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Every week the Centre for Independent Studies in Sydney publishes an electronic newsletter, Ideas@TheCentre, with comments on current events. Listed here are my occasional contributions since 2013 (earlier posts dating back to April 2010 are archived here). Also included are essays posted on the Civitas and Conservative Home blogs from June 2013 onwards

Helping private tenants buy their homes is a good idea – it needs to be a right
(Civitas blog, 8 October 2018)

I’m delighted to read in the newspapers that the Prime Minister’s former adviser, Will Tanner, who now runs the new Conservative think tank Onward, is proposing support for private sector tenants to buy the home they rent. Apparently the Treasury is interested in the idea and it could even be launched in the Budget later this month.

Keen readers of Civitas publications may recall that in June 2016 we published Restoring A Nation of Home Owners which put forward a private sector Right to Buy scheme. The Tanner proposals are similar in some respects, for both plans suggest that, after three years, tenants should be helped to buy the property they are renting, and that landlords be compensated by Capital Gains Tax concessions.

But there are some crucial differences. Tanner’s scheme is not a ‘Right to Buy’, like mine, but a ‘Chance to Buy’. This is because landlords will still be able to choose whether or not to sell to their tenants, which means tenants have no right to purchase their homes.

Nor does the Tanner scheme include any discount on the market price of the property. In my 2016 proposals, I suggested that tenants should be allowed to buy at a discount (which would depend on how long they have occupied the property), in the same way as council tenants can. The same discounts offered to council tenants under their RTB scheme would also apply in the private sector. The Tanner proposals include no such provision.

Instead, Tanner suggests that landlords who sell up should be exempted from half of their Capital Gains Tax liability, and that the other half should go to their tenants to be used as a deposit on the purchase of the house. Rather than offering tenants a right to buy, therefore, what the scheme does is incentivise landlords to sell by offering them this CGT carrot.

In my 2016 proposals, I suggested that landlords who sell should be allowed to offset the discount for their tenants against their CGT liabilities. For example, a landlord with a house worth £400,000 sells to a tenant at the maximum (capped) discount of £77,900 (a sale price of £322,100). Assuming the landlord bought the house 12 years ago at just £200,000, s/he would still make a taxable capital gain of £122,100, but the discount would be taken off this, leaving a taxable gain of £44,200, which would attract CGT of £9,268 (as compared with £52,892 if the house were sold at full market price).

This contrasts with Tanner’s proposals, under which the house would still be sold for £400,000, the landlord would pay half of the £52,892 CGT currently owing, and the tenant would be given the other half as a deposit.

Tanner’s new proposal is most welcome, and it is heartening that the government is apparently taking it seriously. Anything that seeks to unlock some of the property in the private rented sector and shift it into owner occupation should be welcomed. But it is unlikely to make a huge impact on the decline of home ownership in this country. To have a transformative impact on owner occupation rates (as Thatcher’s RTB for council tenants did in the 1980s), we would need to be a lot more radical.

Britain has rediscovered its liberty (Ideas@TheCentre, 1 July 2016)

Since the 1950s, the Eurocrat dream has been to impose a federal union onto the old, historic nations of Europe. Since the creation of the common currency in 2002, this dream has become an imperative.

Nineteen of the 28 EU members dumped their national currencies in favour of the Euro. Since then, unemployment in the southern European countries has surged. Youth unemployment rates are staggering (49% in Greece; 45% in Spain; 39% in Italy). These economies are being sacrificed to the Euro-federalist totem.

To solve the problem, the 19 Euro-zone countries must proceed rapidly to fiscal (effectively political) unification, or break apart in conflict and acrimony. But where will unification leave the 9 non-members?

Nearly all voting in the EU is now decided by a ‘qualified majority’ (a complex system weighted by the population size of member states). The Euro core will increasingly vote as a bloc, because as a monetary and fiscal union, it will share the same economic concerns and interests. This will deliver perpetual majorities meaning the other 9 members will always be out-voted.

Why would a country like Britain want to remain in such a system? Most of the other 9 are required to join the Euro in the future, but the Brits decided a long time ago they were not prepared to lose the pound (nor to dismantle their border posts as part of the Shengen agreement). These opt-outs meant the UK would always be a peripheral member, subject to every EU law, yet outvoted on every key issue. Britain’s future was to be a province of the super-state emerging across the Channel.

Just as Australians and Americans would never put up with this, nor did the Brits. In the referendum, the government machine, all main political parties, the civil service, big business, the unions, the Bank of England, the IMF, the ‘impartial’ BBC and even the President of the United States were all mobilised behind the ‘Remain’ campaign. Yet in an exhilarating assertion of democratic self-determination, Brits faced down this propaganda barrage and voted 52-48 to leave.

The Guardian-reading middle class is livid. It’s not used to losing and it’s in no mood to defer to the popular will. Those who voted Leave are dismissed as ‘chavs’ (Pom-speak for Bogans) and ‘racists’. They want the result over-turned – pace Bertolt Brecht, they want ‘the people’ dissolved and another elected. Self-proclaimed ‘progressives’ who for years boasted of their ‘tolerance’ are, it turns out, only willing to tolerate those who think like them. It’s all getting very nasty.

But when the dust settles, the Brits will find they have rediscovered their liberty. They may not be the only Europeans to do so.

Extend the Right to Buy to private tenants to make home ownership achievable again (Conservative Home, 15 June 2016)

In the last century, home ownership in Britain rose from around 20 per cent to 70 per cent of households. But since 2000, this has gone into reverse. Home ownership is now down to 65 per cent, and among the under-35s, it has dropped from 60 to 40 per cent in just fifteen years.

Surveys show the great majority of people still want to own their homes. The problem is that home ownership has become increasingly unaffordable.

For most of the post-war years, average house prices were roughly three or four times average earnings. This kept housing affordable. There were dramatic house price surges in the early seventies, late seventies and late eighties, but on each occasion, prices came back into line with earnings a few years later.

The house price bubble since 2000 has been different. Average earnings have risen 51 per cent, but average house prices have spiralled by 132 per cent, and there is no sign of them coming back into alignment. The ratio of average house prices to average earnings is now five to one, and in London it is nearly nine to one. This has driven home ownership beyond the reach of many younger people.

Many analysts say the cause of the problem is that we’ve not been building enough houses to keep up with demand. But the evidence does not support this.

In the last forty years, Britain’s population increased by 13 per cent but the total housing stock went up by 43 per cent. True, the number of households expanded has faster than population size (more people live alone, for example), but even allowing for that, we still have as many dwellings per household as in 1971.

Of course, we need to keep building – especially around London where the pressures are greatest. But research commissioned by the Government shows that even if we increased annual house building by 50 per cent until 2030, the impact on house prices would be tiny.

The reason housing has become so costly has much more to do with demand than supply shifts. Two factors in particular stand out.

One is that, from 2000 to 2008, the government and the Bank of England allowed lending for house purchase to get out of control. They focused on keeping inflation, measured by the Consumer Price Index, at around two per cent, but the CPI does not include the price of housing. As house prices rose, millions of people clamoured to get into the market, the banks made borrowing too easy, and government did nothing.

In 2008, when the global crash came, easy access to credit dried up and house prices fell – but only by 15 per cent, back to 2005 levels. A much bigger price correction (30 or 40 per cent) was needed to bring prices back into line with earnings, but it never happened.

The reason prices stayed high was that interest rates were cut to record lows. This meant that, provided you could still qualify for a loan, you could now borrow at historically low cost. So ever-bigger sums are still being loaned so people can buy houses which are increasingly over-priced. The bubble never popped.

To make matters worse, two million new landlords have entered the market since 2000, and they have driven prices even higher. Total Buy-to-Let lending is now twenty times higher than it was in 2000, and 80 per cent of all new mortgages last year were taken out by landlords. First-time buyers often can’t compete.

Clearly, for housing to be affordable for more young buyers, prices have to drop. But the government and Bank of England are scared of doing anything that might crash the market. Instead, the government has been pouring fuel on the fire with its Help to Buy scheme. By topping up people’s deposits and guaranteeing their mortgage payments, this has stoked demand and driven prices even higher.

There’s no easy fix, but in my new report I make two key suggestions.

First, extend the Right to Buy to private sector tenants. Like tenants in the social rented sector, allow private tenants of three years’ standing to buy their homes at a discount from their landlord (but exempt recently-built homes from the scheme). Discounts should never make sale prices lower than what the landlord originally paid for the house, and landlords should be partially compensated by generous Capital Gains Tax offsets. Those obliged to sell to sitting tenants would then still make a good return on their investment.

Secondly, require the Bank of England to target the house price: earnings ratio in addition to CPI. Control over lending should be used as a matter of course to ensure house prices never again escalate out of reach of the next generation of buyers.

A gross generational unfairness has arisen in the opportunity to buy a home. We need to rectify it before Generation Rent gets shut out of home ownership for ever.

David Cameron's sloppy logic (Policy Exchange Integration hub, 3 February 2016

The Prime Minister is fixated on what he believes to be the problem of social mobility. His latest thoughts came at the weekend in an article for The Sunday Times in which he berated Britain’s self-serving elites for their closet racism.

Shamit Saggar (Two Cheers for David Cameron) welcomes Cameron’s intervention as a way of building Tory support among middle class ethnic minorities. But while Cameron’s populist message may win him a few more votes, it threatens to panic our top universities into diluting their standards and it plays to a destructive victim mentality in some ethnic minority youth subcultures.

Cameron slagged off the universities for admitting too few black students; attacked the courts for sending down too many black offenders; admonished the police and the armed forces for recruiting insufficient numbers of ethnic minority candidates. There were few policy ideas, but lots of faux Churchillian blather about ‘digging deeper’, ‘being relentless in the pursuit of answers’ and ‘finishing the fight for real equality’.

Such posturing wouldn’t matter too much if it weren’t so misleading and potentially damaging. In my 2011 Civitas report, The Rise of the Equalities Industry, I dissected the sloppy logic which identifies an unequal outcome between two or more social groups and immediately assumes it must be evidence of systematic discrimination and unfairness. Cameron’s weekend article was crammed full of such fatuous logic.

Take his attack on the universities. He wants to shame them into admitting more BME (and working class) students by publishing data on the social background of their applicants and of those they finally admit. No mention here of academic ability or qualifications! If you don’t have enough black applicants, then you’re not ‘going that extra mile’ to encourage them to apply. And if you don’t accept enough black entrants, you must be guilty of discrimination: ‘I don’t care whether it’s overt, unconscious or institutional – we’ve got to stamp it out.’

Well, maybe the PM should care. Overt discrimination can be directly witnessed and documented. We can assemble evidence to judge whether it happened. ‘Institutional discrimination’ is quite a different creature. It is ascribed by critics whose only evidence is that outcomes are different for different groups.

