Financial Times Europe 02Mar2020

16 ★ FINANCIAL TIMES Monday 2 March 2020

Capacity casefor third

Heathrow runway

has beenoverstated

You endorse the Court of Appeal’s

decision that the UK government’s

backing of Heathrow expansion was

inconsistent with climate change

commitments(“Time has run outfor

Heathrow expansion”, editorial,

February 28). The capacity case for a

thirdrunwayhasbeen overstated.

Most air travel is for leisure purposes.

Even at Heathrow, only 25 per cent of

passengers are travellingfor business.

There is ample scopefor this segment

to grow, displacing leisure travellers to

other airports, as will happen naturally

in the market since those onbusiness

trips will pay a premium for the

advantages ofHeathrow. Ultimately,

the cost ofleisure travel will rise as

capacity constraints bite generally.

Hubbub, an environmental NGO,

recently reported the results ofa

surveyof UK young adults, finding that

halftheflights by men aged 20-45 in

2019 werefor stag parties and a third of

flights by women were for hen parties.

Some increase in the cost ofleisure air

travel would increase the attractions of

domestic destinations, with rather little

loss ofenjoyment.

DavidMetz

HonoraryProfessor,

CentreforTransportStudies,

UniversityCollegeLondon,UK

Europeanshave social

benefitsAmericanslack

I read with interest that“Democrats

are targeting the riches ofthe 1 per

cent”( Janan Ganesh, February 27), in

order to“give Americans universal

healthcare, statutory paidleave and

other staples of the developed world”.

Mr Ganesh dismisses this tax policy,

calling it“social democracy as

understood by Robin Hood”, and

points out that it is not similar to

European social democratic policy of

taxing “more citizens more heavily”.

Democrats lack the political will, he

says.Itisall logic,but makes no sense.

The truth is that more Europeans

can afford to pay more taxes because

they have these social benefits that the

middle-class andpoor Americanslack.

Eggor chicken, you tellme. Successive

Republican administrationshave

successfully raided the Treasury to pay

for tax cutsfor the richest, while

simultaneously attackingthe safety

nets ofthe poor, leavingthem ekingout

alivingwiththeir meagre incomes.

Yes, I concede, it is now a class

struggle, as David Jodrey(Letters,

February 27)points out.

RVijayaraghavan

SanJose,CA,US

No 1 0’s thermostatis

on the wrong setting

The UK government’s approach that

you describe in ““Johnson should

handleWhitehallwithcare”(editorial,

February 27) will be self-defeating

because ofan inherent contradiction:

the aspiration to inject countercultural

thinking coupled with the desire to

control and show no tolerancefor

deviation. Successful change is more

likely to come from a climate of

discussion, challenge and respect,

overlaid by a well-articulated unifying

purpose with which adherents can

easily identify. However, this approach

takes more skill and is therefore side-

stepped.

For change to be successful, the

knack is to turn up the heat sufficiently

to cause discomfort butnot burndown

the house. I would therefore add that

the prime minister’s leadership team

has No 10’s thermostat on the wrong

setting.

Simon Holden

Edinburgh,UK

Quick wins for AI in

non-clinicalhealthcare

Brooke Masters compares the

challenges aheadfor artificial

intelligence in medicine to thosefaced

by the designers ofdriverless cars

(“TheAIdoctor willsee you now”,

February 27).

Alot ofhype surrounds AI and its

allegedability to makebetter clinical

decisions thanhumans. The quickwins

fortheNationalHealthService and

other providers are non-clinical, such

asplanningcapacity, scheduling

appointments andimproving

efficiencies. These will help overcome

the trust barriers and complexities

articulated by Ms Masters.

For example, the automation of

mundane paper-based processes

generates large quantities ofdata. We

use machinelearning against these

data to predict where bottlenecks

might occur and identify better ways of

delivering services. Thisfrees doctors

and nurses to focus on what they do

best, which is providing care with

compassion andhumanity.

BrynSage

ChiefExecutive,

Inhealthcare,

Harrogate,NYorks,UK

Helpthepublic learn to

trustAIwith theirhealth

Was itbydesign or coincidence that

BrookeMasters’excellentarticle“The

AI doctor will see you now”(February

27 ), on health data monitoring driven

by artificial intelligence, should sit next

to Prabhat Jha’sop-ed“WHOmust

learnfrom the IMF to stop

pandemics”?

