In 1992, a certain James Carville, a strategist for the Bill Clinton Presidential Election Campaign, derived a brilliant winning election slogan. It’s the Economy, Stupid! Its brilliance was contained within an apt simple phrase that focused political minds on what was essential to win over the electorate, not the peripheral and divisive nonsense noises off-stage. You might think it would be as relevant today as it was 30 odd years ago, but we live in different times. Today, in an era of meaningless value signalling, it would be seen as merely an easily forgettable platitude. We are all well aware the UK economy is struggling to deliver growth, and we need to get out of a rut we have been stuck in over decades of mediocrity. But whenever a politician speaks on their pet issue and starts talking how to resolve the flat-lining plateau, or the continuous decline in efficiency, or reduction in individual’s well-being you can deduce by simple commonsense and know instinctively it is a hope over reality. You sense deep down it will never happen. ‘It’s the Numbers, Stupid! Nothing you are telling me adds up. When faced with complex and uncertain times you would expect the numbers, and the science would help drive the new policies. The decision-making process formed from rational and logical numbers. When you surround decisions with numbers and proven science it naturally quantifies responsibilities and accountability. Perhaps the very reason why politicians avoid them as though they were contagious viruses. Some judgements, however, are not susceptible to quantifiable numeric and science-based judgements. I am thinking of spiritual enlightenment, morality, ethics, humanity, empathy, liberty, freedom, brotherhood, and even good social manners. But even these were capable of being distilled into ten commandments to guide us and make us responsible for our behaviour and actions, tough at times as they might be. Take some illustrations as examples, where either politicians are delusional or are simply selfishly driving a mantra to raise themselves in their career progression pecking order. Their effects represent huge threats to the well-being of a nation. My chosen ones are:

