
This week Tim explains the Barnett Formula with a bit of help from Money Box's Paul Lewis.
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Thank you for downloading More or Less from the BBC. This is the version of the programme first broadcast on BBC Radio 4. Here's Tim Harford.
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Hello and welcome to More or Less, your weekly guide to the numbers in the news and in life. I'm Tim Harford. This week we'll reveal Ed Balls political sleight of hand. Ask whether Margaret Thatcher was generous towards the National Health Service, and present a striking tale of coincidence. We'll ask whether air pollution is really killing the population of the Shetland Islands each year. Not the actual residents of Shetland, but that many people. Oh, you know what I mean. We'll also look at this question.
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Well, we were wondering how people know how far away the sun is and how big it is. If we don't know how big it is and how far away it is. You need both to calculate, I think.
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But first, the Barnett formula. We had this email from loyal listener Neil McCartney.
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We're told that the Barnet formula means
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that over £1,600 a year extra is spent on each person in Scotland. How is this figure arrived at? A good question. There's been lots of shouting about the formula, but little explanation of exactly what it is. Let's put that straight. But before we do, I need a bit of help. And as if by magic, Paul Lewis of Moneybox appears.
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Hello, Paul.
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You're looking pleased.
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I am pleased, Tim. After years of austerity, it looks like Moneybox is going to get an increase in its budget. That means we'll be able to carry out deeper investigations and campaign for the rights of even more Moneybox listeners.
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Well, that's great news, Paul, but what about the budget of more or less? I know Moneybox is a much bigger program altogether, but if you're getting more money, so should we.
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Oh, and how would you propose to figure out what's fair?
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Well, what about using the Barnet formula? It's been used for nearly 40 years to figure out how much money devolved governments in Scotland, Wales and Northern Ireland should receive.
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Isn't that the formula that ensures the smaller nations get more money? Sounds to me like you're trying to grab an unfair budget allocation for tiny more or less, probably by threatening to become independent.
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Well, that's a common misperception, Paul. Actually, the Barnett formula applies only to additional spending, not to total spending.
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So?
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So, for example, Moneybox is 10 times bigger than more or less. You've been given an extra £10,000, so proportionately more or less should get an extra £1,000.
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Oh, but hang on, that seems a bit excessive because Our budget increase is to hire extra researchers, but you often get a researcher provided directly by BBC Current Affairs. You don't have to pay for that extra person.
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Good point, Paul. The Barnett formula, however, allows for that. If we were responsible for hiring all our researchers, we'd get the full thousand pound, same increase as you, proportional to our smaller size. But because half of our researchers are provided centrally by the BBC at no cost to us, we can also halve £1,000. You get the £10,000 increase, we get £500.
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Well, I'm very pleased to hear you'll be getting extra researchers as well.
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Oh, Paul, we don't need to spend the £500 on extra researchers. No, no, no. That's up to the devolved administration of more or less. In other words, me and the editor. And we've got our eyes on on a really excellent lunch. Thank you to Paul Lewis. I should perhaps point out that both the budget increase and the excellent lunch mentioned in that conversation are purely imaginary. But I hope my chat with Paul does shed some light on the Barnet formula. There are probably three key things to grasp about it. First, it's not some grand bargain allocating overall spending between the nations. Instead, it's all about how spending changes from whatever has previously been agreed. Scotland, Wales and Northern Ireland have long been allocated grants from the UK Treasury. The Barnet formula governs how those grants change. When spending in England changes, it uses relative population. Scotland's population for Barnet formula purposes has recently been 10.03% of England's population. Second, the Barnet formula adjusts for how much devolution has taken place. Health spending in Scotland is almost completely devolved. So if England gets more money, Scotland gets pretty much the same per person. But transport in Wales was 73.1% devolved last time we checked. So if England gets an extra hundred pounds per person of transport spending, Wales would only get an extra £73.10 per person. The idea being that other transport spending would be directly funded from London, not Cardiff. And the Welsh assembly could spend the £73, however it chose. Third, some spending isn't covered by the Barnet formula at all. The state pension, for example, is simply paid by the UK treasury to UK pensioners. So are benefits at the moment, spending per person to the nearest hundred pounds is £8,500 in England, £9,700 in Wales, £10,200 in Scotland and £10,900 in Northern Ireland. These imbalances are often blamed on the Barnett formula, but they're chiefly influenced by historical budget Allocations that the formula only tweaks around the edges and by the distribution of Social Security payments, which are determined by need and by demographics. I spoke to Alan Trench, a constitutional expert who blogs at Devolution Matters. He explained that the Barnet formula should lead to convergence in spending per person across the four nations. But for some reason, particularly in Scotland, that hasn't been happening.
