Saturday, 30 May 2009

I'd rather have throat rot than be lied to

A while ago, I care not exactly when, cigarette packets began to be adorned with gory pictures and threatening words. At the start there were just advisory messages, all of which said nothing more in substance than "smoking cigarettes might make you ill". Things were quite honest in those days. Of course that wasn't enough for the hectoring single issue fanatics, so then we read "smoking kills" and "smoking causes lung cancer". Now we have pictures of rotten teeth and nasty red masses on necks. Yesterday I bought a packet of ciggies adorned by the image of a curved cigarette. The picture appears within a rectangle. The filter end of the cigarette is at the bottom left corner and arches upwards and to the right, then there is a length of white gently curving to the top of the rectangle, then a length of ash curving down from the top-centre towards the middle-right of the rectangle. Beneath the image is the terrifying warning "Smoking may reduce the blood flow and causes impotence".

I had to think about the warning because it seemed on first reading to be garbled and contradictory. The lack of clarity is emphasised by the way the warning is written, there is a change of colour, it reads like this: "Smoking may reduce the blood flow and causes impotence". I'm not a one to be picky but there really does seem to be an awful lot wrong with this whole thing.

The image of a curved cigarette is, presumably, meant to suggest a drooping penis that would be firm and proud if not for its owner's smoking habit. So why does it start by heading upwards and maintain a curve that eventually heads down? Is that what the impotent experience? Do they have sufficient blood flow for the old pecker to start its excited journey on a steep upward path only to find that it can manage nothing better than a smooth curve leaving the tip some thirty degrees above the starting point? Or are they, in fact, not able to get anything like this initial upward thrust? I don't know, but I would guess restricted blood flow into the pecker would almost always mean a state of general firmness can be achieved for some time but without any significant upward movement. I would guess everything heads south albeit with slightly more girth than when the good lady has a headache.

And why do they use a cigarette to illustrate it? They tell us that smoking causes our teeth to rot and show a graphic image of blackened stumps and fetid gums. They tell us smoking causes throat cancer and show a photograph of a man with a massive and, frankly, thoroughly unpleasant scarlet growth on his neck. Why do they get all coy rather than showing a limp, impotent willy doing its inadequate best to prepare itself for the most sticky of matrimonial duties?

The written warning is nothing short of bizarre. It is divided into two parts: (i) "Smoking may reduce the blood flow", (ii) "and causes impotence". Red script is used to emphasise "reduce the blood flow" and "causes impotence".

I can't resist it, I'm sorry but I just can't, I have to be picky. "Smoking may reduce the blood flow" is meaningless. "May" is permissive: "You may have an extra scone, Vicar, if you take your hand off my knee", "Thank you, I'll forgo the scone". "Might", in this context, is concerned with probabilities. They mean "Smoking might reduce the blood flow". As far as I know that would be accurate, as far as I know smoking can cause or accelerate the clogging of arteries, therefore it might reduce the flow of blood around the body including to the willy. But only "might", it does not have that effect on every smoker.

Because smoking might or might not restrict blood flow, it might or might not cause or contribute to impotence, yet there is no qualification on the second part of the warning. It states in bold terms "and causes impotence". That is absolutely true in those instances where it causes impotence, but it is not a universal truth. When it cause impotence it does so by reducing the blood flow, not, as far as I am aware, by any other mechanism. What I find troubling is that the first part of the warning (despite the incorrect use of "may" rather than "might") states that reduced blood flow is a risk associated with smoking cigarettes, yet the second part asserts without qualification that smoking causes impotence.

No doubt those who drafted this incompetent warning would seek to justify it by isolating the words "smoking ... causes impotence" and arguing that this is indeed the case sometimes. That is no justification. The first and second parts of the warning work in tandem, impotence is a sub-set of reduced blood flow. Yet "causes impotence" is given red lettering all by itself. All they have to do to tell the truth is change two words so that the warning reads: "Smoking might reduce the blood flow and cause impotence". No one could argue with that without looking a bit of a chump. As it is, the warning is simply wrong. Perhaps it is just incompetence, perhaps it is deliberate deceit, either way it makes warnings on cigarette packets even more of an absurdity than they have ever been.

Friday, 29 May 2009

The most incoherent climate change clap-trap ever?

There was a most extraordinary letter in yesterday's Times. Extraordinary not just for its factual inaccuracy and it's blatant assertion of an obvious untruth but also for asserting a conclusion that doesn't follow from its flawed premise and for displaying a poor knowledge of English. I will not bother trying to correct their grammar and syntax, no doubt they are too old to learn. The letter was signed by a number of people involved in the field of medicine. I could call them doctors but wouldn't want to mislead because I don't know whether any of them actually holds a doctorate.

Their starting position is that many people assert "climate change doesn't exist". How breathtakingly stupid of them to put their case in this way. "Climate change doesn't exist" is another way of saying "the climate is not changing" and/or "the climate does not change". For all I know there might be some existing in hermetically sealed mental bubbles who do indeed assert one or both of these preposterous nonsenses, but I have never read anything to suggest that such people exist outside secure psychiatric facilities. No sane person could ever assert that the climate is not changing or does not change. Of course it changes and of course it is changing now, it always has and it always will.

They then assert that many say climate change is not caused by humans. This is true enough provided one defines "climate change" accurately. The buffoons who signed the letter clearly have not defined it with any care. Let's go back to the days before human beings found a way to make life comfortable, back to the days before the industrial revolution and the development of processes that keep us alive but produce atmospheric carbon dioxide in order to do so . The climate was not stable then any more than it is stable now. What caused climatic instability in those days? I'm no expert but I would suggest two (no doubt there are many more but no one can argue with these two).

First, the sun. That's the big yellow thing in the sky. It does its thing and the result is more or less heat at the earth's surface. If it is busy we get more, if it decides to put its feet up and read a good book we get less. It changes the climate and human activity has nothing to do with it

Secondly, the oceans, they are those watery bits that appear as two thirds of the earth's surface in atlases and on globes. They are not just surfaces they go down a long way and slosh a vast amount of water about. Some of that water is cold, some is not so cold. Both the warm and cold bits are vast quantities of matter. It moves about, churns itself around and oceanic surface temperatures vary according to what the churning produces. We can have years of relative warm waters at the surface and years of chilly stuff exposing itself to the air. The churnings of the oceans change the climate and human activity has nothing to do with it

There we have it, two hugely powerful factors that change the climate regardless of human activity. It is axiomatic that human activity does not cause these climatic changes. You have to narrow down the field to find a contributory factor to changing climate that can be blamed on people. We all know what that factor is - production by human activity of carbon dioxide that is released into the atmosphere. From there we have to ask what detrimental effect carbon dioxide is alleged to have in order to know what the allegation against we naughty people is, because unless the allegation is defined clearly any denial cannot be placed in its proper context.

The case put against carbon dioxide is that increased levels of that gas in the atmosphere lead to higher surface temperatures because of the so-called "greenhouse effect." It's not actually anything to do with the way greenhouses retain heat, it would be more accurate to call it the "duvet and storage radiator effect". Atmospheric gases are said to act like a duvet in that they prevent heat escaping as fast as it would in their absence (yes, I know it's not actually "heat" but energy which at surface level is translated into heat). They also act like storage radiators by releasing energy to heat the surface when it is cool.

But that's only a tiny part of the picture and it is not the part that matters. Nice Mr Pogo has been kind enough to remind me of this point when I have been too loose in my use of language in previous offerings on this topic. The worse case scenarios produced by computer models and by applicable mathematical formulae suggest that a doubling of carbon dioxide in the atmosphere might, of itself, cause average surface temperatures (whatever that means) to rise by around one degree Celcius. That is equivalent to moving from Brighton to Birmingham. The newspapers are not swamped with tales of emigres from the south coast of England to the middle of the country being troubled by the changed climatic conditions. It is only when the great hypothesis is added that people start to fret.

The great hypothesis is that adding further carbon dioxide to the atmosphere will give rise to an amplification effect. The starting point is that adding carbon dioxide will increase both the duvet and storage radiator effect because more carbon dioxide means a greater storage capacity for the "blanket" around the earth. The crucial hypothesis is that various factors will result in an increase in surface temperatures far beyond those that the increased storage capacity would produce by itself. Some argue that this amplification process will happen, some argue it will not, some argue that it is impossible to tell but are inclined towards one position or the other. The one thing of which we can be sure is that it hasn't happened yet.

When the medical buffoons asserted that many say climate change is not caused by humans what they should have said, in order to have any credibility, is that many dispute the hypothesis that increased emissions of carbon dioxide will result in an amplification process causing significant and detrimental increases in surface temperatures. Being buffoons, they did not say this. Instead they asserted that many say climate change is not caused by man. Not only does this misrepresent the argument put forward by those who decry the Chicken Licken scenario but it is hopelessly misleading because it adopts the weasel words du jour of "climate change" rather than "man made global warming". Unless human production of carbon dioxide will trigger dramatic and damaging warming, the whole Chicken Licken argument falls to the floor.