(a) Zero Carbon Targets

(b) Defence

(c) Housing, and

(d) Mass Migration

(a) Zero Carbon Targets

The numbers say that the average global temperature since 1840, the start of the Industrial Revolution, has risen dramatically from 13.6°C to 14,7°C by 2025, an increase of 1.1°C. There are various models projecting it to rise further by 2050 to another 1.4.°C, a total increase of 2.5°C since pre-industrialised times at 16.1°C. The UN’s IPCC regards an increase of between 2,5°C to 4,0°C  within the equilibrium climate sensitivity per Assessment Report No.6 (AR6) in 2021. That is the range within which the climate is not destabilised. The workings underway for AR7 suggest a projection of a more benign  scenario of around 2,7°C. In 2016 Paris Accord the world decided to hold the current level by 2030 to a limit of an increase of 1,5°C. And by 2050 limit the total increase to be no more than 2,5°C. In 2022 COP 27 reported that annual global emissions of CO² must be reduced by 45% beyond current policies in order to meet that aim. Many politicians, including the Secretary General of the United Nations, immediately seized on these sets of numbers and in his over-zealous pursuit of another bandwagon pronounced, we are all doomed. Before we could absorb what was going on, the UK appointed a minister to effectively enact several energy related projects costing literally trillions of pounds with no evaluation of the financial benefits, no scientific justification, and no indication to its rapidly impoverished citizens what the future costs were in store for them. The IPCC, a gathering of 95 world renowned scientists working for the United Nations, contradicted the UN Secreatary General statement six months later on finalising their report. They unanimously gave the opinion  that there was no evidence they could find that climate change was an existential threat. In fact, the consensus amongst most scientists and economists is that there is no evidence of an existential threat and little net economic impact of human induced climate change to the end of the century (US Government and UN). A proper understanding of the ‘Unsettled Climate Science’ (Koonin) and historical observations, not assumptive pessimistic based models, would have at least caused a momentary pause to think all the numbers through to define an achievable target. I would recommend all decision makers in the energy sector read the book entitled ‘Unsettled’ written by Steven E. Koonin, former Undersecretary for Science in the US Department of Energy under the Obama Administration. They should test their own thinking against the contradictory evidence, or lack of confirmatory data, before they make decisions of such cardinal strategic proportions. It debunks many of the justifications used to support the 2050 zero-carbon mantra. When you examine the basic data, there has been a dramatic rise in greenhouses gases, notably CO² post global industrialisation. It is noteworthy that if there were no greenhouse gases trapping heat in the earth’s atmosphere the global temperature would fall to -18°C. In addition, a reduction of CO² concentrations to less than 180 ppm would make all life on earth extinct! It is reasonable to assume though greenhouse gases have a powerful effect on climate change. Over the last 800,000 years the concentrations of CO² have oscillated between 200ppm to 280ppm. Then there was a sudden change from a 280ppm peak to a new high of 410ppm starting in the 1950’s. Various models have projected an increase to 550ppm or up to 700ppm by 2050. If the politicians had looked at the data of observations between 900 ad and 1300 ad they would have noted that global temperatures were several degrees higher than now but within a normal oscillating trend on CO² concentrations. There was a rapid cooling period from 1300 ad to 1850 ad before there was a resumption of the warming effect. There was no correlation with CO² concentrations during that period. Over the last 200-million-year CO² concentrations have been up to 10 times what they are now. The physical law proved by Stefan Boltzmann would have demonstrated that a doubling of CO² concentrations could only add a temperature change of 0,7°C and then further doubling has little effect on temperature change. There must be other factors at play. So, when you use numbers to fit your ideology be careful. Credibility can be destroyed if the full array of numbers and scientific observations run counter to your argument. So why all the panic and rush to empty our Treasury Coffers already severely depleted through the effects of the 2022 Covid virus and the 2008 financial crisis before that? It is patently obvious the wrong target had been chosen. It should have been based on the loss of abundant cheap energy from fossil fuels and how we should replace this energy source which will still represents 70% beyond 2050 at an affordable human and financial cost. Oil and Gas runs out within 70 to 80 years and coal within 125 years. The real question is what can we deliver by then to mitigate the effect on our people in a sustainable and cost-effective way before we resort to living in caves, sitting around campfires, and ploughing fields with horses. Along the central belt of the UK covering Lancashire, North Yorkshire and Lincolnshire there are sizeable deposits of natural gas which could service the UK economy for 10 years. Ground disturbance would be far less than that suffered during coal mining era. The present government has steadfastly refused exploitation of this resource. Given the nature of this horrendous decision should the whole of the UK Cabinet be impeached (Constitutional Law dating back to1376), in a public company a strategic cardinal error of this magnitude would have manifested in the board’s dismissal by the shareholders.

(b) Defence

The war in Ukraine has exposed Europe’s weakness in defending itself militarily without overwhelming support from the USA. Since a summit in Cardiff the 27 nations of NATO have struggled to meet even a 2% of GDP target failing to recognise the peace dividend is now at an end. Europe has bathed in the largesse of the USA who’s current expenditure on a much greater economy is around 3,5%. It appears we are unable to face down a belligerent nation that is Russia, whose economy is the same size of Italy. Nor are we able to contribute to world peace in other global trouble spots further afield. The combined military expenditure of the EU and UK combined will still only be half that of Russia who devotes an estimated 40% of its GDP on its war machine. Some say the direct Russian commitment is around 9%. To match Russia’s military expenditure would require an average cost of 4% of all countries GDP in the EU and UK combined. The USA has made its position crystal clear, as it has repeatedly done over the last century, it will not aid Europe unless it is in its interests. Europe is clearly not meeting its commitment for a conflagration that primarily is their responsibility. It is hardly surprising we provoke a negative reaction when the US has just pronounced by their Vice President Europe has to be self-sufficient and not helped when the tone of the relationship was soured by grotesques displays of the President sitting on a toilet seat outside the Houses of Parliament with the Lord Mayors sanction. As this article is being written, Ukraine, UK and Europe are being sidelined while a framework for peace is being discussed above their collective heads between the USA and Russia. Ukraine surely must have the primary say, it is Europe’s border not the USA’s! The USA has made its stance crystal clear on Ukraine except for the question of security guarantees to ensure a durable peace and to avoid another Putin adventure. Europe must now face up to its onerous responsibility, enforce its own interests in order to protect its peoples. To maintain peace in Europe it is vital the sovereignty of nations is fully respected. Russia needs to be told now that Europe will not tolerate any occupation of Ukraine and any interference in its sovereignty. That is not to say Ukraine would not be prepared to share in the administration of the occupied territories providing Russia removes all its military forces. Europe must make it plain it has no plans to expand either Nato or the EU beyond its present frontiers as possible concessions but will act against any aggression towards a peaceful neighbouring nation that would be regarded as a threat. Europe must be prepared to build up its military to face Russia if Putin does not accept full withdrawal. In that regard Europe should request the US provides air cover for its troops on the ground should it be necessary to deploy ground troops. The EU in a relative short time could be in a position to face down Russian Occupation wherever that arises and prevent other incursions. In Europe this can only be done by increasing national debts. It may be necessary to issue a European War Bond, part backed by the EU and the remainder by the UK and Ukraine perhaps using some asset backing security from the Ukraine. All the USA has to decide is the level of support it is prepared to give or not. Either way Europe will do what is required. The only question for the US is how long they want this war to drag on. That is how you deal with President Trump and President Putin and define the numbers needed.

(c) Housing

How would you scope out the financial dynamics required to resolve the problem of a 4,3m housing accumulated shortage and the imperative each year to address the population growth of 0.32% per annum in 2025, all within a flexible framework? And how would the financial dynamics fit into a national strategy to include the parameters of GDP Growth, Energy Sourcing, Mass Migration, NHS Rationalisation, Productivity, Defence etc? Those are broader subjects, but a strategic linkage nevertheless is needed so all strategies can hang logically together. To eliminate the housing deficit of 4,3m within 25 years, a generation, and allow the time for the upskill training required for the extra building trades would require building each year a whopping 172,000 homes. In addition, the population growth means the equivalent of another 221,000 souls each year that must be housed in addition to the backlog. Assuming half the houses were 3-bedroom, and the other half were 2-bedroom, it would need the equivalent of an extra 88,000 per annum new homes (221,000 divided by say 2,5). A grand annual total to be sustained of 260,000 versus the government’s stated target of 300,000. Net migration above this figure busts the economy. At least the government target of 1,5m new home within five years seems about right, but where is the delivery? Relaxation of planning controls is only one aspect, there is still the funding issue and skilled labour and material shortages. There has been a failure in the social economy for housing ever since the 1950’s. As a first base, let us assume the private and existing social sectors can deal with the increase in demand from population growth. Assuming the national average cost of each of the homes would be £400,000 for a two-bedroom house and £450,000 for a three-bedroom house, that means a total funding requirement for the backlog of £1,8tr, or £73bn per annum, funded 50% private + 50% public! This is when the deep breathing starts! The immediate benefit would be a growth in annual GDP of the UK of over 3%. A Keynesian boost to prime the economy. It is doubtful such a challenge of this magnitude for both private and social housing could purely be met in the private sector or local government, even if aided by attractive tax or other incentives. Perhaps, once and for all to resolve this primary duty, the government must lead from the front, put in place a funding programme for over a generation and eradicate the stop/start problem governed by parliamentary cycles. The total funding could be via an international 25-year government guaranteed property bond at a fixed interest of 3,5% drawn in 5-yearly tranches each of £365bn. The government would not provide the funds, just the guarantee any shortfall between bond repayments and contributions by private and social householders. Any utilisation of monies would build a property asset base. The objective would be not only to ensure a constant supply of funds to where it is most needed but also gradual rebuilding of the national housing stock free of short-term market influences. All properties bought within a 25-year timescale would, whatever the changes in ownership or tenancy, carry with it the obligations and conditions of the government property bond. The market rent for those opting for private ownership fixed option value would be £1,350 per month for three-bedroom house and £1,200 per month for a two-bedroom house. Social housing would be at 50% of these rates. As the years progressed social houses would in the future be transferable at fixed values to local councils to secure an income stream for them. The financial profile and benefits for the first block averaged annually over the first five years of 860,000 houses would cost £365,5bn (£73,1bn per annum). After annual repayment of capital and interest of £22,17bn, less all rentals of £19,74bn would mean that the government would only have to guarantee £2,43bn knowing this would be covered by increases in property values of at least 3,3%! Overall the benefits would be Eradication of market fluctuations. Social Tenants      Rents fixed between £600pm to £675pm. Private Tenants    Rents fixed between £1,200pm to £1,350pm. Government Net Funding Exposure Maximum over first five years limited to £12,15bn, covered by increase in property values and the backlog starting to be solved. The scheme could be flexed as demanded. These are the dynamics at play. The figures are illustrative and would differ by region, but the principle is sound.