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The Scottish case is an odd one, because convergence should have been happening for Scotland, given the sustained increases in public spending that have taken place throughout the decades, and it didn't. Part of the explanation for that is to do with the population numbers that are used and the fact that Scotland's population has declined quite significantly since the 1970s. But the population numbers haven't always been uprated often enough. And even during the noughties when its population was declining by about 0.3% per year. That appears to have been enough during a four year spending review period to mean that you prevented convergence occurring.
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There's been a lot of conversation about further devolution to Scotland. There are already some powers on the books. They will be devolved. Do we need to revisit the Barnet formula?
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You could not do it without an extraordinary amount of political pain, that you'd be taking something in the order of 4.5 billion away from the Scottish budget if you were to go to a Scottish needs related figure. But if you were to add that money to public spending across the rest of the uk, the benefit would be negligible. Scots would feel a huge amount of pain, but people in England would feel no perceptible benefit at all. So politically, it's never been particularly attractive to table reforming the formula.
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Alan Trench, who perhaps appropriately has academic positions with the University of Ulster, the University of Edinburgh and University College London. Staying with Scotland. Thank you to Rob Eastaway, loyal listener and friend of more or less, for pointing out that it now seems to be an accepted fact that 71% of 16 and 17 year olds who took part in the referendum voted Yes, a much higher proportion than any other age group. The figure has been quoted in numerous places, including BBC Online, the Scotsman, the Mirror and and the Wall Street Journal. But as Rob points out, this figure comes from a poll conducted by the Conservative peer Lord Ashcroft. He polled over 2,000 people who'd voted in the referendum, which is a good number, but only 14 of them were 16 or 17. That means that by sheer chance, the yes vote in that tiny sample might be very different from the yes vote from young Scottish voters as a whole. Whenever we see the claim that 71% of 16 and 17 year olds voted yes. We should substitute the claim that out of the 14 young people polled by Lord Ashcroft, 10 of them voted yes. Incidentally, when polls from both Lord ASHCROFT and from YouGov take a wider definition of young people up to the age of 24, where there's a larger sample, they find a vote split pretty much down the middle. Perhaps 16 and 17 year olds really are very different, but we don't know that for sure. It's quite likely Instead, that the 71% number is. Is a fluke resulting from a very small subsample. You're listening to More or Less with me, Tim Harford. Our email address is more or lessbc.co.uk. we always enjoy it when loyal listeners email us. And some loyal listeners are younger than others. I'm joined in the studio by two of them. Well, perhaps if you'd be so kind, you could introduce yourselves.
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I'm annabelle and I'm 12. And I'm Serena and I'm 10.
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And the fellow in the corner of the studio lurking? Andrew.
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I'm Andrew and I'm 31.
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And you're an astronomer?
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I am.
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Welcome to More or Less Towers. Now, Serena and Annabelle, what can I do for you?
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Well, we were wondering how we can find out, or how people know how far away the sun is and how big it is. If we don't know how big it is and how far away it is. You need both to calculate, I think.
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Yes.
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Serena, this is a problem that's been getting you scratching your head.
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Yes. And it doesn't really make sense because in algebra the unknowns can only be one less than the knowns. And so in this case there are 2 unknowns and 0 knowns. So surely we can't know, is the
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sun really big and really far away or is it small and really close?
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Yes.
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Well, Andrew, you've very kindly agreed to try to explain this. How do we know whether the sun is really dim and close or really bright and big and far away?
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Right, well, bear with me because it is a bit indirect. What we do is we start with the distance to a planet. So let's say Mars. And that's what's going to help us work out what the distance to the sun is. Then we use what we know about the way that planets orbit around the sun. This was written down for the first time by Johannes Kepler and linked to gravity by Isaac Newton. So we now understand it very, very well. And it turns out that the amount of time it takes for a planet to go around the sun rises as the distance that that planet is from the sun also rises. And that link means that if we time how long it takes, say, Mars to go around the sun and how long it takes us to go around the sun, which is about two years for Mars and exactly one year for us, then we can use this link to work out, relatively speaking, how big is the orbit of Earth around the sun and Mars around the sun. Then you add in what you know about how far it is from Earth to Mars, and this gives you all the information you need to solve this problem and work out the distance to the sun.
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So the only thing we're missing then is how do you know how far away Mars is?
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Yeah, I thought you might ask me that. There are a number of different ways that you can find out the distance to Mars. Today, the best estimate that we have is from something called radar ranging. And the way this works is we send big radio pulse towards Mars that bounces off Mars and comes back to us, and then we receive it again here on Earth. And we measure the amount of time that passes between sending out the radio pulse and getting it back. And because we know how fast radio waves travel, they travel at the speed of light. We can work out from that exactly how far away Mars has to be.
