Archive for the Finance Category

« Older Entries

Holding your ground

Posted in Biographical, Brighton, Finance with tags , , , on February 26, 2022 by telescoper

Thinking about the brave defenders of Ukraine, especially in Kyiv, who include numerous civilians I suddenly remembered an old post about a friend I met in Brighton many years ago, a Jewish man of Austrian extraction who went by the name of Solly. He had been sent by his parents to live in England a few years before the start of World War 2 when he was still a teenager.

To cut a long story short, in 1940 Solly ended up joining the Local Defence Volunteers (the Home Guard) in Brighton. This is something he told me reminiscing abut those times. over dinner many years ago.

On 7th September 1940 the War Office issued the following communique:

Message to all UK units: codeword CROMWELL. Home Defence forces to highest degree of readiness. Invasion of mainland UK expected at any time.

After being informed of this signal Solly and his comrades turned up to be issued with the equipment with which they were expected to stop the imminent invasion. In his case it was an ancient pre-WW1 rifle, three rounds of ammunition, and two improvised grenades. With these meagre supplies, they were supposed to hold their positions until reinforced, possibly for up to 7 days.

As they walked to their posts, all the volunteers were certain that they had no chance and that none of them would survive the night. In such a grim situation they were understandably quiet, but what talk there was exclusively concerned the need to make all their shots count. If each of them could kill at least one invader before he himself was killed then the invasion might be thwarted.

After an agonizing wait, and several false alarms, dawn broke. The Germans never came.

Solly clearly found this recollection difficult. Few of us are ever faced with such a stark prospect of death. But I remember one thing he did say, which at the time I didn’t really understand, which is that it was in a way quite liberating – accepting that you are certain to die means that you no longer feel afraid. He had previously worried that he might lack the courage to fight if called upon to do so, but that doubt disappeared on 7th September 1940.

I think we’re already seeing this attitude in Ukrainian President Volodymyr Zelensky, who has emerged as a heroic figure . He must know that he is a marked man, and that his days are probably numbered, but he has refused offers to get him out to safety. The contrast between his courage and another so-called leader, who ran away from reporters to hid in a fridge, could not be greater.

Anyway, as the Russians enter the city of Kyiv, many civilians will be trying to summon up their courage right now. Received wisdom is that in urban fighting, the attacking force needs a numerical advantage of at least five to one and even more if the attackers are poorly trained conscripts, as seems to be the case in some parts of Ukraine. The defenders hold many cards, not least that it’s their land on which they’re fighting.

I fear that there is a bloodbath coming, but it seems to me very likely that the Russians will suffer worse. Not that Putin will be bothered. To him, his soldiers are mere cannon fodder.

Leave a comment »

Hope Springs Eternal…

Posted in Finance, Politics on October 28, 2021 by telescoper

… in the “Office for Budget Responsibility“

A decade of ludicrously over-optimistic forecasts.

“Man never is but always to be blest.”

Leave a comment »

Farewell to Flybe

Posted in Biographical, Covid-19, Finance on March 20, 2020 by telescoper

Just for the record, I today received a full refund for the cost of my Flybe tickets via the Chargeback scheme. Thanks to AIB for processing this so quickly!

The collapse of Flybe happened on 5th March 2020, just over two weeks ago. Can it really have been so recent? It seems like ages ago.

In the Dark

It had been on the cards for some time, but last night the airline Flybe collapsed and has now gone into administration. Let me just leave this Twitter announcement made in January by Transport Secretary Grant Shapps here:

It seems that Flybe has gone the inevitable way of every Tory promise.

I had bought a ticket to fly from Dublin to Cardiff at the end of next week as the following week is a study break that includes the St Patrick’s Day holiday. As a result I got this email this morning.

