Tag: time

Interesting times in the world of software

About a decade ago, I was at a conference and talking to a fellow developer (I still call myself one, even though I don’t code so much these days) when he giddily told me about the funding he’d got for building a new piece of software he was hoping would make it big. It was a two year project and he’d got £100k funding. I asked if it was just him… and no, he had a colleague. So £100k, for two people, for two years? £100k didn’t sound a lot… £25k/yr each, basically. Or what you can earn in a much simpler tech support role. I decided not to say anything and leave the poor guy in peace, although this sort of work seemed a lot like gambling to me.

Today, things are different although there’s still a sniff of gamble about it overall. If you’re a developer it’s relatively easy to find a highly capitalised employer that’s positively dripping with money who will pay you £60k-£90k a year. Potentially quite a bit more. This reminds me of the late nineties dotcom boom. In 1997 I myself quit my safe but somewhat dull job at a multinational to become a freelancer, doubling my income almost immediately, and quadrupling it another year later. The new work was, in some ways, more interesting. It was also a lot more stressful, bad for my health, and definitely wasn’t the most exciting coding work. But it paid. I honestly don’t blame developers who decide to do what I did 25 years ago. It set me up. I think it was also a large part of why I had a heart attack in 2019… living out of hotels for a decade wasn’t healthy, and cheese became far too much a food staple for me as a vegetarian. However, the money was very good and it helped set me up. When you’re poor, it’s very hard to catch up and a good income was necessary for a while.

I bring this up because today I’m not ‘just a developer’ but actually run a web development company that specialises in websites and custom software for clients. And things are happening today that are reminiscent of the dotcom boom on the late nineties. 25 years have passed, but people don’t really change nearly as much as you may think.

The dotcom & Millennium Bug era

The late nineties were a period of post-recession growth and capital release. Banks had been deregulated, money was being created in the way it can be, and we were riding high on increasing productivity. Life felt good. And when money is created it can be invested.

There’s only one little problem in that. Sometimes, people get giddy and start splashing the money out too readily. The boom of the late nineties and early noughties, and the deregulation that encouraged it around the world, eventually led to the financial crisis of 2008. I’m a bit of a cautious soul, so even though I had plenty of income, I resisted borrowing too much to get a bigger house. In some ways I was foolish, because I could now be living mortgage free in the house I have now. But I figured that not having a big mortgage would afford me some other freedoms and I could use my money elsewhere. Mostly I just invested my money in solid companies. Friends, however, were telling me to invest in dotcoms. But I looked at the fundamentals. One example was a firm called Vocalis. They did, basically, telephone voice services software. Small team, and had some crazy valuation that was effectively equivalent of £20m per member of the staff. I rightly reckoned that was mad. My friend went ahead and pumped money in, and I mocked him. For a while I looked a fool. The value of the shares rose and rose.

Right now, there are loads of speculation bubbles. At the café at work I was trying to explain Bitcoin’s fundamental problems to our barista, when our receptionist came over excitedly wanting to know more. Both seemed interested in getting involved. That means the crash is likely imminent. They’re both lovely people, but in the economic chain, they’re nowhere near the top, which means that the speculation bubble is reaching it’s limits.

“If shoe shine boys are giving stock tips, then it’s time to get out of the market.” – Joe Kennedy, 1929 as the stock market was about to crash and lead to the Great Depression

So the dotcom boom and Millennium Bug led to a boom in demand for developers. New software was being created to replace supposedly outdated software that couldn’t be fixed (narrator: “It could”) and salaries were rocketing. I took advantage of that boom. I also knew it wouldn’t last. And it didn’t. My day rate as a PeopleSoft developer went from £200 a day in 1997 to £600 in 2002. It could have been higher. Cisco did an amazing job of raising funds in that era and I remember they kept offering me more and more to go to work for them in the Netherlands. But I didn’t really want to go to work there. I never really chased the money, so that’s about where I peaked. But I remember people with the right skills, experience and self confidence were on as much as £1k a day. That’s getting towards £2k a day at today’s prices. Some skills seen as super hard and rare could command double that. Most people didn’t, of course, make nearly that much, and some people preferred a job with reasonable hours and close to their families – a very valid and decent decision. But I was single with no ties.

There are a lot more developers around today – good incomes have brought many people into the trade. I meet people who called me a nerd in the eighties and now they’re working in IT. It’s a bit weird.

Today’s situation

Now it’s a bit weird. Rates still aren’t at the dotcom level, once adjusted for inflation, but they’re close. You can do very well in tech. But in my little firm we pay typically around £40k for a developer, plus various benefits, kit, resources etc, meaning you’d need to make around £70k as a freelancer to equal it. At least the way I calculate things and always did. I nearly swapped my £600 a day for £60k a year and kind of regret not doing that.

But why have the rates risen? Well, there are a few hot areas, and they can be summarised as AI, analytics, mass market apps, and blockchain. I’ll discuss each briefly:

AI

This is a hot one – the idea we can replace rooms full of people doing dull and not very high value work (from the perspective of the company) such as service desks with AI bots is very attractive. It won’t work though. Most “supposedly AI” bots are just following decision trees and the only bit of AI is in parsing the meaning out of a sentence in a very tightly defined context. AI is useful today for categorisation problems – e.g. looking at a picture and deciding “this is a cat” or “this is a threatening comment”. It’s not brilliant at the job, but I like that an AI can work out which pictures are of my Mum, for example, even if it misses about a third of them… it still makes my life easier. A bit. But what an AI can’t do is right a decent blog post. Sorry, it can’t. They’re awful at it. There’s loads of AI generated content out there and it feels obviously fake. The main job of these AI generated blog posts is to trick other AIs (Google, Bing etc) into categorising a website as useful. And because AI’s make toddlers look worldly wise, they can be easily fooled… and that means you can’t trust them with anything of real importance. Like your business decisions.

But, it’s a hot keyword, and naive venture capitalists like the idea. So in comes the money.

Analytics

Tracking and stalking customers across the internet is very attractive for advertisers believing that doing so makes them seem more interesting to consumers. I’m not convinced. People often find it creepy. They feel like they’re constantly stalked. They visit the website of, say, a printer supplier and they receive ads for a month for printers… but not only for that supplier, but for other printers because the tracking provider is cheerfully using your data as a supplier against you and selling that information to your rivals! I think advertisers are starting to cotton on, but are unsure of what to do… but I know there’s a lot more direct selling of adverts between publishers and advertisers than there used to be.

But, the siren call of analytics is strong, and people love a nice chart on which to justify a decision, so the more nice charts your system can create, the more people will pay to use it and try to gain an advantage over competitors. And advertising is huge, so in pumps the money. For now.

Mass market apps

Can you build the next Facebook, Instagram, or Slack? What’s the potential for an app that lets people read books from any publisher for a fixed monthly fee? How about an app that revolutionises food delivery? Interestingly, some apps are about replacing old and inefficient intermediaries and putting new ones in place. Uber is a nice way of hiring a minicab with flexible pricing that rewards drivers for being available at the right time. They don’t disintermediate, however. The customer is both the driver and the passenger. The new intermediary takes their share.

If you can replace old intermediaries you can make a lot of money. Imagine taking 0.5% of every single financial transaction, like Visa do? That’s a lot of money. Then you have intermediaries between the card firms, providers, and networks, such as Stripe… and then there are those replacing old ones, like Wise, for money transfers across borders.

What other things can be improved? Well, literally anything.

But most attempts to build these apps and the supporting infrastructure are doomed to never turn a profit.

Blockchain

Blockchain is a really interesting concept for a public ledger, using an interesting concept called proof of work to make it hard for any one person to try to dominate the network and win the consensus mechanism on new transactions. There are theoretical ideas out there to improve on this, but at the moment they remain just that and haven’t been proven.

And it’s a scam. Pure and simple. But it’s a hot topic. Bitcoin, Ethereum, Dogecoin and many others are actively speculated upon, as well as being used for the exchange of value – often in a hope to evade regulators. It appeals to the natural rebels amongst us because it’s outside of government control… and given that governments aren’t always a force for good, I get that.

Problem is, Blockchain breaks the rules of good software development… if you look at the big O notation for software, it has to follow certain rules or it will fail at some point and need to be re-engineered. Big O matters. I don’t have academic access to papers, and the internet is full of vested interests pretending that Blockchain scales just fine. I used to see the same in WordPress land, where people said the software scaled fine… but it doesn’t. In WordPress we get scale by putting a layer between WordPress and the internet to balance things out – the work the software itself does goes up in line with the number of people talking to WordPress. We can define that as O(n) so long as you know what you’re doing – that’s OK. We can live with that. But the consensus mechanism required for multi node agreement of transactions as required to track transactions will, by its nature, follow a curve that is likely to be somewhat greater than O(n^2) (each node does O(n) work in a linear fashion but the total work done on the network as each node is added therefore grows as O(n^2) plus a bit for network latency and overheads. Yet bitcoin transaction cost isn’t following that curve in spite of huge interest because, I reckon, most Bitcoin trades aren’t real.