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Are you happy, girls?
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Yeah. Well, I think I kind of understand the principle, But I'm still a bit confused at how you can find the exact distance to the sun. Or is that still unknown? Because as far as I currently know, you can only really make an approximation. You can only kind of guess, quite an accurate guess, but you can only really guess how far the sun is and how big it is.
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Well, in the end, everything that we do in science in some way is a guess. The data we have tell us about the way the planets move around in the night sky is really, really accurate. And these Doppler pulses that we can use are also really, really accurate. And so we think that the estimate that we have is very good. And of course, we've used it to send spacecraft around the solar system as well. And so it's been put to the test.
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Now, Andrew, I have one final question. How far away is the sun?
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It is 150 million kilometers away.
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Wow, that's a very round number.
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Well, that's the number that I remember. I think it's 149,500,000 or something like that.
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What's a few hundred thousand kilometers between friends?
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Absolutely.
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Thanks to Serena, Annabelle, and a Big thanks too to Andrew Ponson. He's an astrophysicist at University College London. At the Labour Party conference this week, everyone was talking about the deficit, which is the amount the government needs to borrow each year to cover the shortfall between tax revenue and spending. Well, not everyone was talking about it. Ed Miliband spoke without notes and forgot to deliver the part of his speech that mentioned it. But Ed Balls, the Shadow Chancellor, did cover it.
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But three years of lost growth at the start of this Parliament mean we will have to deal with a deficit of 75 billion pounds, not the balanced budget George Osborne promised by 2015.
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Roughly 30 seconds later he went on
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to say, working people have had to balance their own books. And they are clear government needs to balance its own books too. So Labour, we will balance the books in the next Parliament. There will be tough fiscal rules. We will get the current budget into surplus and the national debt falling as soon as possible in the next Parliament.
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Let's listen again.
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First clip, we will have to deal with a deficit of 75 billion pounds. Second clip we will get the current budget into surplus.
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You might be forgiven for thinking that Ed Balls has just said that a Labour government would wipe out a deficit of 75 billion pounds in the next Parliament. He didn't. As Carl Emerson, Deputy Director at the Institute for Fiscal Studies explains, that's not Mr. Booles target.
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Rather than try and eliminate the entire deficit, what he said that a Labour government would try to do would be to eliminate the current budget deficit. What that means is he would need enough tax revenue and other receipts flowing into government to cover their day to day spending, but not necessarily to cover the spending they're doing on investment.
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And is that a rounding error, just a couple of percent, or is it something big?
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It's not a rounding error. In 2018 19, the government's projecting about 28 billion pounds worth of investment spending. That means that if we were to borrow that money, we could enjoy lower taxes or higher day to day spending and still meet Mr. Booles objective.
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So 28 billion pounds worth of extra borrowing versus 28 billion pounds worth of lower spending or higher taxes.
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That's precisely right. Mr. Osborne wants to eliminate the entire deficit. So we're not borrowing at all. Whereas Mr. Booles is saying he's actually comfortable with borrowing as long as it's only being used to cover investment spending.
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Carl Emerson from the Institute for Fiscal Studies, staying with a Labour Party conference, Ed Miliband promised to raise 2.5 billion pounds and spend it on the National Health Service. But is that a big Number? Here's the BBC's political editor, Nick Robinson, on Wednesday's Today programme.
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What you have to keep doing is put these things in proportion, though have a sense of historical perspective. The money that he's found, he says two and a half billion pounds is less than 3% of the annual NHS budget in England. Remember that Even Margaret Thatcher, regarded as someone who slashed the NHS by people in the Labour Party, increased the NHS budget, on average, year on year, in real terms, by more than 3%. So even if Labour were able to do this, unless they could find money from elsewhere, they would be cutting the NHS budget more than Margaret Thatcher.
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Loyal listener Justine contacted us and wanted to know whether that could possibly be right. I spoke to John Appleby, chief economist of the King's Fund, a healthcare think tank. What's Nick Robinson right to say, that 2.5 billion pounds is less than 3% of the budget of the NHS in England?
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Yep, that's correct. The spending on the English NHS this year is something in the region of 110 to 112 billion. We can never be exactly precise about these figures until after the event, as it were, but 2.5 billion is around that sort of 2 to 3%, Mark. Yep.
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Then he said that Margaret Thatcher increased the NHS budget on average by 3% a year, and actually not just 3% in cash terms, but 3% in real terms after inflation. Is that right?
