As temperatures in London flirt with the 40°C mark, the city's councils are turning to an unlikely muse: France. The plan is simple. Open public buildings as 'cool-down spots'. Provide free water. And, most intriguingly, chalk the windows of vulnerable residents to track their welfare. It is a strategy born from the Paris heatwave of 2003, where thousands died. But is this a prudent investment or a futile gesture against a force that cannot be tamed?
Let us examine the ledger. The cost of opening public buildings is not trivial. The electricity bill alone for air conditioning in a municipal hall could run into thousands per day. Then there are the staff costs. The free water adds up. All of these expenses must be balanced against the number of vulnerable citizens actually aided. And here we hit the first problem: the invisible hand of the market does not reach these cool rooms. There is no price mechanism to allocate resources efficiently. Instead, we trust the judgement of council officials. History suggests this is a gamble.
Chalk marks on windows. A simple idea, but one that reeks of bureaucracy. The logic is that if a single elderly resident's window remains unchanged for a day, a neighbour or warden can check on them. It is cheap, but again, it is a sticking plaster on a broken bone. The real issue is systemic. We have 3.5 million homes in London that are poorly insulated. The free market would have solved this through energy efficiency investments, but planning laws and regulations have made new development a nightmare. The result? We are left chalking windows while the sun beats down.
And what about the capital flight? This is not just about heat. It is about perception. If London becomes a city where the elderly die in their homes during a heatwave, the gilt yields will not care. But the global financial community will. They will see a city ill-prepared for climate risk. They will see a government that throws money at symptoms rather than causes. They will see a regulatory burden that stifles innovation. And they will take their capital elsewhere.
The Bank of England is already wrestling with inflation. The spectre of stagflation looms. Now, councils are adding to the fiscal burden with ad hoc heatwave measures. It is not sustainable. We need to focus on market solutions. Let energy prices reflect the true cost of carbon. Let homeowners invest in insulation and air conditioning. Let the private sector build resilient infrastructure. Instead, we get chalk and cool rooms.
Here in the City, we watch these developments with a mix of amusement and concern. The bond markets are jittery. The gilt curve is steepening. The last thing we need is another layer of government spending that yields no tangible return. The French approach may have saved lives in 2003, but it did not prevent the economic stagnation that followed. We must learn from their mistakes, not copy them.
In conclusion, while the intentions are noble, the execution is flawed. Cool-down spots and chalk are not a substitute for structural reform. Until we embrace market forces and fiscal discipline, we will continue to see the same cycle of panic spending. The bottom line: this is a cost without a commensurate benefit. Shareholders in the British economy should be concerned.