Obviously it’s an inconvenience for me as I’ll have to find another way to get to Cardiff, but I’ll probably get my money refunded by the Chargeback scheme so it’s not such a big deal. The same can’t be said of the 2000 people who worked for Flybe who have now lost their jobs, nor the many…

View original post 181 more words

Leave a comment »

The Myths of UK-Ireland Trade

Posted in Finance, Politics with tags , , , , on August 20, 2019 by telescoper

It is clear now that the UK Government’s strategy on Brexit is one of economic aggression towards Ireland.  Senior Brexiters seem to think that threatening to put up barriers to trade with the Republic will frighten it and the European Union into abandoning the rules of the single market and customs union.

As well as being morally repellent this strategy is also extremely stupid, as is based on a complete misconception of the state of trade between these two countries. For example, one prominent Leave campaigner and former Minister of State recently claimed that 90% of Ireland’s trade is with the UK. That may have been the case in the 1950s but it is certainly not the case now.

In fact, according to the latest figures, only about 11% of Ireland’s exports in goods go to the UK and this figure is falling rapidly. The largest export destination for Ireland within the EU is actually not the UK, but Belgium (11.65%) with Germany just behind on 8.56%. Overall the EU accounts for about 49% of Ireland’s exports; the largest other contribution is the United States on about 29%.

Contrary to popular myth, Ireland’s exports are not dominated by agriculture and food. By far the largest contribution is from chemicals and pharmaceutical products many of which go to Antwerp for onward distribution and/or further processing. This accounts for the large trade figure with Belgium.

Another fact worth mentioning is that while Ireland overall has a healthy trade surplus overall (it exports more than it imports; see above Figure), its trade balance with the United Kingdom is actually negative (i.e. the UK exports more to Ireland than it imports). In 2018, UK exports to Ireland were worth £38.3 billion; imports from Ireland were £21.9 billion, resulting in a trade surplus of £16.4 billion with Ireland. Ireland accounted for 6.0% of UK exports and 3.3% of all UK imports. Ireland was the UK’s 5th largest export market and the 9th largest source of imports. The UK has recorded a trade surplus with Ireland every year between 1999 and 2018.

Brexiters have frequently used the argument that, since the UK has a negative trade balance with the EU, the EU needs the UK more than the UK needs the EU. It’s a wrong argument, of course, but it’s interesting that the Brexiters don’t apply it to Ireland.

There’s no question that the `No Deal’ Brexit which I’ve regarded as inevitable from the outset will disrupt the Irish economy, or at least parts of it, and in the short term, but I agree with the Irish Times analysis from some time ago and a more recent article from the FT that it will cause far greater damage to the UK.

In the longer term, when the UK is out of the European Union I’m sure its trade surplus with Ireland will quickly disappear as Ireland finds alternative (and more trustworthy) trading partners. Irish businesses are already eliminating British companies out of their supply chains and it seems likely that if and when the hard Brexit arrives, Irish customers will be increasingly disinclined to buy British products.

The UK seems to be hoping that some sort of deal with Trump’s America will help it out of the economic hole it has dug for itself, but remember that the UK currently has a trade surplus with the USA. The Americans will be keen to eliminate that during any future trade negotiations.

The really important thing however is not the overall effect on the economy but on the problems it will cause for communities either side of the British border in Ireland. The recently-leaked documents from Operation Yellowhammer make it clear that the UK government `expects a return to a hard border in Ireland’. The implication of this is stark: the UK government is planning to renege on its obligations under the Good Friday Agreement, which is an international treaty.

If it goes ahead and does that, then it may be that the economic effects of leaving the single market and customs union are small potatoes compared to the price that will pay for becoming a rogue state. I can’t see the United States, with its approximately 40 million citizens of Irish descent, being keen to support a British government that is so obviously seeking to bully Ireland especially, as seems sadly likely, British actions spark a return to violence in the North.

