Pearls and Irritations

A new book about Birmingham and its role in shaping modern Britain illuminates how the UK moved from the world’s first industrialised nation to financialisation and deindustrialisation to many of the characteristics of a failed society.

The book, Second City: Birmingham and the Forging of Modern Britain by Richard Venin, is about the history of a place often considered the epitome of the UK’s 19^th and 20th Centuries’.

Reviewing the book in the London Review of Books (3 November 2022) Owen Hatherley shows that over a millennium Liverpool, Manchester, Bristol and even York were contenders for the title of second city but Birmingham pulled ahead for a number of reasons – not only the industrial impetus of potteries – but also the intellectual impetus of the Lunar Society of which Wedgwood was a member and pioneering industrialists such as Matthew Bolton – the man who introduced steam engines to the world.

Today it is probably Greater Manchester which is considered the second city assisted by being one of the better structured and resourced local government areas in a nation which is still heavily economically centralised.

In the late 19th century, under Tory and Liberal MPs and local councillors, led by Austen Chamberlain, introduced what became known as ‘municipal socialism’. The term is probably a bit of a misnomer because the city was also hostile to the predominantly working class population.

Owen Hatherley describes how in 1873 Chamberlain’s administration took over the private gas and water companies “which had failed to provide clean water and reliable heating”. Similar policies were only adopted nationally after 1945 under the newly elected Labour Government and Labour dominated municipalities.

But therein lies an interesting tale starting with Margaret Thatcher and compounded by later Cameron Government Chancellor of the Exchequer, George Osborne.

In Thatcher’s case it was wholesale privatisation and in Osborne’s a shift towards the financialisation of the UK economy to the benefit of investment banks, tax dodging oligarchs from Russia and other countries and the placing of the City at the centre of British policy and focus.

Osborne’s influence continues with many of his closest advisors and business associates now advising new PM, Rishi Sunak – whose background is his new advisors’ milieu.

So, what’s the point? Clean water and reliable heating are clearly a fundamental characteristic of a healthy and developed society. Yet in 2022 it’s no longer the case in the UK. Power companies are failing across the country. Water companies, one of which was owned by Australia’s own Macquarie Bank, are charging spiralling amounts for water and sewerage while pouring raw sewage and wastes into rivers and on to beaches.

The UK, thanks to Thatcher, was the starting point (urged on by followers of Milton Friedman Hayek and the investment banks which made huge sums from privatisations), of this whole situation.

While Norway built up a trillion dollar national investment fund from North Sea oil Britain gave it away in privatisations and tax cuts. One doesn’t need to be reminded that Australia failed equally miserably in getting the national benefit of its resources boom.

The Birmingham reformers gave the city clean water and cheap gas – part of the offer being sadly dependent on abundant coal mining and burning. Today the water and power companies are going broke as the raw sewage is discharged on to English beaches and into waterways. Water pipes are leaking. Residents shiver through Autumn with worse to come in Winter – not only because of Putin – but mainly because of successive British Tory Governments (with a little bit of help from Tony Blair and Gordon Brown).

Australia has experienced many of these problems but has been partly saved by many of the service delivery societal needs being in the hands of State Governments – although it wasn’t only Jeff Kennett who was a cheer leader for such policies and Labor Governments were complicit as well even if a re-elected Andrew Government is now promising to re-introduce a State-owned power generation company.

Sinclair Lewis called one of his books It Could Happen Here. He was talking about the US but his title was prescient for all of what Tony Abbott liked to call the Anglosphere.

Australia maybe is too multicultural to really be part of an Abbott fantasy Anglosphere but then so is the UK for that matter.

But for decades policy decisions have been made on the basis of another fantasy about markets and services.  It’s just a pity we forgot the lessons of 1873 – and those of our own post-war experiences

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