That deals with the untruth in their letter. Factual inaccuracy is proved by their ridiculous assumption that "nearly 2,000 of the world's leading climate scientists who consitute the United Nations' Intergovernmental Panel on Climate Change" agree with the Chicken Licken hypothesis. I call this an assumption because there is absolutely no evidence at all to support it. Yet, tellingly, the buffoons assume that all those who contributed their thoughts and analyses to the IPCC agreed with every apocalyptic word in the conclusions written by politicians. Even in real science people can contribute their views and be noted as contributors to a report without agreeing with a single word of the final report. I wonder how many of the buffoons have been involved in a research project as a contributor of ideas and analysis only to find that the authors produced something they consider to be utter tripe.

And so we get to their conclusions. How appropriate it is that I have just used the term "utter tripe". This is what they wrote: "there are immediate benefits to be had from action now, mainly about how we move, how we eat and how we redistribute resources more fairly around the globe - all of which are fundamental to health and welfare." I am almost lost for words. But I'll try my best to find some.

Take the first two phrases: "there are immediate benefits to be had from action now". No. No, no no. If you are looking at influences on the climate there are, by definition, no immediate benefits. Nothing we do now will affect the climate immediately even if you believe the most extreme of the computerised projections. Maybe they did not mean climatic benefits. We need to look at the rest of their conclusion to see whether they are actually addressing the climate at all.

What is it that they say we must do? They identify three areas. The first is described as "how we move". I know I said I wasn't going to pick at their use of English but I have to. What in the world of living buggery does "the way we move" mean? My best guess is that they might be referring to aeroplanes and motor cars because these are pet hates for the greenies. But that can't be what they mean because changing our motorised travel habits cannot have an immediate effect on climate and giving up air travel and the internal combustion engine is not "fundamental to health and welfare".

Then they say we should take action about "how we eat". I'm beginning to lose the will to live at this stage. Do they mean importing runner beans out of season from Kenya? Fine, let's bankrupt Kenya's farmers. Well, actually, not fine at all. It may be fine for the buffoons but it's the absolute opposite of what I want to see. Maybe they mean we should all turn vegetarian so as to do away with flatulent cows. No, that can't be it, you'd just transfer the production of flatus from cows to humans. Sorry, I don't get this one at all.

Maybe their third idea carries weight: "how we redistribute resources more fairly around the globe". And the connection to human incuded climate change is ...? Yes, that's right, it has absolutely no connection at all to what industrial plants, cars and cargo planes full of Kenyan runner beans might be doing to the environment. It is a totally different topic, a purely political topic. No climate science is involved. No medicine is involved. I would say no sense is involved but that opens another subject for another day.

These idiots started by saying there are many who deny the climate is changing, and ended by saying that people working in medicine "will be reminding" those who question the effect of human activity on the climate that "immediate benefits" will result from changing the way we move, eat and distribute resources around the world. The whole thing is incoherent clap-trap.

The lead signatory carries the title "Professor". Now words do fail me.

Tuesday, 26 May 2009

Pensions are not optional extras

An interesting survey in today's Times suggests that very few people are making a serious effort to provide themselves with a pension. Although you can't draw any conclusions about the precise proportion of people who are not making their own provision from a snap-shot survey of fewer than 1,400 individuals, the results point towards something of a problem. It was found that almost half of those aged 41-60 are not currently paying into a pension fund and barely a third of those under 30 have a pension. Of course we were assured that this would not happen when the government introduced "stakeholder pensions", yet another of their gimmicks that has sunk almost without trace after costing millions in "consultation" and feasibility studies. Now they are planning a new scheme known as the "personal account". I knew nothing about this until reading the article in the Times, although that is probably a failing on my part.

Pension provision is a huge problem in this country because of institutionalised reliance on the welfare state. We are told the State will look after us from cradle to grave. In relation to pensions the cost of providing a modest subsistence level of income for all is absolutely enormous. Both my regular readers will know that when the state old-age pension was first devised it was to be funded by National Insurance contributions by which everyone would pay into a massive savings pot which would then be dipped into to pay us a modest weekly sum when we reach the defined retirement age. Right from the beginning there was a problem with this because payment-out started immediately and used such a large proportion of NI contributions that the pot never grew. In addition, once government had received money it could not resist the temptation to spend it. It was, therefore, hardly surprising that NI contributions quickly became just another form of income tax. I believe they are still accounted for separately from receipts from income tax itself, but that is just a bean counting exercise; the reality is that all the money is treated as being available for current expenditure and any dream of a pension pot being created evaporated many years ago. What should be quite a sensible arrangement of compulsory payments into a fund from which pensions will be distributed is in fact a giant Ponzi scheme in which the return on our "investment" is paid out of other people's "investment" and there is in fact no investment at all.

Nowadays the basic state pension is added to by various means tested top-ups and some lump-sum payments. Lying behind it all is the presumption that the first port of call for every retired person should be the State. It is rarely mentioned that the state old-age pension was originally extremely modest - well below subsistence level, was paid at age 70, was means-tested and was only paid to those of good character. It was so modest that anyone who thought they might live beyond 70 (which ruled out a vast chunk of the population in the early 20th century) was encouraged to make their own provision. Over time the ever-growing welfare state has shifted perception. Now a shortfall between the value of the state pension and the real cost of living is met with cries of "I paid my stamp, I demand a proper pension". Against this background we find a widespread resistance to making personal pension arrangements, it seems to be viewed as the wrong thing to do because we have already paid for a pension through NI contributions and making our own arrangements is letting the government off the hook.

The new scheme, due to come in in 2012, is nothing other than compulsion to take out a private pension if you have not done so already. It is probably sensible because the alternative is to force people to do it by simply cancelling the state pension, which would be political suicide. The irony is that the State machine encouraged the little people into an attitude of reliance and can only reduce reliance by using the force of the State to make them do so.

I don't know how much should be set-aside by individuals to allow a sufficiently large pot to build up so that it can be relied on for their income in retirement, I have read estimates between 5% and 14% of annual gross income, perhaps 10% is a fair average. That might seem a lot but average life expectancy now suggests the likelihood that most people will draw a pension for at least ten years following a working life of about forty-five to fifty years. If you were paying into the pot for, say, forty years and your income increased steadily throughout that time, the sums you paid-in at the beginning will be very small in cash terms compared to what you paid-in at the end. The smallest sums will have had time to grow but the largest sums will not. Assuming real growth of 2% a year, £100 invested over forty years turns into about £220, over thirty years it would grow to about £180, almost £150 over twenty years and just £120 over ten years. If your pot is used to buy an annuity giving a 5% yield, a pension of £10,000 a year requires a pot of £200,000. It takes a lot of investment to build a pot of that size even over forty years yet it will give you less than £200 a week and if you want the payments to be index-linked throughout your dotage the initial pension will be well under £200 a week. This is a very rough-and-ready example, but it gives an indication of the amount you need to accumulate through your working life if you are to have a bearable pension at the end.

To my mind, pensions are a good illustration of what happens if you don't live within your means. Perhaps it is more accurate to say that our means must be measured by taking into account the amount we should set aside for a pension. We are now in remedial territory. The huge black hole caused by decades of inadequate personal provision is being addressed and the cost will be a reduction in disposable income for all those who do not already have an occupational or personal pension scheme. It comes at a time when remedial therapy is also required for government expenditure because of past mistakes. By 2012 the recession will have ended and modest economic growth will probably have resumed. Then the new compulsory pension will come into effect, initially requiring employees to pay 1% of their gross income into the pot then 3% in 2013 and 5% from 2014 onwards. So disposable income will be forced down, for good reason, just as the economy is picking up. But, it will mean that disposable income will then be measured more realistically than in the past.

Putting off the cost of pensions is a form of credit just as insidious as equity-lending secured against perceived increases in house values. It encourages a false assessment of real wealth and requires a painful adjustment at a later date. I'm all for adjustment where it is needed and for painful adjustment where that pain cannot be avoided. All those in the Times survey who said they are not currently making any provision for a pension are simply putting off the day they have to do so and making that day more painful. As much as anything it is a matter of culture. To date the culture has been for the State to pay for our old age. That aspect of the welfare state has been exposed as rotten to the core. The initial system was right, the way it has been altered over the last century has led to an unaffordable mess that cannot deliver because it has made it impossible to deliver by fostering a sense of entitlement and reliance wholly out of proportion to the practicalities of the issue.

The ethos behind the new regime is something I find very encouraging. Pension provision is treated as a normal cost of life for the individual to bear just as he bears the cost of food and clothing. It is not a matter of shifting the cost from the taxpayer to the individual because the taxpayer would never be exposed to the cost of a decent pension for all. It is far more subtle than that. The paltry state pension will remain and the new system is about something different, it is about making people face up to the reality that a decent income in retirement is attainable, that it must be paid for and that the more they pay the more they will receive (subject, as always, to the ups and downs of any investment scheme). It marks a shift in emphasis towards self-reliance.