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Yeah, that's broadly correct as well, as you say, you point out the difference here. It's 3% above inflation. So in cash terms it would be more than 3%, but yes, 3% per year on average.
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Well, that seems fairly clear, then. Ed Miliband is proposing less than 3%, and that's no allowance for inflation, so it's effectively around zero. Margaret Thatcher, 3% a year in real terms. It seems reasonable, then, to say that Ed Miliband is proposing a far tighter settlement for the National Health Service than Margaret Thatcher offered.
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That's true. On the face of it, I think that the two and a half billion is, in a sense, more of a political marker, really. And as you say, in cash terms, it would just about COVID inflation. So the expectation is that they'll wait to the last minute to reveal their pledges to the electorate. And my expectation would be somewhat more than 2.5 billion each year.
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John, just to give us the context, what has NHS spending under the coalition government been doing?
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Well, over the six years from 2010-11 to the planned spend in 1516, based on our Current estimates for inflation and how much the NHS is spending, it looks like the coalition has spent about 0.66% real increase each year.
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John Appleby. One of the ways Ed Miliband proposes to help fund the NHS is by introducing a so called mansion tax on properties valued at more than 2 million pounds. He reckons that will raise 1.2 billion pounds a year. A YouGov poll found that 72% of people support the idea. London Mayor Boris Johnson isn't one of them. Mr. Johnson called it a tax on London and, well, Ben Carter's here. Hello, Ben. Would a mansion tax be a tax on London?
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Well, Tim, 13% of the population live in London, but according to property website Zoopla, 79% of the 108,000 homes valued at more than 2 million pounds are based in the capital. So you might think he has a point. But when we break down the numbers further, Zoopla say there are 2.6 million properties in London and so the 85,000 homes which would be hit by this mansion tax are only account for 3.3% of the total number.
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Certainly it's a tax that will be mostly paid by Londoners then, but only by a few of them. Well, thank you, Ben. Late last month, Radio 4's Costing the Earth gave listeners this trip down memory lane to the great smog of 1952, when all of London was shrouded in a cloak of smoke. Clothes were very, very dirty and curtains
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were filthy and net curtains all went a strange sort of pale brown colour.
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The program compared the effects of air pollution then, when around 4,000 people were said to have died from the Great Smog to air pollution. Today, according to Dr. Sotiris Vardulakis from Public Health England, things have got much, much worse. Public Health England recently published a report estimating the number of deaths attributable to air pollution in the UK, and this is equivalent to approximately 29,000 deaths. People exposed to air pollution over the period of their life, they will have an increased risk to die from causes associated with respiratory and cardiovascular health. 29,000. That's more than all the people in the Shetland Islands dying every year due to air pollution. This prompted loyal listener Julian Crane to email more or lessbc.co.uk to. These figures seem remarkable. Smoking causes 60,000 premature deaths in the UK among smokers, so air pollution kills half as many prematurely and from the general population. So where does this number come from? What does it mean? And is it True this isn't 29,000 named people with air Pollution written on their death certificates or even asthma. The cause of death is most likely to be heart trouble in fairly elderly people, as it happens. But in any case, this is just an estimate of the likely health costs of pollutants, and there's a wide margin of error around it, from one sixth as bad to twice as bad. The estimate starts with a large study of air pollution conducted by the American Cancer Society. That study found a correlation between mortality rates and fine particulate pollution. In 2010 in the UK, the Committee on the Public Effects of Air Pollutants, COMIPP, published its own numbers, extrapolating from the original American research. Their preferred measure is actually the number of total years of life lost to air pollution, which is 340,000 each year across the UK. An alternative way to express that is everyone's life expectancy is six months shorter than it would be if there was no pollution. But probably a more realistic scenario, says Comiapp, is 200,000 people each dying about two years earlier than they would have done. Yet another way to try to sum up the damage is to say that it's the equivalent of 29,000 people each dying 11 and a half years early every year. That's the 29,000 deaths. The committee realised that this number is hard to understand and might be misinterpreted, but they thought it would grab attention, which it did. I spoke to Dr. Heather Walton from King's College London's Environmental Research Group. She was one of the authors of the COMIAC report. I was curious about a statement the Green Party made on this. Keith Taylor, one of their members of the European Parliament, he said 29,000 people are dying every year because of air pollution and air pollution contributes to over 200,000 premature deaths. Do you think he might be double counting there? I mean, I've just read that, yes.
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I mean, the 29,000 and the 200,000 are, in a way two different expressions of the same thing. You wouldn't add them together.
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I'm just looking at some of the reporting of this number. So the Healthy Air Campaign says it's shocking that air pollution is responsible for more deaths in London each year than during the Great Smog. Does that sound about right?
