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The missed opportunity of the National Food Strategy

Dr Jason Edwards, Lecturer in the Department of Politics, shares his opinion on the National Food Strategy, a report released last week. It’s the first independent review of England’s entire food system for 75 years, and it makes recommendations for the government, which has promised to respond formally within six months.

The publication of the much-heralded independent review of the National Food Strategy – the so-called ‘Dimbleby Report’, named after its author, the food entrepreneur and writer Henry Dimbleby – marks an important moment for food policy and politics.

The report is divided into a consideration of the effects of the food system on health and the environment. The health question is centred on the problem of what Dimbleby calls the ‘Junk Food Cycle’. He sees it as a central failure of the food system, promoting a poor diet with disastrous consequences for public health, in particular the epidemic of obesity and type 2 diabetes. The cycle begins with our appetites for highly calorific food being preyed upon by the junk food industry, which churns out ultra-processed foods containing very high levels of sugar, salt, and fat. Market competition means that any reduction in the levels of these (unconsciously) desired ingredients in food products would lead to loss, and so food production companies have become involved in an arms race resulting in the proliferation of junk food. The more this junk food becomes embedded in the culture, the more it has increased appetites for it, both physiologically and psychologically.

Dimbleby’s solution is to break the cycle by imposing a wholesale tax of £3 per kilo on sugar and £6 per kilo on salt. The report headlines this proposal, and it has been the main focus of the media coverage. But the immediate response of the government to the idea of a sugar and salt tax has been, at best, lukewarm. That seems like an anticipation of the picking apart of the report’s proposals by corporate lobbyists that will inevitably come.

Dimbleby is probably right that the imposition of these taxes would have the desirable effect of reducing the consumption of foods harmful to human health. But the issue is with the whole approach of the report and how likely it is to secure the kind of policy changes required to deal with the deep-seated problems that Dimbleby rightly attributes to systemic features of food production and consumption. These problems cannot be resolved without raising questions about power, ownership, and control in the food system, yet Dimbleby skirts over these.

Dimbleby rejects the belief in de-regulated food markets that occupies the Conservative backbenches and some of the chairs at Cabinet. Nonetheless, he does not escape from the market’s view of food as at base a commodity designed to satisfy the biological appetites of the consumer. Here it is clear that Dimbleby has fallen under the spell of the Behavioural Insights team, popularly known as the ‘Nudge Unit’, established in the Cabinet Office in 2010 to apply behavioural science to public policy. What they are reasonably good at is predicting behaviour where a simple and clear instrumental choice is on offer. But, as the COVID-19 pandemic has shown, when it comes to patterns of activity that involve complex, strategic choices with unclear outcomes, they are at sea. Diet is such a pattern of activity, not a set of discrete instrumental choices. It does not boil down to the selections we make at the snacks shelf in the supermarket or the counter at Leon.

Dimbleby is right to argue that we should be wary of solutions to food inequality and poor diet that shift the responsibility to the individual, emphasising personal food knowledge, cooking skills, or commitment to exercise (which has little impact on weight loss anyway). This leaves the door open to those who all-too eagerly and loudly blame the poor for their poverty. But raising questions about how people could and would act under very different conditions of choice is neither to individualise responsibility nor to renounce the necessarily systemic setting of our food choices. The failure to pose these questions is the principal disappointment of the report. To be fair, it does make a number of recommendations about changing the circumstances in which we make our food choices, such as the Eat and Learn initiative for schools that encourages food education from early years. But more generally there is silence in the report on questions of citizen involvement in the food system. At a time when local councils are selling off allotment sites to fund ‘essential’ local services, there isn’t a single mention of the availability of land for small horticulture, funding for cooperative local food-growing schemes, or the provision of public spaces for common cooking and eating. In short, on these crucial questions of food citizenship, Dimbleby simply has nothing to say. The report needed to question the very foundations of the food system: far from doing this, it merely asks for a reformulation of its parts.

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Retirement and Pensions: Creative Solutions Required to an Age-Old Problem

This article was contributed by MSc Governance, Economics and Public Policy student Thomas Boulton. He argues that increases to the State Pension age are sensible, but daring solutions are needed to safeguard pensioners’ living standards and address fiscal deficit.

In 2017, Theresa May attempted to introduce legislation that would have meant the value of an elderly person’s house was taken into account when measuring their eligibility for state funded care. This would have meant many more people having to pay for their own care. The backlash and subsequent backtracking almost cost May the position of Prime Minister. These events serve as an excellent foreshadowing of the likely problems policy makers will face this century. Data on public finances, forecasts in the UK dependency ratio and declining birth rates globally illustrate the emergent need to recognise the threat that demographic aging poses, and that traditional solutions will not be available.

Why we may have to work longer

Put simply, we are living longer, and old age is expensive to the exchequer. Over the last 40 years, life expectancy has increased at a faster rate than the average working life. As a result, the average number of years of retirement a person enjoys has almost tripled, from 5 years 10 months in 1980, to a peak of 16 years in 2014, and 15 years and 5 months in 2018, which comprises almost 25% of their adult life. Whilst nobody would want to begrudge someone a long and happy retirement, the impact retirement has on public finances cannot be ignored. With longer life expectancy, the length of a person’s life at which they are a net contributor to overall public finances begins to diminish.