(d) Mass Migration

All political parties are incapable of quantifying the level of mass migration the UK can sustain. Why, when this figure is required for the Chancellor to budget the national finances. Here again the numbers and the framework to derive a figure can be articulated. Just a crude overview will guide the politicians where the answer is likely to lie. The UK population is currently estimated at 69.1m. Birthrates are slightly greater than the death rates at around 11.1: 10.3 per thousand, respectively. But the key effect on total population is the birthrate and the level of net migration. For a nation to replenish its population requires a birthrate for women of 2.1 of the total population. The rate in 2024 was 1.6. So, the first thing we can state is that there is an underlying decline running at around 35,000 per annum. Net migration in recent years averaged up to 200,000 but since then has ballooned to nearly a 1,000,000. Let us make an assumption that to cover the nation’s needs we return to the 200,000 achieved result before, but we have now to account for the drop in birthrate and increase the figure to 235,000. Rounding up this would give you a base figure of say 250,000 (The housing assumption was an immigration rate of 300,000). So, at this point we have two factors in broad alignment. It is just not the people numbers but the cost implications as well. There has been a notion promoted by the Treasury that net migration is neutral at worst on the nation’s economy, or as they expect, a driver of growth. The answer to that is why has growth flatlined for so long and there is no discernible correlation? It seems there was an abject failure to recognise the capital costs triggered by mass migration soaking up spare capacity in the public services. There has been a growing number of economic commentators arguing that each migrant on arrival costs £100,000 and then an ongoing annual cost of £40,000 until they fully integrate. So, if the net migration averages out at 250,000 then the first-year cost amounts to £25bn or 0.9% of GDP. So, the year after at the same rate the total growth rate required that these commentators suggest are 1.3% (0.9+0.4)! Do these first-year costs make sense? Here are some rough workings: £bn

Housing

300,000 inward immigrants with an average family size of 4 would give rise to an additional 75,000 houses being built before you could address the housing stock needs for the resident population. 18.75

Schools and Colleges

2 children per household equates to 150,000 pupils. 3.95

Medical Hospitals

There are around 1250 hospitals in the UK. 300,000 immigrants represent nearly 0,5% of the total population of 67,9m. Therefore, of the1250 hospitals it would suggest a minimum extra 6 new hospitals being built. 0,72

Doctors and Dentists

For every 50,000 of the population there is a need for 220 doctors and 25 dentists. At a training cost of £250k each before qualification this gives rise to a recruitment cost of 0,37

Transport (Motorways Only)

There are 2300 miles of motorways costing some £15m per mile. At 0.5% of the population this triggers an additional investment cost to maintain the same traffic volumes of 0,17

Social Security

The UK spends, excluding state pensions, around £120bn in this area per annum. Taking again a 0.5% share would be equivalent to 0,60

State Pensions

Automatically, on acceptance of a migrant, there is a contingent liability for a basic state pension over 65. There are 8.5m state pensioners in the UK out of a total population of 67.9m, or 12.5%. 8.80

Total Minimum Annual Cost

(Or, £100,000 per immigrant)

33.36

The UK GDP in 2023 was                                                                £2,717.00 Therefore, Percentage Representation of                                                    1.23% So, in order for the Indigenous population to standstill the growth rate should be around 1.5%  but in reality the government should target at least 2,50% to cover the well-being of the rest!

Conclusion

I hope in just a crude set of examples proves numbers and the science behind them are not only crucial, but their ignorance or misuse could cause the demise of a whole nation. The numbers man be he or she in finance, an investor, economist, statistician, actuary, or a numerate investigative journalist, listen very intently otherwise someone else might spell your demise!