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Spain’s political leaders turn on each other over flood catastrophe

Blame game begins over failure to alert residents as country suffered its deadliest disaster in decades

Leaders in Spain have begun a blame game over the country’s deadly flood disaster a day after angry survivors hurled mud and insults at politicians and the king as they visited the afflicted area.

Carlos Mazón, head of the Valencia regional government, went on the offensive on Monday by accusing a body run by Prime Minister Pedro Sánchez’s central government of failing to send flood alerts.

Sánchez’s Socialist-led administration hit back, saying Mazón was spreading lies following flash floods that hit Valencia and other parts of southern and eastern Spain last Tuesday.

The row broke out less than 24 hours after both men were pelted with mud as they visited the town of Paiporta in the disaster zone with King Felipe.

Rescuers are still searching for victims in underground car parks inundated with water. Distraught residents, meanwhile, are pleading for help to clean sludge-filled towns that remain strewn with crumpled vehicles and belongings ripped from people’s homes by the deluge.

Mazón, whose conservative People’s party (PP) government is in charge of disaster prevention and relief in Valencia, is under pressure after his civil protection agency failed to send an alert to residents’ phones until after 8pm last Tuesday, when many streets were already under water and some people had perished.

But he sought to turn the tables on the central government on Monday as the confirmed death toll rose to 217, making the floods Spain’s deadliest disaster in decades and one that scientists have linked to climate change.

Mazón said that “no doubt we would have sent the alarm message earlier” if the Valencia government had received an alert from the public body that manages the region’s river basins, which is overseen by the central government. “It would have been done immediately,” he said.

He noted that the public water authority was part of the environment ministry headed by Teresa Ribera, who is likely to become the top Socialist in the European Commission after being nominated as a new competition and environment chief. 

Spanish government officials said Mazón’s comments made no sense and rejected his claim that the water authority had sent three alerts about rivers bursting their banks and then deactivated them.

“The water authorities do not issue warnings. Warnings are issued by the regional emergency services,” said one official. “If the water authorities do not issue alerts, they cannot deactivate them either.”

The role of the public water bodies is to provide information on rainfall and the level of watercourses. Last week’s intense downpours caused rivers to overflow and generated flash floods in a string of towns and villages close to the city of Valencia.

The PP’s national leader Alberto Núñez Feijóo had offered tempered support to Mazón since the floods and on Monday said the disaster should be declared a “national emergency”, which would put central government in charge of the relief effort.

Some of Sánchez’s opponents have accused the Socialists of mismanaging Spain’s dams and reservoirs, a charge the government denies. One news story suggested a Socialist government in 2005 had blocked the construction of a dam that could have protected the disaster zone. Iolanda Mármol, Ribera’s communications director, responded: “This is false and delusional. Stop instrumentalising pain.”

The European People’s party, the EU parliamentary group that includes the PP, has said it will demand answers on the floods.

Sánchez was evacuated from the town of Paiporta in the disaster zone on Sunday amid “attacks and insults” that his office blamed on members of far-right groups. Spain’s interior minister said the premier had been hit in the back by a large stick thrown his way. One government official said those responsible would be brought to justice.

King Felipe continued the visit for more than an hour after Sánchez left. Later the sovereign said: ‘We have to understand the anger and frustration of many people because of the awful time they have had and because of the difficulty of understanding how emergency response mechanisms work.”

One tearful Paiporta resident told Telecinco TV on Monday that the dozens of security officials travelling with the king and political leaders on Sunday “should have come with a damn shovel to help out”.

Barcelona, meanwhile, became the centre of a new bout of torrential rain, with the Catalan regional government issuing a red alert warning people to “exercise extreme caution”.

Dozens of flights were delayed or cancelled as Barcelona airport received a quarter of the rain it normally gets in a year in just four hours, according to the state weather agency.

UK tax plan for wealthy foreigners risks turning London into ‘bigger version of Bahamas’

Advisers warn British government’s proposal to replace non-dom scheme will attract those seeking short-term tax holidays

The UK government’s new regime to attract wealthy foreigners is too short-term and risks turning London into “a bigger version of the Bahamas”, non-doms and their advisers have warned.

Chancellor Rachel Reeves confirmed in her Budget last week the abolition of the non-dom regime, which allows UK tax residents whose permanent home or “domicile” is overseas to avoid paying British tax on their foreign income or capital gains for 15 years.