Whereas the Chinese are usingfacial

recognition to track the movements of

coronavirus suspects, the future logic

ofan“at risk”population wearing a

BioSticker-type product is compelling.

Andyou canguarantee that,aswellas

streamingyet moredata, they will be

made smaller andcheaper.

Lookingat thedisruption andcosts

ofthe current hit and miss approach,

we must ensure that society is

sufficiently informed and appreciative

ofwhy AI-monitored devices will have

an essentialrole, notjust in the current

virus avoidance,but alsogeneral

healthcare.

VivianBush

Beverley,EYorks,UK

Jeremy Oppenheim’s excellent letter

(February27) calls for “a wholesale

effort to protect and restore the natural

world, on land as well as in the ocean”,

to accompany the requiredglobal

transition away from fossil fuels to

clean sources of energy.

He is righttostressthe

complementary nature of these two

lines ofactivity. Preserving the world’s

tropical rainforests will, indeed,

prevent the release of millions of

tonnes ofstored carbon and help

absorb millions morefrom the

atmosphere, as well as ensure that we

have sufficient oxygen to breathe.

The matter is pressing, and the

younger generation want to see

collective action today tohaltthe

deforestation and the overfishing of the

world’s oceans. Currently, thisjoint

human effort is entirely absent. What

is needed is the establishment of UN

protectionforcesfor these two

domains under theblueberet in order

to police them properly. On land these

multinationalforces would act in

support ofnational troops in the

implementation ofagreed plansfor the

sustainable development of the

relevant regions, strengthening the

latter’s resolve and acting asa

deterrent to transgressors.

Only in this way will we bring the

relentless degradation of our inherited

naturalenvironment to a complete

stop, allowingus to hand overa

conserved ecosystem ofprecious plant

and animal life to the generations that

come after us.

Dr John Law

LondonW2,UK

Collective action on climate is now pressing

Letters

MONDAY 2 MARCH 2020

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Extremists were amongthefirst to

graspthe power ofthe internetasa

mediumforradicalisation.

Stormfront,awhitenationalistonline

forum, was started nearly a decade

beforeFacebookwas founded.

Encryptedapps suchas Telegram

have becomefavoured ways of

communicationforIsisand affiliates.

The use ofthe internet by terrorists

andtheir sympathisershasgenerated

asignificant number ofbooks in

recent years. Julia Ebner, a researcher

at the Institutefor Strategic Dialogue,

makes a compellingattempt to

understandhow thesegroups work.

GoingDarkis based aroundher

infiltrationof severalextremist

communities, where sheposesasan

adherent toget others to open up.

Ebner’s comparative work across

groups includingIsis-alignedhackers,

far-right QAnon conspiracy theorists

andproudneo-Nazis shows the same

sense ofcommunity that they offer

beyond their ideological differences.

It is easy to dismiss extremists’

thinkingas irrationalor inexplicable

to moderate society. Thereality is

bothmoremundaneandmore

concerning. Thesegroups offera

chance tobelong,achance tohave

funandan“antidote toloneliness”.

Theresultingnarrative is more

engagingandvisceralthan many

other worksonthe topic. At times,

Ebner’s undercoverwork readslikea

thriller.While embeddedwith

Europeanfar-right“identitarians”, she

is nearlydiscoveredwhenher credit

card is picked up by the partner ofan

Austrianfar-right leader with ties to

theChristchurchshooter. Later, while

waitingto enter a neo-Nazifestival in

Germany,Ebner worries that apolice

backgroundcheckwill leadtoher

identitybeingrevealed.

In one case, she is not solucky.

Afteranarticleshewrote on white

supremacists mentionedEnglish

Defence LeaguefounderTommy

Robinson,thefar-right activist arrived

at Ebner’soffice alongwith a camera

crew. Thevideo, whichwent out to

Robinson’s thousands offollowers, led

to threats ofviolence and death

towardsEbner andher colleagues.