Source: ONS

At the age of 68, the average person ceases to be a net contributor as a result of retiring and paying less tax, compounded by increased health and welfare spending when they reach their 70s.

Hard choices

Increasing the retirement age alone will not plug the gap. Life expectancy is forecast to continue rising in the UK. More significantly, demographic aging trends suggest increasing the retirement age may not have a significant impact, even if the electorate were to regard the idea of working longer as tolerable.

Source: OECD

Whether we choose to stick to a retirement period of just over 15 years, as in 2018, or maintain that a quarter of our adult lives be spent in retirement, people born in 1990 could still expect to be working in 2060. However, this would only leave public finances a little better off than they are now, given the forecast in the old-age dependency ratio.

Source: ONS

Birth rates and net migration

One straightforward solution to the dependency ratio is to increase the number of people in the country between the ages of 22-68. Easier said than done. Birth rates are in decline both in the UK and in all of the countries where the UK’s migrant workers have historically originated. This should leave today’s policy makers wondering where tomorrow’s migrant workers will come from.

Source: World Bank

Private pensions and productivity

One recent policy success has been the institution and uptake of workplace pensions, which will mean many fewer people will be reliant on the state pension. The possibility of withdrawing the state pension for those with large private pensions, and other benefits such as free TV licences may be politically tolerable, if framed in a redistributive way. Other than that, policy makers will have to find ways of ensuring tax receipts can increase, while also enabling higher birth rates. Given the further deterioration of public finances post pandemic, the solutions will have to be creative, and implemented more urgently than foreseen by Theresa May. Above all, they will have to be put forward to the public much more convincingly.

Further information:

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Driving Investment: The Missing Piece to your Investment Portfolio?

This blog was contributed by BSc Financial Economics student Paul Talbot and was originally written as an assignment for the module Quantitative Techniques for Applied Economics.

Picture of a classic car

Classic cars, an alternative investment that is rarely discussed when investors are looking for a strategy to increase ROI in their portfolios. Some prestige classic cars have increased over 400% in the last decade[1], but what sets these assets apart from status quo investing?

“Stories. That to me is the answer. Every car has its own history, its own adventures, its own japes and probably plenty of scrapes. Tales to be told and shared with fellow enthusiasts. Few other asset classes, however valuable or beautiful, can match it”[2]

The majority of investors would not be able to afford a 1960 Ferrari 250 GT, but investment growth has been seen across the majority of the classic car market. A more affordable sector is British classic cars, iconic cars such as the Jaguar E-Type or the Triumph TR6 has yielded over 50% returns since 2007, outpacing the heavyweight UK asset classes.

Graph showing price indices of UK classic cars

The classic car market also benefits from a favourable tax status, investors do not pay capital gains tax on profits as they are classed as “Wasting Assets” by HRMC. Movable assets such as classic cars can be gifted to family members, if no benefit is retained or lent, or for a period each year, to a car museum to avoid paying inheritance tax on death. If you intend to enjoy your investment on the road, they are also exempt from road tax and a MOT.

Tax relief of 20% on investment gains already drives these assets ahead of other financial instruments and it is no surprise that this is attracting some attention. The classic car market added significant gains to the UK economy last year[3] and is expected to continue grow from £940 Million in 2019 to £1.65 Billion in 2023.

Graph showing projected UK classic car market

Investing in classic cars does not come without a few speed bumps, it is not a case of purchasing any car and hiding it away for many years. Paul Michaels of Hexagon Classics notes “The very best cars — meaning those with full histories in exceptional condition, either completely restored or lovingly maintained with some age-related patina — will always command the highest prices.”

It is always advisable to get an expert opinion and the history authenticated before purchasing your investment and continue to keep your new asset lovingly maintained and stored away from the elements. All the above will add an upfront and annual running cost to purchasing the investment, reducing overall yield, but in turn, the better the asset is maintained and stored, the higher possibility of future gains.

The average global investment portfolio last year contained only 4% of luxury investments, this includes fine wines, collectable coins, art, jewellery and classic cars to name a few[4]. With climate change at the forefront of government polices banning the sale of petrol/diesel cars by 2030 and the rise of autonomous vehicles, will only make these investment stars a rarer commodity.

Pie chart showing global average asset allocation.

With central banks flooding the markets with liquidity, artificially supporting equities and driving down bond yields, parking a little piece of history in your garage and diversifying your portfolio will not only provide the perfect inflation and market correction hedge, but you may have some fun along the way.

Next time you look at your annual investment report, the immortal words of Wilbur Shaw may spring to mind.

“Gentleman, start your engines”

Further Information

[1] https://www.hagerty.com/apps/valuationtools/market-trends/collector-indexes/Ferrari

[2] HRH Prince Michael of Kent interview with Knight Frank November 2020

[3] FBHVC National Historic Vehicle Survey – https://www.britishmotorvehicles.com/news/fbhvc-national-historic-vehicle-survey-reveals-significant-contribution-to-uk-economy

[4]The Attitudes Survey is based on responses from 600 private bankers and wealth advisers managing

over US$3 trillion of wealth for UHNWI clients. The survey was taken during October and November 2018

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