It will be replaced from April 6 2025 by a four-year residence-based scheme, which Reeves said would provide “internationally competitive arrangements for people coming to the UK on a temporary basis”. 

Under the scheme, new arrivals to the UK will get 100 per cent relief on foreign income and capital gains for their first four years of tax residence, provided they have not been a UK tax resident in any of the 10 consecutive years before their arrival.

But non-doms and their advisers warned that the new scheme is too short-term to attract people who want to make a home in the UK, educate children or build a business there, suggesting that it may attract transient individuals just looking for a tax holiday. 

“A four-year regime will turn the UK into a bigger version of the Bahamas without any meaningful contribution to the Exchequer,” said Christopher Groves, a partner in the private client and tax team at law firm Withers in London, referring to the Caribbean islands that are a popular tax haven because of the absence of corporate and personal income tax and capital gains tax.

Groves suggested that under the UK’s new regime, “people will come to sell their business, reorganise their affairs and disappear again”. 

Other countries have put in place tax breaks as they compete to entice high earners.

For example in Italy, a newly arrived resident — or an Italian who has lived abroad for at least nine years — can pay a flat tax of €100,000 a year on any foreign income and assets for up to 15 years, and be fully exempt from inheritance tax on foreign assets during that period. The annual levy is doubling to €200,000 from next year. France has a special expat tax regime, akin to the UK’s non-dom regime, which provides tax exemptions for eight years.

The UK’s new residence-based scheme “heralds a completely new approach to attracting wealth creators coming to the UK”, said Ashley Crossley, head of the wealth management department at law firm Baker & McKenzie in London. “Short-term and transient rather than the long-term putting down of roots will now characterise the UK’s new wealth model.”

After four years in the UK, individuals who have set up trusts will be taxed on the trust income and capital gains, but the trusts will remain free of 40 per cent inheritance tax. After 10 years their entire global assets will be caught by the UK tax net.

The non-dom regime was put in place in 1799, in part to shelter those with foreign property from wartime taxes. A crackdown on the non-dom regime began under then Conservative chancellor George Osborne; from April 2017 foreign residents who had lived in Britain for more than 15 of the past 20 years were deemed domiciled in the UK.

In March this year, then chancellor Jeremy Hunt stole one of the opposition Labour party’s flagship fiscal policies when he announced the abolition of the non-dom regime.  

Reeves followed with proposals to further toughen the crackdown. In last week’s Budget she pressed ahead with reversing a Tory decision to permit non-doms to permanently shield foreign assets held in an offshore trust from inheritance tax, ignoring warnings that this would spark an exodus.

“Who is going to come here and settle, buy a house, start a business, just to know that in four years’ time they’ll have to run for the hills,” said Magdalena Wierzycka, a Polish-South African billionaire who co-founded financial services company Sygnia in South Africa, and later moved to London in 2018. “They’ll go to Switzerland or Italy or Greece instead.”

After settling in the UK, Wierzycka set up a venture capital firm, Braavos Investment Advisers, in 2019, which works with spin outs from Oxford university to commercialise intellectual property. But following the abolition of the non-dom regime, Wierzycka said she was reluctantly planning to leave the country, largely due to the implications of UK inheritance tax at 40 per cent.

Property advisers expect the non-dom overhaul to have an impact on the real estate market, with new temporary residents in the UK capital choosing to rent rather than buy.

“I suspect some of their demand gets pushed into the rental market, particularly given you’ve got quite a high cost of purchase because of stamp duty,” said Lucian Cook, head of UK residential research at Savills. Those who intended to stay for up to a decade “would probably continue to buy”, he added.

Ministers will increase cap in line with inflation to £9,535 after eight year freeze

University tuition fees in England will rise in line with inflation from next year, as the government tries to address a funding crisis in one of Britain’s most successful sectors.

Education secretary Bridget Phillipson on Monday afternoon announced that tuition fees will increase in line with the retail price index to £9,535 in 2025, the first increase in eight years. Fees have been capped at £9,250 since 2017.

She also announced that the government would raise the maximum maintenance loan, for supporting students’ living costs, by £400 to above £10,000 in the next academic year. But the government has not reinstated maintenance grants, which do not have to be paid back and were abolished in 2016.