22 Comments »

Self Assessments

Posted in Biographical, Education, Finance, Maynooth with tags , , on January 17, 2019 by telescoper

My first batch of examination marking having been completed satisfactorily and my next paper not taking place until the weekend (Saturday morning, to be precise), I naively hoped that I could devote myself to research for a few days this week as I am behind schedule in completing a couple of papers. Unfortunately this has not been as straightforward as I’d hoped. I’ve spent all of today doing various administrative things (expenses claims, examination reports, and a part of the Department’s Quality Review Self-Assessment document which is due in near the end of the month.

In case you are unfamiliar with such things, a Quality Review is an exercise that takes place from time to time for every Department or Administrative Unit in the University (and indeed for every university in Ireland). For the Department of Theoretical Physics at Maynooth University, the last one took place in 2009). The process begins with the aforementioned Self-Assessment document which basically lays out what the Department is trying to do, the processes by which it uses to do it, reflects on the effectiveness of those processes, and outlines ideas for how they can be improved. All the staff in the Department have been engaged in writing bits of this document, which is now gradually coming into shape.I’ve had a relatively light involvement in this because I haven’t been here for very long, but it has consumed quite a lot of staff effort.

When complete, the Self Assessment report is sent to a range of people both inside and outside the University and there is then a visitation during which the panel talks to staff and students and has a look around the Department. We’re expecting our `inspection’ to take place in March. After that the panel gives feedback to the Department in a report. The panel’s comments are made publicly available, as is appropriate for a publicly-funded body. The report emerging from the last Quality Review of the Department of Mathematical Physics (as it was then called ) can be found here (pdf). It’s all quite a lot of work – the latest Departmental meeting devoted to this yesterday lasted three and a half hours, and we’ve had several meetings like that! fortunately, it  will all be finished by next week. Better is the end of a thing than the beginning thereof.

 

Talking of Self Assessment, I realized last night with a panic that I hadn’t yet done my UK income tax return for 2017/18, also due in by the end of January. I spent this lunchtime getting all the bits of paper in order, and completed the task online fairly quickly as I’ve done it many times before. It turns out that yet again HMRC owes me a substantial refund. They haven’t handled my income tax properly since I left Sussex in 2016 as a matter of fact. Despite repeated attempts to get them to apply the rules correctly they have basically taxed all my income at source at the higher rate (40%) only to pay it back when I submitted my return. Fortunately, I am now domiciled in Ireland so won’t have to deal with HMRC much again.

Anyway, I should complete most of the outstanding administrative stuff this evening and if I do that I can clear a day for research, or at least writing up papers…

 

 

 

5 Comments »

End of Term Thoughts

Posted in Biographical, Finance with tags , , , on May 4, 2018 by telescoper

Today is the last day of teaching term at Maynooth University. My last lecture, a revision lecture, was yesterday morning and I spent most of the afternoon helping students put the finishing touches on their project work, which is due in on Tuesday next week. Next Monday is a bank holiday in Ireland (as it is in the UK), then there’s a short period of private study before the examinations start next Friday. As it happens, the theory paper for the module I’ve been teaching on Computational Physics is on the first day of the examination period.

It’s `Study Week’ in Cardiff next week too, and I have a revision lecture there. Owing to the Monday holiday we’ve juggled the schedule a bit to ensure all modules have a revision lecture so I’m doing my revision lecture on Thursday rather than the usual Tuesday. I have a meeting at the Institute of Physics in London on Tuesday and it’s the Annual General Meeting of the Royal Astronomical Society (also in London) on Friday so I’ll be spending all of next week in the UK, in between Cardiff and London. Since teaching is over I’m not planning any more midweek travel (unless it’s absolutely necessary) and intend to spend one week in the UK and one week in Ireland, and so on, apart from conferences and the like, until I fully relocate in July.

I thought I’d mention another thing, which represents a fortuitous bit of timing. Twenty-five years ago, while I was living in London, I took out a savings policy of the sort that involves making a regular monthly payment into a mixture of investment funds. The term of this policy was 25 years, and the maturity date was 23rd April 2018. On a couple of occasions I have been tempted to cash it in early but decided to let it run until maturity. The performance of my chosen funds has fluctuated over the last two and a half decades, but when the price of units drops and you invest a fixed cash amount you end up buying more units than when they’re expensive so if they do recover in value you do well. This is called Pound Cost Averaging.

However, when a policy like this reaches the end of its term the amount you get back depends on the value of the units on the day that it matures. Although my policy wasn’t doing at all well a decade ago, it seems my portfolio (more by luck than judgement) has done well over the last ten years, but with the stock market being rather volatile in the early part of this year it’s been a bit of a white knuckle ride recently. Thankfully the last few weeks seem to have been more stable, and although the units are not at an all-time high in terms of value they were not far off that when they were cashed in. aturity value turned out to be about three times the total amount I’ve invested. I received the money on 30th April, and the proceeds will make a significant contribution to the cost of purchasing a house here in Ireland.

The downside of pound cost averaging is that the final sum is paid in pounds to a UK bank account, and with the pound languishing against the euro there’s now a decision to be made about when to transfer it to Ireland..

1 Comment »

University Pension Differences

Posted in Education, Finance, Maynooth with tags , , , , , , , , on January 26, 2018 by telescoper

Following a ballot of members of the University and College Union (UCU), the UK university sector is gearing up for strike action over proposed changes to the USS pension scheme. Unless the dispute is resolved in the meantime (which I think is highly unlikely) the first strike lasting two days will place on 22nd and 23rd February. Thereafter strikes will escalate to cover three days, four days and five days in subsequent weeks.  I’ll actually be in Maynooth for the first 48 hour block so won’t have to worry about crossing a picket line initially, but will have to later if it drags on. It looks set to be a bitter dispute which will not be easily resolved.

When I joined USS (in 1988) it was a simple `Final Salary Scheme’. Both employer and employee contributed and the benefits accrued were an index-linked pension of 1/80 of the final salary for each year of contributions and a (tax-free) lump sum of 3/80 for each year of contributions. I joined at age 25 so I expected to accrue 40 years of pension if I retired at 65, namely a pension of half my final year’s salary and a lump sum of three-halves. It looked a good deal and was a significant factor mitigating the relatively low starting salary for academics in those days.

Over the years it became apparent that this scheme is actuarially unsound because (a) people are living longer, increasing the scheme’s liability and (b) investment growth achieved by the USS fund managers has decreased, with a negative impact on asset growth. Moreover, the USS fund is not underwritten by the government, so if it collapses completely members could be left with no benefits at all.

The USS Final Salary scheme was closed to new entrants some years ago and replaced by a less generous defined benefit scheme. A couple of years ago it was closed to existing members too, though the benefits accrued are retained; I will now only be able to get 28/80 of my final salary from that scheme when I actually retire. The scheme was replaced by a hybrid of an even less generous defined benefit scheme and a defined contribution scheme (where the pension benefit is dependent on the fund valuation at retirement, as most private pensions). Now the proposal is to remove the defined benefit component entirely. The loss of pension benefits will be substantial.

I don’t see any easy settlement of this dispute so I’m glad that it won’t affect me very much. I’ll be leaving the UK Higher Education system this summer and relocating to Ireland. Quite a few people have asked me how the pension scheme works here so I thought I’d point out the differences.

The first thing to say is as a professor in the National University of Ireland at Maynooth I am treated as a public servant so my future pension benefits here are covered by the Single Public Service Pension scheme. This resembles the final salary scheme that USS used to be, but with the important difference is that it is integrated with the State Pension to which everyone is entitled if they pay social insurance contributions. This – called the SPC – is similar to the old State Earnings-Related Pension Scheme (SERPS). Since public employees benefit from this as well as the public service pension scheme, the accrual rate in the latter is lower than the old USS scheme – just 0.58% per year – on salaries up to €45,000. For salaries above this figure the amount above the  limit generates an accrual rate 0f 1/80, just as the USS version. There is also a lump sum which accrues at 3.75% per annum, the same as the USS scheme.