I am a great believer in promoting self-reliance because I have a great belief in the ability of people to provide for themselves if only the State would get out of the way and let them do it on their own terms.

Monday, 25 May 2009

Proportional misrepresentation

We have today been treated to the most blatant challenge yet to Gordon Brown's leadership of the Labour Party. One of the few members of his Cabinet capable of stringing together a sentence without using jargon has called for a referendum on our voting system. Writing in The Times, Alan Johnson called today for the next general election to be accompanied by a referendum in which we would be given the choice of retaining the present first-past-the-post system and something called "alternative vote plus". In doing so he knows there is virtually no chance of it happening, but that is not what troubles me.

A referendum is a serious thing. In my lifetime there has only been one for voters in England and the same one is the only one in history for voters throughout the whole United Kingdom. It was held in June 1975 and concerned our membership of the European Economic Community. The referendum was held as a direct result of a general election manifesto commitment by Harold Wilson's Labour Party to hold a referendum on continued UK membership of the EEC once his best efforts to re-negotiate the terms of our membership of the EEC were known. The general election was held in February 1974 and the re-negotiation took almost a year (another general election occurred in this time, in October 1974). By mid March 1975 a new deal had been reached and the following month Parliament voted for a referendum.

Membership of the EEC was a very hot topic at the time. It split both main parties then as membership of the EU (an entity those arguing for continued membership of the EEC in 1975 said was never a prospect) does now. Politicians of both parties expressed their views freely and it was one of the most widespread topics of debate. The referendum was held not just because of the February 1974 manifesto promise but also because the issue was a festering sore, a big red boil that needed lancing. One way or another an answer had to be provided so that the country could move on from an argument that threatened to engulf every aspect of political debate.

Today, completely out of the blue, we find a cabinet member arguing for a referendum on something that was nothing more than an aspiration in general election manifestos. The Labour Manifesto of 1997 included these two sentences tucked in the middle "We are committed to a referendum on the voting system for the House of Commons. An independent commission on voting systems will be appointed early to recommend a proportional alternative to the first-past-the-post system."

The "independent commission" was headed by former Labour Home Secretary and Chancellor of the Exchequer, Roy Jenkins. Labour's Manifesto for the 2001 election watered down the position put forward in 1997. After mentioning that the new devolved authorities for Scotland and Wales, the London Assembly and European Parliament elections had different electoral systems they said: "We will review the experience of the new systems and the Jenkins Report to assess whether changes might be made to the electoral system for the House of Commons. A referendum remains the right way to agree any change for Westminster."

Showing no evidence that they had undertaken the promised review, their Manifesto for 2005 abandoned any proposal for altering the voting system to the House of Commons saying: "Labour remains committed to reviewing the experience of the new electoral systems - introduced for the devolved administrations, the European Parliament and the London Assembly. A referendum remains the right way to agree any change for Westminster."

This is hardly the necessary background for holding only the second national referendum in history. The issue wasn't on the national radar in 1997 when it was a firm manifesto commitment, since then it has even been dropped in importance by the Liberal Democrats who have argued for proportional representation for decades. So, why is it now important? The simple answer is that it is just as important or unimportant as it ever was. What it is not, however, is something to be sprung on us with no more than a year to the next election. The Jenkins report might have recommended "alternative vote plus" and I might have heard or read about it at the time, but it rings no bells in my drink-sodden mind.

I am no fan of proportional representation systems because I believe it is healthier for one party to be able to do its worst and be shot down than to have a series of compromise solutions that satisfy no one. That, however, is not my objection to Mr Johnson's proposal. Mr objection is that the issue is far more complex than choosing between the current system and a proposal Mr Johnson's government has abandoned. If the current voting system is to be challenged through a referendum it should only be after full debate about all the options. I find it fundamentally objectionable that an idea should be brought out of mothballs and presented as not only the solution to current ills but the only possible solution. And why is it said to be the solution? Because of a plea to authority. An "independent commission" considered the matter and we should bow down and accept their wisdom. A wisdom which, as far as I am aware, has not been adopted in any other country. No, it doesn't work like that.

The issue needs mature consideration, not a knee-jerk reaction.

Saturday, 23 May 2009

The upside-down Archbishop

One of the greatest challenges for those interested in politics is to decide where to draw the line between political and personal criticism. As a general rule, the higher someone climbs up the greasy pole of political power the more open he or she is to personal attack. Jeremy Clarkson famously described our current so-called Prime Minister a "one-eyed Scottish idiot", I suspect he would not have described Gordon Brown in that way were he a junior minister. As a matter of inescapable fact he would still have been a one-eyed Scottish idiot, but he would not have been in the firing line for that sort of personal attack.

High rank puts one in the firing line for personal attacks whether or not they are fair or accurate. It's part of the territory - set yourself up above the little people and the little people expect a lot of you. In real life it is necessary for some to be above the little people. Like it or loath it, we need government and that means we need government ministers, and that means we need a hierarchy of government ministers, and that means there is someone at the very top of the pyramid. The higher you climb the more we little people will expect of you and, it has to be said, the more you will profit when your time in office has ended.

Let's go down a few ranks to workaday MPs. They don't have the glory of wielding real power but they are the Parliamentary representatives of all their constituents, on average something like 80,000 people. Of that 80,000, on average something like 78,500 will earn less than an MP's salary. Only a very few of those that earn more than their MP will not be under any pressure to justify their income. Maybe they are authors or musicians raking in royalties, or the sons and daughters of wealthy people living on the produce of historic family investments. Such people are few and far between. The other high earners are in business and answerable to customers and/or shareholders every day of the year. MPs' customers are their constituents, the vast majority of whom struggle to balance the family books from one month to the next. News that our MP has been paid by us for a personal rather than a work expense might receive a "tut, tut" when times are good, but in a recession it receives a "how dare you?"

The single reason we criticise our MPs for using loopholes and manipulating the rules as we might in our lives (if only we could) is that they are above us. They are above us constitutionally and practically, so we have every right to expect them to behave at least as ethically as they tell us to behave. That we might have turned a blind eye for years is neither here nor there, when circumstances change so does the way we all look at things. In particular something we would not have been too concerned about at one time can become a matter of fundamental importance which must be changed. There is no once and for all, right-or-wrong assessment of the matter. In relation to MPs' expenses/allowances it cannot rationally be said that the widespread criticisms being made of MPs now lack merit because they were not made before, nor can it rationally be said that we were wrong not to raise these criticisms earlier. It is all a matter of context. For example, adultery by senior politicians was far more of an issue after John Major launched his "back to basics" campaign than it was before because the government was openly promoting fidelity. Similarly, hearing politicians from all sides tell us to tighten our belts because of recession makes their financial waistlines fair game for comment.

Only time can determine when the criticisms have run their course. It's not like a guillotined debate in the House of Commons in which a vote is forced after a certain time whether everyone with a desire to speak has had their turn, these criticisms will be made by real people for as long as they feel there is a need to make them. Any MP who resigns or announces they will not seek reelection might find they drop off the comment radar, any who do not answer criticism satisfactorily will find they are just delaying the inevitable. In an article in yesterday's Times newspaper the Archbishop of Canterbury said "the continuing systematic humiliation of politicians itself threatens to carry a heavy price in terms of our ability to salvage some confidence in our democracy." I could not disagree with him more.

What is happening now is an essential part of a mature democracy. You do not damage a system based on the notion of representation of the people by forcing the main representational institution to meet the standards required of it by the people. No damage is being done to confidence in our democracy, only to confidence in the way Parliament is behaving. The answer is to force it to change, and that is happening. It is happening because, not despite, "continuing systematic humiliation of politicians".

Confidence in democracy is a deeply ingrained cultural force in Britain. Democracy is often described as the least bad system of government but it is much more than that. It is something that helps to hold the country together. We all know that our personal, individual power to change the law or influence government policy is so small as to be virtually nil, we also know that both the law and policy can be altered where the public mood (expressed in countless different ways) is so strong that government and Parliament have to accede to that mood. In recent times we have seen significant changes of policy on petrol taxes, the 10p income tax rate and, most recently, rights of settlement for Gurkhas; all of them brought about by public pressure and criticism. This has not damaged our democracy, it has enhanced it by showing that it works.

The only way our democracy can be damaged is by damaging the ability of the little people to influence the big people. If it takes the humiliation of dozens of big people in order to ensure that influence remains in place, so be it.

Friday, 22 May 2009

Getting around the smoking ban, or not

The landlady of a pub in Yorkshire tried to evade the smoking ban by nominating a room in her pub as a research facility. As I understand it she placed questionnaires about smoking in the room in the hope that that would make it a research facility and allowed patrons to smoke provided they completed a form. The owners of the pub put a stop to it (here). Donning my curly horsehair wig I want to explain why I think they were right to do so. It really pains me to write this.

The smoking ban operates by defining certain types of premises as "smoke-free". If your premises fall within the description it is an offence to smoke there and to allow smoking there. The general rule is that work premises are "smoke-free", although exceptions may be made. The power to make exceptions is contained in section 3 of the Health Act 2006. Exceptions may be made by providing that "specified descriptions of premises" are not "smoke-free". In other words, where premises of a certain description are identified as being not "smoke-free" people may smoke there without it being a criminal offence and those in charge of the premises will not commit a crime by permitting smoking. One of the descriptions is "A designated room in a research or testing facility". The landlady of the pub in Yorshire tried to get into this description.

There is a specific provision in sub-section 3 of section 3 aimed at restaurants, pubs and clubs with a licence to sell booze. When exempt premises are being described, the description may not include the fact that it is licensed to sell booze. In other words, there may be no exemptions for restaurants, pubs and clubs by reason of them being restaurants, pubs or clubs. That does not necessarily mean that a room within a restaurant, pub or club cannot be exempt under any circumstances, but it cannot be exempted by reason of it being part of licensed premises, although it might be exempt despite being part of licensed premises.

This sub-section is important because it emphasises that the ban is intended to apply to all licensed premises. That does not mean that licensed premises, or a room in licensed premises, cannot be exempt but it sets the scene. Any attempt to circumvent the smoking ban in restaurants, pubs and clubs must be genuine and not just a ruse.

The exemption relied upon in the case under discussion is that relating to "research and testing facilities". It is created by Clause 9 of The Smoke-free (Exemptions and Vehicles) Regulations 2007. Clause 9 paragraph (1) says "A designated room in a research or testing facility is not smoke free while it is being used for any research or tests specified in paragraph (2)". This makes clear that the premises must be a research or testing facility and the designated room must be part of that facility. No doubt there could be a research or testing facility comprising a single room that is not part of a larger unit, but apart from that situation the "specified description of premises" requires the premises to be fairly described as a "research or testing facility". A pub is not a research or testing facility except in the loose sense of it being somewhere people can research and test their liking for and hepatic tolerance of alcoholic beverages. Although people do in fact research and test their liking for and hepatic tolerance of booze in pubs, pubs are not "research and testing facilities" in any real sense. A room in a pub is, therefore, not part of a research and testing facility, it is part of a pub.

The only way a room in a pub can be a "research and testing facility" is if it ceases to be just a room in a pub and becomes a stand-alone "research and testing facility". I have no doubt that this could happen, although it would be a rather strange arrangement. For example, a scientist might need to set-up a laboratory and might hire a room in a pub for that purpose. In that situation the room is essentially separate from the pub, it ceases to be a room in a pub and has its own identity as a research and testing facility. In that situation the room would cease to be part of the pub and would have a status of its own. That is different in substance from a room in a pub being used for some sort of research whilst retaining its essential character as a room in a pub. Say a room is used for a wine tasting evening, that might fairly be described as an exercise in research and testing, yet in substance it is still a room in a pub rather than a research and testing facility.

I don't intend to get bogged-down in analysing the type of research and testing that allows smoking to take place in premises that would otherwise have to be "smoke-free". The details are in paragraph (2) of Clause 9, to which I have provided a link. What is not stated in terms in that paragraph, but is implicit in each of its sub-paragraphs, is that smoking must be part of the research. Just because a laboratory tests the reaction of a piece of cloth to a smouldering cigarette does not allow those working in the lab to get through twenty Benson & Hedges while they are awaiting results from their experiment. Similarly, an organisation that invites people into its office to answer questions about their smoking habits does not trigger the exemption and should not expect the completed forms to be covered in cigar ash. A laboratory in which people smoke so that their physiological reactions to ciggies can be measured does not give carte blanche to the examiners to smoke before, during or after the tests. To suggest otherwise is to ignore the clear purpose of both the primary legislation (the Health Act 2006) and the Regulations made under that primary legislation.

As for the room in the pub containing written questionnaires, frankly it's just a ruse. It is research of a sort but it doesn't make the pub a "research and testing facility". Filling in a form does not require smoking to take place while pen is in hand. As always it is necessary to look not at the form of what is happening but at the substance. The substance is that the room is part of the pub, nothing more, as such it is covered by the smoking ban. Were it a genuine "research and testing facility" the landlady would soon find a condition imposed on her licence preventing her from selling or supplying booze to those using the room and she could have no complaint about that.

Nice try, madam, better luck next time.

Wednesday, 20 May 2009

"Howzatt?" Guilty as charged.

Today a former England cricketer was sentenced to 13 years in chokey for smuggling cocaine. Chris Lewis was an excellent player when he tried, sadly he didn't try often enough and his career was littered with lost opportunities. From the little I have read about it, his venture into drug smuggling was equally half-baked. He and a friend imported liquid cocaine in containers labelled as fruit juice. Most comical of all was the pair's decision to blame each other - the classic "cut-throat" defence.

Smuggling drugs is fraught with difficulties. Actually, I'm not in a position to say how difficult the smuggling itself is but I can say something about the difficulties faced if caught. You see, there's no such thing as a good defence. The tin of pineapple chunks in your luggage turns out to be full of cocaine, what can you say that might possibly make sense?

"My mum likes pineapple chunks so I bought them as a present." OK, so how did it happen that the tin of innocent fruit turned into thousands of pounds worth of Colombia's finest? How did it get onto the shelves of the QuickyMart in the first place? And how very lucky that it was intercepted by HM Revenue & Customs before dear old Ma wolfed it down a drop of Carnation milk.

Or you could try this one: "I never knew it was there, it must have been planted in my luggage by an unknown stranger." Bit tricky that, how do you explain that you didn't notice it? Say it wasn't in your luggage but you came over by car and it was found under the spare tyre in the boot. Then you have to explain how the intended recipient was going to recover it from you. If you have no connection to the importation chain this might prove a little impractical.

And then there is the defence run by Mr Lewis and his chum: "My friend gave it to me to bring over for him because he feared his luggage would be overweight." In this case each said it of the other. Now you know the real reason we are asked that seemingly daft question at airports: "has anyone given you anything to carry?" It isn't so that we will say "yes", it's so we will say "no"; then when we are caught and say we were just carrying the pineapple chunks for a heavily laden friend we find we shot ourselves in the foot at the start of the journey. Of course when travelling with a friend you might find that one of you is over the baggage weight allowance and the other is under so spreading the load makes sense, but only a moron takes a container of anything, sensible people relieve their friend of clothes or stolen hotel towels.

A necessary part of the defence is that you didn't know the stuff was cocaine. This aspect of it tends to stand or fall alongside the inanity of your excuse for carrying the package in the first place. Once a jury dismisses your story about how the stuff came into your possession it follows almost as night follows day that they won't believe anything else you tell them.

Following that theme, I now arrive at the "cut-throat" defence - where the two defendants blame each other. Amateur criminals rather like the cut-throat defence. They talk about it while awaiting trial and conclude that by blaming each other they will both get off because the jury won't be able to decide which is guilty. Or they fall out before the trial and blame each other out of spite. Either way it is an almost guaranteed route to conviction because it appears cowardly and unrealistic. Professional criminals rarely use the cut-throat. Where the evidence is very strong against one and a bit weaker against the other they prefer to sacrifice the one who is going to be potted anyway (in the general run of things his guilty plea earns a reduced sentence). He then gives evidence against the other and enhances his friend's chance of acquittal by making mistakes in his evidence thereby creating a hole in the prosecution case that was not previously present.

Mr Lewis and his friend played it all wrong and will have seven or so years to think of a better defence if ever they are tempted again. They didn't keep their eye on the ball.

Tuesday, 19 May 2009

Speaking of incompetence ...

It was painful watching the Speaker floundering yesterday as his failure to grasp the nettle and show leadership resulted in the very public loss of personal authority over and, indeed, actual control of proceedings in the House of Commons. In just a few minutes last week he made yesterday's humiliation inevitable as he tried to shout down his critics rather than looking them in the face and answering their comments.

For the benefit of my reader overseas I should explain. As you have probably heard our MPs have been caught twisting the rules to award themselves additional income by getting the taxpayer to cover some of their ordinary living expenses. It's caused a huge stink and the Speaker, a rather thick man by the name of Michael Martin, is the person with responsibility for sorting it out. His first move was not to arrange for these claims to be reviewed and paid back but to call in the police to investigate how details were leaked. Last week one MP sought to question his decision to involve the police. The Speaker had two legitimate courses of action open to him, he could have stood by his decision and explained it or he could have admitted that he was wrong and announced that he would be inviting the police to cease their enquiries. Instead he interrupted his challenger, prevented her finishing her question and used extraordinary language to tell her, in effect, to shut up and mind her own business. Another member tried to raise the same issue and was also rebuffed rudely and disrespectfully. Unfortunately Mr Martin picked on two moderate and polite MPs thereby showing himself not just to be intemperate and rude but to be a bully as well.