Yes, that’s right. And what does that mean? It’s because wideboys, crooks and the overly-optimistic are involved. Given it is, by design, a pyramid scheme, it will have to fail at some point. But people are motivated to hide that, so there are Bitcoin tracker schemes, rather like gold purchase schemes, that never hold the asset in question. They will pump and pump values as hard as you like. And as long as there are new people coming in, like our receptionists wishes to, all is good.

And there are enormous amounts of money to be made. As in a goldrush, the people making real money are the shovel makers and traders. And they need developers. So for as long as there’s money to be made, coked up wide boys will be gurning their way through stressful meetings, fidgeting and anxious to cash in before it crashes out. You can earn a lot there. For a while.

OK, so thanks for the very long essay. What does it mean then?

Well, it means developers are really expensive right now. Small firms that do actual useful work and aren’t highly capitalised (like mine) can’t grow because we can’t suddenly charge our customers double for the work so that we can compete against these booms. It’s as if a very rich person has moved into your town and hired all the builders possible to create a huge mansion. They even approached builders working for firms and offered them double to come build that mansion. Soon builders are all swanning around town in Teslas and feeling pleased with themselves for being so cunning as to be in the building industry.

Same in software. Locally there’s a Tesla with a crypto referencing private number plate and a young, bearded and muscular techbro driving it. Fine, I’m not going to judge. He’s happy and making good money.

But if builders are all hired by the rich, the rest of us get priced out. Same in software. Small firms are going to find they can’t afford websites unless they just use some cheap web builder platform – it’ll give a less good solution, but it’ll do the job. Ish. And the firms that can afford will do that bit better. And better. And the gap will grow.

At my firm I’ve had to raise salaries, but we still struggle to clear a profit with the raised salaries. I’m fiscally conservative, so we’ve always had decent cash reserves. This lets us ride out the storm. From 1997 to 2002 dev rates went crazy. By 2005 they were back to normal again. We as a firm can’t handle eight years of this. But it’s not quite the same as back then – you can now hire developers globally and have them work remotely, if you really wish to, which can save some money and also help those countries out with extra foreign revenue. I, however, really like quality and good communications and I find that a geographically tight team works the best. It also makes it easier to hire new people into the trade. So, for now, I’m sitting tight. I won’t seek venture capital, or borrow. And if the worst comes to the worst, we’ll add AI to something that does basic statistical analysis, and blockchain to something with two computers in the network and hope someone out there fancies throwing us some money so we join the party. In the meantime, however, there’s still a healthy living to be made as a business doing useful things and avoiding the hot trends. I never set out to be rich, merely secure – I’ll ignore the rich mansions and do my own thing, creating good code for good people.

n.b. about the above – the above isn’t a paper. It’s a set of opinions designed to inform and illuminate about what’s happened. It relies on anecdotes. Don’t take it too seriously and don’t use it as the basis for what you want to do with software and investing in software. Or crypto. Do your own thing with the information you gather from multiple sources. Also remember that a lot of people say misleading things because it’s in their interests to do so, and that you shouldn’t trust a random blog or news source on the internet. Mine included.

I broke my heart in five places and got it fixed

A year ago, I was sitting, shorn of all body hair and waiting to go in for a five or six hour operation. I knew the next two weeks would be hell.

It’s hard to explain the odd calm that came over me as I sat there, waiting for the biggest operation of my life. I didn’t feel happy. I didn’t feel miserable. It wasn’t as if I’d been feeling terrible. I’d just had one bad morning two and a half weeks earlier where I felt rough, then more rough, then really really rough, then fine again.

It’s weird. You see heart attacks on TV and you get this idea of a mad bad event where you keel over, clutching your heart in agony. But it doesn’t really work like that. The night before I’d felt tired. In fact, for a few years I’d been feeling like hard exercise was a challenge. It took me an age to warm up for a sport, and then I’d be fine. But the first half hour was a chore. And if I’d eaten I was basically useless for an hour or so.

I put it down to age and asthma.

I wish I hadn’t. But thankfully, I got lucky, in a way.

So driving along to work I felt this tightness in my chest, a tiredness, and a general malaise. So I decided, as was sensible, to pick up some vitamin tablets on the way to work. That’s what you do when you’re tired. Take vitamins, and get plenty of sleep. That was my plan. But by the time I got to the counter, I felt even worse and decided to mention the chest tightness to the chemist. She very clearly said I should go to the walk-in centre and get checked out. Instead, of course, I decided I’d get it checked out at some more convenient moment. But by the time I got back to the car I realised I was very out of breath just walking slowly.

I was having a heart attack. I didn’t know it yet. I looked at my Fitbit on my wrist and it said my heart was doing a nice old 70 bpm. Normal enough for me. So why was I puffed out? Must be an asthma thing. But I decided that I would go to the walk-in centre after all. I drove, feeling increasingly out of sorts, parked quite badly, and shuffled in to reception.

A few hours later, I was hugging my wife in A&E at the Royal Liverpool Hospital. I was worried, but not terrified. The doctor dealing with me said “I’m concerned but not worried.” That was a relief. The diagnosis was swinging between heart attack and pericarditis. I was atypical. Relatively young, slim, non-smoker, evidently in reasonable health, and moderately active for someone desk-bound at work.

But they couldn’t satisfy themselves. The A&E cardiologist said I had to go in for observation. They observed me.

Observation is boring

I was sent up to a cardiac observation ward where there were a range of folk from really quite ill and very elderly to me. By then I was feeling fine, quite chirpy, and generally comfortable. My biggest complaint was that the ward was a bit noisy, with an elderly chap who was rather confused causing the most noise. But hey, I was alive, the food was tolerable, I had my Kindle and my phone. I started to obsessively read about the heart, interpreting ECGs and so on. It’s all quite fascinating. And complex. I won’t pretend a lot of it stuck. But now I knew the possibilities.

The rather wonderful Mr Fisher, my cardiologist at the hospital there, did a series of echocardiograms. He felt that I was 95% likely to have pericarditis, in which case a few tablets and I’d be right as rain within a couple of weeks. However, there was a 5% chance of something else, so he’d scheduled me for an angiogram at the Liverpool Heart and Chest Hospital. If they found something, they would be able to stent me there and then and I’d be on the path to recovery.

95% chance of some tablets and everything was fine? OK, I cried a little and started looking forward to the family holiday we had planned.

Angiograms feel weird

An angiogram is where a fine catheter is inserted up to the heart, then a substance that can be detected using x-rays is released into the heart. This allows the surgeon to get a visualisation of the heart. It’s really interesting. And a little unpleasant, but definitely not much more unpleasant than a longer dental visit. It is surgery of a sort, and done carelessly it can do damage, so they always have someone on standby ready to whiz your chest open and do some emergency surgery.

Thankfully it’s usually very safe. It just feels odd, sitting there with this big machine whizzing around you imaging your heart, a massive TV screen to your left, and a very precise talking and unambiguous surgeon on your right instructing his team. I was anxious. He noticed that, and he said “just give him the valium. Now”. At least I think it was valium. In some ways my memory is a bit fuzzy.

Because then, as he finished everything up, he explained that a stent wouldn’t be possible and I would need what is called a coronary artery bypass graft. Four, maybe five. I… didn’t like that news. I felt shocked, scared, and unhappy. I’d gone from probably just an annoying health scare to looking towards having my chest sliced open and my heart operated on.

How do you even operate on a heart? It’s not supposed to stop. Right? Stopped heart = dead. No?

The wait

So then you just wait. And wait. They wouldn’t let me leave the hospital. I was at risk of another heart attack, the blockage was so bad, and they needed my system to flush out the drugs I’d been given when I was suspected of a heart attack. Risks, apparently. It took two and a half weeks from admission to operation. Long enough to think about my mortality, prepare some things, and do weird things like have a company meeting in the middle of the ward to ensure everyone knew what to do, and how.

It was an interesting time. People came and went. I got to know some, and would chat to them as they faced their fears. Most people were older, most were as surprised as I was. What really surprised me is that the image most of us have of people waiting for a bypass wasn’t really fulfilled. Sure, you had the smokers and the fatties. But loads of us were relatively active, relatively slim people. Not that athletic, mostly, but in a line-up of people most likely to need a bypass, you wouldn’t have picked most of us.

Sometimes I’d chat with people facing the operation the next morning and they were, usually, very anxious and worried. Some said things like “well, if I die… I won’t know it. It’s my family I worry for.” Others joked about having their last cup of tea. There’s some morbid humour, but it felt like a release too. A way of expressing anxiety with a laugh.

But the fact so many of us weren’t people who’d neglected ourselves felt terribly unfair. I struggled to deal with that.

Could’ves and should’ves

One chap, about ninety years old and looking in remarkable health, was in for a new valve. He said without it he’d likely not survive the year. With it he had a good chance of another five years. Yes, there was a risk, but as he said “I’ve had a good life.” I guess by the time you reach your nineties you come to a realisation that you can’t really have that long left, no matter what you do.

