The town of Tewkesbury is submerged in receding flood waters of the River Severn and Avon. Photograph: Getty Images
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The drowned world

As the planet warms, extreme weather is becoming a part of our daily life, but Britain is still ill-equipped to cope with the floods.

I arrived in Tewkesbury on the November day the flood waters began to subside. The Swilgate, the tributary of the Avon that runs round the southern edge of the town, had overflown its banks fours days earlier. The dark brown water had spilled across a car park and playground and was lapping at the edge of the site of the new hospital, which is being built beside the old one. The line of trees rising through the middle of the placid expanse of water was the only indication of the Swilgate’s normal course; even the local man standing on the footbridge that led across the river to his home on the far bank had trouble working out where it normally ran.

Another footbridge further down Howells Road was submerged, and there were sandbags piled against the gate of a builder’s merchant. A man sweeping the tidemark of dirt off his drive showed me pictures he had taken two days earlier when the flood was at its height: the water had reached halfway up the drive, covering the wheel arches of his car, but stopping short of the motorbike and the dinghy parked beneath the windows of the house.

He had not been living in Tewkesbury in 2007, when the house was under 18 inches of water and the town acquired its reputation as the capital of a newly flood-prone country. According to the Environment Agency, 414 millimetres (16 inches) of rain fell across England and Wales between May and July 2007, making it the wettest period since records began in 1766. When between 80 and 90 millimetres of rain – more than two months’ worth – fell on Tewkesbury on Friday 20 July, the saturated ground could not absorb it. Water flooded the streets and encircled the town’s celebrated abbey, the second-largest parish church in the country, which stands at the southern end of town.

“We had people who were trapped in their cars, and slept overnight here,” the Reverend Canon Paul Williams, vicar of Tewkesbury Abbey, told me. “We had 200 in the abbey, 200 in the hall and people dotted round about. It’s something quite deep in Tewkesbury, the idea of the abbey as a refuge: people ran for shelter, and it became an ark.” An aerial photograph of the abbey surrounded by dark brown water was transmitted round the world. Paul Williams says it became as widely recognised as the image of the dome of St Paul’s rising through the smoke of the Blitz.

A local councillor called John Badham was one of the people whose house had flooded. He lives in Abbey Terrace, which lies beneath the abbey, close to the Mill Avon, the canal built in the 12th century to service the mills in the southern part of the town. Yet it was not just the Mill Avon that caused the flood; the Swilgate had overflowed as well, and water swept through his house from both sides. “It was very frightening,” he said. “It brought down all the fences in the garden and it was so powerful that you couldn’t stand up in it.”

The flooding wasn’t over. In the summer months, the gauge on the Mythe Bridge on the River Severn usually records levels of 0.5 metres, but on Sunday 22 July 2007 it reached 5.43 metres, beating the record of 5.3 metres set in March 1947. Both the Severn and the Avon burst their banks.

“When I woke up, it was eerily quiet, and I walked outside and saw the water coming, and the Fire Brigade all over the place,” Paul Williams said. He maintains that the abbey is usually immune because the “monks knew where to build” – the story of the vicar who paddled a boat down the aisle in 1760 is a folk memory of the only time in its 900-year history when it was flooded – but at 3pm on Sunday it flooded again. Paul Williams had to go down to the pub and ask people to help him move everything out of the reach of the water. He held evensong at the gates of the abbey and people came out of the nearby houses to listen. “It was a powerful cultic event. You could see the power of ritual holding a community together,” he told me.

Tewkesbury was cut off for four days. Three people drowned, more than 5,000 homes and businesses were flooded, and the Mythe water treatment works shut down for two weeks, depriving 140,000 people of running water. The pattern was repeated across the country, in Yorkshire, Humberside, Lincolnshire and Derbyshire. In total, 13 people drowned, more than 55,000 homes and businesses were flooded, and the emergency services conducted more “search-and-rescue missions” than at any time since the Second World War.

The floods of 2007 are often described as the worst civil emergency in British history, and the Environment Agency estimates that they caused £3.2bn of damage. The true figure is probably higher, because places such as Tewkesbury suffered a “double whammy”, according to Paul Williams: its shops, hotels and restaurants depend on the tourist trade and many people cancelled holidays in the aftermath of the floods. He says it took Tewkesbury three or four years to recover, and many people in the town are still feeling the effects.

