How not to lend money

I am told that the British fondness for owning your own home is not shared by much of Europe. More fool them, say I. In fact I go further, save for those who need to move frequently because of their work there is no sense in renting long-term because you get nothing in return. This does not mean, however, that it makes sense to expand home ownership at all costs because such an approach results in the gullible and the over-optimistic being at the mercy of spivs and blackmarketeers. I am not talking of counterfeit cigarettes being sold as genuine duty frees, nor of World War II nylon stockings, I am talking of greedy shysters pretending to be banks. To explain my point it is necessary to go back about 20 years.

The housing market last peaked in 1989. The economy had improved structurally throughout the 1980s and legislation was brought in allowing long-term tenants of local authorities to buy their homes at discounted prices. Both these factors contributed to house prices rising but they could only do so if the prospective buyers could raise the money. The government announced that it was to end a tax concession known as MIRAS (mortgage interest relief at source), this allowed people to claim part of the interest on their mortgage against tax. MIRAS had been scaled back for some years and in 1989 it was to go completely. In the time leading up to abolition people were falling over themselves to get on the housing ladder so they could benefit from the last few months of this tax break. Again, they could only do so if they could raise the money.

August 1989 came and went, the economy took a bit of a downturn, unemployment rose, the newly unemployed could not pay their mortgages, some existing borrowers could not afford their mortgages without the tax break and the housing market started to falter. It moved downwards at different rates in different parts of the country and by 1992 it was stagnant. Prices were reduced by between thirty and fifty percent depending upon where in the country the property was situated.

I have mentioned some of the reasons why this slump happened but I have left out one of the most important. Banks, building societies and finance companies were falling over each other to lend money to anyone who walked through the door. They thought prices would keep on rising and that lending to someone who cannot repay would not be a problem because the property could be repossessed and sold in a rising market thereby giving the lender absolute security. Not all lenders were so foolish but a lot of new finance companies had entered the home mortgage market and were keen to get a share of the bounty. A new form of home loan finance was devised.

Historically purchasers were required to put down a deposit (usually at least twenty percent of the purchase price) and were lent a maximum of two-and-a-half times their annual income. These figures did not arise by accident, they were the result of banks and building societies analysing risk. Insurance companies do not just pick the amount to charge as a premium out of thin air, they make calculations according to perceived risk. Banks and building societies were doing the same thing. They knew from experience that prices cannot keep going up forever, that repossession usually leads to the property being sold at less than the best possible price, that they would have to continue to pay interest on the money they had borrowed in order to be able to lend it to their customer, that repossession and sale incurs expenses and that their best chance of being paid came from the customer being able to afford the repayments. They also knew that borrowers are often over optimistic about their futures and wanted to borrow as much as they could in the expectation that their income will rise so any initial hardship would soon be overcome. Responsible lenders have to look after their own interests by maximising the chance of being repaid in full, this required them to build in a cushion of equity to guard against the risks of repossession and to impose a limit on the amount advanced in order to guard against the risk of the borrower's circumstances not improving. A beneficial side-effect is that lending in this way also prevents the customer from over-extending himself.

The new lenders were not so cautious. They were prepared to offer deals unavailable from banks and building societies in order to get a foot in the market. A greater proportion of value was lent and higher multiples were applied to customer's incomes. Many of the established lenders felt it necessary to follow this pattern for fear of being excluded from the market. Eventually loans were offered at more than the purchase price (so that the borrower without any savings could afford legal costs, Stamp Duty, new carpets and a washing machine) and no checks were done to ascertain whether the borrower could afford the repayments. In some instances the only assurance the lender required about the ability to repay was the borrower's own word that he could afford it, they did not require his income to be disclosed or, if they did, they allowed the borrower to state his income without producing supporting proof.

Not surprisingly the ready availability of money allowed full rein to the British desire for home ownership and demand for houses and flats increased. Prices were pushed up, and as the lenders relaxed their requirements a little the number of potential buyers increased and an inevitable bubble formed. House prices were not a real reflection of the value of properties in a market because the market had been skewed, demand in a market requires affordability and by making huge sums available to people who did not have means to repay there was a pretense of affordability, a pretense of demand. The bubble burst in 1989-1992 and prices fell back to something like their true level.

The reckless lenders were hit very hard by this because they had to repossess properties in vast numbers and sell them in a falling market. Many were never heard of again, some were bought-out by reputable banks and a very few survived the storm because they had made a lot of good lending and only a little reckless lending.