I talked about my own misgivings. I’d been a bit plump in my twenties, and I enjoyed partying and chocolates. I’d also been a hard working type with little time to do lots of exercise. He smiled and said something like “Life’s full of could’ves and should’ves, but they really don’t matter. You have to deal with the present and make things as best you can for the future. The past has gone. Leave it be.”

He was so right.

Getting closer

As the date loomed I thought I’d get increasingly anxious, but it just stopped. I wasn’t aware of being pumped with chill-pills. I’d seen more frail people go off to operation, and I’d chatted with them as they recovered. It was clearly hard going for them, but they lived and they seemed in good spirits. It’s a very hard operation to go through, I knew that, but now it felt tangible. I also had visits from colleagues, friends and family, so each day I had something to look forward to.

I did do some morbid things. I wrote a note to my family, should I die. I have no skeletons in the closet, but wanted to ensure they knew where to find financial stuff. I knew that they knew that I loved them. I kept the schmaltzy stuff to a minimum. Just crack on. What needs to happen has to happen.

The day itself

Now, this is where it gets more interesting, really. First thing you have to do is shave off all body hair below the neck. You’re handed a quality hair trimmer, with a sterile trimming blade, and pointed to the bathroom. Bzzzzzz! It takes for ever! And those things bite! Once on the balls. I wasn’t really sure where to stop, and I couldn’t really do my back on my own, so I left that, assuming they knew that too.

My operation, schedule for the afternoon, meant no food or drink. I read a bit, chatted with Romana, and refused to say goodbye. I was coming back. I knew it. I was confident. I’d already met the surgeon, and he seemed confident, precise, and concise. I like that in a person. We talked a little about technicalities and how the procedure would be done one me, what arteries they were harvesting and from where. I’d also spoken to another surgeon who I assumed assisted. He poked me and checked how various bits of me worked. I had a breath test. I had a lot of tests. But the day of the operation itself was quiet, really.

So I knew the operation was going to be a beating heart one, without using a heart-lung bypass machine. The attachment of the grafts would be done using some weird sucker machine (maybe called an Octopus) that would stabilise my slowed down heart, but at no point would it be stopped. Amazing. Each stitch carried out between the beats of my heart on arteries just 1.5mm wide.

And then it comes. The porters arrive, you give everyone else on the ward a wave, they say good luck, and you go. All the stuff you have is bagged up and taken away. You don’t need it the next day, and if there are emergencies stuff can get lost, so it’s better if a friend or partner handles it.

Then you wait in a pre-operation room with clouds painted on the ceiling. It made me think of going to heaven, but it was better than white tiles, I guess. That was when I chatted with Romana, ensured she knew I loved her, again, and waited. And then they come for you. You say goodbye, and off you go to theatre.

There, the anaesthetist I’d met before, hooked me up to a skullcap for monitoring my brain, and started preparing me with those injection thingies. A theatre nurse chatted and joked with me. Clearly there to keep my mind off things and keep me calm. And the moment comes. The anaesthetic is injected and you’re switched off.

It really is like that. You don’t have any awareness.

I’m awake and alive!

Actually, I remember a vague moment of having something pulled out of my throat, being conscious, and then out of it again. According to Romana when I first woke I became agitated, so they sedated me again for a while. When I next woke I had a nurse talking to me, giving a button to press with instructions about how it delivered morphine and would ease my pain. I couldn’t overdose with it apparently.

I tried.

I clicked that button again and again! Not to deliberately kill myself or anything, but because it was so nice! However, it’s rate limited. Keep pressing and it just beeps. When it kicks in you feel this warmth, and the pain goes. It’s a very nice drug and I’m not surprised people get addicted.

Romana came in. I was… not really in the best place. I was in pain. I felt like I’d been hit by a truck. I don’t even know if I have the order of events right.

Click. Oh, that lovely morphine button.

We chatted a little, but I remember very little. I had an oxygen mask, I was uncomfortable. I realised I had a urinary catheter in place, so I could stay still. She left, and I think I slept.

Intensive care is weird

One thing I never realised from films, is that intensive care really is just that. It’s actually, in this case, Post-Operative Critical Care. A nurse is stationed at the end of your bed and watches you constantly in the first night. At one point I remember being woken.

“David… can you breathe please?”

I took a gasp.

“You’re worrying me with your apnea,” she said.

I took a few breaths. I felt as OK as I could manage.

I could only see one other person on the ward, and he would wave at me and give me thumbs up. He couldn’t take his mask off. We waved and smiled at each other. I never saw him on the cardiac recovery ward, but he could have had different conditions – they do other kinds of surgery there beyond hearts.

The next day was a bit less painful. You get x-rayed in your bed, poked, prodded and checked. My blood pressure tended towards the low side, but you could see that at the 24hr point I was getting a lot less attention, all the pipes in my chest were out, stitches put in, and I was being made to sit for a while now and again. The second night I was definitely left to my own devices for a bit.

After a few checks the next morning, it was off to recovery.

Not my best, look, just two days after the operation. But alive and happy about it!

The poo of doom

Each day you feel better. You need less and less supplemental oxygen. You start eating normally again.

I’d also heard that after a major operation, you get constipation. Had I known this I’d have been tempted to stop eating two days beforehand!

Because after a few days, you realise you have to poo. Thankfully this comes once you’re mobile again. But even walking fifteen metres to the bathroom is still tiring on the third day. The poo won’t wait. Nor should it. Because the longer it takes, the worse it’ll be.

Man, you’re giving birth.

Seriously. I sat in the bathroom. It started to come. Very very slowly. It. Was. Huge.

And a huge poo is going to be unpleasant, no matter how much time you give it. I feel for heroin addicts dealing with that. Their piles must be quite something.

I strained, but only a little as I’d been warned not to. So I had to tolerate this thing… half in, half out. Slowly but surely, little by little, it came. But it seemed to never end. I swear, I spent an hour in that bathroom, swearing, cursing, and wishing I’d never been born. And if I pushed too hard my heart rewarded me with a palpitation or to and I’d feel breathless.

The thought occurred to me… what if I died right now? A poo, half the way out of my arse and me, on the floor? That would be the last thing the world saw of me. Ew.

Deep breath.

Carry on. Wait. Be patient.

Eventually, it was over. I hobbled back to the bed, grabbed my oxygen mask, and had a nap. I’d deserved it.

Eventually you get to go home

Six days after being open and lying surrounded by dedicated specialists, I was going home. They test you to see if you’re capable of being trusted. You have to walk a certain distance, unaided, and climbing and descend a flight of stairs. A group of you go together for this test. We all did it. There was some sort of air of celebration around us. We were survivors! This thing wasn’t going to defeat us after all! Each day we were stronger!

The homecoming

Getting to leave the hospital is a joy. I’d been taking walks and stepping outside anyway. I was very keen to be moving. I felt frail and slow, but it allowed me to feel like life was going to improve.

But in spite of that, on discharge, you’re given your bag of drugs and wheeled to the door. Once you’re off in your car, you’re no longer their problem. Until then though, they have a process to follow and they’ll stick to it!

As you can see, I had the weird hospital socklets and stockings on. The compression stockings help reduce the chance of a blood clot forming in your legs, and reduce swelling. You can see from this photo that my left leg, from which a vein had been harvested, was definitely bigger than my right

And that’s it. The next phase is about getting back to full fitness, work and leading a full life. I surprised myself, and I’ll share more soon. I’m planning to discuss stress, work-life balance, family and a few more things. And this blog may even come back to life a little bit. I’m bored of helping Facebook and friends to keep their platforms populated with content that is then lost in a silo. Longer writing definitely has a place. Please feel free to join me here.

The great pension scam, how people were conned, and how young people fixed it

In my previous post, I discussed the importance of separating wealth from income, and to stop beating up a chap called Rob Barber who made the mistake of having a high income but not feeling rich. I get exactly where he’s coming from because I’ve been in the same position. In fact, it was more dangerous, because I made the mistake of thinking I was rich before having a sudden epiphany.

In the hazy distant past of my life, I worked at ICI from 1987 to 1997. It was a good ten years, in many ways, because although it started skint I acquired the skills and knowledge to make life a lot better for myself. I didn’t appreciate it as much as I should have done at the time, but in part because being skint at 18 is equivalent to trying to get out a pool of oil. Slippery and error prone.

In that time at ICI, and in the years when I left to become an IT consultant, I worked on payroll software and corporate financial software. When you code something into software, you have to know the subject intimately. Everything I code, I learned about in great detail then explained to a dumb computer. Programming is a really great way to understand things – a computer is like a very patient, dim student with fantastic memory. And when you teach, you learn. You have to.

So I remember when I was around twenty-five some of my older colleagues would always go on about how they hoped for early retirement. This seemed dreadful to me, because I remember my grandmother’s retirement in poverty. But what I didn’t know was how much things had changed.