They are not alone: the Department for Environment, Food and Rural Affairs says 5.2 million households in England are at risk of flooding, and the present agreement between the insurance industry and the government that guarantees affordable insurance to flood-prone homes is due to expire in June. On 26 November, as flood waters rose again, the Association of British Insurers (ABI) said that negotiations over a new deal had broken down. It issued a statement saying it wanted taxpayers to provide a temporary overdraft for a non-profit fund that would be used to pay claims in the early years of the scheme before it had a chance to build up reserves, but the government had refused. Defra says that negotiations are ongoing, but the ABI says they have reached an “impasse” that will leave 200,000 high-risk households struggling to find affordable insurance.

There are other points of contention: the last agreement proceeded on the basis that the insurance industry would continue to provide affordable insurance to flood-prone homes on the assumption that the government would continue to invest in flood defences, and the ABI maintains that “investment in flood defences needs to be at a level to match the flood risk”. It is estimated that every £1 spent on flood defences saves £8 on the cost of clean-up and repairs. And yet, no matter how much we invest, flood damage is sure to increase as climate change begins to take effect. A report commissioned by the Department for Business, Innovation and Skills in 2004 predicted that the cost could increase from the current yearly average of £2.2bn to as much as £29bn by 2080.

Natural variations in the weather make it difficult to establish the cause of any one event, but the pattern of increasingly extreme weather we are beginning to witness is probably the result of a warming planet. Ten of the hottest years on record have occurred in the past 11 years, and in September it was discovered that the Arctic sea ice had shrunk to its smallest recorded extent. A heatwave in late June and early July in North America broke many records, and sea-level rise has doubled the risk of flooding in many parts of the US and Canada. There were harsh droughts in China, Brazil and Russia between January and September and severe flooding in West Africa and Pakistan. Hurricane Sandy caused scores of deaths when it struck New York and the east coast of the United States in October, just days before the US presidential election. In early December, the “super-typhoon” Bopha killed more than 1,000 people in the Philippines.

In the UK, the March heatwave that contri - buted to hosepipe bans in the south-east of England seems more improbable now than it did at the time, because the following month turned out to be the wettest April in 100 years. There was more heavy rain and flooding throughout summer and early autumn. In late September, 570 houses and businesses flooded and the River Ouse in York reached its second-highest recorded level. In October, the Devon fishing village of Clovelly was hit by a flash flood that sent water cascading down the main street. Yet the worst flooding was triggered by the heavy rainfall that began on 21 November, with Wales and the south-west of England hardest hit. A woman drowned and 500 households were evacuated in the small Welsh town of St Asaph after the River Elwy burst its banks. The government has been criticised for cutting 294 flood defence schemes that had been approved in 2010, and on the day I arrived in Tewkesbury it announced that it would spend another £120m on flood defences.

When I left the abbey I walked down Mill Street to Tewkes - bury Mill, which stands on the banks of the Mill Avon. The mill had been cut off in 2007 – Paul Williams said the people set up a bosun’s chair to ferry supplies back and forth – and now it was cut off again: water covered the base of the steps leading up to the entrance and spilled through the open doors of the cellar, though it wasn’t until I looked at Google Street View and saw photographs taken on a summer afternoon that I realised how high the Mill Avon had risen, and how much it had altered the layout of the streets. The water that surrounded the mill and lapped at the picturesque half-timbered houses on St Mary’s Road concealed a park and a road, as well as the reed-fringed banks of the Mill Avon and the flat green fields beyond.

As I made my way along the edge of the town, following the course of the Avon as closely as I could, I kept passing steps that sank into the water, and signs directing me towards submerged footpaths. I passed Ye Olde Black Bear, “Glosters oldest inn”, which stands beside the bridge across the Avon Navigation, and turned into a cul-de-sac of terraced houses called King John’s Court. A sign restricting parking to permit holders protruded through the surface of the water at the end of the street. The way the railings at the side of the car park diminished in height as they advanced into the water confirmed that the land fell away in front of me, though it must have risen again in front of the marooned lock-keeper’s cottage, for the bench positioned for looking out across the floodplain was only half submerged.

Trees and telegraph poles marked the borders of the drowned fields, which stretched west towards the confluence of the Severn and the Avon. The still surface of the water mirrored the trees and clouds, and the silhouette of the water treatment works shut during the floods of 2007 was the only sign of human occupation. It reminded me of the descriptions of “the Lake”, the “inland sea of sweet water” that covers central England in Richard Jefferies’s prescient novel After London (1885).