Many have questioned his suitability as Speaker ever since he was appointed, in the space of just a couple of minutes everything became clear even to his supporters. Here is a man out of his personal and intellectual depth. Parliamentary chickens began to come home to roost. Yesterday he decided to make an address about the whole scandal of MPs' rampant profiteering and offered a limp apology by way of reading a short written statement over which he stumbled on a number of occasions. There was no plan to deal with the problem merely the announcement of a meeting with leaders of the various political parties. It simply didn't get anywhere near addressing the problem, it showed no leadership or initiative and gave no hope that he was capable of resolving a problem that had become a national scandal.

Following his address he was asked what was happening about a motion of no confidence in him which had recently been tabled but not yet scheduled for debate. And that is when his last shred of authority disappeared as he was unable to explain the applicable procedure. It was apparent that he had totally lost control of proceedings as members barracked him in a way not seen in living memory. Today he opened the day's proceedings with a personal statement lasting barely half a minute in which he announced that he will resign as Speaker on the 21st of June.

These events were a fine example of what personal authority entails. One might expect a Speaker of the House of Commons to be an expert in Parliamentary procedure, to have a quick mind that allows him or her to respond to points of order without disrupting debate unduly, to possess a ready wit with which to diffuse tension, to have an air of authority and to be able to represent our Parliament overseas and to visitors from overseas through intellect and charm. Mr Martin has none of these qualities. Most obviously lacking is the air of authority without which it is impossible to be an effective chair of a debate.

Personal authority is such a difficult thing to define yet nothing can be easier to recognise in real life. It is that aura that makes us automatically listen to someone and to be prepared to accept what he says, we see it in captains of sports teams and at our places of work, some people are natural leaders and others are not. Tony Blair is whereas Gordon Brown is not, indeed he is the only Prime Minister in my lifetime to lack that capacity. I think the quality is one of self-assurance as much as anything else, but it is not only self-assurance. It carries with it an invitation to follow the leader rather than a challenge to do so. It is "this is what I think and I hope you will agree" rather than "this is what I think and you must accept it". The first causes any debate to start from a presumption that the leader is correct whereas the second encourages discord and conflict.

The central lesson to be learned from Mr Martin's disastrous reign as Speaker is that picking the wrong person cannot easily be rectified. He became Speaker in October 2000 yet it took until May 2009 for the cumulative detriment of his incompetence to be so overwhelming that he had to go. In the meantime the government has steamrollered badly drafted and ill-considered legislation through Parliament with little, if any, debate and detailed policy initiatives are now launched through leaks to newspapers and speeches to special interest groups. A competent Speaker would not have allowed this to develop as it has. The recent furore over MPs' expenses was the last in a long line of issues on which Mr Martin's lack of leadership led to conventions of honourable behaviour being weakened and then abrogated entirely because there was no one to uphold them. It's all very well saying MPs and ministers should behave honourably but not all will, some try to push the boundary. That is where qualities of leadership are required in a Speaker so that he can ensure proper standards are maintained. It helps to set the whole atmosphere by which the business of the legislature is conducted and acts as a check on any governmental desire to rule by diktat rather than by reason.

So now we have reached a point at which both Parliament and the government are drifting from one crisis to another, neither is being led or managed with any degree of competence. It will take a lot more than a new Speaker to put things right, but it does need a new Speaker, one who can pick the whole thing up by the scruff of the neck and give it a good shake. That won't make the government any more competent, nothing can do that because they simply don't have able people waiting to replace the dross currently filling the cabinet. What it can achieve, however, is the reintroduction of a proper system of law making so that any further damage done in the final year of this rotten Parliament is kept to a minimum.

Monday, 18 May 2009

The trouble with booze

For as long as I can remember I have drunk quite unfeasibly large quantities of booze. Wine is measured in bottles not glasses, cider in litres not pints and as for gin you can forget laughable pub measures - slosh the stuff in. Days without drink have become more regular in recent times whereas in the past there have been many years without a single dry day. Increased cost hasn't put me off, I just cut back on something else and bogus health scares about numbers of "units" of alcohol consumed and the danger of "binge drinking" are dismissed as pointless sermons from Puritan hypocrites. I drink a lot because I want to, no other reason. My liver is pretty much wrecked now and the battle to keep my blood pressure within measurable limits requires heavy medication. But it has been my conscious choice to lose a few years at the end in order to enjoy the ones I experience.

Over the last twelve months I have experimented with dry days. It's awfully hard work and strangely satisfying in a self-flagellating sort of way, as well as providing a much needed boost for manufacturers of high-juice orange squash. The last couple of weeks have been quite bizarre. Perhaps I have misbehaved in some way and require punishment, although I can't think of any particularly sinful activity that merits reproach, nonetheless six of the fourteen days have been dry including two in succession this time last week. Yesterday was a dry day and resulted in absolute proof that I must drink for the sake of my sanity because last night I dreamt of Gordon Brown.

So dire had public finances become that Gordon decided to convert 10 Downing Street into flats and I bought the basement flat (called the Garden Flat because that's what estate agents do). He stayed on at ground floor level and we had shared use of the garden. One sunny afternoon I was up a ladder cleaning a muddy gutter with my bare hands when the Prime Minister descended the rear stairs carrying a portable piano which he set up on my patio and then donned a flowery dress and proceeded to perform as Mrs Mills. It was all good sing-along stuff and he was at his very campest, even more so than in his recent disastrous YouTube broadcast on MPs' expenses.

What did it mean? I'm no expert on interpreting dreams but if truth be told I'm sure no one can be an expert because there is no way of proving one theory over another. Was it, perhaps, just a hope that Gordon will resign and turn to work more suited to his personal tastes? Did it reflect a previously unknown fetish for fat women with stubble? Was I displaying my desire to be Prime Minister and to not be scared of getting my hands dirty in the task of rescuing the country? There was an additional, and deeply worrying, matter. At one stage Gordon launched into a medley of George Formby songs and sang in a style more reminiscent of Rab C Nesbitt.

Actually, it's quite clear what it means. It means I should not upset my natural equilibrium by the irrationality of temporary teetotalism. I'll drink to that.

Friday, 15 May 2009

Euro-elections and MPs' expenses

We are now just a couple of weeks away from the elections to the European Parliament and little is being heard about it above the noise of the expenses scandal. I have tried casting my mind back to the last lot of Euro elections to see whether I can remember there being much excitement then, sadly, memory is there none. Why, I wonder, can't I remember? I remember general election campaigns and even some aspects of local election campaigns, but nothing about Euro elections.

I think it's probably a consequence of what Euro elections are. Voting for an MP or local councillor means voting for someone with a direct part to play in the implementation of policy and the making of law (Acts of Parliament in the case of an MP and by-laws in the case of a councillor). The number of MPs/councillors elected for each party determines the form of the national or local government that rules over us. For all the deficiencies and quirks in the first-part-the-post constituency system and, indeed, in the amount of power political parties have over elected representatives, at least the outcome of the election decides who governs and sets the strength of their nominal majority in the chamber. Returning an MEP to Brussels has no discernible effect on policy or on the structure, form or political balance of the ruling EU elite.

So what can we vote for in the Euro elections? What issues are there? It seems to me there is really only one issue and our votes are just a glorified opinion poll on that issue - do we want to stay in or do we want to get out? The policy of all three main parties is to stay in the EU. They don't campaign by promising they will actually achieve anything if elected because they know they can't; they angle for support because votes in any election strengthen their overall domestic position.

An interesting side-issue arising from the MPs' expenses fiasco is that it shows how public opinion can bring about change regardless of the voting strength of the parties in the House of Commons. Fiddles of a few hundred pounds here and there have raised a stink just as much as profiteering by tens of thousands on sale of a house paid for by the taxpayer. Neither the government nor the opposition parties can ignore the fuss because it is engulfing the whole country, there is simply no buffer between them and us, no insulation to allow them to carry on as they wish. By contrast far greater corruption goes on within the EU institutions. MEPs can and do draw many thousands in perks, allowances and so-called expenses. Commissioners receive substantial salaries and simply enormous fringe-benefits including pensions so sweet they would make real people cry. When exposed to howls of derision among the little people over the failure of the EU's accounts to pass audit and the lack of controls over MEPs troughing, nothing changes. Nothing changes because change can only come from the self-appointed EU elite who are not subject to any direct pressure from the serfs. They serve their time, pick up their massive salaries and are replaced by their friends. Neither the ballot box nor public opinion has any influence at all.

The row over MPs' expenses shows a strength of our democratic system. When something is sufficiently repugnant to normal standards of fair play there are avenues through which it can be addressed. Those avenues are not restricted to the ballot box. Genuine disquiet can cause a major change in Parliamentary procedures or in government policy whatever the result of the most recent general election. The effect of public opinion does not operate outside the democratic system, it is part of it. Indeed it is more accurate to say that elections are just one way in which public opinion influences the way we are governed.