These colleagues, you see, had a defined benefits pension scheme and ICI was a company on the wane. It needed to reduce headcount each year. One way that a department could reduce headcount was to retire people early, as young as fifty. Today I’m fifty and the idea of retiring and not being poor just isn’t there. I’d be quite hard up. So how could these guys get excited at the idea?

Defined benefit (DB) pensions vs. defined contribution (DC) pensions

All those guys retiring in the nineties onwards were born around 1940 onwards. They started work sometime around the early to mid sixties. And they won life’s lottery big style. They had two key things going for them. 1: the economy of the country was growing fast after the war, so there were lots of opportunities for work, and 2: because of a difficulty in hiring people, firms needed to find ways to attract and keep staff that was cheap at the time and hopefully kept wages down a bit.

At ICI, we were all on what’s known as a “defined benefit pension.” That means that the pension you get is defined according to a set of rules. If I remember rightly, the rule at ICI was quite simple – you got 70% of your final salary. This kind of final salary scheme exists today in only a few legacy situations or with older staff in some firms.

I remember thinking how it was crazy that a 50 year old with thirty years of experience could then look forward to another thirty years on 70% income. Given the reduced costs of retirement (no commute, no need to keep smart work clothes, etc) it was almost like having a full salary. Not only that, many would take a consulting or part time job and be on substantial incomes. They would earn more money in retirement than they would during their working careers!

I smelled a rat! The maths didn’t work out. As I then worked more and more on corporate finance I got to know a lot of accountants and some financial directors. I asked about this problem and they all said one thing: “Those pensions were promised to people by directors who are long gone, and mostly now dead. Totally unaffordable and the company now has to make up the gap… or go bankrupt.”

If you’ve ever wondered why so many of the giant companies of the UK that existed in the sixties are no longer with us, then that’s one key reason. Pensions. At one point, Rolls Royce was putting over a third of its gross profits into pensions. British Airways was once described as a massive pension company with a small airline attached.

This problem was known about in the seventies, but few people discussed it. It was brushed under the carpet. If you have some time, I highly recommend reading this 1975 letter from Warren Buffet on the subject of pension funds and likely shortfalls.

Moving on to your situation today – now you have a defined contribution scheme, if you start a pension scheme. It’s generally a good idea to have a pension scheme, especially because the UK government encourages it with generous tax breaks on contributions. Both you and your employer can contribute, within limits.

A defined contribution scheme (DC) is based on the money you put in, and that’s it. In many ways, that makes more sense. But how does saving a portion of your salary get you close the pensions your grandparents or parents got from large employers like ICI, universities, and the public sector? A hint… it doesn’t.

The great wealth shuffle

What’s happened, and it’s absolutely not the fault of the benefactors, rather than of cynical weasels that are long dead, is that wealth has been shuffled to the older generation in a very effective way. Not all older people, sadly, but those who had decent jobs in decent employers  and owned their own homes did best, whilst those in more casual employment, rented their homes, and didn’t realise the importance of savings are left with nothing more than a state pension… so they did the worst and can still be in relative poverty. Unfortunately, if you’re not thinking and acting carefully today, your retirement, even if you work in a good employer, could be a lot more like that poor old person’s than you think and a lot less like your grandparents with their motorhome and three bedroom house.

So, I like charts, right? Remember this one from the last article?

That shows my wealth including the value of my property, savings and other bits and bobs like a car up to the age of thirty, with a different line for a middle class person with the same career.

Let’s see how that changes if we take into account the defined benefit pension scheme I had at ICI. I then didn’t contribute to a pension scheme until I was in my forties, mainly because I had other priorities and, well, I knew what I was up to. But for most people that would be terrible advice. Don’t do as I did!

Take a look below:

Now, do you see the change? In fact, for one glorious year in this story I was ahead of the middle class chap called Julian from the previous post! It wasn’t to last, because we’re assuming he worked in the same way I did and had the same sort of career, just a few years later.

Just so you know, I worked out the pension wealth on a simple basis – it was worth, based on my leaving salary, the equivalent of £100k if I tried to buy an annuity, because today, to give the benefits I can still expect from my pension, I would need about a £200k or so fund in order to buy an income equivalent to my defined benefit. I hope that makes some sort of sense. In essence, I count my pension scheme as being a £200k bit of wealth that I don’t think about.

Defined benefits pension schemes made people who started work before the mid-nineties surprisingly wealthy. It’s just not fungible.

What does fungible mean when it comes to assets? It means that the money isn’t readily available. A bicycle is fungible. You sell it for cash, and can sell it quickly. A house isn’t terribly fungible, but still better than a pension scheme because the pension scheme is sort of a bet. It can release some money to spouses, but doesn’t necessarily have to – that depends on that defined benefit.

So my ICI company scheme increased my effective disposable income in those years by more than 100%. I never even realised it at the time, because I only really learned properly about money in my early thirties.

So now you know how that sweet little old lady with the poor education, who worked at a factory, has managed to afford a decent pension with three annual holidays and a mobile home near Carnaerfon.

So this is good, right? We made older people richer!

It is fantastic that older people were made richer. The only slight fly in the ointment is who paid. And why. And why it could be better.

First of all, remember above I pointed out that companies had big shortfalls in their pension funds? Well, if they had to find £5,000 for each year that I worked extra, that had to come from somebody who currently works at the company, and from the dividends. But if all big firms cut dividends, all pension funds (which hold shares in big firms) would have had even bigger shortfalls! And share values would have gone down, making these firms vulnerable to aggressive takeovers.

Reality is, and this is all a layman’s explanation without too much detail, that younger people paid to make older people richer, but without having the same future benefit for themselves. The older generation, realising the problem, and now running companies, took away those benefits wherever possible.

Pension funds also being large shareholders and needing their income, also pressured companies they held shares in to return greater profits! So that meant that younger people’s incomes were pressured in another way!

At least young people have avocados now?

Well yes, they have access to avocados. But not houses – they’ve become more expensive, because with people living longer, and fighting any development that may affect them and their neighbourhood, young people can’t afford houses. A starter home in my home town of Widnes is around £200k. That’s a *lot* of avocados you’re going to need to cut back on to make a dent in the wealth differential. Relatively speaking, my grandmother bought a brand new starter house for £17,000 in 1984. Which is about £55,000 today. Good luck buying anything other than a tiny ruin in Widnes today for that sort of money.

Houses and pensions have led to the following interesting chart:

Now, this chart has its caveats, and I recommend reading the full article here, but let’s face it, with these sorts of gaps, Rob Barber is going to have to earn £85k (a lot less after tax) in order to catch up with a well established boomer. And let’s not discuss how much harder it is if you’re working class and end up supporting the boomers that didn’t do so well on the pensions lottery and had more casual jobs. Life is harder if you started poor.

Photo credit: Photo by Matthew T Rader on Unsplash

Wealth, income, and why that bloke on Question Time with £80k was wrong (and right)

There’s a bloke who’s been on Question Time who makes £80k a year and claimed he’s not in the top 5%. Which clearly makes him a moron and a subject of derision, right? Sock it to the wealthy! They’re all bastards who need putting in their place!

Well actually, he’s not. A lot of people arguing about him are misunderstanding him. Mostly through their own equivalent ignorance.

Now, I don’t know too much about this guy, but in the way he dresses, talks and where he comes from I’ve noticed a few things.

He and I are super similar, but he got a better start in life than me. He’s even doing well as an IT consultant, like I did. And he likes racing motorbikes. I liked racing a Lotus. Both of us have good lives, relatively.

I don’t feel rich either. I know I’m richer than a lot, but I’m still poorer than a lot too. And now I’m going to explain why someone working class, like Rob Barber or myself from relatively humble backgrounds don’t get to feel (or be) as rich as Julian Middle-Class from Surrey even though our incomes may be substantially higher. Because the system is rigged against us, dear reader, and not against the wealthier middle classes.

Those of you who are working class and shouting at Mr Barber are perpetuating this. I’ll explain this over a few key thingies (it’s an official term for worked out stuff, stick with me), using graphs and stuff. I hope it helps. Today is part one, reaching thirty.

1. The starting point

When I was 11 I went and lived with my granny. Lovely, batty lady, from a well off family, oddly enough, but had fallen on hard times through a bad choice of a first husband, deaths, and poor financial planning. We lived in a caravan. It wasn’t a pleasant experience.

I don’t know much about Rob Barber’s early life, so instead, I’ll just do a chart of my approximate wealth from childhood to the age of 30 (I’m now fifty) and, for comparison, a similar middle class person who also gets into IT and starts consulting at the age of 27.

Now, let’s take a look at this hastily drawn chart.

I’m very very different to that middle class person. But why? Well, for starters, the middle class parents carefully saved £500 a year and put it into an account for their kid. I had no such luck. So by the time Julian Middle-Class was 18, he had nearly £10k saved to help him in university. I didn’t. I didn’t even have a home and my grandmother was clearly getting older and less able to look after me. I decided I should really work as soon as I finished my A-levels.