The absolute bottom of the market came in about 1992 and lasted for a couple of years. By then the economy was recovering and lending practices had improved. As the economy appeared to be doing well over the next ten and more years lenders with no eye on the past reintroduced the sort of foolish lending which had bankrupted many of their predecessors. Prices rocketed again and a lot of the increase was false for exactly the reasons it was false in the 1980s, it was based on false demand fuelled by reckless lending. We are now seeing a fall in the prices of houses and flats and only time will tell how large the fall will become.

The lenders sometimes seek to defend themselves by saying they have only reacted to their customers' demands, but that is nonsense. These lenders are not (or, more exactly, should not be) Mr Loanshark with his bag of cash and boys with baseball bats to "persuade" defaulters of the error of their ways, they are companies with obligations to their shareholders to run the business with a view to profit. Finance companies do not just magic money out of thin air, they have to borrow it. Their profit comes from borrowing at one rate and lending at a higher rate. There will always be cases in which the borrower cannot repay because of changed circumstances and any losses in such cases are factored into the margin between the cost of borrowing and the receipts from lending. But to have lending policies which increase the risk of default bites into the margin even more and leaves the lender exposed to collapse if the housing market takes a downturn.

Mr & Mrs Young-Borrower with no savings and a joint income of £30,000 before tax can only afford to repay a certain amount. Lending them £150,000 involves a substantial risk they will not be able to keep up with the repayments. It is bad business because it exposes the lender to unreasonable risks. It is bad policy because it builds exaggerated hopes in the Young-Borrowers, they might be able to cope but if they cannot their lives will be ruined.

It takes a very hard heart to blame Mr & Mrs Young-Borrower, they are told they can get on the property ladder and bend over backwards to do so because they see prices rising. When it comes to make the first repayment at the end of Month 1 they do so in the belief their property has increased in value by more than 1% in that month. They pay £1,000 but take comfort from news stories that they have made a capital gain in excess of £1,500. Without the market being skewed by reckless lending the true value of their property might be £100,000 and the true increase in value might be 2% a year not 1% a month. Suddenly their £1,000 a month expenditure looks distinctly unattractive.

The fault lies firmly with the lenders. I am not suggesting they owe a duty to potential borrowers, but they do owe a duty to their shareholders and that requires them only to lend against sound security - security both in the property itself and in the people who are obliged to repay the loan. Executing that duty diligently has the added benefit that it minimises the risk of a price bubble and, thereby, increases the number who can genuinely afford to buy. The real benefit of that is seen in the long-term. After 25 years Mr & Mrs Young-Borrower own their home outright, no mortgage to pay, no rent to pay and a substantial capital asset.

Today's bad word - Community

While I am in the mood for words and their misuse by politicians, how about "community". What a lovely, friendly, cuddly word it is. In our road we have a vibrant community, hosting street parties every time the Labour Party gains a vote in an election; come one come all, old Mrs Miggins with the lazy eye shares a drink with Festus Cannabis, the Rastafarian pole dancer from Wigan, swearing lessons for the educationally challenged kiddies, discussion groups on how to claim benefits for their parents; roll up roll up all the fun of the fair in our happy community. It is an inclusive word, bringing together people of different backgrounds and experiences by finding common interests and a sense of, well, community. It is a physical thing involving actual people doing actual things, not a label.

But not for politicians. They tell us of the black community, the muslim community, the Indian community, the Irish community, the football community, the rugby community, the gay community. They claim to be furthering the best interests of every mis-described community they can think of, is there any truth in the claim? Quite obviously there is not and the explanation is simple. These are not communities at all they are labels for disparate people with one of more characteristic in common but no, or very limited, common interest.

Take the Indian community for example. People of Indian descent in the UK do every type of job, have every type of interest, hold every conceivable prejudice; they range from the most indolent to the most hardworking, the richest to the poorest, the cleverest to the thickest, the thinnest to the fattest; they support every political party and none. The only thing they all have in common is that they or their ancestors came from India. In no sense does this make them a community.

But what is the result of labelling them a community? It seems to me there are three results. First it separates them from everyone else by turning them into a distinct group, secondly, it encourages loudmouthes to claim to be able to speak for all people of Indian descent and, thirdly, it causes unhappiness and, sometimes, unrest in those who do not wish to be labelled. Suddenly, instead of someone's national origin being irrelevant to the law and to policy-making special provisions are being discussed to reflect the supposed special interests of this supposed community. As a result those not entitled to the label resent others being given special treatment and special attention and the loudmouthes press for greater and greater special treatment to bolster their own power base. Instead of "community" being a description of how people act together it has become a divisive and self-defeating concept.

It must be abandoned and we must return to equality under the law for all.