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No, for two reasons. The deaths during the Great Smog were as a result of acute exposure to air pollution, whereas the 29,000 is as a result of long term exposure to air pollution. So the basis is not actually the same. If you had calculated the effects of long term exposure to the smog in 1952, it would be substantially Larger. The results are roughly proportional to the concentrations of pollution, and we know they were very, very much higher in 1952.
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Another newspaper report said up to 29,000 people are choking to death on polluted air every year across Britain. Choking to death makes it sound like cyanide, right? I mean, people are actually sort of dropping like flies on the pavement. And that's not what you're discussing.
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No, and I think it's a difficult thing to put across, but quite an important point to put across, that some of these risk factors that in combination with other risk factors having a small effect, can still have a big public health impact over the long term.
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Dr. Heather Walton of King's College London. After our piece last week on Huntrodsday, many of you emailed more or less@BBC.co.uk to tell us about your coincidence. Coincidences. We can't read them all, but Ben Carter's here. Ben, what was your favorite?
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Well, Tim, this one is my personal favorite. And this was sent in by Peter Larcombe, and he says, when I was a student in London in the early 1990s, I placed an advert to sell a windsurfer in a national magazine. I used my parents phone number in Somerset as a point of contact. I forgot to tell them that I had done so. Unfortunately, the magazine printed the STD code wrongly, so I didn't expect any responses. Several weeks later, my parents were in an antique shop in Bath, about 40 miles from home. They were trying unsuccessfully to attract the attention of the couple behind the counter who were arguing about a phone call. The advert says 01642-33456. But that's unobtainable, said one.
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Presumably 123456 would be unobtainable then.
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Well, I can't give out the actual phone number, Tim.
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Okay, right, get on with the story.
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I understand. So this advert says 01640 and the other one says, you must be dialing it wrong. And my mother said, excuse me, that's my phone number and it's 01460. What are the chances of my parents walking at random into a shop at the precise moment that the person inside was trying to make a phone call to them at home concerning an advert that they didn't know existed?
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All right, Ben, that is a good one. That's very good.
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And Peter goes on to say that he sold the shop owner his windsurfer.
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Oh, fantastic. Well, thank you very much, Ben. And thank you to Peter and everybody else who sent in their coincidences. The Hunt Rods were a couple whose gravestone records a lifetime of coincidences. And as Michael Blasland told us last week, it's a wonderful story in a way.
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They had 12 children, married for 80
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years, a long time to live in those days. Commemorated in Whitby churchyard, by the way, the church that inspired Frankenstein, which prompted attentive listener Wynn in Sheffield to email and ask, please, can you estimate the
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number of listeners who will know that
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Frankenstein by Mary Shelley has no connection with St. Mary's Church, Whitby, whereas Dracula by Bram Stoker has a major connection? Fair question. Much like Ed Miliband this week, Michael was speaking without notes and it is possible for the best of us to make mistakes. We'll set Michael to reading a few Gothic novels that'll soon sort him out. Well, that's all for this series of More or Less. We'll be back on January 2nd, but never fear, you can still catch a little bit of statistical magic on the version we do of the program for the BBC World Service. You can get that every week if you subscribe to our podcast, which you may do@BBC.co.uk more or less. Thank you for listening and until next series, goodbye.
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More or Less was presented by Tim Harford, the Financial Times undercover economist, and made in association with the Open University. You can Download many more Radio 4 programmes for free. Find these@BBC.co.uk Radio 4.
Host: Tim Harford
Main Theme:
This episode of More or Less explores the Barnett Formula—how it really works, what it does and doesn’t do, and challenges some common myths about how the UK allocates money to Scotland, Wales, and Northern Ireland. Alongside, Tim Harford and guests scrutinize contemporary claims in British politics, investigate air pollution statistics, recount an incredible coincidence, and answer a curious astronomical question.
Guest: Alan Trench (Devolution Matters blog)
With Ben Carter
Listeners: Annabelle (12) and Serena (10)
Expert: Andrew Ponson (UCL Astrophysicist)
([09:03] – [13:16])
Listener Submission: Peter Larcombe
The episode maintains More or Less's signature tone: accessible, wryly humorous, and scrupulously factual. Expert commentary is interwoven with analogies and listener questions for clarity and engagement.
More or Less unpacks myths and misunderstandings about the Barnett Formula, UK government finance, health policy, statistics in the media, and even the solar system, with characteristic insight and wit. If you want clear answers on whether Scotland is “subsidized,” if the NHS is threatened, or what “29,000 deaths from air pollution” really means, this episode is for you.