Depictions of post-apocalyptic worlds became commonplace in 20th-century fiction, but Jefferies was a Victorian naturalist. “At the eastern extremity the Lake narrows, and finally is lost in the vast marshes which cover the site of the ancient London,” writes the novel’s unnamed narrator. He does not know exactly how the Lake formed, but speculates that “changes of the sea level” threw up great sandbanks at the mouth of the Thames, while a “broad barrier of beach” obstructed the mouth of the Severn: once the rivers’ eastward and westward flow was blocked, they “turned backwards . . . and began to cover hitherto dry land”. London becomes a foul, decaying swamp, but “the Lake” in the novel is as “clear as crystal, exquisite to drink, abounding with fishes of every kind, and adorned with green islands”.

J G Ballard’s early novel The Drowned World (1962) offers a less idyllic vision of a flooded planet. The rise in global temperatures that precipitates Ballard’s version of the catastrophe is caused not by human activity, but by “a series of violent and prolonged solar storms” that deplete “the earth’s barrier against the full impact of solar radiation”. As once-temperate areas become tropical and tropical areas become uninhabitable, the human population is reduced to no more than five million, who live on the polar ice caps. As the novel begins, “the South” has been abandoned, and Ballard’s protagonist, Kerans, is one of the few people to have remained in London. The city that once lay on the chilly fringes of northern Europe has become a tropical lagoon; giant ferns sprout through the windows of the abandoned buildings and the air is thronged with giant bats and mosquitoes. Reptiles are the dominant species.

Yet it is not only the external landscape that is changing. As the natural world cycles back through its evolutionary history, its human inhabitants are also drawn into what one calls the “archaeopsychic past”. Far from fearing the disintegration of the life they knew, they welcome the re-emergence of a primeval world with which they are subconsciously familiar: “How often recently most of us have had the feeling of déjà vu, of having seen all this before, in fact of remembering these swamps and lagoons all too well,” one character says. “Each one of us is as old as the entire biological kingdom, and our bloodstreams are tributaries of the great sea of its total memory.”

I was contemplating Tewkesbury’s own drowned world when I became aware of a man watching me from the window of the nearest house. It transpired that he was more concerned by burglars than flooding – his neighbour’s car had been stolen the previous day and he was wary of a return visit. Once reassured that I was not a threat, he told me of his disdain for people who fail to appreciate that Tewkesbury always floods, and argued that his house was perfectly safe despite being located on a promontory enclosed on three sides by water. “These houses were built with flooding in mind,” he said, indicating the slab that raised the front door half a metre above the ground.

He conceded that the November flood water had been higher than usual and that it had taken longer for it to subside, but he insisted it had not been a threat: the Severn had peaked at 4.8 metres – only 70 centimetres lower than 2007, but an enormous volume of water was required to effect any rise in the level across the thousands of acres of floodplain. A family had to be rescued in Sandhurst, Gloucestershire, ten miles downstream; flood defences failed in Kempsey, Worcestershire, 12 miles upstream; and even the White Bear, which stands on the main road a hundred metres north of the Black Bear, had flooded; but King John’s Court had remained untouched. “Personally, I don’t see a problem for us here,” the man said. “There is a problem in other places, but that’s the subtle difference with Tewkesbury –we don’t try and stop the water, we just let it flow through.”

It was another version of the two contrasting views that I heard repeated several times while I was in the town. Paul Williams told me that he takes communion to housebound old ladies who used to regard flooding as so routine that they would move upstairs and let the water flush out the downstairs rooms, yet other people were not so sanguine. Councillor Badham, who moved upstairs for six months after the floods of 2007, said that 10 per cent of Tewkesbury’s residents live in fear of being flooded. “It would be nice to have security, not just for me, because I’m relatively well off, but for other people in the town,” he said. “This is a workingclass town. There are a lot of people in Tewkesbury who don’t earn very much, who face enormously increased bills on their insurance – if they can get it at all – and face the anxiety every time the water comes up of being flooded. In some parts of the town, there are a lot of very, very anxious people; often quite poor people, and elderly people: vulnerable people.”

Yet both groups had one thing in common – whether they fear the flood or view it with equanimity, the residents of Tewkesbury are used to living with it. They have made the kind of accommodation that more of us will be required to make if water levels continue to rise as predicted and flooding becomes more frequent. Paul Williams believes that we will have to accept we are not “above nature”, though J G Ballard raises the more disturbing possibility that we already have done so. Perhaps we do not fear the flood, and will do nothing to avert it, because we recognise it as part of the cycle of life on a planet that sustains us, and yet remains indifferent to our existence.

Edward Platt is a contributing writer for the New Statesman. His latest book is “The City of Abraham” (Picador, £18.99)

This article first appeared in the 07 January 2013 issue of the New Statesman, 2013: the year the cuts finally bite

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt