Radstats Critical Essay Competition

CALLING EVERYONE to enter the Radical Statistics Critical Essay Competition!

GET your essay published & WIN a book token

Submit an original essay that addresses a current social research/policy question with critical use & interpretation of relevant data sources (3,000 words max) by 1st July 2014

F i r s t p r i z e £ 5 0
S e c o n d p r i z e £ 3 0

Plus 1 year subscription membership to Radical Statistics (RadStats).

All winning essays will be published in the RadStats newsletter/journal.

Please tell students and others and post this  flyer in your department or community.

There are two categories:

  • Student*: undergraduate or postgraduate
  • Open: any non-student

Your submission must be unpublished & unaided original work:

  • either specifically produced for the competition
  • or originating from your course of study or dissertation

Your essay could address a current social research policy/question with critical use & interpretation of relevant data sources, or be a critique of statistical methodology in an applied context.

Prizes will be awarded on the basis of readability, clear presentation of statistical material, critical perspective & convincing argument.

Essays do not necessarily have to involve statistical modelling, only critical use & interpretation of relevant data sources.

The deadline for submission is 1st July 2014
Judge’s decisions by 1st October 2014

Winning essays will be featured on the website & published in a special issue of Radical Statistics.

Enter by sending your essay, including full name, email & postal address, to essay@radstats.org.uk.

* Note: if entering in the student category, please provide university & details of essay origin when submitting (ie module details for coursework essays or whether the essay stems from an undergraduate, masters or PhD thesis).

Reduced Statistics Redux

In 2012 ‘Reduced Statistics’, a working group from Radical Statistics, took a detailed look at cuts to official statistics under the coalition  since 2010, and what they might mean in local government, housing, health and education. This led to a draft report as well as a debate with the UK Statistics Authority and ONS at the Royal Statistical’s Society’s conference. In a recent blog post and seminar at the London School of Economics, Alex Fenton looks at the latest information from the UK Statistics Authority on official statistics, and considers what it means in the light of the government’s proclaimed enthusiasm for “open data” and “transparency”.

View the LSE British Politics and Policy blog pos by Alex Fenton (3/11/14): Austerity stats: Making sense of cuts and changes to official statistics under the coalition

Is Britain Pulling Apart? Today!

Radical Statistics is gathering in Manchester today to take a fresh look at inequality in Britain for the 2014 conference, Is Britain Pulling Apart?RScrowd2014

Look on twitter for #Radstats to follow along. Presentations will be collected, proceedings are being filmed, and of course there will be a special issue of the journal.

If any delegate would like to contribute a blog post please get in touch with me at web-editor@radstats.org.uk.

Robin Rice

Is the UK too complacent on drinking water safety?

On 7 November,  Water Minister Dan Rogerson argued in response to a written question from Chris Ruane, Labour MP for the Vale of Clwyd, that water filtering within households is unnecessary, as monitoring by drinking water regulators shows tap water quality in the UK is “equivalent to the best in Europe”. (I’m not aware of a data series that would underpin this claim). 

On 9 December, a statistical study by engineer Marc Edwards was published showing that cheap water filters certified to remove lead, together with advice to run taps and consider bottled water in older buildings, prevented hundreds of miscarriages in Washington DC in 2004-2006, when a change in water treatment caused a city wide spike in lead in water levels (links below).   The paper also examines a miscarriage cluster in an office undergoing renovation, where lead in water from solder on copper pipes may have been wrongly excluded as a factor, because water was tested too late. 

The study compared fetal death rates and birth rates in Washington DC against a similar sized city with the same water supply (Baltimore), and the US as a whole, before, during and after two incidents when lead “rust” from lead pipes and from solder on copper pipes was disturbed. The first lead spike was caused by a change in disinfection chemicals, the second by attempts to solve the first problem by replacing sections of lead pipe work. 

Appropriate domestic water filters can reduce chlorination by-products present in tap water from chemical disinfection, together with the herbicides, other farm chemicals and pharmaceutical residues present in some river water (but not in water from boreholes favoured for bottled supplies). Filtering tap water was recommended in 2010 by the US President’s Cancer Panel, along with washing fruit and vegetables to remove pesticide residues and avoiding charred meat. 

Concerned over the known toxicity of disinfection by-products, the Netherlands has abandoned the use of chlorine in a water safety system which prioritizes choosing the safest raw water sources for drinking water (link below). Edwards’ statistical analysis shows that the US change in disinfection practice – initiated and persisted with in an attempt to reduce miscarriages from chlorination byproducts – did not achieve its health goal. Possibly the by-products of the replacement disinfectant regime, though less studied, are equally noxious. A troubling pattern for regulatory changes. 

Edwards’ key recommendations  – supported by his laboratory test simulating lead release from solder in response to physical disturbance – are that pregnant women should always receive advice to use filters, flushing or bottled water in older premises, and that everyone should receive warnings and take precautions when plumbing is disturbed. Currently no such advice is issued in the UK, despite a predominance of older properties (lead free solder was only available from the late ‘80s),  on-going lead pipe replacement to meet a stricter lead in water standard from the end of this year, and programmes to retrofit water meters.

It would be interesting to review fetal death rate trends within the Netherlands, to see whether the package of changes they made to how river water was treated (areas with better water sources never used chlorination) measurably improved maternal health. There is no easy switch to the Dutch method – the need for residual disinfection here goes hand in hand with the c. 25% leakage rate from poorly maintained pipework (vs. 4% for the Netherlands). Bottled water and home/office filtration are the policy options currently available in the UK to safeguard fetal health. 

Lucy Borland


Lucy Borland’s paper on Drinking Water Regulation in Rad Stats: http://www.radstats.org.uk/no109/Borland109.pdf

Hansard, Written Answers 7 Nov 2013: http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm131107/text/131107w0001.htm#13110787000006

Marc Edwards: http://www.vtnews.vt.edu/articles/2013/12/121313-engineering-edwardsnewstudylead.htmlhttp://pubs.acs.org/doi/abs/10.1021/es4034952Increase in miscarriages coincided with high … – Washington Post

2008-2009 – Environmental Factors in Cancer: Reducing Environmental Cancer Risk, What We Can Do Now available at http://deainfo.nci.nih.gov/advisory/pcp/annualReports/

The Dutch Secret: how to provide safe water without chlorine in the Netherlands, P. W.M. H. Smeets, G. J. Medema, J. C. van Dijk:  available to download at www.drink-water-eng-sci.net/2/1/2009/dwes-2-1-2009.pdf

The AllTrials campaign calls for all past and present clinical trials to be registered and their results reported.

Radical Statistics is a supporter of the AllTrials campaign. This paper is reprinted from http://www.alltrials.net/all-trials/ under licence: CC BY-NC-ND 3.0.

Download this as a PDF here (310Kb)

Clinical trials are investigations designed to assess the effects – wanted and unwanted – of healthcare interventions in people. The Declaration of Helsinki, which is the World Medical Association’s statement of principles for medical research involving people, states that every investigator running a clinical trial should register it and report its results. Millions of volunteers have participated in clinical trials to help find out more about the effects of treatments on disease, yet that important ethical principle about reporting has been widely ignored. Information on what was done and what was found in these trials could be lost forever to doctors and researchers, leading to bad treatment decisions, missed opportunities for good medicine, and trials being repeated. This is what led to the AllTrials campaign in January 2013, a campaign which is now supported by thousands of individual patients, clinicians and researchers across the world, and by hundreds of organisations representing millions of people.

This document sets out more information about achieving a situation globally where all trials are registered and results reported. It is an achievement that will involve regulators and registries, clinical trial funders, universities and institutes, professional and learned societies and medical journals, patients and researchers.

This document is part of a continuing discussion which many different organisations are working on elaborating further over coming weeks and months. Please email views and contributions to: alltrials@senseaboutscience.org

What trial information needs to be registered and reported?

There are four levels of information in clinical trial reporting: (1) knowledge that a trial has been conducted, from a clinical trials register; (2) a brief summary of the trial’s results; (3) full details about the trial’s methods and results; (4) individual patient data from the trial.

The AllTrials campaign is concerned with the first three. There are now initiatives in many countries to work out how individual patient data can be shared with other researchers.

 1. Registration

In brief: Planned clinical trials should be registered, with a summary of the trial protocol, before the first participant is recruited. Past trials that were not registered should now be registered retrospectively. This is essential if the trial was on medicines or interventions that we currently use (this includes some trials conducted before registries were established).

Checks on the registration status of published trials, show that around 40% of clinical trials concerning treatments in current use were not registered[1]. This figure does not include unregistered trials that have never been published.

The situation is improving: increasingly, funders and research organisations are insisting that trials are registered and it is a legal requirement for trials on some medicinal products in the EU, USA and five other countries[2].

The World Health Organization (WHO) has set out a 20 item Trial Registration Data Set[3]of the minimum information that should be included when registering a trial. Registration covers rationale and background to the trial; information on study participants and informed consent; the intervention under investigation, primary and key secondary outcomes; the method of data collection and statistical analysis plans.

For further information see the SPIRIT[4] guidelines published in 2013.

Prospective registration is the gold standard for the reasons set out in the 2005 Ottawa Statement[5]. All trials that were not prospectively registered should still be registered now, i.e. retrospectively. This is particularly important for trials conducted to evaluate the efficacy and safety of a treatment in current use, some of which were done before trial registration was possible. Many registrations are incomplete against the WHO data set and registries should advise on which aspects of these could reasonably be completed.

There is no excuse for not registering planned or completed clinical trials. Clinicaltrials.gov is the world’s largest register. It accepts registration from anywhere in the world and allows retrospective registration of trials. There are numerous national and regional registries, and others held by funders, institutions and corporations. About 20 of these are collected in the WHO’s Registry Network[6].

The proliferation of registries with different requirements is, though, limiting the usefulness and transparency of reported information. A trial can be registered in multiple registries but the entries are not always connected together. It is not currently possible for researchers or patients to find all trials that have been done on a particular intervention, even if all the trials have been registered somewhere.

The registration system could be streamlined and standardised internationally. There are now discussions about how to achieve this. Drawing down central information to multiple destinations may be more achievable than drawing it in from multiple sources to a central place, which has so far been the model. A small number of global centres would make it possible to standardise the way the data are structured so that entries can be linked and searched. Another option is to ensure that registries require trials to give all other registries’ ID numbers for trials that appear on multiple registers. Both strategies would help to ensure that trials can be linked and tracked from registration to publication of results.

Enforcement and Monitoring

It should be impossible to obtain funding for a trial, including funding from Government, or to sell a product, or to obtain permission to do a clinical trial, without proving registration.

Regulatory routes: In some regions the registration requirement has become or will become law for trials related to new marketing authorisation of drugs. The proposed EU Clinical Trials Regulation will require registration as part of approval for any new trial of a medicinal product. The US TEST Act, tabled in 2013, would require trials used to support licensing applications to have been registered before they have started. The FDA Amendments Act 2007 already requires trials with at least one site in the US to be registered within 21 days of the first patient being enrolled. The regulatory and ethical approval processes for clinical trials in every country can be developed to incorporate and monitor compliance with registration.

Funders: Applications for reimbursement and funding could include explicit statements that the trials will be registered and results reported. Some funders have already started to do this. Trial registration IDs should be requested and compliance monitored to the best of an organisation’s ability. A declaration that all past trials conducted by the investigator were registered could also be requested.

Journals and professional societies: The International Committee of Medical Journal Editors (ICMJE) committed in 2005 to publish only reports from trials that had been registered at inception. Requesting the trial number will help to monitor compliance with this more effectively. However, in order to overcome the historic gap in trial registration and reporting, journals should look at how they deal with any previously unreported trials that weren’t registered or pre-dated the registration requirement. For the future, journals could also ask for disclosure of registration details of all linked trials and commit to making it clear on a trial report if previously undisclosed trials come to light after publication. Professional bodies and learned societies should make it explicit in their codes of conduct that members must register clinical trials, and they can lobby for this to become an international standard.

2. Summary results reporting

In brief: A summary of results should be publicly available where the trial was registered, within one year of completion of the trial. Summary results from all past trials of medicines currently in use should be made publicly available on a register now. Summary results include information on the primary and any secondary outcomes measured and statistical analysis. This is part of the structured information that global registries should support.

An audit published in 2012 found that only a fifth of trials registered on clinicaltrials.gov had reported results within one year of completion[7] and different research found that trials which produced negative results are twice as likely to remain unreported than positive trials[8].  Publication of all results will reduce reporting biases and help researchers and policymakers produce more reliable systematic reviews of the safety and effectiveness of medical interventions.

Millions of patients have volunteered for clinical trials in the expectation that the findings generated by their effort will contribute to the body of knowledge about their conditions and future treatments. Publishing results fulfils clinical trialists’ ethical responsibility to patients in clinical trials, as set out in the Helsinki Declaration.

Summary results should be posted publicly within a year of the completion of the trial[9]where the trial was registered. Current discussions about registry development are looking at how to provide a clearer timeline of updates made to each entry and to indicate more clearly where information about the results is missing. As well as helping to improve compliance this will raise awareness among investigators about what is expected.

All past trials which have not reported results for medicines in current use should do this now. Registers should provide space for reporting of requests for results by third parties and include a log of requests for overdue information sent to trial sponsors, as well as responses to such requests.

Reports of clinical trial summary results on a register should at least contain the items on aclinicaltrials.gov results page (which includes summary participant information, protocol and amendments, summary results for pre-specified primary and secondary end points, details of adverse events and statistical analyses)[10]. If they don’t, they should be supplemented with extra information added to the register the trial was registered on. Results are produced in a variety of formats – in peer reviewed journal papers, clinical study reports in the case of drugs for which marketing authorisation applications are being made, reports to grant giving bodies, and so on. These may contain all or some of the summary results information required. Links and documents can be uploaded directly onto registers.

Registers currently have different formats for reporting results. Results cannot be uploaded to clinicaltrials.gov as PDFs for example. Ideally every major register could require results to be uploaded in a format that allows the main reported items to be searchable and enables sharing of information between registries. Some registries are curated to ensure there is internal logic in entries. Global registries would certainly have to do this to be useful and manageable.

The ICMJE has stated that prior publication of results on a register is not a barrier to publication in a journal. Journal reports on trials should be linked to the clinical trial unique identifier.

Enforcement and Monitoring

Regulation: The US FDA Amendment Act 2007 requires that results must be posted on clinicaltrials.gov within a year of the completion of the trial for all trials with at least one site in the US. The FDA has the power to fine trial sponsors who do not comply but rarely does this. Whether or not a trial is required to post results – or has been granted an extension – is often the subject of legal discussion, and as a consequence there is no clarity about whether a trial is truly overdue by the terms of the Act. The proposed EU Clinical Trials Regulation will require that summary results for every registered trial must be posted within one year of the completion of the trial, and the European Commission is discussing how to enforce this properly. Trial approval bodies in each country should consider expanding their monitoring of reporting, and ensure there is routine and open public audit of compliance for each individual trial.

Funders: Trials approval, processes such as marketing authorisation and reimbursement for medicinal products, and applications for funding could require an explicit statement that the results of the trial will be made available on a register within a year of trial’s end. Some funders have started this, and begun withholding funds until results are shared. A declaration that results from all past trials conducted by the investigator have been reported could also be required.

Journals and professional societies: Journals should state clearly that there are no bars to subsequent publication of a trial report when summary results are posted to a register. A number of journals have supported the Restoring Invisible and Abandoned Trials statement which gives trialists an amnesty of one year to publish results of previously unreported trials[11]. Professional societies should ensure that their professional codes of conduct reflect the requirement to report summary results.

3.  A full report

In brief: Trial sponsors or others who produce a full report for marketing authorisation or any other purpose should make this publicly available. The narrative reports of adverse events and individual patient data in a full report can be redacted and available on request to researchers, in the same way that reports of adverse incidents currently are, with a commitment that no reasonable request will be refused.

Full reports (Clinical Study Reports or their equivalent in non-commercial settings) contain a large amount of detailed information about the methods, analysis, results and conclusions of a clinical trial[12]. This information is needed to make and to scrutinise decisions about medicines and to assess published summary findings. Clinical Study Reports are produced for regulatory and licensing purposes and follow a standard structure set out by ICH GCP guidelines[13]. An equivalent for researchers who do not plan to produce a Clinical Study Report is any document that complies with the 25-item CONSORT statement on trial reporting.[14] Full reports should be made publicly available when they have been created.

Full reports sometimes contain narrative descriptions of adverse events experienced by trial participants. This information is important to understanding the trade off between risks and benefits of a treatment. These paragraphs may contain identifiable patient information which may need to be redacted. These paragraphs should be available on request to researchers who provide a protocol of their study plan, with no reasonable request refused by the academic or company who authored the report. This is similar to the system for releasing the full narrative descriptions in spontaneous reports of possible adverse events to prescribed medications, reported by doctors and patients to regulators through the Yellow Card[15] scheme in the UK.

Clinical Study Reports also contain line by line individual patient data on all participants in one carefully specified section. We do not call for individual patient data to be made publicly available though there are extensive discussions at present on how this information could be shared where it is of value to research. The EU Ombudsman has ruled that it is not a significant burden to remove individual patient data from full reports before public sharing. Some organisations (GSK) have committed to making all of their reports publicly available, with this information redacted. Others (Roche) have committed to providing this information on demand.

Enforcement and Monitoring

Regulation: The proposed EU Clinical Trials Regulation will contain guidance that no information in a clinical study report should be considered commercially confidential once a decision about marketing authorisation has been made. The European Medicines Agency’s transparency policy is to release any full report it holds on request. Other regions should adopt a similar approach.


4. Individual patient data

The AllTrials campaign is not calling for individual patient data to be made publicly available.

There are currently initiatives in many countries looking at how to improve sharing of this level of information for the benefit of future research. This offers significant opportunities, such as: improving the accuracy of estimates of benefits from a treatment, through individual patient data meta-analyses; and identifying subgroups of patients who respond better, or worse, to a specific treatment. Patient groups, medical research funders and trialists have raised concerns about the inability to reuse past research. They are keen to develop consent protocols that will optimise the ability to reuse findings, and want legislators to look at whether new data protection regulations impose unnecessary burdens and restrictions on reuse of past research.

The AllTrials campaign is an initiative of Bad ScienceBMJCentre for Evidence-based MedicineCochrane CollaborationJames Lind InitiativePLOS and Sense About Science and is being led in the US by Dartmouth’s Geisel School of Medicine and the Dartmouth Institute for Health Policy & Clinical Practice. AllTrials was launched in January 2013 to call for all clinical trials to be registered and results reported. www.alltrials.net

[1] Huser 2013, Freshwater 2013, Killeen 2013, van de Wetering 2012, Jones 2012, Scherer 2012, McGee 2011, Mathieu 2009, Rasmussen 2009

[3] WHO Trial Registration Data Set http://www.who.int/ictrp/network/trds/en/index.html

[4]SPIRIT 2013 (Standard Protocol Items: Recommendations for Interventional Trials) explanation and elaboration: guidance for protocols of clinical trialshttp://www.bmj.com/content/346/bmj.e7586

[5] Krleža-Jeric K et al for the Ottawa Group 2005 Principles for international registration of protocol information and results from human trials of health related interventions: Ottawa Statement  http://www.bmj.com/content/330/7497/956
[6] The WHO Registry Network http://www.who.int/ictrp/network/en/
[7] Prayle AP 2012 Compliance with mandatory reporting of clinical trial results on ClinicalTrials.gov: cross sectional study http://www.bmj.com/content/344/bmj.d7373
[8] Song et al 2010 Dissemination and publication of research findings: an updated review of related biases   http://www.hta.ac.uk/fullmono/mon1408.pdf
[9] The completion date of a trial is the final date on which data was (or is expected to be) collected.
[10] See Appendix 1 for a suggested list of contents of summary results

[11] Restoring invisible and abandoned trials: a call for people to publish the findings BMJ2013;346:f2865 http://www.bmj.com/content/346/bmj.f2865

[12] Doshi & Jefferson, 2012 Clinical study reports of randomised controlled trials: an exploratory review of previously confidential industry reports. BMJ Open http://bmjopen.bmj.com/content/3/2/e002496.full

[15] Yellow Card Scheme – MHRA https://yellowcard.mhra.gov.uk

Time to show your love for the Census

Be sure to read the recent Radical Statistics articles about the implications of the loss of the population census by Danny Dorling and Paul Norman, then answer this consultation!

The Office for National Statistics (ONS) is consulting on the census and
the future provision of population statistics in England and Wales.
Improvements in technology and in government data sources offer the
opportunity to modernise the existing census process or to develop an
alternative census method that reuses government administrative data.

Therefore the two approaches to modernising the census in the future are:

1. An online census that is completed once a decade.
2. A census that uses existing government data and compulsory annual

Both approaches would provide annual statistics about the size of the
population, nationally and for local authorities. A census using
existing data and surveys would provide more statistics about the
characteristics of the population every year. An online census would
provide more detailed statistics once a decade.

To find out more about the consultation please download the consultation
document from http://tinyurl.com/o22s8l3.

To take part in the consultation please complete the online survey
available from http://www.surveymonkey.com/s/XY3SK3W.

The survey closes on the 13th December.

Latest news from AllTrials campaign


Dear AllTrials supporters [N.B. Radstats is an organisational sponsor]

The AllTrials campaign has put together a more detailed statement about the registration and reporting of all clinical trials. This was developed from the meeting at the BMJ earlier this year and brings together discussions with hundreds of other organisations who have signed up to support the AllTrials campaign.

The statement sets out the different levels of information from registration to individual data (AllTrials is not calling for publication of individual data) and reflects the wide range of different formats in which results are presented.

Achieving the goal of all trials registered and reported will involve regulators and registries, clinical trial funders, universities and institutes, professional and learned societies and medical journals, patients and researchers, and their thoughts about what they will need to do to achieve it are included in the document.

You can download the PDF or read it online.

 This document is part of a continuing discussion which many different organisations are working on elaborating further over coming weeks and months. Please email views and contributions to:alltrials@senseaboutscience.org

And please keep people signing the petition at www.alltrials.net

Best wishes                                                                        


Dr Chris Peters

Campaigns & Policy Officer

Sense About Science

 Tel: +44 (0) 20 7490 9590

Mob: +44 (0) 7837 394 957


On Twitter @senseaboutsci

2013 UK Budget: A contextual appraisal

Contributed by L Brownstein

Osborne’s latest budget was both a non-event yet contained some peculiar features. In discussing it I have avoided technicalities, particularly mathematical (= algebraic) ones. It isn’t that the algebra is difficult but there can be a lot of it and, therefore, difficult to keep track of.

One reason that this budget was such a non-event is that most of the measures that come into effect have already been passed, like the bedroom tax, so called. Another was Osborne’s concern to avoid any ridiculous mistakes.

One of the problems besetting discussion of economic policy and budgets is that so many journalists, even those who have some economic training, make fundamental errors. Two who usually, though not always, avoid doing this are William Keegan of the Observer and Larry Elliott of the Guardian. Keegan has written more than once that, in his opinion, Osborne is the worst chancellor in living memory, and he remembers Macmillan’s one year stint as chancellor. Another astute economic commentator is Aditya Chakrabortty of the Guardian.  One journalist for whom I have a great deal of respect is Andrew Rawnsley of the Observer. When discussing political matters, he is quite insightful, but when discussing economics, he invariably gets it wrong, as he did this weekend. So, it is important to be able to distinguish the empirically relevant comments dealing with economic issues from those that miss the mark, for whatever reason. There are journalists whom I have not named but whose work is eminently worth reading.

What we are experiencing is a private sector crisis portrayed as a public sector crisis.

First, let me note that although Osborne and Cameron still try to blame the Labour Party for the ‘disastrous’ legacy they left the coalition to contend with, this discourse has been somewhat replaced with claims that it is Europe’s plight that is hampering the UK’s recovery, a claim he made in this budget. Labour Party spending had nothing to do with the creation of the crisis. Their lack of sufficient oversight of the investment banking sector was, however, a contributing factor. It is highly unlikely that the present government, had it been in office at that time, would have done any better, given its actions so far.

Second, he did something quite odd with respect to the Bank of England. Although it was unclear what was meant, since he never spelled it out, some of his and the Treasury’s responsibilities appear to have been shifted to the Bank of England.

There are matters that need to be clarified in order to interpret the budget and its fallout. First, there is the nature of money. Second, there is the relationship between taxation and government spending. Third, is the character and function of welfare spending.

Since all budgets are political in character, indeed, are ideological in nature, they inevitably affect someone adversely. The real question to ask is, as Cicero did, Cui bono, Who benefits, which he attributed to the Roman consul, Lucius Cassius. In virtually all of Osborne’s budgets, the relatively well-off benefit and the poor do not, even with measures claimed to do so.

The second thing to say is that the UK is not Europe and it isn’t Greece, in fact, it is nothing like Greece economically. Because the UK is not a member of the Eurozone, any economic similarities are purely fortuitous. The countries of the Eurozone function more like US states or Australian territories than sovereign nations like the UK. This difference makes a big difference in the range of economic policies a sovereign state has to hand, something not available to the individual European nations. Individual US states and Australian can, and indeed sometimes do, go bankrupt. Sovereign states, on the other hand, due to the kind of monetary system they have, cannot economically go bankrupt. Sovereign  can always, in principle, pay the country’s debts. The only exception is if the political system intervenes, as Congress has done in the past in the US. Contrary to an article of the Constitution which stipulates that the government can always pay its debts, Congress can ensure that the government is unable to pay its debts. But this is not because the government has run out of money.

A third thing to notice is that credit rating agencies’ ratings have no relevance whatsoever to sovereign nations. A credit rating is an index of how likely the organization being rated is likely to go bankrupt. As the UK can never go bankrupt, these ratings are economically irrelevant. However, they can be politically relevant. Which they are in Osborne’s case as he made them a rod for his own back.

A fourth thing to notice is that the economic problems facing the country have nothing to do with the public sector, except incidentally. The fiscal crisis is the consequence of a private sector bubble, not overspending by the public sector.

A fifth thing to notice is that when politicians and journalists contend that some measure is being funded by the taxpayer, this is false.  While the measure is being funded by the government, it does not follow from this alone that it is the taxpayers who are picking up the tab. The issue is where the money is coming from. This point and the second point are linked.

Where does the money the government spends come from? It arises ex nihilo. From nothing. Government creates the money it needs out of thin air. This is the essential difference between what is known as a metal money system and a chartal money system. Many economists and most journalists think in terms of metal money systems. They think something must back up government spending. They are right, but it isn’t anything physical, like gold. It is something intangible, like confidence that the government won’t collapse, or the like.

The monetary system that virtually all nations use now is known as a fiat money system with flexible exchange rates vis-á-vis other sovereign countries. This is a money system where the money is self-created. There are hybrid systems, such as the one running between the end of WW2 and the early ‘70s, where you had a fiat money system being treated as a metal money system with gold as the backing. However, since Nixon’s famous statement that we are all Keynesians now, the global currency system has been a fiat money system with flexible exchange rates.

The Eurozone could operate a fiat money system like that of the UK or the US or Australia or Japan, but its organization prevents it from doing so. The Eurozone demands a federal economic system with a federal treasury and a federal bank with the requisite powers. While the Eurozone has a central bank, it does not function as a lender of last resort. It can only exercise this function under the table, which renders it ineffective. It has no federal treasury. Creating these institutions would mean a small loss of sovereignty, but this is small beer compared to the loss of economic sovereignty they lost when they joined the Eurozone.

So, when Osborne or Cameron say that the government or the treasury has no money, this can only mean that it hasn’t been created yet. What does having a fiat money system mean for public spending on for instance the NHS, or schools, or indeed welfare? It means that the UK can meet all its internal financial obligations without any difficulty whatsoever. (I am ignoring the spectre of inflation for the moment.) So, whenever a government minister contends that the government can’t pay for something like schools or the NHS, they either do not know what they are talking about or they are lying. The issue isn’t whether the government can pay for our schools or the NHS, it is whether this is the best way of running these organizations.

This is a problem concerning which institutions should be public and which private (or a hybrid). And this includes banks. My position is that it would not be a bad idea to have government banks where all citizens deposit their money and companies get their loans and leave casino banking to private banks. But this is a separate issue.

If the government can create its own funding out of thin air, what is the need for taxes? In a fiat money system, taxes are not needed to fund government expenditure. Taxes do three related things. (a) They legitimate the established currency – taxes can only be paid in the legitimate currency, which is what the government says it is, hence the current furor over the bitcoin. (b) Taxes also direct or constrain private spending. This can, of course, be overdone, and there is an argument for cutting taxation during a deflationary period like the one we are in now. An obvious example is VAT, a crude sales tax. (c) From our current perspective, perhaps the most important function of taxes lies in its redistributive function, thus enhancing surplus recycling, necessary for capitalism to function at all. Put starkly, taxes take the excess from the rich and redistribute it to the poor — this function is related to the second point but is not identical to it. The current coalition is misusing the latter two functions of a fairly functioning tax system, either possibly for perverse reasons of their own or through sheer ignorance about how the modern currency system works.

So, when Osborne gives himself credit for spending on this or that, he is doing nothing special. The monetary system within which he works can’t prevent him from doing this. It is not whether he spends that is the issue, it is what he spends his budget on. What is even more important is where he restricts his spending. As we have seen, there is nothing to prevent Osborne spending his budget on anything he likes, as much as he likes. He can spend as much as he likes because in a deflationary economy, there is no likelihood of inflation, that is, there is no likelihood of inflation as a consequence of any spending he engages in. Overspending on his part would only become a problem were there full employment.

The inflation we have is due to external factors, like the weather causing food prices to rise, and the like. It is not due to any internally generated wage-price spirals, which can cause inflation to get out of control. When such positive feedback processes take place, the need is to control all the elements of the process, not just one, as was done in the US. Nixon froze both of them. Freezing prices irritates capitalists while freezing wages irritates labourers. Hence, the need to deal with both of them simultaneously in order to be fair to all parties.

Osborne has noticed that banks aren’t lending. This is for a number of reasons. One is that the money that the government has put into what are basically insolvent institutions has been used to pay down their debts and to pay back the government. Whatever is left over has been sitting in the banks. It is known that corporations are sitting on funds instead of spending them. Neither individuals nor businesses are asking banks for loans. Banks are not lending because no one is borrowing. Those who can don’t wish to. And those who haven’t been able to still can’t.

Why hasn’t QE, quantitative easing, worked?

QE is a sort of fiscal policy where the money goes to the banks who are then supposed to lend it out, the assumption being that there are borrowers to lend to. The problem is that the banks have been using the money to pay down their debts, pay back the government, increase their capital reserves, and pay bonuses to their high level employees. It is for reasons such as these that QE hasn’t led to growth. A better fiscal policy would be for the government to directly give the money to businesses or individuals who would then spend it. Tax cuts for the rich won’t lead to spending, while substantial tax cuts for the poor would. Because of the crisis, the surplus recycling mechanism has stalled. Benefits for the rich tend not to be recycled, while those for the poor do. Osborne has consistently failed to place money where it would be used as opposed to saved, or if he places it with the poor via one measure, he removes it with another. The result is that the economic position of the poorer either remains the same or worsens as a more or less direct consequence of his policies.

Since Osborne has consistently hammered the welfare system, this surely must be because it is a drag on the economic system. Well, it would be, were we operating in a metal currency system where there is a finite amount of money. Since we are operating a fiat monetary system, there is in principle an infinite amount of money available to the government. In fact, the welfare system ensures a certain degree of circulation and recycling. A better welfare system would naturally ensure greater degrees of the circulation and recycling of money to the benefit of everyone. From this point of view, there is no economic justification whatever for cutting welfare payments. All justification thus tends to be moral in character. Andrew Mellon, Secretary of the Treasury under Hoover, insisted that the rot had to be purged out of the system. This purging applied only to those who weren’t rich or if rich had misspent their money. It can then be legitimately asked: who are Mellon, or Osborne for that matter, to make moral judgments about the rest of us? An identical argument can be made for the pension system. The public pension system is not in trouble. It will never default, unless made to. Hence, there are no economic  reasons for Osborne to do what this budget and previous budgets have done to the public pension system.

It is clear that economics as a field of study is not just about money and its distribution and recycling in the absence of the social and cultural, indeed ethical, context in which economic activities take place. Osborne makes it clear that he understand this in relation to overseas aid, even though it is only 0.7% of GDP, which given the scale of the UK economy is trivial. However, it is when he deals with the domestic situation that the ethical imperatives become cloudy. It is an odd situation where the poor have to be “beaten” in order to work whereas the rich have to be “bribed”. Investment bankers appear to need to be bribed with bonuses in order to carry out their jobs. Their salaries are obviously insufficient motivation.

One of the most important matters in the last budget is the child care provision that is designed to enable those who care for their children to go back to work by enabling them to take advantage of child care facilities which would otherwise be too expensive for them. It is of interest, and perhaps indignation, who benefits from this particular piece of legislation. Here is a chart I scanned from the Observer of 24 March.


It seems obvious that those whose need is greatest benefit least if at all from this scheme. In fact, the beneficiaries are those who pay a certain amount of tax in addition to those families where both parents work. This distribution of funds makes no economic sense.

This entire budget is like this. In this budget and the last, the richer benefit the most and the poorest the least, but in general, everyone loses. If this isn’t a budget based almost entirely on moral premises as opposed to economic ones, then I don’t know what is. Take the LibDems’ £10,000 tax credit or personal allowance. Who benefits? Again from the 24 March Observer [below].


The Treasury contends that even after all allowances are taken into account, the overall impact of the tax and benefit changes will be negative, as can be seen in the chart. In fact, according to the Treasury, the richest 10% are a little over 2% worse off while the poorest 10% are a little under 2% worse off. This difference will not make much difference to the top 10% whereas it will make a great deal of difference to the bottom 10%.  In the Treasury’s view, virtually all households are worse off.

The economic rationale underwriting this set of figures is deeply flawed. And it increases the economic inequality that we are experiencing now. The perspective I outlined above would turn this on its head. Such inequalities lead to de-legitimization of the social contract. In the US, some of the rich already live in gated communities and have for the past 30 years. And they feel the need to carry guns. Part of this lies in the US’s history, but part lies also in the grotesque economic inequalities that have become so pervasive in the US.  Neither the US nor the UK governments, however, have done much to shift the economic burden on their citizens, especially since the financial crash of 2008. If anything, this budget entrenched them further, while claiming the opposite is taking place.

In assessing this budget, we must never forget that the financial crisis arose from excessive leveraging in the private sector, most particularly the investment banking sector, not overspending in the public sector. What we are experiencing is a private sector crisis portrayed as a public sector crisis. There is a public sector problem, but this derives from the public sector bailing out the private sector responsible for the crash of the economic system, which occurred because of the absence of sufficient safeguards, safeguards that were in place from the thirties until the ‘80s and ‘90s when they were dismantled.

This budget does nothing to deal with the essential insolvency of the banks and their egregious practices.

Especially since two of the largest have been effectively nationalized. It is often said that the taxpayer owns these banks. This is true only in so far as the taxpayers/citizens own their own government. Even were we to agree that citizens own their government, it doesn’t follow that the taxpayer is paying the salaries of the bankers. While the government is paying the salaries of the bankers, with our implied consent, the taxpayer is not effectively involved. This is because what government spends is not dependent on its tax base  – taxes are not the foundation of government expenditure, as I mentioned above.

It has been said by some that this budget may have been a preparation by Osborne to be replaced in the summer Cabinet reshuffle.  The 2010 intake and senior Tories want Redwood or Hague to be Chancellor. Because Osborne’s budgets have had so little relation to reality and, therefore, have either had no effect or had a quite pernicious effect, his position has become increasingly vulnerable, leading to a number of his own party wanting him removed as Chancellor.

Check out two recent research reports by Donald Hirsch on the contradictions inherent in Osborne’’s tax benefit/universal credit schemes:

A miminum income standard for the UK in 2012: Keeping up in hard times. http://www.jrf.org.uk/sites/files/jrf/minimum-income-standards-2012-full.pdf

Tackling the Adequacy Trap: earnings, incomes and work incentives under the Universal Credit. http://www.crsp.ac.uk/publications/tackling_the_adequacy%20_trap.htm

The analysis of he and his colleagues is in my view devastating for Osborne’s policies.

– L Brownstein


Please act *now* if you want to save small area population data!!

Please act *now* if you want to save small area population data!! Dear colleagues

Image from Photologue_np on flickr


Understandably, only a few of us can invest much time in following the plans for future censuses and you may therefore be unaware of recent developments. If you are a user of small area census data, please read on and act if you can – there is a real risk of losing the small area census data that you currently take for granted.

ONS are currently undertaking research on potential replacements for the conventional census in 2021. Although that seems a very long way off, recommendations need to go before parliament next year and the preparatory work is already well advanced. Based on the series of roadshows run by ONS last autumn, they have not received convincing high-value use cases for small area population attributes. Arguments such as “they are used to target local services” are not sufficiently robust to stand up to the inevitable financial scrutiny. A leading option is to derive basic age/sex data from linked administrative records and to use social survey data to obtain the types of population attributes that would previously have been obtained from the census – (ethnicity, LLTI, tenure, car ownership, employment, etc.) This would clearly not deliver small area data of the current quality, if at all.

We are urgently appealing to the research community to have your say: if no case is made, it seems entirely likely that ONS will not be able to include generation of costly small area data as part of the recommended option. If you can demonstrate high-value research (and ideally high-valued impacts!) based on small area 2001 census data, please mail us – we need to marshall further evidence by the end of February. Ideally, we are seeking identifiable research with an estimate of value and impact and/or an indication of why it could not be done without high quality small area data. If you can supply a paper or URL where further details could be pursued, better still.

NB This is about England and Wales, although Scotland and Northern Ireland will be reviewing the same issues in due course. If you want to find out more about Beyond 2011, see http://www.ons.gov.uk/ons/about-ons/what-we-do/programmes—projects/beyond -2011/index.html Although there is not a formal consultation currently open, you can also mail them at beyond2011@ons.gsi.gov.uk With many thanks, David Martin, University of Southampton Email: D.J.Martin@soton.ac.uk Paul Norman, University of Leeds Email: P.D.Norman@leeds.ac.uk

[Reposted with permission from the radstats jiscmail list.]