Public opinion is irrelevant to the workings of the EU institutions. It is irrelevant because there is no mechanism for it to operate on those workings and, more significantly, it is irrelevant because the institutions exist not by the will of the people but by the will of a self-perpetuating political elite. It is an elite that has devised a system to give it powers wholly removed from the democratic process. If we ever want an example of the importance of retaining a direct link between the will of the little people and the activities of a ruling elite, the expenses row is it. Manipulation of expenses rules to the personal benefit of MPs existed because it could. The corrupt ones, supported at every turn by the hopelessly incompetent trougher-in-chief known as the Speaker, fought tooth and nail to keep their practices secret but eventually the truth came out and now they have to face the consequences. For many of them those consequences will be dire, so be it, that's the price you pay for cheating. Yet that price can only be exacted for so long as there are both means of exposing corrupt practices and the will to combat those practices. The latter is wholly lacking in the EU institutions.

In or out? That's an easy question for me. Contrived arguments about the EU having kept the peace in Europe can be stuck where the attendance allowance doesn't shine, not only are they factually unsustainable but they are also now irrelevant. Dissolve the whole EU today and there won't be war or any threat of war between France and Germany - forget Italy, Spain and the rest, the only fear of serious western European war in the last century has involved those two countries. Contrived arguments that a free market, or anything approaching a free market, between European nations requires centralised political control are patently absurd. Both the EU and the USA have defined free-trade agreements with numerous countries without any need for the blending of governments. Arguments about how much money membership of the EU costs the UK and how much departure from the EU would harm our economy are neither here nor there. Figures given by protagonists on both sides are always selective, hypothetical and/or exaggerated. If we gain, great. If we lose, we lose.

To me it is a matter of self-determination. Only self-determination by nations states can create the circumstances necessary for stable society (I have opined on this point before). Only a direct link between the will of the little people and the power of the ruling class can keep political misbehaviour and corruption to the minimum. That link is impossible on any scale larger than the nation state and, let's be frank, it's difficult enough even in a small country like the UK. Leaving aside any other aspect of the in-out debate, this one is utterly persuasive for me.

Thursday, 14 May 2009

If it ain't working, fix it

In the real world, if something doesn't work it is abandoned. It might have seemed a good idea at the time and its intended outcome might have been a great boon to mankind and to fluffy bunnies, but if it doesn't work it doesn't work so we say "nice try, bad luck" and we move on. Abandoning an unsuccessful experiment can be very expensive for those engaged in the project. History is littered with many thousands if not millions of "greatest inventions since sliced bread" that never got anywhere near the toaster let alone were buttered and consumed. Countless inventors and investors have lost every penny pursuing an idea which either failed to meet its potential or failed to find a market. Because that's what real life is like - someone has an idea, it seems like a good idea so it is tried. If it seems like a really good idea initial failure might justify further attempts. Always, sustained failure results in abandonment. The money required to continue the experiment can no longer be justified so the tap is turned off.

This illustrates one of the many fine qualities of money. Money allows us to measure success or failure of every commercial project. We can tell from a profit-and-loss account whether it has been a financial success to date, if it hasn't yet made a profit we can tell by the level of loss incurred whether it has a decent prospect of becoming profitable within a reasonable time. Money not only allows us to measure how successful a commercial enterprise is, it also provides a means by which we can assess whether a commercially unsuccessful venture should be continued (through private or public subsidy) because it provides a benefit that is perceived to be affordable. For example, a local council might operate a swimming pool and choose to spend up to £100,000 of taxpayers' money subsidising it each year; once running costs exceed entry fees by more than £100,000 questions will be asked about whether it should stay open. The mere fact that the swimming pool has been built and provides a benefit can never justify limitless spending on it. Some would say no such subsidies should ever be given, others might argue that £200,000 is the correct maximum figure, but whether a subsidy is given and if so how much it should be are decisions taken with an eye to money - the universal means of measurement.

Some areas of government expenditure cannot easily be assessed in monetary terms. The armed forces, the police, prisons and the fire service can only be effective if they have a certain number of front-line personnel and the equipment necessary for them to do their work. The level of necessary service determines how much must be spent, it is not possible to say "we can afford half a billion for the police and that's that". Of course countless arguments can be had over what level of service is appropriate, how it should be organised to get best value for money and whether there is a sensible role for the private sector, but at heart these services must be funded according to need (however you wish to define that) and cannot or should not be limited by purely financial considerations. The central point about these services is that they are protective services, they exist to prevent trouble and to protect us when trouble brews.

Other so-called public services are not protective in nature, they are intended to provide a positive benefit rather than to protect us from a threat. Health, education, refuse collection, laying and maintaining roads, providing street lighting and many other things are essentially commercial activities being carried out by one arm of the State or another. Some of them are usually provided by private sector businesses but paid for from taxation, road maintenance and refuse collection being perhaps the most widespread examples of this.

Not so long ago refuse collection was manged by local authorities and performed by people employed directly by them. In many areas the task has now been contracted-out to private businesses who are paid less than it cost the local council to run it's own service and are subject to a contract requiring them to provide a service at least as good as the one they replaced. As far as I am aware, no council has chosen to revert to the old system once a contract with a private provider has expired. No doubt one reason for this is that a council would incur a substantial cost in buying or hiring the necessary lorries and installing managers on its payroll but the more compelling reason is that the work is a service which is best left to the private sector because only that sector is subject to market pressures to keep its costs as low as possible, not least because they do not have to battle against the monopoly public-sector unions. The provision of refuse services is a normal commercial exercise. Local authorities specify the service they require, price is a matter for negotiation and the result is a binding contract. There is an important public health element to the work but so there is in the supply of all sorts of goods and services, appropriate contractual terms and general legal obligations on suppliers ensure (insofar as you ever can) that health is not adversely affected by the identity of the supplier.

The effectiveness of private-sector delivery of services such as refuse collection can be measured by money. Once the standard of required service is defined it is a matter for competitive tender who can give the purchaser (the council) the best price. That these tenders will be pitched at a level that allows the supplier a profit does not mean that the state sector could provide the same service at a lower cost in particular because working practices in the state sector are not subject to the same constant pressure to be efficient as the private sector because the provider is also in charge of paying the bills.

When it comes to health and education is there any reason to believe the private sector will provide an inferior service? After all, non-state schools and hospitals have to provide what their customers want or they lose business. MRSA infections don't happen in private hospitals because a single occurrence could cost the business millions in lost custom. Indiscipline and a failure to teach to a high standard can have the same effect in private schools, so it just doesn't happen. It doesn't happen because the system is designed to deliver a service not to deliver a political agenda.

The NHS doesn't work. It doesn't do what it was set up to do. Part of the problem is that it is not operated as it was intended by its founders to be operated. The original idea was for it to be a universal health service funded by insurance but operated as the best private hospitals and general practices were operated. Instead it has become a perpetual opinion poll, fiddled with by government after government with at least as much of an eye to political advantage as providing a service. There is now about twice as much money in real terms being pumped into the top of the NHS as twelve years ago. It hasn't resulted in twice as good a service at the bottom, despite the efforts of the vast majority of doctors and nurses to do their very best by every patient. The NHS is the largest single employer in the western world and it has the highest rates of hospital acquired infections of any developed country. It simply isn't working.

State schools don't work. They don't do what they were set up to do. Levels of general numeracy and literacy at age sixteen are pitiful. Far too many bright children are not stretched as they should be to develop their analytical powers. Universities have to hold remedial classes for those who have splendid examination results on paper but struggle in real life to construct a sentence. It simply isn't working.

Why have these failed institutions not been farmed-out to the private sector which has a long record of providing a better service for a lower cost? No doubt part of the reason is the desire of politicians to use health and education as measures of the success of their time in government. If they had any sense they would realise they are onto a hiding for nothing in the long term. A system that cannot deliver, cannot deliver. You can fiddle with it to your heart's content but it still won't deliver. You can boast of so many more billions being spent on the NHS or school and, as we have seen, you can win elections, but a system that cannot deliver, cannot deliver.

The central problem is that additional money is pumped in at the top rather than the bottom. Pumping in extra money at the top means, in the mind of government, that there must be additional oversight of how the bit that gets down to the coal face is spent. Ah, but there's more, you can't just pump money in and distribute it to everyone, you have to choose where it goes. That requires committees. Extra committees to deal with the extra money. And if more is getting down to a region the region will need an extra manager or ten to supervise it, and every hospital will need an extra manager or five to report back on how it is being spent. The whole system doesn't work. It's almost as far as it could be from Beveridge's idea of a private system funded by public insurance.