It's time to be nasty to Gordon

I chose the name of this blog before I had any idea what I would write, but there are many subjects on which my opinions are firm so "bigot" seemed appropriate somewhere in the equation. As the weeks have rolled on it has become clear that my musings are, perhaps, not all that bigoted after all. For example, usually I choose not to attribute motives to actions I disagree with because I feel it serves little if any purpose to do so. Mine is not a swear-blog, it is just an opportunity for me to throw out some views - many ill-formed, some reasonably sound, all matters of interest to me. Sometimes, however, I have to touch on a subject that makes me want to be really nasty. Nothing, at this stage of British history, prods my nasty button like the current government. It is all the rage to rage and I want to throw in my modest contribution. It is time to talk bluntly about Gordon Brown and that requires me to be nasty.

I have to start by asking what qualities are required to be an effective Prime Minister. It seems to me that there are too many to count but leadership is undeniably the first quality, leadership of the government and leadership of the country.

How does Gordon rate as a leader of his team? Not being in the cabinet I cannot speak from first-hand knowledge so I have to rely on what I have observed, read and heard. If we take his time as Chancellor of the Exchequer it is plain beyond argument that he did not trust other members of the cabinet. His biannual budgets were only disclosed to the Prime Minister shortly before they were delivered and policy in all departments was affected by his need to interfere. It was not enough for him to set the budget for each department, he needed to oversee how that budget was spent. One might observe that the bunch of shocking incompetents appointed to high office since 1997 did not deserve to be trusted, but that is a different issue, the fact is he did not trust them. That is not a sign of a good leader of a team.

His leadership of the country has been non-existent. He started by saying that he wanted to let us know his vision for Britain. That was the correct starting point, because it was only fair to let the country know whether it would be more of the same or something different. All I can remember of that vision is "British jobs for British workers" (completely illegal under EU law), a proposal to tax plastic carrier bags and today's great initiative of holding cabinet meetings outside London. These are not leadership of a country they are ad hoc gimmicks. Everything else he has done in the last year has been a reaction to events, usually a panicked reaction when events had overtaken him. Sometimes events overtake even the most competent Prime Minister for a short while, but qualities of leadership and judgment can bring matters back under control. Gordon's problem is that he is not a leader.

Leaders need to believe that people will follow them, they need confidence in their own ability to lead. Confidence in your ability to make a sound judgment is one thing, confidence that other people will follow your judgment simply because you say so is another thing entirely. People only follow their leader when they have confidence in his judgment.

Today Michael Vaughan resigned as England's cricket captain. His batting has not been at its best for some time, but he knew, and followers of cricket knew, that the players respected his ability as a captain to guide the progress of the game. It was not his fault that England lost to South Africa yesterday, he tried every trick in the book to combat the South African batsmen. Things started to drift away before tea but he took command, changed the field and swapped his bowlers around to maximise the chance of an England victory. The defeat was despite his captaincy not because of it.

If we look at it from a different perspective we can see the task Michael Vaughan faced yesterday. England started the day in a good position but they were facing an extremely good team, man-for-man probably a more skilled team, and there would be a time when South Africa took the advantage. Rather than looking at what Michael Vaughan did through our televisions, let's try to be him and see the challenge he faced. The opposition start piling on the runs and one of your bowlers is not on good form. What do you have to do? You have to change thing, you have to work out a plan. "I'll have 4 overs of swing up the hill and some spin down the hill, then switch the end of the spinner and give them some pure pace downhill, see how that works." "I'll move the field to give the impression the bowler is planning to attack leg stump when in fact he's planning to attack off." "I wanted 4 overs of swing, it's not working after 2, I'll change tack, take him off after 3 and give the fast man a go." Whatever the tactics are they can only be implemented if you have confidence in your team to perform and the confidence of your team in your decisions. I bet there wasn't a single England player on the pitch yesterday who would have swapped their position for Vaughan's and every one of them would have looked at how he manipulated his bowlers and fielders and said he did exactly what a good leader should do. It didn't work, but that isn't the point, the point is that he had the character to do it rather than let the game drift away without a fight.

Gordon has not displayed any such qualities in his year as Prime Minister. There has been no guiding of events, no experimentation to try to outflank his opponents, no anticipation of what might happen, no plan to cut the attack off at the pass. We have had a year of horses bolting and stable doors being slammed with a lot of noise long after the nags have run three Grand Nationals and been dragged to the glue factory. The simple fact is that the man is not a leader. He is not a leader of his team and he is not a leader of the country. Nothing can change that, it is a matter of character. And that is why Gordon must be condemned.