When Sir William MacPherson notoriously condemned the Metropolitan Police for ‘institutional racism’, for example, his main evidence was that black youths were more likely than whites to be stopped and searched. But the judge never bothered to look at other possible reasons for this disparity. Subsequently, research by criminologists at the University of Reading established that black kids spend more time hanging out in public areas, which is why they get stopped more. Control for the amount of time kids spend on the streets, and blacks and whites get stopped by police in equal proportions.

Once we take the trouble to dig a bit deeper like this, we often find that differential outcomes that casually get ascribed to ‘racism’ or ‘discrimination’ actually have perfectly legitimate causes. In my Civitas report I gave numerous examples.

  • The ‘gender pay gap’ has less to do with sexist employers and unfair promotion policies than with the kinds of jobs women and men opt to do, and the choices they make about family and career.
  • Infant mortality rates in the Pakistani community are twice those of whites, not because of racism in the health care system, but because of a higher incidence of congenital abnormalities associated with high cousin inter-marriage.
  • Blacks are five times more likely than whites to be in prison. They are also much more likely to be involved in gangs, gun crime and drug crime. The two sets of statistics are likely to be related.

Sometimes, of course, discrimination does occur. Sometimes, racism or sexism is the explanation. But before attacking the universities, courts or military as racist, we should first check other possible explanations. Victimology might make for good politics, but it’s often lousy social science.

And what about those racist university admissions? Well, it turns out that 23% of UK admissions go to ethnic minority candidates. Afro-Caribbean and Pakistani students are under-represented, but Indians and Chinese are over-represented. These differences have nothing to do with racism, overt or institutional. They reflect cultural differences in the value different communities place on education, and the support offered by strong families.

Instead of attacking admission tutors, Cameron might ask why 54% of black Caribbean children grow up in single parent families compared with only 9% of Indians. But this might not win him many votes.

What are we to do about Jeremy?
(Ideas@TheCentre 18 September 2015)

In Britain, the Tories think all their Christmases have come at once. Labour Party activists have overwhelmingly chosen as their new leader a Marxist, Jeremy Corbyn, who has the support of barely 10% of his own MPs. He has in turn appointed a shadow cabinet comprising long-term comrades like new Shadow Chancellor of the Exchequer, John McDonnell, plus a smattering of faint-hearted fellow travellers from the Blair and Brown years. He has given the agriculture portfolio to a vegan!

The Tories believe Labour under Corbyn is unelectable (some even paid £3 to register as Labour supporters so they could vote for Corbyn in the leadership ballot).

Economically, Corbyn’s Labour will be ‘anti-austerity’. Rather than reducing the huge government deficit, Corbyn and McDonnell would force the Bank of England to buy billions of pounds of new debt by creating money (‘People’s Quantitative Easing’) to fund more government spending. They also want to increase taxes on high earners, scrap student fees, renationalise the railways and energy supply industries, control the banks and clobber private landlords.

Foreign policy would be vehemently anti-American and anti-Israel. Corbyn wants Britain out of NATO and says he would scrap the Trident nuclear weapons system. He would refuse to deploy any British forces to fight in the Middle East. He and McDonnell claim they are long-term peacemakers, but theirs is a one-eyed pacifism: in Ireland they befriended Sinn Fein/IRA (McDonnell even called for IRA bombers to be “honoured”) and in the Middle East their chums are Hamas and Hezbollah.

But are the Tories right that Labour is now unelectable?

Much of Corbyn’s program will be popular. There is already strong support among voters for renationalising the railways, taxing ‘the rich’, bashing the bankers and scrapping student fees. Next year the government starts cutting tax credits (top-ups for low-paid workers) and this will fuel ‘anti-austerity’ sentiment. There is also widespread weariness with foreign wars.

The assumption that parties can only win elections ‘from the centre’ is also suspect. Corbyn’s friend, Ken Livingstone, won the London Mayorality on a hard-left platform, and in May the anti-austerity SNP took 56 of Scotland’s 59 seats at Westminster. Emotive, populist leftism is surging across Europe; there is no reason to believe the UK is immune.

Worse, the Tories themselves could soon be in trouble. The referendum on Britain’s membership of the EU, due in 2017, is almost bound to rupture party unity (there have already been mutinous rumblings as Cameron has tried to gerrymander the voting rules). And with China’s growth flagging and Europe tanking, another slump in the world economy seems almost inevitable before 2020, when the next general election is due.

If that happens, Britain will suffer badly, for the asset bubble — fuelled by public and private borrowing — is bigger than ever. If and when the economy crashes, the Tories will forfeit their reputation as competent economic managers, and with the centre party Lib Dems now almost wiped out, voters will turn to Corbyn

Shy Tories key to UK poll
(Ideas@TheCentre, 15 May 2015)

The most uninspiring UK election campaign of recent times culminated last week in the most extraordinary result. Eleven opinion polls conducted the day before reported Labour and Conservatives neck and neck, yet the Conservatives beat Labour 37% to 30% and won an overall majority of 12.

How could every poll have got it so wrong? The answer being touted by the pollsters is 'shy Tories.'

Socialists are often proud of their allegiance. They believe they occupy the moral high ground, so they have no problem telling pollsters how they intend to vote. They think voting Labour shows they are decent people who care about others, so they put posters in their windows and banners in their gardens. It's what James Bartholomew calls 'virtue signalling.'

Many Conservatives, however, seem ashamed. After telling pollsters they didn't know how they would vote, they crept into the polling stations, marked their crosses, and slunk out again like dirty old men buying pornographic magazines.

It's not the first time this has happened: in 1992, when all the polls predicted a Labour victory, the Conservatives won more votes than any party in British history.

Why are socialists proud of their beliefs while Conservatives seek to hide them? Because there is a widespread belief that state socialism equates with virtue. People understand that capitalism delivers material growth and prosperity, but they feel bad voting for it. They worry that lower taxes mean not caring about the poor, and that free markets reward selfishness.

Yet the core case for capitalism is an ethical one: accepting responsibility for creating wealth rather than demanding that others give you theirs. This is a moral argument that has to be spelled out clearly and repeatedly if people are to feel good about voting for parties advocating free markets and a limited state. This is why think tanks like CIS are so crucial in the battle for hearts as well as minds.

Nobody knows why Cameron wants to be PM
(Ideas@TheCentre, 1 May 2015)

This UK election campaign has been the most tepid and uninspiring I can remember. Everyone seems bored.

Support for Labour and Conservatives has hardly flickered (both stuck around 33%). Barring some last minute seismic shift, Britain is heading for another hung Parliament, this time with the socialists of the Scottish National Party holding the balance of power. They will back Labour.

The Tories have run an ineffective campaign. They've targeted Miliband, but the Labour leader performed well in TV debates and his ratings are up (from minus 52% to minus 18%!). Voters say the Tories have been too negative.

With the economy apparently strengthening, the Conservatives should have had a positive story to tell. Growth is the strongest in Europe. Two million new private sector jobs have been created (more than in the rest of the EU put together). Real wages are recovering. The deficit has halved (though debt is still huge). This should be enough to win an election.

But the message has been garbled. All parties have been offering spending bribes, and the morality of austerity - we cannot leave this massive debt to our children - has been lost.

The Conservatives seem ashamed of their successes. Four hundred free schools have been founded, 4,000 schools have become self-governing academies freed from local council control, and education standards at last are rising. But none of this gets mentioned (Cameron sacked his Education Minister to appease the teacher unions).

Week after week, the focus is on the NHS (Labour's strong suit) and immigration (where the Tories are outflanked by UKIP). Voters have been left wondering: What do the Conservatives stand for?

In a telling blunder, Cameron this week forgot the name of the football team he claims to support. It was symptomatic of his lack of belief in anything. He wants to be Prime Minister. But nobody knows why.

Full steam ahead on the ship of fools
(Ideas@The Centre, 17 April 2015)

At the 2010 UK election, the Conservatives promised to eliminate the government deficit while Labour offered only to halve it. Five years later, the deficit has been halved, yet Cameron boasts of this 'achievement' while Miliband attacks the cuts it necessitated. Such is politics.

In 2010, 70% of voters thought the economy was the most pressing issue. Now only 30% do. Not only have many voters ceased to worry about the parlous state of government finances -- they don't even understand them. Only 14% realise that total debt keeps getting bigger until the deficit (the gap between revenue and spending) is eliminated.

Because the government is still borrowing to finance its spending, Britain's national debt has escalated from £1.07 trillion in 2010 to £1.6 trillion (82% of GDP) today. Even with record-low interest rates, more is spent each year servicing this debt (£43bn) than on defence. When interest rates eventually rise, this burden will become impossible to manage. Britain will be like Greece.

Yet at this election, neither Labour nor Tories will explain how they plan to eliminate the deficit, still less start paying down the debt. Both parties have promised they won't increase income tax (except for the very highest earners), or VAT (Britain's equivalent of GST), or National Insurance. Nor will they reduce spending on health, education or age pensions -- the big ticket items.

Clearly, then, neither politicians nor voters are taking the deficit seriously any more. Instead, they argue about immigration (which as an EU member Britain can do little to control) and the NHS (still heralded on all sides as the 'envy of the world' despite poor health outcomes compared with other European countries with insurance-based systems).

So, with neither crew nor passengers looking where they are going, the ship of fools steams full ahead towards the iceberg.

Why Britain could be headed for chaos
(Ideas@TheCentre 27 March 2015 - extended version)

When the 2010 UK General Election ended in stalemate, and the Conservatives and Social Democrats formed a coalition, they agreed on four important constitutional reforms. The fall-out from these will have a major impact on what happens this time around.

The first was to introduce fixed-term parliaments, removing the power of Prime Ministers (through the Crown) to choose when to call an election. The aim was to prevent David Cameron from terminating the coalition by calling an early election at a time advantageous to him. It means we have all known for the last five years that the next election will be on May 7th 2015.

If, as opinion polls suggest, the next election also results in a hung parliament, the fixed term rule could cause problems. After seeing what's happened to the Liberal Democrats, whose support has collapsed in coalition with the Tories, none of the smaller parties is keen on entering another formal coalition. This means either the Conservatives or Labour would have to form a precarious minority government.

Under the old arrangements, the Prime Minister could then ask the Queen to call another election in the hope of gaining a full majority (this is what Labour's Harold Wilson did in 1974, when he called a second election eight months after the first). But under the new law, Parliament cannot be dissolved unless the governing party loses a vote of confidence, or two-thirds of MPs vote for a dissolution.
The opposition parties could therefore decide to keep a weak, minority government in office indefinitely, until it suits them to terminate it. There is no longer any mechanism by which a Prime Minister with a small or no majority can attempt to strengthen his position. Britain could be heading for a period of debilitating political instability.

