and simultaneously ask the question of what are the compromises. How much would it hurt your productivity and cost structure to move to a more hybrid version of organic? Is it a bargain given that pure organic gets a big premium? It may well be that hybrid form of farming may give you the best output per unit of sustainability, but the most money per unit may well come from total organic following the rule book and picking up a 50% premium for your product…

On whether organic food can “feed the world”:

We have a 50% surplus of food, as we speak. We have tons of waste and a decent amount of land and huge areas which can be increased in efficiency by going organic in, say, Africa. If hypothetically someone said to you we all must change to organic across the board, you wave your wand and everyone does it, your productivity drops by 18%. We can absorb that today. By if we wait 30-40 years and have an 18% hit they all starve.

On “austerity”, debt and monetary policy:

Fiscal and monetary policies are extraordinarily difficult at the moment. The history is not clear as to what works. The theory is even less clear. My guess is that you want to be careful about how quickly you tighten the austerity screws and that the more austerity-orientated approaches look to me more dangerous and seem to be delivering greater pain on the economy. Eventually, you have to address the question of debt, but I’m on the record as saying that I think the world in general exaggerates the significance of debt. That isn’t to say it’s insignificant, but what it is to say is that it’s a paper world and it takes our attention away from the real world of the quality of education and training and the quality and quantity of capital investment and legal structure. We don’t build things on paper and yet we’ve begun to talk as if we do. People say that the Chinese have built all their railroads on debt, to which I say, “no, they haven’t”. They’ve built them with real Chinese people and real cement and real steel that are part of the real world. When you run out of people and capital capacity then you can’t increase any more. America conducted the world’s greatest experiment in debt. It tripled the debt-to-GDP level from 1982, where it was 1.25x GDP, up to 3.5x over the next 30 years. And during this time what effect did this have on the long-term growth of the system? And that’s the only reason they do it, just to get more growth? Everyone says that, of course, the financial burst caused devastation and brought us to our knees. Yes, it was a terrible idea and eminently avoidable, but if you look at the breaking of the housing bubble in America and you realise how many trillions of dollars would evaporate if it went back to the trend line of the ratio of house price to family income, you must realise that people are going to feel devastatingly poorer than they were. They still have the same house, but, in perception terms, they thought they had a pension fund stored up in their house and it went away. They feel poor and they are going to spend less and it will be a drag on the economy. It was a well-behaved bubble. It went extraordinarily high then all the way back in three years to trend line, and slightly below, and is now moving back up to trend. It was a huge hit to the economy and guaranteed the recovery would be slow. And if that was not enough there was a second factor – the price of oil quadrupled and the price of other assets, such as metals and food, tripled from 2002-2008. Every time that had happened before, like 1974 and 1979 in the two oil crisis, it was followed by global recession. That alone should have been enough to cause a recession. Add that to the housing bust and you don’t need to create any space to explain why we had a recession and a slow recovery. I remain open to persuasion that debt is that big a deal. We have had it foisted upon us that the general idea that finance is so incredibly important that, if a corner bank goes bust, the whole of civilisation grinds to a halt. It’s enormously helpful to the banking system to have believed such nonsense, but I think that’s what it is.

On the human species’ chances of overcoming its environmental challenges:

Whether we have the nous to pull it off is an interesting question, but I think the odds are we will scrape through. Not that we deserve to. [Laughs]. It’s a 50/50 shot that declining fertility rates and alternative energy will save our bacon. But nature and development don’t run on a puritan basis of just punishment. It’s often sheer luck. It’s sheer luck we found hydrocarbons. It’s sheer bad luck that carbon dioxide has a greenhouse effect. It’s sheer bad luck that the oil industry has incredible vested power and is prepared to use it to delay the speed of our reaction…
It isn’t that we can’t do it, it’s that the Anglo-Saxon countries – where, by the way, there is a vast concentration of oil companies – are rather intractable on this issue and they’ve managed to find a little army of non-scientific, persuasive “loony lords”, as I call them, to argue the case, either because they like being wined and dined by the enemy, or because they’re naturally contrarian and like the publicity, or that they are genuine idiots. Who knows? I’m always puzzled by the modus of these people.
What we forget at the end of all this is Pascal’s Wager. What is the penalty for acting as if this was really serious? You spend some money and end up with wonderfully cheap alternative energy? Big deal. Or you continue acting as if it’s trivial and keep listening to the loony lords and doing nothing and having it cripple the planet as we know it? If the potential threat is big enough – like insuring your house, it’s a necessary payment even though you don’t expect the house the burn down – any sensible person who understands Pascal’s Wager will agree to that. It’s simply asymmetrical. The downside risk of this getting out of control is massive. The penalty for spending more money than you should have done because as it turns out, for scientific reasons, we have completed messed up and it’s not as bad as we thought, are very modest in cost by comparison. That’s the killer argument for any rational person, but, as we know, this is not about rationality. It’s about our unwillingness to process unpleasant information. And the unwillingness of vested interests to stop funding this damn stuff.