In theory that should give me an immediate advantage. But my grandmother died just a couple of weeks after I started work. There was really very little for me to inherit except a knackered piano and a broken Reliant Robin. But what I did need to do was find somewhere to live, get transport for work which wasn’t easily commutable. Thankfully I had a decent job and better income than most of my peers. Unfortunately I spent too much on consumables and partied too much. But I was in my late teens with no parental guidance, so bite me. I got into a bit of debt too, which explains the flatlining.

But at 21, Julian got an inheritance when Nana Mabel died. Only £50k in shares. Good job too as during university he’d been burning through those savings he’d acquired from his parents!

So, already, quite the difference. I’m earning and Julian isn’t, yet he’s the rich one in comparison! He’s joined the Socialist Students Revolutionary Union because he thinks he’s poor with his lack of income and the state should help him not eat into his capital. He’ll eventually turn into a Conservative. But he’s young and feels skint, so he’s all about wealth redistribution. He means income redistribution, actually, but doesn’t realise it.

On graduation from his Computer Science degree, he spends a year working in a company in London, and takes some risks because he knows that if he screws up and loses his job, he can go home to his parents. The risks pay off and he gets promoted twice in his first year!

I didn’t. I was super careful. I still cocked up, but I couldn’t afford to lose my job, and as employers in the area were generally struggling, there weren’t many options in my small northern town to choose from. I could have moved, but that felt risky.

At 22, Julian decides to buy a modest house. This flatlines his wealth a bit for a while because furniture is expensive and he needs to buy a bit, but it gets him on the property ladder. The furniture depreciates immediately, but the house starts to appreciate right away.

At age 24, Julian’s wealth suddenly spikes! Why? Because his great grandparents died within months of each other. They were very elderly, but in good health and had dodged care home costs. He and his brother got a share in a £600k house which they sold because they had an inheritance tax bill. Julian suddenly starts feeling more, well, Conservative, having seen so much money gobbled up by taxes.

At 26, finally clear of debt, I finally buy a house, cheaper than Julian’s, but about the same size because he’s near London and I’m in Widnes. So at least there I get to feel a little smug.

At 27, we both become IT consultants. Like Mr Barber.

I have a good income, but a good income also comes with some expectations. At a client’s I got the piss taken out of me for my cheap suit. At another I was mocked for my smoky old Peugeot. I bought some good suits and a Rover 600. Phew! But that meant my wealth still didn’t climb as much as Julian’s. Also, property prices aren’t rising in Widnes like they are in London’s commuter belt. So his wealth continues to outstrip mine!

Keeping the working classes down

I’m going to go off on a tangent now. I became an IT consultant not because I was desperate to do so, but because at my large corporate employer I’d kind of hit a glass ceiling. People I’d trained up had been promoted above me. I wasn’t a stellar programmer or anything, but neither were they. But they had Oxbridge degrees and I didn’t. They were on £30k and I was on £18k. I could have tried harder, but going back to Julian’s situation where he could take risks… I couldn’t. I was scared. So I was timid and overly cautious quite often. I was very anxious when on call that I didn’t screw up the payroll of the 70,000 people who depended on my decision during a call-out.

Technical people are often looked down on. It’s something graduates do for a short while on their career paths into corporate management. It sucks. At 18 I was a better coder than half the computer science graduates I interview today, but I didn’t know it then. So I was constantly scared of being found out. I thought I was blagging it compared to those with qualifications. But by the time I was 27 I was over that. I’d acquired a bit of security and stability by then.

Young Julians are currently shouting at Mr Barber, as well as actually hard up people who dream of £80k incomes! Neither should. The hard up should look to him as an example of a working class lad done good. He’s still working class, but he’s cracked the glass ceiling. Good on him! He just doesn’t understand himself very well. Not yet. Give him time.

Coming next

I’m my next post I’m going to cover hidden and typically non fungible wealth. The wealth I had by the time I was 27 and didn’t even realise it.

The EU are bullying the UK

A short screenplay, by me.

It’s a Monday morning at a small train station on a mainline. It’s bustling as business travellers head to London for their week’s business. The air is cool, with people blowing little clouds of steam as they head into the station from their taxis and cars.

Mr Hock, a late-middle aged man with a red face and bumpy nose caused by years of excessive alcohol and rich food approaches the ticket office. Miss Nowak, a young Polish woman living in the UK for five years now, is behind the glass, and looks up as Mr Hock sets down his briefcase.

Miss Nowak (neutrally): Good morning. How can I help you?

Mr Hock (confidently): I’d like an open return ticket to London Euston please.

Miss Nowak: That will be £193 please. Are you paying by card?

Mr Hock (with irritation): £193? I’m not travelling first class then, how much for standard class?

Miss Nowak: That *is* standard class. If you need to pay less you can travel out of peak hours. Would you like that?

Mr Hock (exasperated): That’s outrageous! How can it cost so much? I used to travel this way a lot in the eighties and it only cost £20!

Miss Nowak looks down for a moment, then regards the queue of people behind Mr Hock.

Miss Nowak: I guess things have changed. Do you want a ticket or not?

Mr Hock, squinting one eye: Why are you bullying me?

Miss Nowak (confused): What? I… no, this is just how the prices work. Do you want a ticket or not?

Mr Hock (his face reddening): Well can’t you give me a special price?! I’m a very important person you know! People in shops often negotiate you know!

Miss Nowak: I can’t do that, and look, there are other peo….

Mr Hock (interrupting): I will pay £80! Not a penny more! And it must be first class, on the next train to London as I have a very important meeting at ten o’clock and will miss out on getting a very important job if I don’t get there on time!

Miss Nowak: I’m sorry, but rules are rules and I’m not allowed to give you a discount. If you want to go to London you’ll have to try a different way. Now please pay, or go, there’s a queue.

Mr Hock, now furious, grabs his briefcase and storms away to the exit of the station. Looking at his watch, he realises that if he misses the next train he’ll be late for his meeting, and then it dawns on him! A brilliant idea! He grabs his phone and scrolls through his contacts, looking for his friend John.

Mr Hock: John? Hi John! Yes… can you hear me OK it’s a bit… yes, good… OK, remember when we used to watch Scrapheap Challenge? Great wasn’t it? Shows how easy it is to make a vehicle! I need to get to London for 10am. It’s far too long to drive, and the train company is bullying me for £193! But if we can just knock up a home made train in an hour I can make my meeting and…

John interrupted, his voice is a little distorted over a poor mobile connection: Roger? What are you on about? We can’t build a train in an hour… Scrapheap Challenge is just a show and…

Mr Hock: Poppycock! The show only ever lasted an hour and they built all sorts of wonderful machines in that time!

John: No, it doesn’t work like that. These things are carefully orchestrated to make entertainment, and in real life making a train in an hour is impossible.

Mr Hock pulls his phone away from his head and stares at it, shaking with fury, before bringing it back to his ear.

Mr Hock: I see. Well if I fail to get to the meeting, it’s YOUR fault! I’m fed up of people with a can’t do attitude! What happened to plucky English spirit eh? EH? We need to stop letting train firms bully us with their inflexibility, high costs and hatred of people like us! I am proud! I fought in two world wars and won! Well not me personally, no, John… but people like me! And we didn’t make bouncing bombs in two hour…

[muffled voice on phone]

Mr Hock: Yes I know I saw it in a film, and it lasted two hours, it was amazing. Plucky English heroes!

John: You’ve gone mad, Roger. What are you on about? You don’t know anything about bombs or trains. It’s simply impossible. And even if you do make it, National Rail won’t just let you put it on the railway… and… why am I even bothering with this?

Mr Hock: Well it’s people like you that hold people like me back! This should be easy! John… John?

Mr Hock looks at his phone and realises John has hung up. He looks around, sees a taxi, and raises his arm. He gets in. The screen fades.

The taxi pulls up outside a scrapyard, and Mr Hock looks, optimistically, at all the materials there that he can use for his project. A large man in greasy overalls, dismantling an old car, eyes him up as he gets out of the taxi and approaches.

Mr Hock: Good morning!

Large man: Alright. What d’ya want?

Mr Hock: I’d like to make a train! I have one hour. Well, fifty minutes.

The large man stares at Mr Hock, up and down, slowly, without answering. Mr Hock starts to feel uneasy.

Mr Hock: Well?

Large man: Is this a gag or summat?

Mr Hock: I’m deadly serious.

The large man starts to laugh.

Mr Hock: What? Are you one of them? Are you in cahoots with the train company? Is this a conspiracy to take away my freedom on trains?

The large man, between laughs: Fuck off!

Mr Hock turns, and gets his phone out of his pocket. He dials a number and puts it to his head.

Mr Hock: Yes, hello, is that Stephen Barclay? Well, it looks like I can’t get to London for today after all. Yes, I know I wanted the job of chief negotiator in your department… yes… I appreciate that, it’s just I have some minor things to sort out, all fixable with technology of course, and then I’ll be there… Stephen? Stephen? Hello?

Screen fades out.

Why learning to lose is the path to winning

Last night was the count for the local by-election, in which I stood as a Liberal Democrat candidate. I lost. I came third. And I’m OK with that. But this isn’t a political blog, at all, even though I’m involved in it. So if you want the results, they’re here.