The second major constitutional change agreed in 2010 was a referendum on electoral reform. The Liberal Democrats have long wanted to replace the 'first-past-the-post' system, claiming (correctly) that it is unfair on smaller parties. So in 2011, a referendum was held on a proposal to move to an Australian-style Alternative Vote system.

Unfortunately for Nick Clegg, two-thirds of voters rejected the idea. Badly bruised, he then pinned his hopes on the third constitutional change agreed in 2010: a radical reform of the House of Lords, making 80% of the seats directly elected.

This went west, however, when 93 Conservative back-benchers opposed it at second reading. Recognising he could not get the bill through the Commons, Clegg withdrew it, and then retaliated by withdrawing Liberal Democrat support for the fourth constitutional measure, a fundamental review of parliamentary boundaries.

In 2010, the coalition parties agreed to reduce the number of Commons seats and equalise population sizes in each seat. But Clegg's about-turn means the 2015 election will now be fought on the old boundaries - and these heavily favour Labour. If Labour and the Tories both got the same number of votes, Labour would win up to 40 more seats. This is one reason why it might be unwise to bet on a Conservative victory in May.

Don't be surprised if on May 7, the Conservatives win most votes but Labour forms a government.

Who you gonna call? (Civitas Blog, 12 February 2015)

The other day, while visiting my parents in south-east London, my wife and I took our dog for a walk in the local park. There were several other people walking their dogs, but the peace was disturbed by a youth on a trail bike who roared across the park at full throttle and then, a few minutes later, roared back again – straight towards me.

I waved him down, worried that he might plough into my dog. Predictably, our interaction was short and aggressive. My wife ushered me away before he could act on his threat to smash my head in, and he roared off.

This incident prompts two thoughts.

One is that I had no idea who to call if I wanted to report an incident of anti-social or petty criminal behaviour like this. Phoning 999 would clearly have been inappropriate, for it was not an emergency, but standing in a park far from home, I had no idea of the number of the local police station.

[I have subsequently learned of the 101 non-emergency number, but many people I have spoken to seem unaware of it, just as I was]

My second thought is that, when I was growing up, parks like this one were normally patrolled by park keepers. My friends and I used to go in fear and dread of the park keeper, for if we got up to mischief, trampling the flower beds, smoking on the swings, or cycling over the cricket square, he would soon appear in his peak cap and put a stop to it.

But municipal parks and recreation grounds nowadays seem not to be supervised. Indeed, public spaces in general seem not to be supervised, other than by remote CCTV cameras. Cinemas used to have ushers or usherettes who would not only show you to your seat, but would literally shine a light on any unacceptable behaviour in the stalls during the film. Buses had conductors whose job was not simply to collect your fare, but also to ensure that people did not put their feet on the seats and to deter drunks from pestering other passengers.

But low-level public order jobs like these have disappeared in the modern world as government and the private sector alike have looked to maximise economies. I suspect this has turned out in many cases to be a false economy, for unsupervised, unregulated public spaces are a magnet for vandalism, graffiti and worse.

Some years ago, I wrote a two-part paper called What are low ability workers to do when low-skill jobs disappear? (download part one here and part two here.

Noting that new technologies and globalised product markets have reduced demand for low-skill labour (particularly men), I criticised the conventional government response, which has been to lengthen schooling and devise more training courses. The unpalatable truth is that some of us do not have the cognitive ability required to train successfully for new, high-tech jobs, which means a lot of this extra education and training is falling on stony ground. The result is that low ability workers are increasingly consigned to long periods on welfare benefits.

Some of these people, though, could make good wardens, caretakers, watchmen, ushers, bus conductors and park keepers. These are jobs that require common sense, reasonable physical fitness and a sense of responsibility, but do not need GCSEs or much in the way of training. Rather than having low ability men spend their lives on the dole, it would make a lot more sense to employ them to patrol our public spaces, just as their grandfathers used to do. This could even form part of what the Australians call a ‘work for the dole’ programme, getting people off welfare and into serious, worthwhile jobs that need doing.

A policy that deters petty criminal behaviour and reduces welfare dependency at the same time? Worth a try.

Britain's Pauline Hanson moment (Ideas@TheCentre, 17 October 2014)

In a by-election last week in the run-down, seaside constituency of Clacton, the United Kingdom Independence Party (UKIP) won its first-ever seat in the UK Parliament. The town's Conservative MP switched parties, resigned his seat, then fought and won the ensuing by-election under his new colours, gaining a stupendous 60% of the vote. Perhaps even more remarkable, in a by-election held on the same day in the northern seat of Haywood & Middleton, triggered by the death of the sitting MP, UKIP came within a whisker of winning what had been a safe Labour seat.

This was no flash in the pan. In May, UKIP won 24 of the UK's 73 seats in the European Parliament. And about 1 in 6 voters say they intend to support the party at next year's general election - enough, say the pundits, to take a dozen or more seats (Conservative and Labour) under Britain's First-Past-The-Post electoral system. UKIP itself believes it could win as many as 25 seats next year, ousting the Liberal Democrats as the third-largest party at Westminster, and possibly holding the balance of power in a hung parliament.

Founded by an London School of Economics academic in 1993 as a "democratic, libertarian party", UKIP's core objective has always been British withdrawal from the EU, but this has traditionally been linked to a raft of policies likely to appeal to classical liberals. Its 2010 general election manifesto, for example, emphasised tax cuts and limited government. Rather like the CIS's 'Target 30' campaign, it demanded a return to 1997 levels of state spending with a flat rate income tax of 31% and abolition of inheritance tax. Free trade deals would replace Britain's existing EU treaty obligations.

Other policies also reflected key libertarian ideas. All parents would be offered education vouchers to be redeemed in state, independent, or faith schools, and 'health credit vouchers' would allow patients to opt out of the National Health Service in favour of private treatment if they so wished. There would be a single, flat-rate welfare benefit, limited to people who have lived in the country for at least five years, and public sector pensions would be frozen to bring them back into line with the private sector. The Climate Change Act would be repealed, voters would have the right to call referenda and recall MPs, an Australian-style points system would be introduced for awarding work visas, and there would be an increase in prison places as part of a tightening of law-and-order.

So is Britain approaching next year's election with a classical liberal party in serious contention to take a significant number of seats and possibly help form a coalition government? Unfortunately not, for UKIP leader Nigel Farage has now disowned the entire 2010 party manifesto. While withdrawal from the EU remains central to the party's program, the one policy which is now being pushed to the exclusion of almost everything else - and which is cited by most voters as their sole reason for supporting UKIP - is an immigration clamp-down.

UKIP has morphed from a libertarian party attracting very little support (just 3% of the votes in 2010) into a populist, nationalist party with the potential to attract very substantial support. Gone are the radical ideas about health vouchers - at the next election, UKIP will feed the NHS sacred cow as generously as all the other parties. The flat tax and swingeing spending cuts seem unlikely to survive either. Instead, Farage seems set to offer millions of disaffected, marginalised, and alienated voters protection against foreign workers competing for their jobs, plus bucket-loads of government patronage to cosset and comfort them.

Support for classical liberal ideas remains depressingly small in Britain. It is not Hayek the country is starting to embrace with its flirtation with UKIP - it is Hansonism.

Lord Freud and the employment of disabled workers
(Civitas blog, 15 October 2014)

Welfare Reform Minister, Lord Freud, agreed in answer to a question at a Conservative conference fringe meeting that some disabled people cannot do the same value work as more able people can. For this, he is being crucified.

I would have thought Freud’s observation was true by definition (isn’t this what defines some people as ‘disabled’ in the first place?). But some politicians and BBC journalists found this a startling and offensive thing to say.

The relevance of Freud’s remarks lies in the unescapable fact that, if an employer has to pay a minimum of £6.50/hr (plus overheads, so probably more like 8 or 9 quid), and an employee can only produce goods or services to the value of, say, £2/hr, then either that person will not be employed, or their employer will go bust. Neither of these outcomes is desirable, so we need to face up to the problem and think about a solution.

Freud seemed to suggest that maybe it would be a good idea to lower the cost of employing people with certain kinds of disabilities, so they can get jobs and employers don’t go bust employing them. The shortfall in their income can then be made up with welfare payments.

For daring to suggest such a thing, Harriet Harman, Ed Miliband and various representatives of disability pressure groups have piled into him, demanding that he should be sacked. Freud himself swiftly apologised as Cameron rapidly distanced himself from his remarks. The BBC has led its news bulletins with the story.

This spat is another clear illustration of why most politicians end up saying nothing of interest about anything of importance. It also shows why so many crucial and pressing issues go undiscussed, and why the electorate then becomes increasingly disenchanted and disengaged from the whole political process.

Nobody in politics is allowed to say what they think (even if it is obviously true), and no politician can follow a line of thought which may end up discomforting anyone (even if it opens up crucial policy questions that ought to be openly debated). The reaction to Freud’s comments is enough to make you weep.

A tale of two piers (Civitas blog, 3 August 2014)

Last Wednesday, a fire destroyed part of Eastbourne’s 150 year-old pier. Within two days, David Cameron arrived in the town and announced that the government would make £2 million available to help with rebuilding.

Four years earlier, just 17 miles along the coast from Eastbourne, Hastings pier was similarly engulfed by fire. Built in 1872 by Eugenius Birch, who also designed Eastbourne’s pier, Hastings pier was owned by a company registered in South America, and had been badly neglected. Its poor state of repair had led to its closure on safety grounds just a year earlier, and the damage caused by the fire (much more extensive than in Eastbourne) seemed to have sealed its fate. The Prime Minister and his cheque book was nowhere to be seen.

Undeterred, a few optimistic and resourceful local people came together to form the Hastings Pier Trust. They started raising funds to rebuild the pier, opened a dedicated shop, and drew up detailed plans for restoration. The local newspaper backed their campaign to save the pier, several thousand people demonstrated on the seafront, and Hastings council was pressured into issuing a Compulsory Purchase Order against the absentee owners. Ownership was then transferred to the Trust which is now restoring the pier and will run it on a not-for-profit basis.

After a visit to the town, the National Lottery Heritage Fund agreed in 2012 to put up £8.5 million provided the Trust raised another £1 million from its own efforts. This money is now in place and the pier is being rebuilt with the intention of re-opening next year.

The tale of these two piers reminds us of three vitally important lessons about the role of government in a liberal democracy.