GoingDarkpulls backthe facade of

invulnerabilityandremorselessness

that extremists promote withglossy

propaganda, to understandthose they

recruit. Europe’s identitarians may

lookto educated,well-dressed

members as their vanguard,she says,

but“a recurringtheme... is identity

— a troubled self-image, a broken

self-esteem”. Similar“profound

identitycrises”playout on a white

nationalist chatgroup on thegaming

appDiscord. Ebnerfinds multiplefar-

right extremists there whoare

strugglingwithnon-white ancestry

disclosedbyDNA tests.

It mightbe expectedthat members

would be pushed outforfailingracial

purity tests, andthat this might

changetheir worldview. Instead,

extremists oftenturntomental

gymnastics, including“even more

absurd conspiracytheories”.One

memberof theDiscordchatwhocalls

himself“MrWhite” claimsthat the

DNA tests are simplyatoolofthe

“Zionist Occupied Government”,a

classicanti-Semiticcanard. “Distrust

is one ofthe key constants that brings

individuals to extreme-right

channels,”says Ebner. Shefinds

similar patterns in Islamistgroups:

recruiters encourage“situational

estrangement”in order to win over

would-be supporters.

“Subversion over confrontation”,

aphrase takenfrom an identitarian

book, is another recurringtheme. its

implications are clearest when Ebner

talks to“trad wives”,agroup that sits

at theintersectionbetweenmale

supremacist andwhite nationalist

ideologies. Thelanguageitadopts—

attackingfeminism and“modernity”

—hasacertainallureeventoEbner.

“It wasfar too easy toget drawn into

this strange place,”she admits.

Despite the bleakness ofGoingDark,

Ebnerdoes offersolutionsforthe

problems. Those rangefromfinding

ways to“immunise”activists against

intimidation attempts to improving

algorithmic transparency.Herfinal

recommendation,“education against

extremism”,isperhaps the most

important. Ebner is righttoargue that

theseissues deservea“human-

centred approach”rather than

treatingthem as primarily

technologicalflaws.“Questions

around identity, trust,friendshipin

theonlineworldmust beraisedifwe

want to break through the‘us and

them’thinkingthat all extremist

movementshaveincommon.”

ThereviewerisanFTleaderwriter

How extremists

find solace and

identity online

Book review

Siddharth

Venkataramakrishnan

GoingDark:TheSecretGoingDark:TheS

SocialLivesofExtremists

byJulia Ebner

Bloomsbury, 368pp, £16.9 9

COMMENTONFT.COM

Nick Butler

European oil majors’ climate change steps are

goodbut celebration now is misplaced

http://www.ft.com/nick-butler

Theodore Roosevelt summeduphis
foreign policy with the motto,“Speak
softly and carry a bigstick.”The British
approachto negotiations on a post-
Brexittrade dealwiththeEU,pub-
lishedlast week, reverses that: thesub-
stance of thedocumentismuchmore
conciliatory than the often aggressive
rhetoric thatframed it. As talks begin
in Brusselstoday, there are substantial
areas ofagreement between the two
sides and an outline ofa“landingzone”
—ifthere is willingness to compromise.
That is no reason tobe complacent.
Prime Minister Boris Johnson’sgovern-
mentbelievesbrinkmanship and
threats unlockedthe compromise over
the withdrawalagreementlast year.
His cabinet is comprised ofBrexittrue
believers.TheEUand business should
take seriouslyhis threat to walkaway
from the talks. An acceptable agree-
ment is possible,but not inevitable.
Partlythat isdue to the Canada-style
tradeagreement theUKisseeking,
which will meanthereisfrictiononthe
borders. Even with no tariffs or quotas
there will beadministrative andregu-
latory checks. For many sectors ofthe
Britisheconomy that relyonjust-
in-time supply chains this willfeel
very similar tohavingnodealat all.
Thedifferenceinoverallcost to the
economybetween walkingaway or
securingan agreement islower than it
would be ifthe UK was seekingmore
alignment.
Adealis stillabigprize.Tradingwith
theEUonlyonWorldTradeOrganiz-
ation terms would deeplydamageboth
sides’economies purely throughthe
imposition oftariffs—ashighas10per
cent on cars and 22 per cent onfood.
The wider agenda ofco-operation on
regulation, security andservices trade
makes a deal evenmorevaluable.A
breakdown intraderelationsbetween
suchclose allies would beageopolitical
aswell as aneconomic blunder.