Once upon a time, I loved motorsport. I dreamed of being a racing driver, with adoring fans. I wanted to be like Damon Hill, who’d achieved a lot without losing his essential good character as a person. The only problem was that I had no money. At all. I was pretty much skint right up to my mid twenties when things started to sort themselves out. I had my extravagances, of course – this is the UK. Being skint doesn’t necessarily mean no car, no healthcare, and destitution. But I was skint enough that from the age of 18 to 25 my only motorsport release was the odd bit of indoor karting.

And during this, I realised that although I felt fast, I never won. I could get to the front, sometimes, but I’d always lose it.

Then one day, a friend and I were chatting, and we realised we had the same problem. We tried to hard. We so desperately wanted to win, that if we found ourselves in the first three positions we’d try so hard to maintain the position or pass the person in front that we’d make mistakes.

So in our chat, something profound was said, and I don’t know by whom, and it went “You know, it’s OK not to be first. If you have a strong second, sit on it.”

So we attended race night, and he came away with first place, and I came away with third. We’d both done better than ever before. Because we accepted that it was OK to come second.

And it’s OK, even, to come last. After I acknowledged that, I actually got better, and won my class several times in a real life car, albeit at a regional level. But at no point did I worry about losing. I just wanted to do my best.

Watch this race:

https://www.youtube.com/watch?v=D1q6JZtLrdc

I chose women’s athletics for a reason. Why? Because these are probably people most of you have never heard of. And you see the lady who came last? You’ve no idea who she is, right? You can’t even work it out by quickly looking at the video.

Yet she is, far far and away, a much faster sprinter than almost anybody you know in real life. She’s a ‘loser’ to many. But she isn’t to me. I bet she’s put in as many hours of effort as the champion. Maybe even more. I bet she’s worked and sweated, and strained and trained, and been shouted at and told off, and when she goes to the supermarket, few people will recognise her.

She’s the brave one. She’ll know for sure that she’s not going to be the fastest. She’ll even know that she stands a good chance of coming last. But my oh my, did she put the hours on, just to get to where she is.

Trying matters. In trying, you can make a difference. To yourself, to others. But you can’t and mustn’t beat yourself up about it.

It’s OK not to win. It’s not OK to not try, if you think you can do it.

If you’ve ever taken a look out of the window and thought “That’s not good enough” but then gone back to doing nothing, then that’s no good unless you have a really good reason. And there are plenty – again, don’t beat yourself up.

A winner in life is someone who tries. People notice. Losers are the people who say they won’t pick up litter, because it’s beneath them. Losers are the people who spit on your pavement because they can’t be bothered to use a tissue. Losers are the people who mock others because they’re different and, in the minds of the loser, somehow inferior.

Losers don’t come last. Losers don’t even try. And they lose the hardest in the end.

So I suspect I’ll stand for the council again. And I’ll almost certainly lose again. And that’s OK.

And if you fancy joining me as a loser in local politics, well, leave a comment with your email address below. Your email address won’t be published online, and I’ll ping you. At some point. Don’t expect an immediate response, but I’ll try!

Featured image Photo by Tim Gouw on Unsplash

Why political parties lose support by winning.

People do like to look back angrily, don’t they?

Yet many a time, their anger today doesn’t reflect how they really felt back then. If you look at the Iraq War, and the UK’s involvement in it, most people supported the action. For sure, an awful lot of people today don’t think it was right to be involved in Iraq. And if you suggest they did, they react angrily and deny it vehemently.

A Yougov poll and survey suggests that what’s happened isn’t the same as what people say happened.

Are people lying?

Not really. It’s more that most people’s memories are far more plastic than people realise. Hindsight bias is one type of problem with perception.

So if you support Labour right now, it’s very easy to throw everything that happened in the Blair years under the bus. To disassociate yourself from the man who was involved in starting an illegal war in Iraq. It was obviously illegal at the time. That’s why you cut up your Labour membership card and joined the Liberal Democrats. Right?

Labour membership did plummet just afterwards.

Source: https://en.wikipedia.org/wiki/Labour_Party_(UK)#/media/File:Labour_Party_membership_graph.svg

Oh.

It was already pretty much half what it was. In other words. The plummet started… when Blair got into power.

Membership up in opposition when an attractive leader turns up. Down when he or she deals with the tricky nitty gritty of life in power.

Never mind.

At least councillors, being local and well known figures in their communities, won’t be punished by the parliamentary party shenanigans, right?

Party membership chart over time, showing its decline overall. Source: House of Commons Library

Dammit. No. Whilst Labour were in power, their councillors dropped off. Whilst Lib Dems were in power… their councillors dropped off. Whilst Labour were in opposition, councillors went up.

So in the Lib Dems, a traditionally localist party, we can look back and see that being in government was terrible for the party. But it turns out, that being in government is terrible for all parties.

Why?

Because, it’s hard. Being in government is tough on a party. It means making difficult decisions and trade offs that can’t possibly satisfy everyone. And they can express that dissatisfaction and will hold onto it for a cyclical period.

Which leads to a question. What’s missing in politics? Why does the party in power always suffer loss of members (although Conservatives have been failing to gain members whilst out of power, which is a problem for them) and councillors and never please the majority of their actual supporters?

Is it a case of becoming complacent? Like a decent but lazy football team that gets 2-0 up and then coasts to a 2-3 defeat?

I’ll posit another reason.

No party politicians ever manage to engage with a majority, because they never address all the issues

So here we go… turnouts for the last twenty years have always been below 70%. And not above 80% for over fifty years. That’s in spite of it being ever easier to use postal votes.

Voter turnout in UK general elections 1918-2019. Source: House of commons library

And the number of votes for the winning party has hardly ever been over 50%.

Source – Wikipedia

Look at that. Since 1930, no single party has offered a view to satisfy the majority of voters, let alone the majority of the population. So when a party gets into power, it’s in an unenviable position – most people don’t want them there.

Only twice have there been governments that are technically approved by a majority – the WW II coalition, and the 2010 Conservative/Liberal Democrat coalition.

Both weren’t rewarded by their voters.

If we keep repeating the same mistakes, all parties keep losing by winning

One of the best ways to avoid losing your hard fought members is to not win. UKIP have almost entirely fallen apart recently… because they ‘won’ at Brexit. Boom! Job done! Party wiped out. Their purpose over, and the public scrutiny of the Brexit process rapidly revealing them as little more than political arsonists of little substance. Everything they said turned out to be bluster. It’s not the fault of the immigrants, and it’s not the fault of the EU that people’s salaries have been stagnant. It’s more to do with a greedy class of company boards and underperforming pension funds coupled with a financial crisis. The reasons for all that I’ll go into another day.

Now, given that avoiding losing members and popularity by avoiding winning in parliament sounds like a silly idea for a political party, we have to think a little more deeply about what anyone, in any political party, can do to actually get some stability back into the country.

I have a few ideas, and I’m using my marketing and business experience here…

1. Work for everyone, but especially the people who have been left stagnant

The economy has been stagnant for a lot of people, for a long time. Not the very poorest, who are generally in a better situation than ever before.

Not the very richest, because they’re actually quite well off and much more so than for a long time.

Labour has systematically failed people who are not unionised and who work. Try being a cleaner on £8 an hour, looking after two kids, and dealing with school holidays and child care in a constructive and nurturing way. Go on. It’s almost impossible.

And the Conservatives have been cutting finite resources, such as social housing (and Labour, when in power, didn’t grow social housing either, so they can’t get too smug here) and then both have become surprised when populist anger has risen, blaming immigrants, globalisation and bankers. Yet without more immigrants we are not going to be able to care for our elderly, or deal with our NHS… we will go bankrupt. If we allow the populists to leverage the anger of the people who have lost out from economic growth, then we will have huge problems in the future.

This graph charts the distribution of income across earners, with 50% of people getting only 20% of the income and the top 10% most recently getting 35.7% of the income – so 3.5x as much as the rest.

On the upside, it’s way better than it was at the turn of the 20th century. But the lowest half haven’t increased income that much, and the top have reduced income, so it suggests that people the top 50% to 90% range, the middle classes, have done best of all and must have seen their incomes do quite well in that period – probably largely due to the emergence of a new technical class.

Source: ONS Chancel and Piketty (2021), in the World Inequality Report 2022

2. Stop looking at averages

Don’t look at averages, but look at curves like the above. Those poor performing people, those losers, are the working class and lower middle classes of Western economies.

We need to look and listen to the stories of people and stop looking at averages. Average income going up is no use if you’re in the group of people where average income is not going up. But we need to find convincing stories to bring back to them. We can’t say “Hey, we’re cutting back all the welfare for you and spending on your schools, but we can spend it on bringing in a load of immigrants!” Now, we are 100% correct that we need lots of immigrants here, but we have to explain why – if our economy is based on the amount of workers and the amount of capital in the system and we’re not replacing our population then populists will do the stupid thing. They will say “No to immigrants! More welfare and money!” But that can’t work. It’s pathetic.