The first is that people will come together to resolve common problems, but not if government takes over. Had Mr. Cameron arrived in Hastings two days after the fire, reassuring everyone that the government would take care of everything, nobody would have bothered doing anything. There would have been no Pier Trust, no shop raising funds, no information centre staffed by volunteers, no campaigning, no local effervescence. As Edmund Burke famously observed, the strength of the ‘small platoons’ of community engagement depends on there being something for people to do – and this sometimes requires government to get out of the way.

The second lesson is that politicians never miss an opportunity to use taxpayers’ money to make popular gestures likely to win them a few votes. Eastbourne is a Lib Dem seat, the general election is less than a year away, and Tory HQ reckons two million quid of your money is a small price to pay if it helps Dave squeeze back into Downing Street.

The third lesson is that governments are forever robbing Peter to pay Paul. Whenever one special interest group gets paid off, another loses out, and then starts demanding favours too. This is how government spending keeps being ratcheted upwards.

That £2 million isn’t ‘government money’ because governments have no money of their own. It is coming out of people’s taxes. But taxpayers in Hastings (and here I declare an interest, for I am one) might feel somewhat aggrieved that their tax money is being used to renovate Eastbourne’s pier – especially when their own pier received no such generous treatment, and they had to raise their own funds to ensure the restoration.

It is desirable that Eastbourne pier should be saved. But Mr Cameron needs to learn that not every problem requires that he ride into town offering a solution involving the expenditure of other people’s money.

Liberty or licence?
(Ideas@TheCentre, 18 July 2014)

As every libertarian knows, John Stuart Mill's essay On Liberty argued that people should be free to do whatever they want, provided their actions do not harm others.

What is less well remembered is that Mill also thought that, provided they were well educated, free individuals would chose to use their liberties to pursue 'higher pleasures' rather than base, animal ones: 'No intelligent human being would consent to be a fool, no instructed person would be an ignoramus, no person of feeling and conscience would be selfish and base.'

Mill was no moral relativist. He understood that base desires are more easily satisfied, but he insisted that enlightened, 'cultivated' people would and should seek to express 'nobleness of character' by exercising their 'higher faculties.' Only this would result in the greatest happiness all round.

Which brings me to the Magaluff nightclub in Majorca, where an 18 year-old British woman reportedly performed sexual acts on 24 men on stage to win a prize. The Sun suggested that competitions like this were now common in a number of holiday resorts frequented by British youth, and concluded that 'binge-drink Brits' had sunk to a 'new low.'

The libertarian news site, Spiked Online, responded with an article by assistant editor Tom Slater which attacked both The Sun and various feminist commentators for their censorious hypocrisy. He dismissed their condemnation of the incident as the latest in a long tradition of middle class 'moral panics about the habits, the sins and the excesses of the lower orders.' The only people who could judge this behaviour, he said, were those involved in it.

Foolishly, I posted comments on Slater's piece suggesting that he and others like him were abdicating their responsibility to make moral judgements about good and bad behaviour. Just because something is legal does not make it acceptable - certainly not in public - and the suggestion that only snobby middle class people find this sort of behaviour unacceptable showed how little Slater knows of traditional working class values.

Soon, the 'libertarian' readers of Spiked Online piled in to trash my comments. 'God save us from the new puritans,' said one. 'Nothing wrong with it,' ventured another of the nightclub competition, adding: 'If you don't like it then piss off and stop interfering in other people's business.'

In response to my question, 'would you want your daughter behaving like this?,' one man said he could have no grounds for criticising her, while a woman wrote: 'I'd want her to have the choice.' Someone else likened my question to the famous, bumbling comment of the judge at the Lady Chatterly censorship trial fifty years ago: 'Is Lady Chatterley's Lover the kind of book you would wish your wife or servants to read?'

As for my suggestion that no society could flourish in the absence of shared norms of decency, one response summed up the general view: 'How's about a society with a shared code of minding your own bloody business?'

It is easy in today's permissive culture to invoke Mills' core liberty principle in populist appeals to self-determination. It is much less comfortable thinking through the consequences. In an age of mass, free education, Mills' fond belief that people would learn to use their liberties to make enlightened, life-enhancing choices has spectacularly been proven false.

The question is: does this matter? Are we happy allowing people to do whatever they want (short of harming others), even if the consequence is degraded human beings and a society dragged down to its lowest common base?

Free movement of labour bad for Britain's youth
(Ideas@TheCentre, 6 June 2014)

More than a quarter of British people who voted in the recent elections to the European Parliament voted for the UK Independence Party (UKIP). I was one of them.

UKIP wants Britain to leave the EU. It also supports immigration controls in place of the free movement of labour required by EU membership.

A left-wing friend challenged me on this. Wasn’t I being inconsistent, arguing in favour of free markets yet voting for a party that wants to shut down Europe’s free market in labour?

My answer was that free movement of labour worked well when EU countries were at roughly comparable levels of prosperity (which was the case when the European Economic Community was first set up). But today, the EU encompasses poor countries as well as rich ones. Romania’s average wage levels are about one-fifth those in Britain.

A free EU labour market is great for bright, enterprising Romanian workers, who can go to Britain and earn more money. It’s also good for UK employers, who get good workers at a low price, and UK consumers, who can buy cheaper goods and services as a result.

But it is bad for hundreds of thousands of young, relatively low intelligence, poorly-educated, and often lazy Brits with no social skills. They won't and can't compete for the low-level jobs in McDonald’s which Poles and Bulgarians are now doing, so they end up on welfare instead.

If Britain didn’t have a welfare state, free movement of cheap labour from poor countries might work, for Britain’s poorly-motivated youth would have no choice but to compete for whatever low-level jobs are on offer. But with a welfare state, unrestricted immigration cements them into long-term, large-scale welfare dependency instead.

A few years ago I wrote two CIS papers (available here and here) addressing the problem of finding low-skill jobs for low-ability youngsters to do. I argued that if we want to push poorly-motivated youngsters of limited ability off welfare and into work, we have to ensure there are enough routine, low-responsibility, low-skill jobs for them to do.

Countries like Australia and Britain have seen millions of these jobs disappear in recent decades due to global competition (the Chinese are doing them) and new technology (machines are doing them). The minimum wage doesn’t help, either, with wages often set above the value of the work that might potentially be offered.

These problems are made even worse if the low-skill jobs that remain in the country all get taken by keen, young immigrants. It’s great having bright, polite Poles serve me my Macchiato in Costa Coffee, but it means idle British-born kids are rotting their lives away on benefits.

So unless Britain is prepared to scrap its welfare state (unlikely), it needs an immigration policy like Australia's, where you can come in only if you can offer skills the economy needs.

The crunch problem, however, is that Britain is not allowed to introduce an Australian-style strategy of selective immigration based on skills. Australia can do this, because it is a sovereign country. But as an EU member, the UK no longer has the freedom to make such decisions.

Politics and empirical truths (Ideas@TheCentre, 13 December 2013)

In a lecture delivered at Munich University in 1918, the great German sociologist, Max Weber, outlined the qualities required by anyone considering a career in politics. He ended with this warning: 'Only he has the calling for politics who is sure that he shall not crumble when the world from his point of view is too stupid or too base for what he wants to offer.' That counts me out, then.

Having spent the last 14 years working for public policy think tanks in Australia and Britain, I have become increasingly frustrated by the 'stupidity and baseness' of politicians who refuse to acknowledge awkward empirical truths. Even when, occasionally, a politician summons up the courage to tell people facts they would rather not hear, he or she immediately comes under pressure to withdraw their comment, and even apologise for it.

Rod Liddle recently offered one example in the UK edition of The Spectator. He highlighted an apology issued by the Attorney General, Dominic Grieve, who had warned of a culture of 'endemic corruption' in certain Asian countries (notably Pakistan) from which many British ethnic minorities originate. As Liddle showed, Grieve's warning was fully justified, for Pakistan is one of the most corrupt countries in the world, and the UK Electoral Commission has expressed concern about bribery and vote-buying in certain Pakistani communities in Britain. But although he was right, Grieve issued a grovelling apology.

This problem of thought crime and self-censorship is not limited to issues of race and ethnicity. It extends to discussion of gender and class differences too.

Last week, for example, a UKIP Member of the European Parliament, Stuart Agnew, was censured by his own party after claiming that men outnumber women in top jobs partly because many women choose child-rearing over career building. But he was right. A 2009 survey found only 12% of British mothers want to work full-time, and a 2008 report found two-thirds of working mums would still want to reduce their hours even if improved child care were made available. In Norway, where mothers can choose between free child care (if they continue working) or cash payments in lieu (if they raise their children at home), four-fifths choose to stay home.

Again last week, the Mayor of London, Boris Johnson, landed in hot water for pointing out that one reason upward social mobility is not more extensive is that some people lack the intelligence needed to perform high-level jobs. Again, he's right - this is something I have been documenting for the last 20 years, and Boris is the first prominent politician in all that time to acknowledge it. But in politics, evidence is often irrelevant. Deputy Prime Minister, Nick Clegg, attacked Boris for his 'unpleasant, careless elitism,' Cameron hastily distanced himself from him, and the BBC and newspaper journalists declared open season on him for several days afterwards.

Max Weber wouldn't have been surprised by any of this. He taught that political leadership is about charisma, the mobilisation of emotion among your followers. Evidence can be left to faceless bureaucrats. Populist leaders in search of votes work on sentiment.

If like the CIS, you are in the business of shifting policy agendas through appeal to evidence and reason, this emphasis on emotion and sentiment can represent a major frustration. But as Weber concluded in his Munich lecture: 'Only he who in the face of all this can say 'In spite of all!' has the calling for politics.'

Earning your licence to vote
(Ideas@TheCentre, 29 November 2013)

British Labour Party leader, Ed Miliband, wants to lower the voting age for UK elections from 18 to 16. The Liberal Democrats agree with him, and in Scotland, the Nationalist government has legislated to ensure that 16 year-olds will be eligible to vote in next year's independence referendum.

All these parties expect to strengthen their support by lowering the voting age, reasoning that young people tend to be more radical. But leaving aside the electoral arithmetic, is it a good idea?

Many sixteen year-olds work and pay taxes. At 16 you can get married and start a family; at 17 you can join the armed forces and die for your country. It doesn't seem unreasonable, therefore, to allow 16 and 17 year-olds to vote.

The main argument against is that they may be too immature to be given this responsibility. But while it is true that some youngsters are ill-equipped to make well-informed and sound political judgements, this applies to many older people too. Surveys indicate that many people vote for parties with no idea what they are voting for, or why.

In his essay on Representative Government, John Stuart Mill argued that voting should depend on your level of education. He thought it devalues citizenship to allow ignorant people to vote. It undermines liberal democracy if ignorance is given the same weight as informed decision-making in the polling booth.