Headlines suggestingMr Johnson

would“tear up”the political declar-

ation, the non-bindingagreementfrom

thefirst stageofBrexit talks that set out

the rough shape ofthefuture trading

relationship, were notborne outbythe

text ofits negotiatingapproach. Rather

than rejectingoutright a“level playing

field”, the paper accepts the principle

ofnon-regression, sayingthat a trade

deal shouldinclude commitmentsnot

to scalebackcompetitionlawsorenvi-

ronmentalandlabour protection.

Neither does the EU’snegotiating

mandategoasfar on a level playing

field as some suggest. It only callsfor

EU law to be used a“reference point”

for worker and environmental protec-

tions, rather thanbedirectly imple-

mentedin the UK. State aid,however —

whereBrusselswantsBritainto con-

tinue to followEUlaw—isanotable

exception. London andBrusselsalso

have very different views on the

governance ofthe new agreement, and

the role the European Court ofJustice

willplay. Movement willprobablybe

needed onboth sides.

Bellicoselanguagenowmaybe a tac-

tic to ensure anydealcanlaterbe

“sold” to a UKdomestic audience as a

success,butdoes nothelpbuildtrust.

Thegovernment’s threats to leave the

negotiatingtable unless there is suffi-

cient progressby June aim to raise the

stakes fortheEUfromabreakdown.

Not only could the blocface tariffs buta

recalcitrant UK, unwillingto enforce

the protocoldesignedto prevent ahard

border in IrelandandblockingEU

boatsfrom Britishfishingwaters.

UK evasiveness over the protocolhas

alreadyerodedtrust. Mr Johnson says

there will benoregulatory checksin

the IrishSea, thoughthese are required

bythe withdrawalagreement,but

never spells outhow. Allthis isgrounds

forcaution.Adealistheretobedone—

but thereisnoguarantee that it will be.

Britain’snegotiatingpaperisnotashardlineastherhetoricsuggests

Thereisalandingzone

foraUK-EUtradedeal

After spendingmuch of the last decade
in abeyance,fear has returned witha
vengeance to the markets. Rattled
traders returningto their desks on
Monday will be bracedfor more volatil-
ity after last week’ssell-offinglobal
equities, the largest since the depths of
thefinancial crisis in 2008. Mounting
concerns at the rapid spread of the
coronavirus caused one ofthe quickest
market corrections in the benchmark
US S&P 500 since the Great Depression
inthe 19 30s.
The speed ofthe decline in equities
suggests there may be reasonsfora
bounce in the coming days but it also
highlights that markets had been rid-
ingfor afall. Investors, used to an envi-
ronment of persistently low interest
rates and cheap moneyfrom central
banks,hadgrown complacent and
were ignoring the mounting signs of
an economic slowdown. Equities, in
particular US technology stocks,had
begun to look overvalued. A revision
was overdue even before the outbreak
ofthe coronavirus. The market rout
has been amplified by the increasing
dominance ofpassive indexfunds as
wellas algorithmic trading.
Previous sell-offs in response toa
global health epidemic provide only so
muchinsight into where markets are
headed. Arecent assessmentofthe
market impact ofpast outbreaks by
JPMorgan, including Sars andswine
flu, found that a sharp initial stock
market decline quickly gave way toa
recovery. There is no certainty that a
similar rebound will happen this time.
There arefresh concerns that the risks
ofa global recession are mounting. The
yield on the US 10-year Treasury note
dropped below 1.2 per cent on Friday
for thefirst time to hit 1.167 per cent as
investors sought safe havens. Goldman
Sachs haswarnedthat profits at US
companies willstagnate this year.
Thecoronavirus outbreak—andthe

world’s policy response to it — are cre-

ating a negative shocktobothsupply

anddemandthat willreduce growth.

Strongconsumer activity has under-

pinnedtheUSandeurozone econo-

mies. Restricting travel,closing schools

and isolatingwhole communities will

have an inevitable effect on spending.