In summary, then, the big difference is that in Ireland the public service pension is integrated with the state pension, whereas in the UK the latter is entirely separate. It’s also the case that in Ireland the pension is guaranteed by the government (which, of course, can change the rules…)

In my opinion the pension scheme for University staff in Ireland is significantly better value than the diminishing returns provided by the USS scheme, yet another reason why I made the decision to move here.

 

13 Comments »

Things Falling

Posted in Finance, Politics with tags , , , , , , on August 3, 2017 by telescoper

A very busy but also very interesting day at the office in the Niels Bohr Institute ended this evening with a thunderstorm, complete with spectacular lightning and torrential rain. I got wet on the walk back to my small home, but I managed to get inside before the worst of it started. I seem to remember a similar thing happened last time I was in Copenhagen. Maybe it’s the time of year.

Anyway, torrential rain isn’t the only thing that’s been falling today. The Pound dropped sharply against the Euro, so it is currently around €1.1069, not far from its lowest point in the last year. That’s not directly relevant to my visit to Denmark, which isn’t in the Eurozone, but the Pound has tumbled against the Danish Kroner too. In fact it’s been falling steadily over the past three months:

At 8.234 Kroner to the Pound, this the worst exchange rate I can remember in all the approximately 30 years I’ve been travelling to Copennhagen. The rate has usually been about 10:1 or even higher. Copenhagen has always seemed a rather expensive place, but converting prices into Pounds at the current exchange rate makes your eyes water. Fortunately I’m getting my local expenses paid by the NBI so the increased cost won’t really affect me, but it’s definitely noticeable. Such is the shambolic state of our government that I wouldn’t bet against the pound reaching parity with the Euro before too long.

Of course one is not allowed to suggest that the falling pound and sluggish economic growth might be something to do with BrExit because that would be `talking the country down’. The worrying thing, though, is that we haven’t left the European Union yet. Just wait until March 2019 when we leave the European Union, together with the Single Market and Customs Union without any trade agreement. Where will the pound be then, I wonder?

15 Comments »

The UK Financial Contribution to the EU

Posted in Finance, Politics with tags , , on April 22, 2016 by telescoper

There’s so much misunderstanding and distortion flying around about the United Kingdom’s contribution to the European Budget and what it might be spent on if we left the EU that I just thought I would post this for information. It shows official figures from HMRC for 2014. Similar pie charts are available for other years, but often they include the EU contribution under “other” which is why I’ve chosen this particular one. Also, I’m very lazy and it came up first on Google…

fat cut

Although it’s a lot of money in cash terms, it’s very small compared to current expenditure on, e.g. Health, Education and Welfare and even compared to the interest payments on our national debt. Saving this contribution would not make sufficient financial resources  available to make a significant difference to these other big ticket  items. Note also that if the UK loses its current credit rating, the expense of servicing our debt will increase by an amount that could easily on its own wipe out the saving on our EU subscription.

And of course what we get for that relatively small contribution is access to beneficial trade agreements, inward investment from EU companies and other sources, and access to the science programmes. You may disagree, of course, but I think it’s money very well spent.

 

 

22 Comments »

Nervous

Posted in Finance, Science Politics, The Universe and Stuff with tags , , on November 22, 2015 by telescoper

The outcome of the 2015 Comprehensive Spending Review is to be announced shortly (on Wednesday 25th November), a fact which suggested this piece of music. It’s a solo piano piece by the late great Mal Waldron. Among many other things, Mal Waldron was Billie Holiday’s regular accompanist from 1957 until her death in 1959 and it was during that time he was booked to appear on a famous all-star TV Jazz broadcast called The Sound of Jazz from which this solo performance is taken. It’s an original composition by the pianist, and it’s called Nervous.

p.s. I did a blog post some time ago about Billie Holliday’s heartbreaking last performance with Lester Young, which also appeared on The Sound of Jazz. You can find it here.

1 Comment »

« Older Entries