Nowadays, of course, everyone is 'educated,' but this guarantees little as regards their knowledgability, responsibility, or plain common sense. Applying Mill's reasoning today, we might suggest that what is needed is a citizenship test which people should be required to pass before they are allowed to vote.

This idea will sound particularly odd to Australians who have grown accustomed to compuIsory voting. Rather than forcing people to vote even when they don't know or care what they are doing, people would not be allowed to vote until they had demonstrated a basic level of competence. But as Mill argued, the result would strengthen democracy, not weaken it.

A simple voting test, which would only have to be passed once in a person's lifetime, would raise people's understanding of the parliamentary system, the parties, and key areas of public policy such as taxation, inflation, defence and welfare. Just as you have to take a test before you are allowed to drive, so you would have to earn your 'licence to vote' before being allowed to choose the government. We require this demonstration of knowledge from new immigrants, so why not of natives too?

Much like passing the driving test, passing the voting test would be a public recognition of achievement and competence. A qualifying test for all new voters over the age of 16 would endow the act of voting with a status and gravitas that it currently lacks. It would preserve the universal right to vote, but it would emphasise that this precious right comes with the responsibility to inform yourself about what you are doing before you cast your ballot.

Welfare should be based on what you pay in – not on what you get out

Our National Insurance system was established nearly 70 years ago on the principle that everyone who is capable of working should make contributions to pay for their retirement and tide them over in periods of sickness or unemployment. The architect of this system, William Beveridge, believed that relying on taxpayer-funded benefits should be a last resort: ‘The plan for Britain is based on the contributory principle of giving, not free allowances for all from the State, but benefits as of right in virtue of contributions made by the insured person themselves.’

This ‘contributory principle’ was a deeply moral one. It was, and still is, widely supported by the British public because it taps into an instinctive sense of fairness. We believe people who are in need of help should be assisted, but we also believe that people should be expected to make provision for themselves and their dependents whenever they can.

In the last 70 years, however, this contributory principle has been badly corroded. Today, people who have made no NI contributions are often treated by the welfare state as if they had, and those who really have accumulated entitlements get very little advantage for their efforts. Unemployment and sickness benefits are paid at the same rate regardless of your contributions record, for example, and from 2016, retirees receiving the non-contributory Pension Credit will get almost the same amount as those whose lifetime contributions have made them eligible for a full state pension.

To make matters worse, many of us have no idea what our NI contributions are funding, and many erroneously believe our contributions are accumulating for our future when they are actually being paid out to existing claimants and pensioners in a giant Ponzi scheme. The government’s unfunded future state pension liabilities currently stand at £3.8 trillion (260 per cent of our annual GDP), but this terrifying burden on the next generation is not included in the National Debt (currently about £1 trillion). Yet the OECD has warned these future claims could bankrupt the whole system.

National Insurance has long ceased to have anything to do with ‘insurance’. It has become little more than a cumbersome second layer of income tax, except it is more opaque than income tax, and it costs employers millions of pounds to administer. Economists at the Institute of Fiscal Studies think it should be merged into the income tax system (creating a basic income tax rate of 32 per cent with the employer’s 13.8 per cent contribution becoming a payroll tax). Eligibility for the state pension and welfare benefits would then depend, not on real or imaginary contributions, but on a simple residency test.

This makes a lot of economic sense. But where would it leave the crucial contributory principle?

In my new report for Civitas, Beyond Beveridge, I argue that if pensions and benefits were to be paid out of general taxation, rather than from contributions, they should be means-tested (although entitlements based on contributions up to the time National Insurance is scrapped should of course still be honoured). The key point is that contributions establish entitlements, but it is wrong to expect taxpayers to fund payments for people who do not need them. Means-testing the state pension could eventually save as much as £40bn per year, and many economists believe it is going to have to come at some point anyway.

Means-testing would in turn require enrolment in the new work-based pensions to be made compulsory for all workers (at present, it is possible to opt out) to guard against moral hazard problems.

All this sounds a bit grim, but there is a silver cloud, for compulsory workplace pensions could gradually be developed into much broader ‘personal welfare accounts’ which would give people control over their own contributions that they never had under the NI model.

These personal welfare accounts could be used, not only to save for a retirement income, but also for funding short periods of unemployment and sick leave, insuring against future nursing home costs, providing loans to pay for higher education fees, and financing parental leave.

At the moment, minimum contributions into workplace pensions have been set at 11 per cent of salary (combining the employee’s and employer’s contribution, and adding the value of government tax relief). This is clearly too low to guarantee self-reliance in retirement, still less to fund additional functions like sick pay or student loans. Hard-pressed workers cannot be expected to pay any more than this – unless their tax burden is reduced pro rata.

But tax cuts could be funded by channelling the mounting savings accruing to the government from means-testing the state pension into reducing taxes on wages. If, initially, the employer Payroll Tax came down from 13.8 per cent to 12 per cent, and the basic rate of income tax dropped from 32 per cent to 30 per cent, total contributions into workers’ personal welfare accounts could rise to around 15 per cent while leaving take-home pay unaffected. Proceeds from future privatisations of state-owned bank assets could also go to boost workers’ personal welfare accounts.

The good news is that gradually, welfare functions currently carried out by the state, using money taken from the working population, could be clawed back by workers retaining more of their own money and beginning to control these things themselves.

National Insurance has all but collapsed as a system for delivering genuine, contributions-based self-reliance. But an evolving system of compulsory personal welfare accounts could fulfil the promise of Beveridge’s original plan. The crucial difference is that contributions made into your own account remain under your control and are therefore secure against the predations of future governments.

With the state pension debt now approaching £4 trillion, the deceitful and immoral game of generational pass-the-parcel, which has been played by successive governments since World War II, cannot continue. But if we dismantle the National Insurance system, the contributory principle at the heart of Beveridge’s thinking must not be lost. Personal welfare accounts offer the best opportunity for realising Beveridge’s flawed but deeply moral plan for Britain 70 years after he produced it.

Wrong, Sir John. Social mobility is the norm in Britain, not the exception
(Conservative Home, 12 November 2013)

In a speech last Friday, Sir John Major joined a growing list of prominent politicians from all parties to express ‘shock’ and dismay about a problem that doesn’t actually exist.

The ‘problem’ is the absence of social mobility in Britain. Like Nick Clegg, Michael Gove and Alan Milburn (Cameron’s ‘social mobility Czar’) before him, Sir John would have us believe that children born into lower social classes are being systematically denied the opportunity to fulfil their potential.

In his speech, he claimed that social mobility in Britain has “collapsed” (something he blamed on the last Labour government). He said working class people (people from ‘his background’ as he put it) have been “abandoned” as a result of social mobility having been “lost,” and he suggested that an education system which “should help children out of the circumstances in which they were born”, is instead “locking them in.” As a consequence, “every single sphere of influence” in Britain is now dominated by “the affluent middle class” or by people who were privately-educated.

It’s a grim picture. But it’s not true.

t is true that privately-educated individuals are often over-represented in top positions in our society – not least in the current Cabinet where more than half the members went to independent schools. It is also true that people from middle class backgrounds are more likely to make it into middle class careers than people from working class backgrounds (their chances are about three times greater). But it is a mistake to conclude from any of this that social mobility has ‘collapsed’, still less that talented children from poorer backgrounds are being denied the chance to succeed.

In my 2012 Civitas report, Social Mobility Delusions, I review a wide range of studies demonstrating that social mobility in Britain is extensive. If we divide the working population into three main social classes, more than half of us are in a different class from the one we were born into. Almost one-third of men born to parents in routine jobs end up in professional-managerial positions, and a similar proportion of those born to professional-managerial parents are downwardly mobile. Of children who grow up in poor households, 80 per cent escape poverty when they become adults. Social mobility is the norm in Britain, not the exception.

It is often suggested that our social mobility rate is one of the lowest in the western world, but this isn’t true either. Sociological studies of class mobility put Britain around the middle of the international rankings. The chances of moving into a different class from than the one you were born into are a bit better in the UK than in Germany, France or Italy, but a bit worse than in Sweden, the USA and Australia. These findings have been confirmed by the OECD, but you will rarely hear politicians or media commentators refer to them.

Instead, they prefer to cite research published by a group of UK economists working for the Sutton Trust who compare people’s incomes with those of their parents and conclude that Britain compares badly with other countries on this measure. But international comparisons of ‘income persistence’ suffer from a paucity of good, comparable income data from different countries across different generations. Even the Sutton Trust authors admit it is impossible to say with any confidence whether Britain ranks above or below countries like Sweden, the USA, Australia or France on this measure, and the OECD warns that ‘these comparisons can be invalid.’

What of Sir John’s claim that our education system is ‘locking’ children into their class backgrounds? The OECD ranks Britain ninth out of 30 countries on the extent to which children’s educational attainment is independent of their parents’ socio-economic status. When it comes to detaching children from the class they were born into, our education system, while certainly not perfect, does not seem to perform significantly worse than the systems in other rich countries.

Sir John’s belief that social mobility has ‘collapsed’ is also false. Several different studies report that the probability of a working class child getting into the middle class, and of a middle class child ending up in the working class, has if anything risen slightly since the 1950s. Nor is there any evidence from the British Household Panel Survey that income mobility has been getting any worse. Politicians like Sir John keep making these emotional and hugely dispiriting and damaging claims about the collapse of opportunity while remaining blissfully unaware of relevant research findings.

In his speech, Sir John said he wants a society where children can “fly as high as their luck, their ability and their sheer hard graft can take them.” But he and others like him never ask how far social classes are already recruited this way. Sir John and his ilk assume from the fact that middle class children on average outperform working class children that this must be the result of unfair social advantages and disadvantages. But to a large extent it reflects the distribution of ability. My research shows that in Britain, cognitive ability is about three times stronger than class origins as a predictor of people’s eventual social class destinations.

What Sir John fails to understand is that, even in the meritocratic system he claims to favour, people born to more successful parents will still tend to do better. This is because talented people filling top positions will tend to produce above-average ability children who will in turn compete successfully for these positions.

Politicians say they want ability to drive social outcomes, but they refuse to acknowledge that in a meritocratic society, average ability levels will come to differ between children born into different social classes. No politician wants to think about this. It’s much easier to express ‘shock’ and outrage about the apparent unfairness of ‘the system’ than to risk antagonising voters by telling them that the opportunities are already there, and that if their children fail to get to the top it may be because they just weren’t good enough.

The penalty for murder
(Civitas blog, 27 October 2013)

A 25 year-old Lithuanian immigrant and self-confessed white supremacist was this week found guilty of the murder of an 82 year-old Muslim man, and of detonating three bombs near mosques in the West Midlands. The Crown Prosecutor wanted a Whole Life sentence, but the Judge resisted this and ordered that Pavlo Lapshyn spent the next 40 years in prison.

