Carry on clinging on

A post earlier this month followed up a story in the Financial Times on 15 February about the division of the British middle-class into the 'über-middle' and the 'cling-ons'. Subsequently an article in The Times (£), Super-rich professions squeeze out traditional middle class, went over the same ground, quoting a little more data:

and the FT has returned to the subject, particularly the housing implications which I touched on in the last post. On 22 February (again a Saturday) the FT lead was High earners face London lockout, ‘Cling-ons’ priced out of homes by ‘uber-middle’, Camden and Hammersmith now unattainable. To help those who had missed the previous week’s story, it explained:

The purchasing power of a wealthy "über middle" is increasingly pushing the most desirable neighbourhoods out of the reach of "cling-ons" - the architects, engineers and academics whose salaries have failed to keep pace over the past 40 years. … People who could once have afforded Richmond, Wandsworth or Islington, are now buying homes in Barnet, Lambeth and Haringey, the data show.

“the data” came from Savills estate agency, as in my post. They were also one of the sources for a map on page 2 of the FT titled “Britain’s middle class has been forced out of “prime” neighbourhoods” showing how for various districts the percentage of electoral wards where average housing costs for a household with a net income of £58,000 are unaffordable (ie need more than 35%):

The accompanying article focussed on Oxford, quoting Savills’ man on the spot:

A lot of the families who lived in north Oxford up until the time that I started (in 1961) were academic families. A lot of those have sold and gone out. And the people coming in might have an academic background, in so far as they were undergraduates here, but they have gone off and made their fortune either in industry or in the City or as senior consultants or accountants and so on.

Another article described the difficulties faced by the cling-ons in affording private education, one of the attractions Oxford offers the übermenschen.  An FT video is available, British middle class splits in two, featuring St Albans as the context.

The FT offered an interesting point about London from Chris Hamnett, professor of geography at King's College, London, who has charted its "gentrification" over 50 years. He said that the capital was now "a global centre for the international rich whose desire to secure a home in the capital amounted to "a process of global asset diversification". Next month Evan Davies has a two-part series on BBC2, Mind The Gap: London Vs The Rest, which hopefully won’t be just a eulogy of Bojoburg and will be prepared to look at the strains the capital is starting to impose on the rest of the country.

Some interesting issues may emerge from this fission of the middle class into über and cling-on.

Firstly, the political implications. If the Conservatives start to be perceived as the party for of the über-middle and above in London and the south east, can they ever win a national election? The foreign owners of London properties don't even vote. Worse, many of the under-60 middle class, whose support the Tories need, will be increasingly aware of their precarious cling-on situation and may find Labour's concern for the squeezed middle appealing.

Secondly, for how much longer will the NHS be able to pay its medical staff über-middle rates of pay? 

Thirdly, are these stories underlain by an internal debate at the FT as to whether it should remain a national newspaper with declining print sales? Could it decide to push away the UK cling-ons? The FT could then concentrate its efforts on physical distribution only at the weekend and on-line subscription all week for the über middle and richer catchments, the dark bits in the map above and their equivalent across the Anglosphere? Much of the content of the FT’s How to Spend It supplements (see its “website of worldly pleasures”) concerns goods and services already clearly unaffordable by mere cling-ons. The weekend House and Home section is in a similar vein, Cheap as pommes frites*, being the headline of an article describing the cheapness of the French property market – from €4.5 million upwards.

*UK chips, US French fries.

 

UPDATE 6 MARCH

Tyler Brülé is the editor-in-chief of Monocle magazine and he also writes a weekly column, The Fast Lane, for the Weekend Financial Times. On 1 March, a few days after this post appeared with its concluding bit of speculation, Brülé chose to write about a new Australian newspaper appearing for the first time that day, The Saturday Paper:

It comes at a time when many of the world's big news groups are considering what to do with their print editions from Monday to Friday (go exclusively on-line? Drop home delivery? Limit distribution to big cities only?) while placing more emphasis on their weekend editions (The FT, for example, has a big global campaign to bolster its weekend offering).  

The Saturday Paper cuts out the cost that comes with running a newspaper throughout the week and is building on a readership base from an established sister magazine, The Monthly. Publisher Morry Schwartz's move to shake up weekend reading should be monitored closely by press barons, both established and emerging.

The FT on 1 March seemed to be giving the über-middle/cling-on thing a bit of a rest.

Engineers in the UK (and China)

In a post in February I lamented the status of professional engineers in Britain, and the misuse of the term “engineer”. I didn’t hold out any prospect of significant change then, and the situation was hardly helped last week on the BBC1 reality show, The Apprentice.   Lord Sugar (enobled, and rivalled for charm, by Gordon Brown) chairs a “Board” and selects an aspiring young business person for (in this series) investment and partnership – tasks are set and each week one of the wannabes is stood down. On the 15 June show Sugar decided to ‘fire’ senior design engineer Glenn Ward from the competition because he was an engineer. According to the New Civil Engineer, Sugar told Ward:

“I have never yet come across an engineer that can turn his hand to business. I’m not convinced that a leopard is ever going to change his spots, and [that] an engineer is going to have the right ideas to come in business with me.
He later said that Ward was “exactly the example” of an engineer who fails at business.