But it’s imaginary and easy and short term. So when Farage says this they’re just trying to take advantage of a situation that the rest of us leave lying around.

3.  Politics has to stop ignoring the voters

All parties are doing this. They pretend people are better off because they can afford smartphones and big TVs, but if going to university leaves you with a massive debt (rather than leaving it on the shared government balance sheet) and you feel you can’t afford a house like your parents had, then you don’t feel better off than your parents did… you feel annoyed and angry.

But listening to the voters doesn’t mean doing what the voters tell you to do. It means showing thought leadership. Explaining, patiently, why you can offer more than the previous status quo. The constituency I live in has voted Labour since its creation. But it hasn’t become better off even when Labour were in power. Why not? Why did house prices still rocket up?

4. Create these policies

Because I’m intolerably lazy, I’ve broadly nicked these 5 changes from an expert on all this. A chap called Mark Blyth. He’s an expert. I know we’ve had enough of them, and I know why we’ve had enough of them. But Mark Blyth is genuinely sharp on this. Look him up. He’s not right on everything, nobody is. But that doesn’t mean these points aren’t valid:

  1. Make university tuition free again. Because it takes a stress away. Yes, the system in the UK is very well structured and very fair, but it doesn’t feel it. And that matters.
  2. Provide much more subsidised childcare over a broader. Including during school holidays. Because it discourages women from fully contributing when the cost of childcare for two children is more than a salary. And because it helps single parents to function properly and give the nurturing care their children need.
  3. Resist and prevent the NHS being dismantled or turned into a multi-payer US style system. Simple, that one. The NHS is hyper-critical.
  4. Corporate reform of how shareholder value is distributed. I know this will scare the capitalists, but it shouldn’t. Because trust me, an angry and inward looking economy looks like North Korea or Venezuela. And that’s even worse for you. You’ll still be rich if you can keep our economies open. Trust me.
  5. Break up or open up digital monopolies. They have too much power and too many rewards for too few people, with returns of over 60%. That’s just not sustainable. So you have Google blocking YouTube from certain platforms and Facebook downgrading your pages’ natural viewings if you don’t have a healthy advertising budget.

If you notice, none of this says “Punish the rich.” Don’t do that. They feel unfairness as much as anybody, and there’s no point making them angry as well. Just fix the structural issues and things should balance out fine. You don’t need to simply turn up and take their money off them with a massive tax application. Just make sure their money has to be invested, rather than spent on impressive schemes like rocket ships that don’t address the problems that many people actually face.

Enough already

That’s my thoughts for now. About 1800 words of them, which is enough. These are the under-considered problems of the past generation, that are structural and required for a political party to prosper. And, if they get it right, perhaps they can even get a majority of people on-side.

Who knows eh? Maybe somebody can do it, and can convince enough people to do so. I don’t really care whether it’s Labour, the Conservatives, or my own favoured party, the Liberal Democrats. But somebody has to do it before the populists get another chance at polling booth. We don’t want them. At all.

Photo by H E N G S T R E A M on Unsplash

This article was updated with new charts and some copy changes on the 28th of May 2024.

Our office cleaner doesn’t vote. I think I know why.

Ever noticed that there’s a group of people who don’t vote? Good people, by and large… but they don’t vote. Eventually, I think I worked it out.

Ever noticed that there’s a group of people who don’t vote? Good people, by and large… but they don’t vote.

I noticed this during post-referendum chats with our office cleaners. Almost all of them said they didn’t vote. One said she voted for who her dad told her to vote for. I was a bit taken aback.

“But surely if you don’t vote, your interests won’t get looked after?” I asked.

One looked at me and snorted, “Like that happens! Doesn’t matter who gets in, they’re all the same!”

Sounds like a stereotype.

At the time, I wasn’t politically active. Now I am. The time before June 2016 is simply stated as “before the referendum” around here and with most people I know. As referendums go, it dwarfed all others. The Referendum, it should be. Because at that moment, a lot of things changed.

And, unusually, a lot of people voted. They voted for a change, and they were told it would make the NHS better and leave the country with more money.

I was deeply upset. I kept arguing with the hardcore Leavers, and then, in private, a friend sent me this message:

I’ve read a lot of what you have shared about the referendum, and as I leave voter I now fear I have made the wrong decision. I didn’t envisage the racial attacks that have since occurred, and did not vote out on the basis of immigration. I come across some of these people in work, and you then realise these are just normal and friendly people on the whole. I don’t have a great knowledge of politics and this is dangerous, as we all have the option to vote. I almost never voted, as had no strong bias to either side. I guess I’m trying to say your passion for remain has made me sit back and look at things from other people’s views. I can see you want the best for people. I wish I realised sooner, although it wouldn’t have changed the result.

Thing is, a lot of people realising sooner would have changed the result.

But people like me… we voted. But we didn’t try, did we? I know I didn’t protest, or man a stand in the streets. Had it too easy, you see. I thought others were doing it all anyway. Different people.

Let’s go back to our cleaner. Why didn’t she vote? Because she didn’t feel like she made a difference. Like she was going to get the shitty, difficult end of the stick either way. Not only that, but politics felt unreachable to her.

The Referendum got more people engaged, largely because a simple promise was made. £350m more for the NHS.

And people, even in post-Brexit Halton are still worried about the NHS. Here’s a local survey I did about concerns – sample size not massive at 67, but it’s enough to be a reasonable representation for the Halton area.

NHS is important. People worry about it. Because ultimately, we all get some sort of health problem at some point in our lives. Or our kids do. And we hear the stories of bankruptcies faced by US citizens due to their harsh private healthcare system.

Then Brexit and UK stability came in highly. And education. These are people’s primary concerns. I was actually surprised how few were worried about the benefits system, but then unlike the popular image of the North, most people aren’t substantially dependent on benefits. At least not in Widnes and Runcorn. So it’s not their biggest priority.

But let’s get back to our cleaner. Why doesn’t she* vote?

Unfortunately she couldn’t articulate it.

So I decided to remember what it was like when I was young, skint and facing homelessness. At no point did it occur to me to contact a councillor or my MP to see what could be done. They were distant people. Different people. Like teachers. I remember the shock and surprise when I learned that teachers had to go to the toilet! Yes really – they too need a wee sometimes. Amazeballs.

When you’re relatively naive, you don’t see the world all that clearly. Business-people are different. Asian people are different. People from the next town along… are different. It doesn’t matter. If you don’t know people, they’re different.

And most people don’t really know their local political parties. In the thirty years during which I’ve been able to vote, I’ve only heard from politicians during elections. I have never ever spoken to one on the doorstep. Except for one short period when I lived in Garston and my MP was David Alton. Now, David Alton has some peculiar views that I disagree with, but he’s a Liberal Democrat, now a Lord, and his councillors would drop in these weird Focus newsletters to the house. And I’d read them! I learned about what was going on in the area. They even had contact details so I could get in touch! They reached out… to me! Weird. But I realised, all politicians should try to do this. Push out their messages.

Then I moved back to Widnes.

And never, ever heard from a politician. Except during elections.

Sure, sometimes they’d say something in the local papers. But nothing relevant to me. Nothing that would fix my problem of living in a shitty shared house. Nothing that would make it easier for me to get a decent home. My parents had been able to get a council house, but it was denied to me. And I couldn’t save enough for a deposit on a house. It didn’t help that I wasn’t great with money either (credit card advertising has a lot to answer for!). But just being a young man, trying to run a car to get to work, renting a room, feeding myself, clothing myself and so on was sometimes tough. And nothing I ever saw from a politician made much impact on me.

Then I got older. And richer. Slowly but surely I made more money. I became a freelancer and discovered a piece of legislation might affect me – IR35. It wasn’t a massive issue, but it affected me. When politics affects you, you get to know stuff.

But working people are looked after by Labour, right?

I used to think that. Many people I knew voted Labour. Always voted Labour. Unquestioningly. I didn’t get it until I learned more about how unions work. Then I realised that unions and Labour are tied at the hip. Which is fine. The Labour Movement was what Labour was about, and it was massively important to the working man. Did a brilliant job.

Sadly, some unions got a bit giddy on power and decided to have battles to get more power. Which is a shame. They’d succeeded at getting working wages and privileges to a good point. They couldn’t see that some of those privileges were unaffordable in the long term. They simply had to keep them. At all cost.

That led to an interesting thing happening. Large organisations such as public sector, NHS and corporates started to outsource more and more functions. Our cleaners are employed by a company employed by our landlords. In many ways that can work. But truth is, that a cleaner at ICI or any other old large corporate like BA would have been exposed to unions, but our cleaners today are not. And even they were, many work for small companies disinterested in trade unions and employing fewer than 21 people. Others may not wish to join trade unions because they don’t like that they fund a political party.