Forty years! It may not be a whole life span, but it’s still an awfully long time. Forty years ago, in 1973, I started my first job, my second child was born, and I bought my first house. Since then I have raised two children, had two careers, bought and sold five houses, saved for a decent pension, travelled around the world, lived abroad, got divorced, had several love affairs, got re-married, drank many pints in pubs, eaten many meals in restaurants, and been blessed with three grandchildren and a dog. None of this will be possible for Lapshyn.

Assuming he serves his full sentence, he will come out of prison in 2053, by which time he will have become hopelessly institutionalised. He will have no source of income, no career, nowhere to live, no friends, no family, no achievements and no memories. He will almost certainly have to be looked after by the state for what remains of his wretched life, and if he still poses a risk to the public, he will need to be kept under close surveillance too. His crime was appalling, but his punishment seems empty, self-defeating and pointless.

Pointless not just for him, but for us too. The UK Ministry of Justice says it costs almost £40,000 per year to keep someone in prison. Lapshyn’s punishment will therefore cost UK taxpayers £1.6 million at today’s prices. And then we’ll have to house, feed and look after him when he comes out. Is there no better alternative?

Capital punishment is the obvious alternative, and there are strong arguments in its favour. The great French sociologist, Emile Durkheim, argued that the function of punishment is to heal the wounds done to collective moral sentiments by transgressors. The greater the violation of shared norms, the harsher the punishment has to be. Societies execute murderers, not for vengeance, nor for deterrence, but because shared, sacred values have been violated and can only be restored by proportionate punishment.

Many people seem to agree with this. Almost fifty years after the UK Parliament suspended and later abolished capital punishment, 74 per cent of British voters still favour it as a penalty for at least some types of murder []. Some killings are just so appalling that nothing less than execution seems adequate as a response. Anything less feels like an insult to the victims and a slap in the face to the rest of us.

But there are two powerful objections to executing convicted murderers. One is that occasionally, we make a mistake and kill an innocent person who has been wrongly convicted. The memory of Timothy Evans, wrongly hanged in 1950 on a charge of killing his wife and infant daughter, still haunts us.

The other is that judicial execution is a grizzly business which no longer feels appropriate in a humane, liberal society. Whether we tell the state-appointed executioner to hang, electrocute, poison, shoot or decapitate prisoners, modern sensibilities are likely to feel defiled by such an act carried out in our name.

The ancient Greeks had a more civilised solution. As we know from the story of Socrates, they brought the condemned prisoner a cup of hemlock and left him (or her) to drink it. Nowadays, of course, we have pills and potions that will terminate a life more swiftly and less gruesomely than hemlock. These could be made available, on request, to any convicted murderer serving a life sentence.
Under this proposal, there would be no requirement for murderers serving life sentences to end their own lives, and no pressure would be exerted on them to do so. But those who preferred this option to the prospect of endless years behind bars would be given the means to exercise it.

Such ‘enabled suicide’ would be a lot less grizzly than capital punishment, with no need for hangmen, firing squads or doctors with needles. It would also avoid the risk of executing an innocent person. No prisoner would be required to take a pill, so those fighting to prove their innocence could still do so, just as they do now.

Pavlo Lapshyn is to be kept alive at huge public expense so he can spend endless days in a confined space with no point to his existence. The grief of his victim’s family is not assuaged by this; other racist hot-heads will not be deterred by it; Lapshyn himself will not become a better human being for the experience of 40 years inside; and the rest of us will have to pick up the tab for decades to come. It would be better for everybody if killers serving long sentences were given the option in prison to terminate their wretched lives early and humanely.

Is Britain's health care the envy of the world? (Ideas@TheCentre, 20 September 2013)

It has come as a bombshell to many Brits, but it seems that socialised health care doesn't work very well after all.

Ever since the National Health Service was established after World War II, politicians have been assuring the British people that their health care system is 'the envy of the world.' Up until now, the population has believed it.

Remember last year's London Olympic Opening Ceremony with hundreds of NHS nurses dancing around NHS beds? Danny Boyle, the producer of that fantasy, was knighted by the Queen for his efforts. In a country which (its ethnic minorities aside) has largely forsaken religion, the NHS has a sacred, totemic status making it immune to criticism or radical reform.

But recently, public faith in this national religion has been sorely tested.

In February, a public inquiry into the Mid-Staffordshire NHS Trust published its report. The Inquiry was sparked by concerns that death rates in Stafford Hospital seemed remarkably high. What it discovered was a history of 'appalling and unnecessary suffering of hundreds of people.' Soiled beds were left unchanged with patients lying in their own urine and faeces. Requests for water went unheeded, so patients had to drink from flower vases. Cries of pain were disregarded, patients were given the wrong medicine, and vital equipment was turned off because nurses didn't know how to operate it.

When patients or their relatives complained about this nightmare neglect, they were ignored. There was no effective accountability in the system, and when problems came to light, everyone closed ranks. Incompetent staff were not disciplined or dismissed, but promoted.

It swiftly became clear that these were not the unique problems of one area, but were common throughout the system. In July, a report on 14 NHS Trusts found that 11 were so bad they had to be placed in special measures.

Then last week, the NHS suffered a further blow when statistics were released showing that English hospitals perform far worse than those elsewhere in the developed world. England's hospital death rates are 22% higher than average. Particularly devastating, given years of negative propaganda aimed at the American private health care system, was the news that you are 58% more likely to die in an English hospital than in an American one. Deaths from pneumonia in English hospitals are a staggering five times higher than in America.

The problem is not lack of money (NHS spending increased in real terms by 7% per year under Blair, NHS employment rose from 1.06 million to 1.44 million as more bureaucrats were recruited, and doctors' salaries went through the roof). Nor is it lack of training, for nursing is now an all-graduate profession - they may not change soiled bed sheets any more, but nurses know all about sociological theories of labelling and the latest ideas in public administration. The problem lies in the core structure and culture of a socialised health care system where nobody takes responsibility and there is no effective consumer voice.

Whether the British electorate is ready to learn this lesson and support fundamental NHS reform is, however, questionable. Official state religions take a lot of shifting, and even as disconfirming evidence piles up, those with faith are generally loathe to abandon their familiar gods.

Ideological blindness on intelligence and social class (Civitas blog 26 July 2013)

There is an ideological blindness on the left which seems to preclude them from acknowledging any biological basis to cognitive differences. I discuss this in Social Mobility Myths and I experienced it yet again this week when I was a guest on Radio 4's The Moral Maze.

The programme was discussing meritocracy and, as usual, I suggested that the evidence shows Britain is a remarkably open and fluid society with a lot of movement between classes, up and down, which is driven principally, but not solely, by intelligence and hard work.

Left-wing panel member Matthew Taylor refused to believe it. He expressed incredulity at my position, and at one point said that what I was claiming could not possibly be true “unless you think intelligence varies between classes”.

But this is precisely what I do think. Indeed, I know it. It’s not just the evidence shows it; the logic of a meritocracy requires it to be true.

In a meritocracy, employers will try to select the brightest people for the top positions. There, they meet and pair off with other bright people, and although this does not guarantee their children will be bright (IQ regresses to the mean between generations), the probability is that they will be above average. Mean intelligence levels will as a result be higher among children from middle class parents than those from working class parents. These children then grow up and compete successfully for the top positions, just as their parents did, because they are bright.

The fact that Matthew Taylor had clearly never thought about this is telling. How can you discuss the ethics of meritocracy on national radio if you don’t understand this basic feature of the meritocratic process? Michael Young (who first coined the term in 1958) understood it well enough which is why, as a socialist, he disliked it intensely. Charles Murray is another who understands it – he has drawn attention to the ‘cognitive stratification’ now occurring in the USA and other countries as a result of the expansion of opportunities to all children.

Professor Robert Plomin’s work – showing that exam performance is largely down to a child’s genetic inheritance rather than the quality of their schooling - is hugely important. But I wish him well trying to convince the powers-that-be in this country. David Cameron, Nick Clegg, Alan Milburn, Harriet Harman – they all believe fervently that equal proportions of lower and middle class children should succeed, and that if they don’t, it must be due to unfairness, nepotism etc. Cameron has even announced that his absurd ‘social mobility strategy’ is this government’s top social priority!

So rectifying a problem that doesn’t exist is more important than improving the supply of affordable housing, remedying care failures in the NHS, improving teaching quality in the schools, reducing welfare dependency, sorting out the mess in nursing home care, etc, etc? It makes you want to weep.

On the trappings of power (Civitas blog, 2 July 2013)

Last week, for the first time in my life, I attended the Wimbledon tennis championships. My wife entered the ballot for tickets last year (the closing date was in December) and she hit the jackpot: Centre Court, three rows from the front. We had a memorable day.

Glancing up at the Royal Box, there was Camilla (Duchess of Cornwall), and Prince Michael of Kent… and sitting just along from them in the front row, Labour’s Deputy Leader, Harriet Harman.

I was surprised to see Harriet up there with the royals, peering down at me, for she is a passionate egalitarian, architect of the 2010 Equalities Act. Perhaps, like everyone else, she entered the ballot for tickets last year and ended up winning the chance to buy even better seats than we did – but I doubt it. A seat in the Royal Box at Wimbledon on a day of your choosing is just one of those perks top politicians come to expect, even those who say they hate privilege. I hope she didn’t have to queue too long for her strawberries.

A few days later, we spent a weekend in Bruges, the picture postcard medieval town in Belgium. In the Groeningemuseum, we were confronted by Gerard David’s gruesome The Flaying of Sisamnes, painted in 1498.

Sisamnes was a judge in Persia in the fifth century BC. When the King discovered he had accepted a bribe, he was punished by being skinned alive. His son was then appointed to the judicial bench in his place, where his chair was covered in his father’s skin.

David’s painting depicts the judge sprawled naked across a table to which he is bound by his wrists and ankles. Five flayers go about their task methodically with knives and scissors as the King and his court (dressed in fifteenth century Flemish clothing) watch impassively. It is a deeply disturbing painting.

It was commissioned to hang in the Aldermen’s chambers in Bruges Town Hall, as a daily reminder to the town’s leaders of what happens to those who abuse the privileges of office.

Just for a moment, gazing at that picture, I fantasised that we too might commission such works to hang, say, in the Palace of Westminster where they might prompt our politicians next time they are filling in their expenses claims, or voting to award themselves another pay rise.

Or perhaps, like the Romans, we could employ someone of the lowest rank to stand behind our leaders, whispering into their ear at their moments of greatest triumph: ‘You are not a god, just a mortal human being’.