This produced a predictable chorus of complaint, for example in the Observer from James Dyson, the inventor and vacuum cleaner tycoon. He was kind enough not to bring up Sugar’s famous prediction in February 2005: 'Next Christmas the iPod will be dead, finished, gone, kaput,'.   In fact it was well before then that Sugar seemed to have lost the nous for consumer electronics he had shown in the 1980s.

While not intentionally trying to make amends, the BBC is providing a much less half-baked view of the role of engineers in Made in Britain, a three-part series presented by Evan Davies . Unfortunately this is on BBC2 and will get a much smaller audience than The Apprentice on BBC1. In the first episode on 20 June Davies visited China, including Shanghai, to look at high-volume, low-value manufacturing of the type no longer viable in the UK. That morning, The Times (£), under the headline, Children get maths lessons from Asian ‘Tigers’, reported that maths teaching in English schools would adopt practices from Singapore and Hong Kong. It also pointed out:

Singapore came second in the latest international league of pupil achievement in maths, the UK was in 28th place. Shanghai came first.

Davies’ later programmes (if his accompanying book of the same title is anything to go by) are very likely to bring out the need for graduate engineers, if Britain is to undertake the necessary expansion of its manufacturing base. There is already no lack of demand: Dyson remarks “… the City loves engineers. I wish it didn't. I'm trying to lure another 400 bright minds to our Wiltshire laboratories.”

Rory Sutherland (vice-chairman of Ogilvy Group UK ) revealed in an article in the Spectator on 18 June, a marked contrast to the British way of running things :

This is from a 2007 blog, listing the Chinese politburo:

Hu Jintao, 62, President of the People’s Republic of China, graduate of Tsinghua University, Beijing, Department of Water Conservancy Engineering.
Huang Ju, 66, graduate of Tsinghua University, Department of Electrical Engineering.
Jia Qinglin, 65, graduate of Hebei Engineering College, Department of Electric Power.
Li Changchun, 61, graduate of Harbin Institute of Technology, Department of Electric Machinery.
Luo Gan, 69, graduate of Freiberg University of Mining and Technology, Germany.
Wen Jiabao, 62, premier of State Council, graduate of Beijing Institute of Geology, Department of Geology and Minerals.
Wu Bangguo, 63, graduate of Tsinghua University, Department of Radio Engineering.
Wu Guanzheng, 66, graduate of Tsinghua University, Power Department.
Zeng Qinghong, 65, graduate of Beijing Institute of Technology, Automatic Control Department.

I just checked to find out if anything had changed since 2007; perhaps they had recently decided to embrace diversity, appointing two female poets and someone with a background in contemporary dance. And so they have. Of the four new appointments since 2007, one is only in his late 50s and only three are engineers. Li Keqiang, the lone non-engineer of the nine, has a PhD in economics. This preponderance of engineers is not quite so exceptional as it first seems, since it reflects the communist fetish for heavy industry 45 years ago. And it is not all good — left unchecked, engineers are prone to devise grandstanding infrastructure projects that deliver little human value. But it is still revealing.

How many scientists are there in the House of Commons? Rather few, it seems. … No, I don’t want to be ruled by engineers. But you can’t deny that over the past 150 years they have solved more problems than politicians have.

China came up again in The Times when, kicking off its CEO Summit, it provided the results of a Populus opinion poll which had asked voters to rank the UK alongside its five major competitors on tax, infrastructure, skills, workforce and business friendliness, as summarised in the table below.

Obviously this is about public perceptions more than realities on the ground – after all how could “2,047 adults aged 18+ online between 17th June 2011 and 19th June 2011 across Great Britain”, and, “Generally speaking from everything you know or have heard or read”, be equipped to make such judgements?   38% of the sample had not taken a foreign holiday in the last three years, and 34% had left school before the age of 16. “Infrastructure” was defined “like the road & rail networks and other transport links” – but what about broadband, secure supplies of electricity and water, and so on?

Not that my views are likely to be of much value, either. I’ve been to the US and Germany in the last 10 years, but never to China or India, although I’ve probably been to France enough to have a stab at comparisons with the UK. Looking at the Table, the workforce skills relativities look dodgy: China second to Germany – one day maybe. France is almost certainly not fifth in workforce skills, nor behind the UK in my view, I’m sorry to say (plombiers being only a minor element of the French workforce). I also find it difficult to believe that France is worse than India as a place to set up a small business, and I wonder if France’s infrastructure is superior to Germany’s, taking the old East and West together, despite the enormous investment of recent years in the former. With its large fleet of nuclear reactors, France certainly won’t have Germany’s dependence on imported gas for electricity production in years to come.

To end on a more upbeat note, I see that BT send a ‘technician’, not an ‘engineer’, out to fix your stuff, unlike British Gas (see previous post). However, BT are well aware of the cost of what they call “wagon rolls” and, unless the problem is their fault, you may well get a bill shortly after the visit! I would expect that in China they are all called technicians.