So they’re not represented, really, by Labour. Labour mostly cares about people in trade unions and people who vote for them. People in unions are, for the most part, not the poorest part of society. In fact, I don’t think I know anyone in a union who earns less than about £30k a year once they’ve got five years experience in. That’s one reason why Labour are surprisingly reticent about taxing people in the OK to Quite Well Off groupings.

Nicked from the IFS website.

You could ask why the Lib Dems aren’t harder on the top 2%, but having worked with a lot of that range of people I can tell you that tax on income starts becoming optional at that level. If tax is too high they either put it into various perfectly legal vehicles (pensions and ISAs work well up to a limit) or they start looking keenly at moving cash offshore if possible. And taxing people too much can feel very unfair to those people. Get a £30k bonus and see £20k go to the government. They may not be right to feel like that, but that’s not the point. They feel unfairly treated and so get motivated to look for alternatives. As the IFS study reveals, the Lib Dems would almost certainly raise a lot more money with their tax changes than Labour would.

Labour is the party of the middle classes.

It’s true. Student fees position? Well, the current regime of student fee repayments introduced by the coalition means your repayments are lower if you earn under £35k than under the earlier top up fees system introduced by Labour.

Pensions position? Most of the people affected are people with good pension incomes. They are not poor people. Poor pensioners are considered in a secondary way, because they do at least vote. But most of the policies continue to leave wealthy pensioners paying far less in tax than young people on equivalent incomes.

The unions? Most union members earn good money. According to a study by the Department for Business, Innovation and Skills, trade union members were paid an average of £14.45-per-hour, 5p more than in 2012 (£28k/yr, equivalent to over £30k/yr today) – source

So who does represent the best interests of our cleaners?

I say the Liberal Democrats. A party I finally got involved with in 2016, after The Referendum. You’ve seen the chart above, and in the early years of coalition, before the Conservatives neutered them, they did a great job of taking low earners out of the tax system entirely. The UK’s Gini Coefficient improved for once!

For more information, see https://www.equalitytrust.org.uk/how-has-inequality-changed

But here’s the problem for the Liberal Democrats. Nobody really knows this. But our doorstep action, whilst being great on a local level, needs to talk about the bigger issues. Potholes and poorly kept parks are important, but these things rarely keep the bulk of people awake worrying. But the NHS does worry people. Brexit does worry people. Not being able to feed the kids does worry people. These issues need addressing. Loudly and proudly.

If you’re campaigning in the 2018 local elections, it’s important to share a little bit about what the Lib Dems mean for everybody. Not just campaign in the middle class areas and get squeezed, but in the poorer working class areas where we can make a big difference. Our policies are better for them. They just don’t know it. Not to tell them this is a disservice to them and to the Liberal Democrats. The working poor need us to help them. And if we reach out to them, maybe they’ll reach out to us. And our cleaners and their friends – they’re essential people, and once they get going they are awesome!

Feature Photo by Verne Ho on Unsplash

Staleys in the Isle of Man

One of the funny things about children and their memories is just how fallible they are. Full of false memories and forgotten realities. I lived, for a while, somewhere on the outskirts of Douglas on the Isle of Man, when I was about nine years old.

The family I stayed in had a boy about a year older than me, and a girl about a year younger. The girl was nice, if disinterested by my presence. The boy was giddy at first, but horrible if I dared beat him at anything. Within a month or so every toy I’d brought with me (and they weren’t many) was damaged in some way by him and he wasn’t great at sharing… though he didn’t always get much choice in that matter.

His parents were, I suppose, alright. Why would they have looked after me if not? The father was a Scottish oil-rig worker and absent for what seemed like an age at a time. I didn’t mind. When he was home there seemed to be a lot of porridge to eat, and they weren’t good at making porridge. Then it became An Issue when I didn’t eat it all. I remember one day being left alone with what seemed like a monstrous bowl of porridge while everyone went out. I had to finish the porridge.

The good news is that with care and running water you can wash any amount of porridge down a sink. I don’t know why I didn’t think to use the toilet instead, but I didn’t. It would certainly have been a faster way of disposing of the sticky gloop.

And I have a massive collection of memories from the place. There was a bar of soap in the shape of a blue elephant. A bar of soap which, I must add, wasn’t to be used as soap. Simply not allowed. No idea why. But the days passed. I would go to school, come home for lunch of some thin, hideous soup – often oxtail, and go back. Sometimes I’d have a sandwich to take with me. I only remember soup and porridge from the Isle of Man. I’m sure I got nice meals too. I just have zero recollection.

The funny thing about informal fostering is how risky it is. I suppose that isn’t funny at all, really. But in doing it, your parent(s) could be unwittingly exposing you to dangers. So if I spoke to strangers in the park (and I would, being that kind of child) then my Dad would make it An Issue. But being dumped on an island while Dad goes off to marry his new 19yr old wife? Yeah, no problem!

But nothing bad happened, porridge aside. Nobody molested me. Nobody beat me. Nobody really shouted at me. All the people who put me up were better at the basics of childcare than Dad, no matter how bad their soup was. No matter that mostly they were much more boring in my eyes. Because Dad, although volatile and drunk, was funny and interesting. I didn’t want to live with him, but when he was sober and happy, he was great. But it’s how you act when things aren’t going well that tends to define you. And when things went badly he was a horror and couldn’t keep things together. Hence all the informal fostering when his latest escapade had gone wrong.

What was best about this informal fostering was the new experiences. In Horwich, the landlords of the Albert Arms put me up for quite a while. They handled feeding me, discipline and keeping me relatively on the straight and narrow. I was a little feral, I suppose, but that wasn’t so unusual in 1980. They even made delicious food like fish fingers. They even bought me my first bike, a used Raleigh Chopper. Good people. Took me on holiday too. To Garstang, admittedly, but it was still a holiday and I loved it.

Back in the Isle of Man there was one memory…an experience… that really sticks with me. There was a bakery in a nearby row of shops. I’d been told by some other children that they sold “staleys” some days. Confused, they explained a staley was just yesterday’s cakes and still tasted delicious! I was reluctant at first, but a friend, the guy with the mute mother, took me in and showed me the ropes.

To a nine year old with relatively little going on in life this was… heaven. The only feeling better was the same friend whose mum handed me unused toys and board games to take home. I loved her, a little. And I loved that bakery, because if I found 2p in the nearby phone box I had a treat to look forward to. I’d run in excitedly, ask to be shown the staleys, and choose the nicest I could afford.

But it annoys me that I don’t know the name of the school I went to. Or my friend with the mute mother. Or the name of the family I stayed with. Or their grandparents who often looked after me for long, tedious weekends. Nothing. Just gone. But I remember the bakery. And I remember the broken JPS Lotus model toy that got broken by my temporary roommate. The little shit.

Image credit: CC-BY https://en.wikipedia.org/wiki/%C3%89clair#/media/File:Eclairs_at_Fauchon_in_Paris.jpg

Bono’s office, some time in 2014

Hi guys, I suspect you know why I’ve called you in here for this meeting. Adam, Larry, uhm… hat guy… you know that costs have been rising and, what with piracy and everything we just don’t get the receipts we used to.

Obviously that means we have to find some savings and, after looking through the options the management have come up with a plan to help save the band and allow us to continue delivering on our mission statement of creating slightly banal rock music along with big, over the top live concerts.

I’m really sorry to be the messenger in this, but I have to inform you that your roles are being replaced by a team of six musicians from Hyderabad in India. Obviously this pains me greatly, and eventually I will go as well as I’m staying as a transitional figurehead until somebody just as annoying can be found and trained up.

You’ll be pleased to note that I’ve been able to negotiate a generous three month notice period for you all, including a generous pay off equivalent to an additional six months of pay if you work out your notice period to management’s satisfaction. I hope this is agreeable to you. There will also be assistance in you finding a new job through our redeployment unit who will be offering training and help with tidying up your CV.

What’s that Larry? What will you be doing during the notice period?

Well, mostly you’ll be training up your replacements who are arriving later today. Hat guy, you’ve got Ishaan and Krishna, Larry you’ll be working alongside Arjun and Diya, and Adam, you’ve got Om. You were supposed to have two guys with you but there was a problem with visas or something.

Hat guy, you have a question? OK, fine, “The Edge” it is… I do wish you’d let that go. What’s wrong with Dave eh? Sure sure, we’re digressing… anyway, no, management don’t believe quality will suffer.

I’m obviously unhappy this has had to happen, but I’m sure you’ll all find success in your new jobs out there. I believe most people who suffer redundancy find themselves better off than before! One guy I knew was just a cleaner, got made redundant, got trained as an electrician and makes four times what he did. Amazing eh?

No Adam, I don’t think after this has happened I’ll suddenly find myself in a nice managerial role. I’m as gutted by all this as you all are, I can assure you.

Chaps, I know our new album is part way through, but I’m sure you’ll all be professional about this and make sure that you transfer all your knowledge and current working situation to our new colleagues. Good luck, Larry, Adam and Dave, and let’s stay friends. Right… right?

image credit link: http://en.wikipedia.org/wiki/File:2005-11-21_U2_@_MSG_by_ZG.JPG