In the real world a system that doesn't work must be replaced, root and branch if necessary. We are seeing at the moment how the public have a taste for radical change where systemic inefficiency, waste and corruption are to be avoided. Today it is MPs' expenses and allowances, this is the perfect time to widen the debate and expose systemic inefficiency in the state delivery of services. Strike while the iron is hot and tomorrow we can spend less and receive more.

Monday, 11 May 2009

A full tummy and a smile

For those of us currently living off our savings treats have to be rationed these days as the returns from main-stream investments tend to be negative, it makes treats even more of a treat than they used to be and causes us to be more discerning in our choice. Being a plump boy, my treats tend to involve food, and at the moment they alternate between Indian and Thai. Saturday was a Thai evening.

Within walking distance of FatBigot Towers there are three Thai restaurants, all of which have experienced my custom at some time but these days I only go to one of them. One of the others is an extraordinary place. I only went there once although I go past it frequently and it never seems to have any customers. My single visit provided me with the worst meal I have ever had the misfortune to pay for, an overcooked starter and bland but decidedly unpleasant main course. It was reasonably cheap by the general way of these things but grossly overpriced for what it was. Never will I darken their door again.

The second is relatively new and quite nicely appointed, I have been there three times. Their food is good but they have a skeleton staff and delays are not unusual. They are noticeably more expensive than the one on my blacklist and a little cheaper than the third. The third is in a different league. It is the most expensive of the three, although not by much, large and extremely well presented with a magnificently stocked bar and waiters and waitresses constantly buzzing about in the background. To my taste the food at the second is marginally better than at the third, yet the third is my establishment of choice in these straightened times.

If a business wants my money it has to pry it from my grasping hand by providing something I really like. The food doesn't have to be spectacular, the wine doesn't have to be fine but the overall experience has to be enjoyable and for me that means clean premises, unobtrusive yet attentive service, no more than one "how is your food?" per course and an overall air of friendliness. It was interesting walking to the restaurant at around 7.30 on Saturday evening. On the way I passed at least a dozen eateries and only two of them were busy, an independent pizza place and the excellent curry house at which I was assailed some weeks ago by the world's most ignorant person (see here). All the others had fewer than a quarter of their tables occupied, including my second-choice Thai establishment.

Walking in a different direction from FatBigot Towers takes me to my favourite local curry house, on that route I pass five or six restaurants including quite a new one also serving Indian food. I ate there a couple of weeks ago and the food was exceptionally good, however I was treated as an inconvenience by the snotty staff. That is perhaps only to be expected by a scruffy, aged, fat alcoholic who decides to impose his shambling self on high-quality premises; yet others welcome me to their business and smile sweetly as I hand-over cash at the end of the evening.

I know who is going to get my cash, it's the place that makes me feel welcome and gives the impression they have enjoyed having me there at least as much as I have enjoyed being their guest. They might be lying. They might want to get rid of me in case other potential customers are put-off by the rancid old man in the corner who looks as though he smells of stale urine, yet they smile through gritted teeth and realise that one scrofulous customer spending real money is worth more to them than any number who might visit but have not done so.

Next Saturday it will be curry again at my usual haunt and I am sure I will leave with a broad grin and a feeling of deep satisfaction with the product I have paid for.

Thursday, 7 May 2009

Is it time to flatten the black economy?

We now have confirmation that the Chancellor of the Exchequer is just guessing what he should do, he has admitted that his decision to increase the top rate of income tax from 40% to 50% was not based on any evidence or analysis but was a personal judgment.

As the Director of the Adam Smith Institute, Eamonn Butler, points out in an article in The Times today, increasing rates of income tax, particularly at the higher bands, does not increase the overall tax take. It's all pretty obvious really. The more you have to pay in tax the more cost-effective it is to pay an accountant to keep your bill to the absolute minimum and the more fastidious your accountant must be to keep you happy. Equally, if earning above a certain level will result in you having to pay a rate of income tax you consider to be excessive you might well choose to keep your earnings below that level. Or you could just move to Papua New Guinea and be done with it. On the other hand, being liable to income tax at a rate you consider fair reduces your incentive to find ways of reducing your tax bill. Not only does the cost of hiring an accountant form a greater proportion of your tax liability, such that he has to find substantial savings to justify his fee, but there is simply less inclination to do so if you feel you are being asked to pay a fair amount.

I rather like the idea of income tax being set at a level which provides very little incentive for avoidance. It's not that I want to put accountants out of business, although I am happy to allow them more time to formulate their proposals for Land Value Tax. Reducing tax avoidance is something of an empty concept. By definition, tax avoidance involves careful examination of the tax laws so as to ensure you take advantage of ways in which those laws allow you to reduce your liability to tax below what it might otherwise be. Everyone who lawfully claims an expense against tax is engaged in tax avoidance. Say you have a gross income of £20,000 and you spent £15 on travel from one place of employment to another, a taxi from one of your employer's offices to another because you were needed at the other office. You can put that expense against tax and reduce your taxable income by £15. You don't have to make the claim, you can pay the extra tax if you want to, but the law allows you to set that expense against your income so that you are taxed on a smaller total sum. There is absolutely no difference between the shy paper-pusher who reduces his tax bill in this way and the brash multi-millionaire who sets up complex trusts or has money paid to an overseas management firm rather than to his bank account in the UK. Each is doing exactly as the law allow him to do - he is arranging his affairs within the law so as to reduce his liability to UK income tax. It should not be forgotten, however, that those who engage in tax avoidance are complying with the law, not breaking it.

Changing the law so that various forms of avoidance are no longer available is aimed only at those who comply with the law. Very often such changes merely make available new means of avoidance because closing one "loophole" opens another, the risk they run is to be too effective and encourage those who previously complied with the law to operate outside it.

The "black" economy is, in my view, the real black hole in the UK government's income stream. It is anyone's guess how big it is. Some parts of it, like organised crime, are so far outside the law that there is no reasonable prospect of them being brought into the tax net, but I believe an awful lot is a direct consequence of tax and national insurance being at the rates they are at the moment. The headline standard rate of income tax of 20% doesn't sound too bad, but employees pay national insurance on top at 11% and employers have to chip-in a further 12.8% on all but the first £110 a week. A base weekly wage of £400 will cost an employer more than £430 yet the employee will receive in the region of £300. Pay half the wage in cash, half through the books and both employee and employer benefit, the employer's weekly outgoing is reduced by around £19 and the employee's take-home pays rises by around £65.

There are two further incentives for employers operating small businesses to keep a proportion of their turnover off the books. The first is to ensure that they personally only pay income tax at 20% rather than 40%. Declare a taxable income above £37,400 in the current financial year and you retain only 60 pence for every pound above that figure whereas you keep 80 pence in the pound below £37,400. Having said that, I suspect many of those who under-declare their income are more interested in finding a figure that will not leave them open to enquiry rather than just avoiding the top rate of tax and so will declare around £25,000 or £30,000 rather than being too cute and running right up to the limit. Nonetheless, they will steer well clear of the 40% tax band.

The other factor is VAT. A turnover of £67,000 triggers the need to register for VAT and, therefore, to charge VAT (currently 15%) to all your customers. The £67,000 threshold is on turnover not profit. I was speaking just the other day to a neighbour who is having a new kitchen installed. She engaged the services of a specialist kitchen fitter who is certified to do electrical and gas work, so that he can undertake all the work himself, but who is not registered for VAT. He advised her that he does not provide any materials, units or appliances because he needs to keep his turnover below the VAT threshold in order to be able to charge a competitive rate for his services. My neighbour chose and bought units and appliances herself and the fitter told her what additional materials he needed (including cables, copper pipes, solder, a gas canister for his blowtorch, tiles, grout, filler, paint and even tubes of silicone sealant) which he asked her to pay for (she paid him cash, he bought them, provided her with the receipts and, of course, gave her the change).

Not every tradesman has a customer willing to engage in this circuitous process. The others have to buy materials themselves and it doesn't take long before their turnover exceeds the magic figure and they have to put their prices up, thereby doing themselves out of business. Building materials, in particular, are quite staggeringly expensive. Their only practical option is to seek payment in cash so that they can buy materials in cash and pay their staff in cash, thereby keeping enough off the books to avoid having to charge VAT.

I believe the scale of this type of tax evasion to be enormous. It happens all over the country with tradesmen who fear that strict compliance with the law will make their services too expensive. As a consequence they not only jiggle figures to keep their overheads and prices down, they also see an opportunity to declare a lower personal income then they would be happy to declare if only they didn't feel the need to fiddle the system in the first place. Once they are fiddling to reduce staff costs and fiddling to keep prices down they have nothing to lose by also fiddling to keep a proportion of their own income away from the taxman. It is a cumulative process, each fiddle that is considered necessary to stay in business encourages a further fiddle to make additional profit.