The university sector’s finances have been under pressure from rising costs while the freeze on tuition fees has left institutions increasingly dependent on a dwindling pool of international students, particularly from China.

“We will fix the foundations, we will secure the future of higher education so that students can benefit from a world-class education for generations to come,” Phillipson told the House of Commons.

She said the rise in fees had “not been an easy decision”. She added that the move would not cost graduates more each month as they start repaying their loans because repayments are based on earnings, not the outstanding balance.

Carl Cullinane, director of research and policy at the Sutton Trust, noted that raising tuition fees without also reintroducing maintenance grants would “hurt students from the poorest households the most” given that students from lower-income backgrounds had been leaving university with the highest levels of debt and were struggling with repayments.

The Institute for Fiscal Studies said the increase in the size of maintenance loans only partially compensated for real-terms cuts. “Even after the uplift, the poorest students will be entitled to borrow around 9 per cent less next academic year than an equivalent student 5 years earlier,” it added. 

The National Union of Students welcomed the increase to maintenance loans but called for a fundamental review in the way that government finances higher education that takes into account the unaffordability of living expenses for the poorest students.

“Universities cannot continue to be funded by an ever-increasing burden of debt on students,” added Alex Stanley, vice-president for higher education at the NUS, describing the changes as a “sticking plaster”.

Vivienne Stern, head of Universities UK, said that “today’s decision cannot have been easy for government, but it is the right thing to do”.

But Nick Hillman, director of the Higher Education Policy Institute, said universities “need a fee rise that is significantly above inflation even to stand still”, adding the sector faces £400mn of extra costs as a result of increases in employers’ national insurance contributions announced in last week’s Budget.

The Institute for Fiscal Studies said in June that tuition fees should rise with inflation from 2025-26, reaching £10,500 by the end of the decade, to avoid further real-terms funding cuts to the sector.

The cap on fees means universities are losing an average of £2,500 on every domestic student, according to analysis by the Russell Group of leading research universities. 

Labour said in its general election manifesto that higher education was “in crisis” and that the current funding settlement did “not work for the taxpayer, universities, staff, or students”.

More than 50 universities have announced job cuts this year and several are on the verge of bankruptcy, according to Whitehall officials.

Goldman goes to battle

Last week, OpenAI released its highly anticipated search product, ChatGPT Search, to take on Google. The industry has been bracing for this moment for months, prompting Google to inject AI-generated answers into its core product earlier this year, and producing some embarrassing hallucinations in the process. That mishap led many people to believe that OpenAI’s search engine would truly be a “Google killer.”

But after using ChatGPT Search as my default search engine (you can, too, with OpenAI’s extension) for roughly a day, I quickly switched back to Google. OpenAI’s search product was impressive in some ways and offered a glimpse of what an AI-search interface could one day look like. But for now, it’s still too impractical to use as my daily driver.

ChatGPT Search was occasionally useful for surfacing real-time answers to questions which I would have otherwise had to dig through many ads and SEO-optimized articles to find. Ultimately, it presents concise answers in a nice format: You get links to the information’s sources on the right side, with headlines and a short snippet that confirms that the AI-generated text you just read is correct.

However, it often just felt impractical for everyday use.

In its current form, ChatGPT Search is unreliable for what people use Google for the most: Short, navigational queries. Queries shorter than four words represent the bulk of searches on Google; these are often just a few keywords that get you to the right webpage. They’re the kind of searches most people are barely even conscious they’re making all day, and it’s what Google tends to do very well.

I’m talking about “Celtics score,” “cotton socks,” “library hours,” “San Francisco weather,” “cafes near me,” and other queries that make Google the doorstep to the internet for billions of people.

My test run with ChatGPT Search was quite frustrating at times, and it made me conscious of just how many keyword searches I perform in a day. I couldn’t reliably find information using short queries, and for the first time in years, I actually longed for Google Search.

Don’t get me wrong, Google has declined in quality for the last decade or so, largely because it’s been flooded with ads and SEO. Still, I kept opening Google in a separate window during my test because ChatGPT Search couldn’t get me a correct answer or webpage.

Who would win: ChatGPT Search or short queries?

I typed in “Nuggets score” to check how a live NBA game between the Denver Nuggets and the Minnesota Timberwolves was going. ChatGPT told me the Nuggets were winning even though they were actually losing, and showed a Timberwolves score that was 10 points lower than it really was, according to a Google result at the same time.

Another time, I tried “earnings today,” to check the companies reporting quarterly results that could affect stock prices on Friday. ChatGPT told me that Apple and Amazon were reporting their results on Friday, even though both companies had already reported a day earlier. In other words, it hallucinated and made up information.

In another test, I typed in a tech executive’s name to find their contact information. ChatGPT showed me a summary of the person’s Facebook profile, and hallucinated a link to their LinkedIn page, which produced an error message when I clicked it.

Another time, I typed in “baggy denim jeans,” hoping to shop. ChatGPT Search described to me what baggy denim jeans were in the first place (a definition I didn’t need), and recommended I go to Amazon.com for a nice pair.

I could go on, but you get the idea. Broken links, hallucinations and random answers defined my first day using ChatGPT Search.

This was not an insignificant launch for OpenAI. Sam Altman praised the feature for being “really good,” even though he’s known for downplaying his startup’s AI capabilities. The reason this time is different may have something to do with search being one of the biggest businesses on the internet, and OpenAI’s version could be a real threat to its biggest competitor, Google.

To be fair, Google Search is a 25-year-old product and ChatGPT Search is brand new. In a blog post, OpenAI says it plans to improve the feature based on user feedback in the coming months, and it seems more than likely this could be a significant area of investment for the startup.

To its credit, ChatGPT Search is rather good at answering long, written-out research questions. Something like, “What American professional sports league has the most diversity?” isn’t a question you could easily answer with Google, but ChatGPT Search is pretty good at scraping multiple websites and getting you a decent answer in just a couple of seconds. (Perplexity is also pretty good at these questions, and its search product has been around for well over a year.)

Compared to the traditional version of ChatGPT, which already had web access, the search feature feels like a better interface for browsing the web. There are more clear links to the sources where ChatGPT gets its information now — for news stories, ChatGPT will be tapping the media companies that it’s been striking all those licensing deals with.

The problem is that most searches on Google are not such long questions. To really replace Google, OpenAI needs to improve these more practical, short searches people are already making throughout their day.

OpenAI is not shy about the fact that ChatGPT Search struggles with short queries.

“With ChatGPT search, we’ve observed that users tend to start asking questions in more natural ways than they have in the past with other search tools,” said OpenAI spokesperson Niko Felix in a statement emailed to TechCrunch. “At the same time—web navigational queries—which tend to be short, are quite common. We plan to improve the experience for these types of queries over time.”

That said, these short keyword queries have made Google indispensable, and until OpenAI gets them right, Google is still going to be the mainstay for many people.

There are a couple reasons why OpenAI might be struggling with these short queries. The first is that ChatGPT relies on Microsoft Bing, which is widely regarded as an inferior engine compared to Google. The second reason is that large language models may not be well suited to these short prompts. LLMs typically need fully written out questions to produce effective answers. Perhaps there needs to be some re-prompting — running short queries through an LLM as a longer question — before ChatGPT Search can do such searches well.

Though OpenAI has only now released its search product, Perplexity’s own AI search tool is already serving 100 million search queries a week. Perplexity has also been touted as a “Google killer,” but it runs into the same problems with short queries.

Aravind Srinivas, the CEO of Perplexity, discussed how people use his product differently compared to Google Search at TechCrunch Disrupt earlier this week: “The median number of words in a Google query is somewhere between two and three. In Perplexity, it’s around 10 to 11 words. So clearly, more of the usage in Perplexity is people coming and directly being able to ask a question. On the other hand, at Google, you’re typing in a few key words to instantly get to a certain link.”

I think the fact that people are not using these products for web navigation presents a bigger problem than OpenAI or Perplexity are letting on. It means that ChatGPT Search and Perplexity are not replacing Google Search for the task it’s best at: web navigation.

Instead, these AI products are filling a new niche, surfacing information that gets buried in traditional search. Don’t get me wrong, that’s valuable in its own right.

OpenAI and Perplexity both claim they will work on getting better at these short queries. Until then, I don’t think either of these products can fully replace Google. If OpenAI wants to replace the doorstep to the internet, it has to create a better one.

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