These whisperers could accompany our political leaders when they go on jaunts to places like Wimbledon. They could sit in the row behind them in the Royal Box whispering into their ear: ‘Remember everyone else paid for their tickets.’ Or: ‘Remember you imposed the Equalities Act on all those people down there.’ Or even: ‘I think I hear the flaying team sharpening their scissors.’

The moral case for a smaller state (14 June 2013)

The CIS believes in finding non-government solutions to society’s problems. But why not use government, given the resources and power it has to change things? Three answers are commonly given.

The first is economic. Demands on government are potentially infinite, the budget keeps expanding and big projects often go wrong. As the CIS TARGET30 program suggests, there has to be a limit. But not everybody agrees. If something really needs doing, they say, government should find the money. Australian public spending is less as a percentage of GDP than in many other developed countries; we could spend more.

The second answer is political. The bigger the state becomes, the more power accrues to politicians and bureaucrats, and the greater the threat to individual liberty. This is the key concern of classical liberal thinking from Locke to Hayek, but again, not everybody is convinced. Is a new day care centre really going to push us down the road to serfdom? Is Scandinavia really closer to totalitarianism because of its generous welfare system?

This leaves the third answer, which is moral. Leaving things to the government, rather than doing them for ourselves, is wrong.

This argument is the most difficult to make. Many people assume socialism is ‘moral’ because it aims to make the world better with well-intentioned programs for social reconstruction. Supporting high taxes, radical income redistribution and an expanded welfare state are signs that you ‘care’ about people. Opposing these things indicates selfishness, greed and a reckless disregard for society’s problems.

This is why, even when the CIS makes a powerful case for limiting government on some specific issue, opponents are likely to feel in their gut that it’s the wrong thing to do. So we have to win hearts as well as minds, and this means arguing on moral grounds, as well as economic and political ones.

Perhaps the best moral argument for small state solutions was developed by Charles Murray in In pursuit of happiness and good government. Murray says policies should be judged by their impact on human happiness, which he defines as ‘justified satisfaction with your life.’ Happiness is not the same as passive contentment. Justified satisfaction with life is only possible when we do things for ourselves.

The welfare state undermines this. Referring to Maslow’s hierarchy of human needs, Murray shows how increasing reliance on government threatens both self-respect (which is achieved by taking responsibility for things) and self-actualisation (which is achieved by overcoming challenges). Yet both of these are essential for leading a good and happy life.

It is always possible to raise a bit more money so the government can launch another program to tackle some problem. And it is not necessarily true that this threatens personal liberty and pushes us further down the road to serfdom. But to lead good and fulfilling lives, people need to be able to sort out their own problems, individually or in cooperation with others, rather than having the state take this responsibility away from them. A bigger state may be able to make people more contented, but a smaller state is essential if human beings are truly to pursue happiness.

Letter from James Caan, star of Dragons' Den & new social mobility Tsar (Civitas blog 6 June)

Dear Civitas,

I've heard that you've published some bits and pieces in the past about social mobility, so I thought you might like to know that I've been made 'Social Mobility Tsar' by dear old Cleggers. I've replaced the Labour chap, Alan Milburn, who achieved so much in this post.

How did I get the job? Well, knowing Cleggers helped, I suppose. And I think the PM must have seen me on the telly.

It's certainly not because I know the first thing about social mobility, as I'm afraid was all too apparent from my interview on Tuesday this week on the Today programme. But I winged it, and as one TV personality to another, dear, charming John Humphreys gave me an easy ride.

I came out with all the usual platitudes, trotted out a few Sutton Trust statistics I'd been given, and avoided an awkward question about school selection. I also added one original idea of my own (that parents should stop helping their children get on in life). As I told John: "It's not good to create a society where people get jobs according to who you know."

Unfortunately, some smart Alec later discovered that I gave my two daughters jobs in companies I control, so I had to go back on radio on Wednesday and explain to Justin Webb that this was purely on merit.

I explained to him that when other people pull strings for their kids, it's nepotism and I'm determined to stamp it out. But when I do it, it's meritocracy, because my daughters were clearly the best candidates. As I said to Justin, "You should not discriminate against family and friends."

I think Justin understood (even though I called him Julian).

And now I'm off to stop any more toffs getting into Oxford. Gordon Brown, eat your heart out. Wish me well!

Ever yours,

James Caan

What is driving income inequalities?
(31 May 2013)

I was recently asked by a journalist if we should be concerned about widening income inequalities. Here is my reply:

The question is not whether wider material inequalities are a good or bad thing, but what is driving them.

If it were the case, as Wilkinson and Pickett claim, that greater economic inequality creates individual unhappiness and social malaise, I might be worried about recent trends. But the claim is untrue. Their work has been demonstrated to be fundamentally flawed (not just by me); propaganda masquerading as social 'science'.

A number of factors in the last 20 years or so have combined to increase income inequalities in advanced capitalist countries. The main one is a big increase in remuneration for the very top earners - the distribution among the bottom 95% hasn't shifted much - and this reflects the globalisation of the market for corporate leaders.

Is this widening income inequality a bad thing? If it is a result of fraud, deception or outright coercion, yes it is. But if it is a result of freely-taken decisions by people using their own money, no it isn't.

Consider the world's top footballers who nowadays earn $250K or more per week. Why do they get this much? Because top clubs chase scarce talent to improve their team performance. Who pays for these huge salaries? Ultimately, the millions of people who want to watch these players and who are prepared to pay higher ticket prices and/or monthly Pay-TV subscriptions in order to do so. Who gains? Everyone: players, the clubs who employ them, the clubs' customers who want to watch them, and the taxpayer. Who loses? Nobody.

It's the same with corporate high-flyers. Institutions compete for their services and bid up the price, but nobody is forced to pay it. Shareholders benefit from the enhanced profits these guys bring (if they don't, they sack them); customers benefit from the efficiencies they generate; taxpayers benefit from the increased tax revenues. If they break the rules, of course they should be penalised. But if not, they have a right to every dollar they earn.

For a thoroughly reasoned defence of this position, look no further than Robert Nozick's 'Anarchy, State and Utopia.' Nozick provides a compelling argument for assessing the ethics of inequality, not in terms of outcomes (how much do different people get?) but in terms of inputs (why do some people get more than others?).

If your labour creates more value than mine, you have a right to a higher reward. Similarly if as a result of exchanging and trading freely with others, you end up with more than me, you have a right to keep the proceeds. I have no grounds for complaint in either case. If I do still choose to complain (and even worse, combine with other malcontents and mobilise the coercive power of the state to take from you what is rightfully yours), my action is not ethical; it is malicious, driven by nothing but envy and spite.

Equality is a crucial principle, if we mean simply that all individuals should be subject to the same rules, without prejudice or favour. Everyone has equal value in the eyes of the law.

But the morality of equality gets twisted when applied to the results of free individuals operating under a common system of law. Working and freely exchanging goods and services with each other, equal individuals will always generate unequal outcomes between themselves.

Providing a welfare safety net for those who fail is one thing, but deliberately using the state to rob those who succeed is quite another. It is ironic that those who support policies of radical redistribution often believe they are expressing the highest 'moral' principles, when in reality they are peddling envy and greed.

Requiem for a reformer (19 April 2013)

To London on Wednesday for the funeral. I was worried that with most of her natural supporters at work, the procession route would be lined with attention-seeking students, angry teachers with rings through their noses, and an assortment of agitprop writers and artists feeling bitter about their arts council grants. I wanted to make sure she had some friends as she trundled through town for the last time.

I needn’t have worried. On a dull, grey London morning, thousands of well-wishers turned out. The crowd on the Strand was seven or eight deep on both sides of the road. Thatcher’s people. I asked the man standing next to me where he lived.
‘Colchester,’ he replied guardedly.

‘Did you come to London just for the funeral?’

He nodded.

‘Why did you come?’

‘To pay my respects.’

I met up with Richard, an old chum from my youth. The son of a baker, his parents bought their council house thanks to Maggie. He left school at 15 for a clerical job at Lambeth council. Today, after working all hours and seizing his opportunities, he is a millionaire. He lives in a fifteenth-century thatched farmhouse in Suffolk. Mrs T would have thrilled at his achievements.

Behind us, a middle-aged man raises a banner for a TV crew to film: ‘Rest in [the word 'peace' struck out] shame.’ Richard says he doesn’t understand the vicious hatred expressed in the days since Margaret Thatcher died. ‘I don’t feel that way about anyone,’ he says, genuinely bemused.

To our right, a woman holds up another sign: ‘I’m here for the people she killed through poverty.’ She has a young child who is next to a man hiding his face behind a scarf.

A woman with bright red hair parades with a placard informing us: ‘I am not happy to pay for Thatcher’s funeral.’ Have you noticed how protesters nowadays make themselves the issue? I’m here because of poverty; I’m not happy paying for this funeral; this war is not in my name.
The man in front of me scowls: ‘Did she ever pay any tax in her life?’ Several people laugh. ‘No, but she’s received plenty,’ says another.
The protesters are heavily outnumbered. As the coffin passes, draped in the union flag and drawn by six black horses, the applause begins. We hear it ripple up the Strand as she disappears past us. The protesters hold their banners aloft, but remain silent. Democracy has won.

We turn and shuffle back up Aldwych, feeling slightly silly that we went to all that trouble just for a few brief seconds. A journalist is taking a photograph of an elderly woman standing at a crash barrier with a basket of spring flowers containing a message of sympathy. A man pushes past her holding aloft a giant yellow smiley face.

‘I’m glad we came,’ says Richard. I’m glad too, although still not convinced that such ceremony was appropriate for a political leader (even her). I wonder whether we have set an unfortunate precedent, and I worry this was another sign of the emotional incontinence (or what Paul Comrie-Thompson called in a CIS publication ‘conspicuous compassion’) that has flooded the country since Princess Diana’s death.

On the train home, I read that morning’s Times editorial. It notes that there was no Times editorial on the morning following Thatcher’s election back in 1979. The print unions had shut down the paper between November 1978 and November 1979 in a fierce battle over the introduction of computers in the newsroom. It is a reminder of just how bad things were before Maggie. Perhaps she deserved a bit of state pomp after all.

Margaret Thatcher: An extraordinary woman
(10 April 2013)

In death, as in life, Margaret Thatcher sharply polarised opinion.

This week she has been hailed as Britain’s greatest peacetime prime minister, a remarkable woman who rose from the obscurity of a Grantham grocer’s shop to reverse her country’s dismal economic decline while confronting the global enemies of liberty.

But this week’s news was also taken by some as a cause for partying. Leftists swamped Twitter with vicious, hate-filled spite vilifying her achievements and trashing her memory.

Many of these frenzied detractors are too young to have known what Britain was like before Thatcher came to power. Others seem conveniently to have forgotten.