I wonder what would happen if the first £15,000 of income were free of income tax and then a flat rate of 20% applied to everyone with no additional national insurance contributions. My guess is that a great part of the black economy would be brought onto the books because the incentive to work outside the system, with the risk of detection and penalties necessarily involved in doing so, would be cut drastically. I would also guess that the vast majority of those currently taxed at 40% and those who will be taxed at 50% when the new rate comes in (if it ever does) will readily pay 20% rather than spending money seeking to reduce their liability. Of course this is just a guess, but it accords with my idea of common sense.

There is no way of knowing what a radical change like this might do to the tax take, perhaps it will provide enough for the government to do the things it really needs to do, perhaps it won't; it's anyone's guess. What it will most certainly do, in my view, is trim the costs of collection enormously. Plenty will bleat about it being wrong that someone on £100,000 a year of taxable income should pay "the same" as someone on £10,000. This raises an aspect of so-called "progressive" taxation I have never really understood. The person taxed on £100,000 does not pay the same as the person on £10,000; under a flat-rate system at 20% the former pays £20,000 and the latter pays £2,000. My maths might not be particularly good, but I see a factor of ten differentiating these amounts.

To my mind there are only two arguments for "progressive" taxation. One is that the person on a lower income necessarily pays a higher proportion of his money on subsistence, so it is fair that the tax paid on the amount available for discretionary spending should rise. That is all very well when subsistence costs have to come out of income that is taxed. For the current financial year income tax is payable on earnings above £6,475. Assuming £15,000 to be subsistence level (as I have for the purposes of this piece), Mr Modest is required to earn over £17,000 just to reach subsistence level because he pays tax at the current rate of 20% on everything above £6,475, so to end up with £15,000 he must earn an additional £2,000-odd. Even if true subsistence level is £10,000 or £8,000 he is still paying tax on part of his income within the subsistence bracket. In that situation I can see that a modest up-lift for those earning comfortably more than subsistence can be justified. The other argument is essentially similar, it is that above subsistence level everything is an optional extra but some optional extras are a normal part of life in this country and others are real treats. In essence the argument is that true subsistence level is higher than the base costs of housing, heating, food and clothes. Actually there is a third argument, that people earning more are some sort of wicked parasite and should be punished; attractive though that might be to some I consider it to be mindless nonsense.

That is all very well, but the sensible answer is surely to lift the personal allowance to subsistence level and then concentrate on bringing everyone into the fold rather than providing incentives for some to escape. This is what lies behind the flat rates applied in some Eastern European countries after they shed the yoke of Soviet rule. The black economy was rife as was corruption by both municipal and tax authorities. A system had to be adopted which reduced incentives to operate outside it otherwise the well-established evasion techniques would just be adopted by even more people. Introducing flat rates at modest levels was a huge gamble because the new governments could only guess whether those operating outside the system would play ball. The result was that they did in sufficient numbers to make the new system work, both in terms of tax raised and in being easy and cheap to administer.

Britain's black economy is rarely addressed by our main political parties other than through bland assertions that they will clamp down on evasion. A few builders and car mechanics are caught each year and a few shops are monitored and discovered to be taking far more in cash than they declare. So what? Has it done anything to bring substantial sums onto the books and into the tax system? Of course not. There are some jobbing gardeners, builders and plumbers who issue formal tax receipts for everything they do, for every one of them there are dozens who ask for payment in cash and when pressed to issue a receipt give a document signed in the name Michael Mouse.

Enforcement against those operating outside the system is a fantastically expensive exercise which might or might not provide a return in excess of the costs. That, however, is the wrong way to look at it. It is not a trading enterprise in which the Revenue can be seen to be successful if it costs £100million to collect £101mlillion because it is not about the net £1million they collect, it is about the countless hundreds of millions that escape their attention completely. All that money is outside the tax system because the risk of being caught is small compared to the benefit of saving income tax and national insurance by doing things on the sly.

I have heard it argued that those operating in the black economy are such thoroughgoing rogues that they will evade tax no matter what. I find that impossible to accept. Of course some are, but the jobbing handyman or gardener who earns £400 in a week and declares £220 is just trying to earn a living wage and the builder who keeps his declared turnover below the VAT threshold is just trying to stay in business. These people are not major criminals, they work for every penny they receive. The effective cause of them fiddling their books is the current tax system under which they fear (rightly or wrongly) they could not make a living if they kept by the rules. Any system containing such an incentive is necessarily flawed.

It would take a bold government to make such a radical change. My guess is that it would pay off in spades.

Wednesday, 6 May 2009

Football can be very unappealing

I watched a ball kicking contest on the television yesterday between Manchester United and Arsenal. Having grown up in Sussex and being a long-standing resident of Highbury my support (such as it is) has always been directed at Manchester United. The game wasn't particularly entertaining because United were wholly dominant from first to last and Arsenal seemed to have neither the will nor the skill to fight back after conceding two early goals. Apparently another bunch of cheating thugs based in London was eliminated from the same tournament this evening and the final will pit United against Barcelona in three weeks' time. I'm not particularly interested in football, in fact I find it rather tiresome as a spectator sport and the behaviour of almost all the players is nothing less than organised cheating. To an extent it shouldn't really matter if the game is administered unfairly given that the players spend so much of their time trying to mislead the referee into awarding them free kicks and throw-ins, but something arising from yesterday's game really shocked me.

Towards the end of the match a Manchester United player was adjudged to have committed a foul and was sent off. He will not now be allowed to play in the final against Barcelona. Apparently there is no right of appeal no matter how incorrect the referee's decision might have been save in two very limited circumstances. The first is where there is a case of mistaken identity such that the referee has mistaken one coiffurred and tattooed millionaire ponce for another. The other is where the referee himself admits that he was in error. I find this a quite bizarre state of affairs.

For all its thuggishness, professional ball kicking is big business and the players have only a limited time playing at the very top level. The player who was sent off yesterday is Scottish so he will never play in any important international games, his chances to fulfill his potential are restricted to club football. Perhaps he will never again have the opportunity to play in the final of the European Cup. And so far as his team is concerned their chances of winning could be compromised by his absence, something not only of personal importance to the players and supporters but of huge financial significance to the business of the football club itself.

How can it possibly be right that there can be no appeal against a decision with far-reaching consequences? On looking into matters a little further I have discovered that in the English league system clubs can appeal against a player being sent-off but not against him being given a formal caution during a match (something I will always think of as a booking but which we must now call a yellow card). Yet an accumulation of yellow cards leads to suspension from future matches even if each referee issuing the caution was wrong to do so.

Not having a right of appeal against an incorrect decision strikes me as fundamentally wrong. Having said that, restricting rights of appeal has been a feature of the development of English civil litigation over the last twenty or so years. When I started in the law a disgruntled litigant had an automatic right to appeal against almost any decision. None but the most foolhardy would just appeal willy-nilly because an unsuccessful appeal could be very expensive, nevertheless the system acknowledged that decisions at the lowest rung of the judicial ladder are made by just one person who can get it wrong so there was an opportunity to, in effect, seek a second opinion. Rules set various tests that had to be met to overturn rulings in different types of case and from different ranks of judge resulting in some decisions being easier to change than others. The technical details don't matter, what was important was that the system recognised the fallibility of human judgment and that it can have a profound effect on real people.

There was then a major change about twenty years ago. A general requirement was introduced for obtaining permission from the court before you could appeal (there were some exceptional instances in which permission was not required but they were rare). And, somewhat strangely, you had to seek permission to appeal from the very judge who had ruled against you. This might sound like a recipe for embarrassment and in front of some judges it was because they took it as a personal insult. Fortunately they were few in number, but it was still a slightly uncomfortable thing to seek to persuade a judge he was wrong when the ink of his signature at the bottom of the judgment was not yet dry. Even if he or she refused permission to appeal you always had the right to ask the appellate court for permission. You might or might not have been correct in thinking that the first judge got something wrong but at least you had the chance to put your objection and if there appeared to be something substantial in your point you would be given the chance to make a formal appeal. This filtering system actually worked very well and I presume it still does.

The idea that you should have no way of challenging a plainly erroneous decision strikes me as absurd unless there are special reasons justifying that position. I can see, for example, that a right to appeal every decision for a free kick or throw-in by reference to television pictures might cause any sport to be delayed and stultified. Decisions about whether to award a penalty and whether the ball has crossed the line for a goal are in a different category because they can have a significant impact on the outcome of the game. Decisions leading to players being suspended from participation in future matches are even more serious. Maybe yesterday's referee was correct, maybe he was not. I don't know. But I can understand the argument voiced by the commentators at the time, and by many observers since, that he was completely wrong. For there be no way of raising that argument would be said by some to be a breach of the player's (and possibly the club's) human rights. I prefer to look at it as being unfair and, therefore, unacceptable without the political dimension of "human rights" being dragged into the matter.

This seems to be yet another example of a self-important transnational body (in this case UEFA) setting itself above the standards of decency and fair play by which we little people try to live. The UN does it and the EU does it so it is perhaps no surprise that other unaccountable bodies with access to virtually unlimited amounts of other people's money should do it as well.