On the Manhattan Project:

The Manhattan Project was brilliant and is the highpoint of our achievements as a species. Anyone who says government can’t do this, or can’t do that, I say a pox on you, have a look at the Manhattan Project. They did remarkable things. They were outside the box. They stuck the brightest minds out in the desert. They were herding cats with great egos, but it worked. Amazing effort. If we did that on alternative energy we are home free. Even half that. It was our best-ever response to a problem. Civilisations have fallen for the lack of something like that. For once, we came up with the right response, but you can’t count on that being our natural reflex as a species. If it was, we would have analysed the problem of climate change and energy, and decided it was a bigger threat than Hitler. But we didn’t get a Pearl Harbour or invasion of Poland. We’re not programmed to respond to vague, problematical – you can’t put a precise number on it – and the long term. That is not our strength. We’re much better when the tiger attacks and the bombs drop. [Superstorm] Sandy was probably the closest thing we’ve had [in the US] to a Pearl Harbour moment in terms of moving public opinion of whether climate change is real.

Poll shows gloom and doom for decades as citizens fear for living standards

Category : Business

YouGov-Cambridge surveys shows majorities in Germany, UK and US remain pessimistic about economic future and personally hit by slump

Clear majorities across the western world claim to have been personally affected by the economic slump that most citizens expect to drag down living standards for decades to come, according to YouGov-Cambridge.

The academic polling thinktank found 57% of Britons, 64% of Americans and 54% of Germans had been personally affected by the economic problems of their countries during the last five years to a “great” or “fair” extent. The French, whom happiness researchers routinely find are given to accentuating the negative, are gloomier – 80% of them claim to be feeling the pinch personally.

More shocking than the reporting of present penury is abject pessimism that sets in when YouGov-Cambridge’s questioning turned to the future. Respondents were asked whether, despite the recession, they were “basically confident that our children’s generation will end up enjoying a better standard of living than our generation, just as our generation has mostly been better off than our parents”, the reassuring rider reminding them that – whatever the ups and downs of the cycle – the slow miracle of economic growth has eventually touched most family’s lives, by roughly doubling the size of the world’s big economies every 30 years. But even after this prompt, 19% of Britons, 15% of Americans, 16% of Germans and 17% of the French agree with this statement. Instead, overwhelming respective majorities of 64%, 65%, 66% and 59% incline to the view that “the younger generation will find it harder than ours to enjoy a reasonable standard of living”.

Within the British economy particularly, there is evidence that recent personal experience is feeding through into a dismal view of distant future horizons. Only 15% of those who have suffered materially from the recession incline to the view that the rising generation will end up better-off in the end, compared to 27% – nearly twice as many – of those who have escaped the big squeeze. In the other economies, the link between personal experience and expectations for the distant future are far more muted, suggesting that the recession may be exerting a particularly divisive effect on British psychology.

A separate series of questions on the opportunities available to young people also suggested that recession-hit Britons are becoming gloomier in a distinctive way. The 57% of Britons, for example, who believe that “whereever you start in life, enough hard work will bring you success”, is very much in line with the 61% of French respondents who say the same, but in Britain the recession-hit are considerably less-likely, by some 14 points, to take this cheery view than those who are not feeling the personal squeeze, whereas in France personal experience makes no substantial difference.

In Britain alone, YouGov asked a near-identical question in August 2012, and at that point 59% feared that the younger generation would find it harder, as against just 23% who then feared that the young would find it tougher to achieve a reasonable standard of living over the course of their lives. The 64%-19% split of British opinion in favour of pessimism today represents a four and a half point swing towards gloom since mid-2012, a likely response to the run of mostly negative economic news over the last 20 months.