In 1970s Britain, the state was involved in everything, yet nothing seemed to work. It owned great swathes of industry – supplying water, gas and electricity, digging coal and making steel, running the railways and a major airline, building motor vehicles and aero-engines, monopolising post and telecommunications – and was landlord to more than a quarter of the nation’s households. But nobody wanted to buy the cars it built, British Rail was a laughing stock, the coal and steel industries were on their knees, and it took months to get a telephone connected.

Governments in the 1970s operated in fear of the union bosses who were treated to ‘beer and sandwiches’ in Downing Street as they told successive prime ministers what the unions would and would not tolerate. Political scientists began writing books about the emergence of a ‘corporatist state.’

A few years before Thatcher won office, Britain’s homes had been plunged into darkness by a miners’ strike that put industry on a three-day working week. At the shops there was a run on candles. Then in the winter of 1978–79, public sector militants stopped rubbish being collected from the streets, disrupted meal deliveries to the housebound elderly, and left corpses unburied at graveyards.
Time and again, union militancy was bought off with unaffordable pay deals that pushed annual inflation past 25% and sent the Callaghan-Labour government scurrying, cap in hand, to the IMF for emergency loans. Britain became known as ‘the sick man of Europe.’ Political scientists began writing books about the country being ‘ungovernable.’

In their increasingly fruitless attempts to control the mounting chaos, successive Conservative and Labour governments increased controls over many aspects of everyday life. You were not allowed to take more than a couple of hundred pounds with you if you went abroad for a holiday. Your wages were pegged by law. A government hotline was set up for informers to report shopkeepers whose prices exceeded those laid down by the state.

Britain was locked into a downward spiral, and nobody seemed to think it could be reversed. Except Maggie.

She scrapped the price and wage controls, arguing that governments cannot possibly know how investment is best directed or who should be allowed to trade at what price. She sold off the nationalised industries, opening them up to the cleansing blast of competition and setting an example that the rest of the world quickly followed. She allowed working-class families to buy their council houses at a discount (a policy that infuriated middle-class socialists but which at last prompted me to re-evaluate my socialist beliefs).

Decades before politicians got around to worrying about ‘social mobility,’ Thatcher was a committed meritocrat. As a woman in a man’s world, and the product of a petty bourgeois background to boot, she was the perpetual outsider of British politics. She hated establishment power and attacked unearned privilege wherever she encountered it.

The trade union bosses were defeated and power was returned to ordinary workers through laws enforcing secret ballots and abolishing enforced membership of unions. Professional monopolies in house conveyancing, optician services, and other areas were dismantled. The cosy cabal of the City of London was blasted open by deregulation of financial services.

She was a committed democrat too, standing firm behind the principle of national self-determination. In Europe, she resisted the encroachment of a non-accountable federal superstate (the issue that eventually brought her down). In Northern Ireland, she confronted the murderers and thugs of Provisional IRA/Sinn Fein, insisting that the future governance of the province was a matter for its people to determine democratically (a stand that brought the bombers to her bedroom door in Brighton in 1984). In the South Atlantic, against the advice of the appeasers and pessimists, she successfully despatched a taskforce to expel the fascist invaders from the Falklands. And in Eastern Europe, where she became a popular hero of those suffering from oppression, she and her friend and ally, Ronald Reagan, confronted Soviet power eyeball to eyeball and eventually brought it crashing to the ground in Berlin in November 1989.

Of course there were mistakes. She should not have allowed thousands of schools to sell off their playing fields. She should never have signed up to the Single European Act. She failed to tackle the bloated welfare state (for all the talk of ‘vicious cuts,’ public expenditure actually rose in real terms by an average of 1% per year during her period of office). Rail privatisation was botched and the Poll Tax was a political disaster (although the principle that everyone who uses public services should contribute towards the cost was certainly sound).

But taking her record as a whole, the balance is clearly and overwhelmingly positive. The proof is that no succeeding government has tried to reverse her key reforms. For all the left-wing bluster, nobody has ever seriously suggested that industries be renationalised, union bosses be re-empowered, or that governments should again try to fix prices, wages and dividends, or direct private investment. Margaret Thatcher found a country on its knees in 1979, and in just 11 years, she reversed decades of miserable decline.

What an extraordinary legacy! What an extraordinary woman.

Fairness in the welfare state
(15 March 2013)

We social scientists learn from an early age to be wary of the language of cause and effect. The natural sciences have developed causal laws of the form, ‘whenever A, then B’, but this kind of reasoning is rarely appropriate in the explanation of social phenomena.
Even the so-called ‘laws’ of economics, such as the ‘law of supply and demand’ or the ‘law of diminishing marginal utility’ are not laws in the way that Newton’s ‘laws of motion’ are. Natural science laws apply at all times everywhere in the universe, but the law of supply and demand refers only to a tendency in human behaviour (people usually buy less of something if the price goes up). At best, this is a ‘probabilistic law’, not a universal one.

One key reason that social science cannot provide watertight causal explanations of social phenomena is that we are dealing with human activity, and human beings are not automatons. It is true, for example, that most of us prefer to buy something at a cheaper price, but sometimes, for a variety of reasons, we opt for more expensive equivalents.

It’s not only economists who struggle with human volition. Political scientists will tell you that we are more likely to vote Labor if we work in manual employment and belong to a trade union, but there are plenty of manual worker trade unionists who vote Liberal. Criminologists know we are more likely to commit criminal acts if we have been neglected by our parents and grow up in a deprived area, but many such children turn out to be respectable and law-abiding.

This makes it problematic to talk of ‘causes’ in social science – only of ‘influences,’ ‘tendencies’ and ‘probabilities.’ Yet sometimes, something happens which makes one think (with the wisdom of hindsight): ‘Of course! It was inevitable!’ Sometimes, social life does seem to exhibit an awful predictability.

This week my Occasional Paper, Re-moralising the Welfare State, was published by the CIS. It is about morality and fairness in the welfare state. At one point I discuss the case of Jamie Cumming, a 36 year-old Scot living in Dundee who has been identified by the British press as ‘Britain’s most feckless father.’

When I wrote the paper, Cumming had fathered 15 children by 12 different mothers. Because he was unemployed, the maximum he was required to contribute to the upkeep of all these children under UK welfare rules was £5 per week (Australia’s welfare rules are no better). I suggest in my paper that this is unfair on taxpayers and that welfare rules like this reward and encourage irresponsibility.
Last week, just prior to my paper being published, Jamie Cumming was in the news again in the UK. He has fathered two more children by two more women, but this is not the reason he’s again made the headlines.

Cumming has been convicted of murder. Attending a friend’s birthday celebration at a Dundee pub, he got in a fight in the toilets, then went outside and finished off his victim, repeatedly stabbing him in the heart, lungs and liver. When the police arrested him, Cumming told them: ‘I’ve thrown my life away.’ His, and many other people’s lives too.

Was it inevitable that Cumming should end up killing someone? Probably not. But is it a surprise that he did? Not really. Cumming grew up lacking any sense of personal responsibility or self-control; a self-absorbed egoist. In this he was encouraged and supported by an amoral welfare state which, like an indulgent parent, happily handed out money but shied away from judging whether or not the recipient ‘deserved’ support.

So here is my social ‘law’: if the welfare state insists on rewarding irresponsible behaviour and refuses to distinguish deserving and undeserving cases, the inevitable result will be more and more Jamie Cummings.

Legitimation crisis
(18 January 2013)

What happens when the citizens of a country lose trust in those in key positions of authority and responsibility?

When I was growing up in England in the 1950s, there was a widespread (and perhaps slightly naive) faith in the integrity of people in authority. The local bank manager was a man (always a man) of the highest standing. Nurses (always women) were angels of mercy committed to altruistic ideals of public service. The virtue of priests and vicars was unquestioned; ditto the honesty of political leaders. The BBC was the ultimate voice of truth. And if you needed to know the time, you asked a policeman.

Not anymore.

The rot began with the revelations of sexual abuse perpetrated (and then covered up) over many years by priests in the Catholic Church.

Shortly after that, the bankers were exposed as greedy and dishonest, trading in debts which they knew to be toxic, and conspiring to distort market lending rates so they could squeeze out bigger profits and bonuses for themselves at the expense of their customers.

Hot on the heels of the banking crisis came the revelations about Westminster MPs fiddling their expenses. British voters discovered their elected representatives had been embezzling thousands of pounds from taxpayers by claiming to live in houses they rarely frequented, or by submitting expenses for dredging their moat, building a duck house, or even paying for their husband’s porn. Several of them ended up in jail; many more probably should have.

Next came the exposure of serious neglect and abuse in the nation’s hospitals and elderly care homes. One investigation last year reported that hospital patients were being left in their own excrement and denied access to drinking water. Another suggested that nurses with impressive paper qualifications often lacked compassion, a sense of vocation, or even basic caring skills.

Then the BBC came under the spotlight - first, when allegations surfaced of sexual abuse by Jimmy Savile and others on BBC premises, and then when the Corporation responded to criticisms by falsely and recklessly accusing a senior Conservative politician from the Thatcher years of involvement in a child sex abuse scandal without bothering to check the veracity of its ‘evidence’. Meanwhile, the nation’s press has been put through the wringer by the Leveson inquiry which has exposed the grubby practices by which the popular newspapers feed their readers’ appetites for scandal and titillation.

Most recently, it has been the turn of the police. First we learned that, following the Hillsborough disaster in 1989 (when 96 football supporters were crushed to death on overcrowded terraces), officers systematically falsified their accounts to exempt the police from any responsibility or blame. Then it came to light that a cabinet minister forced to resign for allegedly insulting police officers in Downing Street had done no such thing. They’d ‘fitted him up.’ Many of us have assumed for a long time that the cops might ‘massage the evidence’ to ensure that a villain gets convicted, but when even cabinet ministers get ‘stitched up like a kipper’, nobody can feel safe.

Now it may be that those in authority were always flawed. Perhaps the nurses 50 years ago weren’t angels, the local bank manager had his fingers in the till, and the priests were never as innocent as we supposed. But the important point is that we didn’t think this was the case. We respected authority figures back then. We believed the country was in the hands of decent, honest, virtuous people, people we could trust.

That trust has now collapsed as, one after another, the pillars supporting our civic culture have crumbled. It has been displaced by a weary cynicism. Whether a liberal, democratic nation can survive mass disillusion and distrust (what the Marxist theorist, Jürgen Habermas, once aptly called a ‘legitimation crisis’) nobody knows. But I think we’re about to find out.

For more blogs, discussing the London Olympics, shopping in your pyjamas, penal policy, putting feet on the seat on the train, overpaid lecturers, a knighthood for Keith Richards, and much, much more, click here!

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