Given already low borrowingrates,

monetary policy is limited in what it

can do to sustain weakening demand

andto preventliquidity problems.

Christine Lagarde last weekplayed

downthe chances ofthe European

CentralBankproviding an imminent

response to the virus. Mark Carney,

outgoing governor ofthe Bank ofEng-

land, meanwhile saidBritain should

prepare for a downgrade in economic

growth. The Federal Reserve on Friday

signalledit waspreparedto act.

Despite the constraints, policymak-

ers may need to deploy non-standard

monetary policy tools. South Korea’s

centralbank lastweekdecidednot to

cut its benchmark interest rate but

noted that a more effective response at

this stage was targeted support for sec-

tors and companies most affected by

the virus.

Anarea offocus shouldbethecredit

markets and upcoming debt rollovers.

Corporatedebthas soaredover the

past decade. A first test could come as

soon as the start ofJune when some

$200bn worth ofdebt isdue to mature

in the sectors most exposed to a slow-

down. Airlines and travel groups in

particular are worriedaboutlosing

business during the summer season.

The longer-term economicfallout

remains thebig unknown. The number

of new cases in China appears to have

dropped but in Europe and elsewhere

theyhavekept rising. The worry is that

themarketroutwillturn intoacredit

crunch. Ifthat looks likely, policy-

makers needto show they are readyto

takedecisiveaction.

Policymakersmustbewarethemarketroutbecomingacreditcrunch

Coronavirusunmasks

vulnerabilityofbullrun

Cost of leisure air travel will ultimately rise— Universal Pictures/Suzanne Hanover/Kobal/Shutterstock

It’s time UK taxpayers

stopped funding fossil

fuel projects abroad

In an extraordinary24 hours last week,

TeckResourcescancelledaC$20bn

project to develop Canadian tar sands,

the Anglo-Pacific investment group

ruled outinvestmentin newcoal

miningoperations, and Equinor

became thethirdmajor oilcompany to

abandon plansto drill for oil andgas in

the Great Australian Bight marine

park. These decisions all reflect the

same basic truth: the economics, and

ethics, ofnewfossilfuel projects simply

don’t make sense in today’s world.

So if investors do not see the profit,

then why are taxpayers still havingto

shell out? The UKgovernment

continues to use taxpayer money to

fund new fossil fuel projects abroad,

with backingfor a new gas drilling

project in Mozambique currently

under consideration. The project

would beanecologicaldisaster,destroy

the livelihoods of many local people,

and produce enormous quantities of

climate-wrecking greenhouse gases.

The government should follow

businesses’ lead and withdraw — and

then endallcostlyandhypocritical

fossil fuel fundingabroad once and for

all.

Aaron Kiely

FriendsoftheEarth,

LondonSW9,UK

Scale is not the only factor

in onlinebanking success

Further to Revolut’s $5.5bnfunding

round(report, February 25): it is

evident that the racefor scale in the

onlinebanking sector is on. But with

fickle customers (see the Ogury

research you mentioned in“Fintech

users just can’t get enough of

traditionalbanks”, FT Alphaville,

January 7), how many profitable and

independentdigitalbanks can Europe

realistically stomach?

One should rejoice at the hyper-

competition in this sector in the UK,

which, in theory, can only be beneficial

to consumers. However, what’sinitfor

investors? Not all digitalbankswill

survive (see N2 6 pulling outoftheUK

as a potential sign ofweakness).And

not all ofthem will be able to do an

initial public offering. In this context, it

is surprising that trade sales do not

seem tobe a priority, when there isa

multitude of potential acquirers: from

retail banks, which have already

startedbuying onlinebanks, to

investment banks(think Goldman

Sachs becoming a consumer brand)

and digital giants(Apple, Alibaba,

Google, Tencent) to name but a few.

An IPO is a logical and efficient goal

for investors. But in digital tech at

large, entry barriers can collapse

rapidly. One could argue that thefuture

ofan online bank should be more

secure if it is part of a large company

than ifit remains“on its own”, listed on

a stockmarket.

Thejury is out,but scaleisnotthe

only successfactor. The timingand

nature ofan exit might count more.

ChristopheCauvy

Partner,

IntersectionM&A,

Oxford,UK