There is nothing wrong with not being a leader provided you never seek a position of leadership. This man fought tooth-and-nail to become Prime Minister. Maybe he did not know he is not a leader, some might think, but I believe that can never be the case. We all learn from an early age whether we are leaders or followers, we witness it in countless things we do during our lives and only an arrogant fraud seeks leadership despite knowing he is unsuited to it. Gordon sought the premiership out of pure selfish arrogance. He wanted to be able to say he'd done it. He knew he wasn't up to the job but he didn't care, he just wanted to be there.

Gordon Brown has made Britain his fag-hag.

Social Justice and Humpty Dumpty squared

Humpty Dumpty was a very sensible chap. He could never be wrong no matter what he said because words meant what he wanted them to mean. I mused yesterday on the new meaning of "unnatural", today I want to ask what "social justice" means.

Social justice is a term that trips off the tongue of politicians when they are at their most earnest and their most evasive. "What can you do for me?" asks the man of the parliamentary candidate, the candidate looks him in the eye, lowers his voice and says in his most reassuring tone "I will bring you social justice." Just two words act like Rennies after a vindaloo, all burning is negated and the hope of a good night's sleep is increased. How can these words have that effect? The answer is simple, because they do not have an established meaning and, therefore, can be interpreted by the listener to mean anything he likes.

Taking the words literally "justice" is an adjective qualifying the noun "society". Instead of saying "I will bring you a just society" it is snappier, and still grammatically correct, to say "I will bring you social justice". And Humpty Dumpty told us we can do anything with adjectives.

But what is a just society? It is fairly obvious that it is the type of society someone considers to be just, and therein lies the problem - we all have different opinions about what is just and what is unjust, about what is fair and what is unfair. Not only do we have radically different views about the justness or individual policies, we also have radically different views about the desired economic and social structure of the country as a whole.

On some issues there is probably broad agreement. I doubt few would disagree with the proposition that those who do work which requires great skill and which provides a great benefit should be paid more than those in jobs requiring less skill and providing a lesser benefit. We might compare a brain surgeon and a tree surgeon. Looking at it with a broad brush we can say it is fair for the former to earn more than the latter. We then have to ask the next logical question, namely, how much more? When we get to that level we find ourselves having to put a value on the two jobs and here there is far more scope for disagreement. Should it be twice as much, four times as much, should the comparison be made before tax or after tax, should it be reflected in pension arrangements and so on. The more detailed our examination of the subject, the more there will be disagreement. So we can start with a general proposition which carries broad consensus as one element of a just society and have no consensus at all about anything other than the general proposition.

Governments cannot operate by general propositions, all they can do is put into effect specific policies. When they tried to abolish the 10p tax band they were not met by people in the street saying "this does not accord with my notion of social justice", they were assailed by the poor saying "you are putting my tax up and I am already poor". The catch-all term "social justice" is completely irrelevant to assessment of the merits or otherwise of specific policies.

Any politician who uses the term "social justice" without defining, with precision, the policies underlying the term is being Humpty Dumpty squared. Not only does it mean whatever he wants it to mean but it will be interpreted by his audience as whatever they want it to mean. The reality is that it means nothing.

"Unnatural", a new definition

It wasn't very long ago that everyone would snigger behind their newspaper when reading reports of an actor caught committing "unnatural" acts with a man in a public lavatory. Many careers were ruined, fortunately a few were saved such as that of John Gielgud who entertained us for decades after an unfortunate encounter in a public loo brought him before the magistrates. We all knew where we stood then, "unnatural" meant homosexual.

Times have changed and so have general attitudes. Those who like to dip their nib in the alternative inkwell are no longer considered perverted sinners by the law. Of course there are still many people with a genuine belief that homosexuality is unnatural and some of those believe the law should criminalise all or some homosexual activities. But the criminal law should not pander to minority opinions, it should reflect the standards of society in general (insofar as they can ever really be measured). Live and let live is a thoroughly unfashionable notion in these enlightened days of regulation, so-called equality and human rights; but it still prevails in much of the criminal law and long may that be the case. Do what you wish with your willy or labia, but only do it with a living creature if that creature freely consents.

One consequence of the relaxation of the laws relating to homosexual activity is that we have lost the previous meaning of "unnatural" acts. Indeed, were any newspaper today to describe George Michael's historical deeds in America as "unnatural" it would be inundated with letters and emails condemning its antediluvian attitude. Homosexuality is no longer "unnatural". Yet the word is still in the dictionary, it needs a new meaning.

As luck would have it, at almost the same time that George Michael's closet was opened, so was a new definition of "unnatural". Today it means "industrial". I will not linger on the question whether we need to find a new use for "industrial" because my concentration is all on "unnatural". And how convenient it is that I said concentration because that is the key to the new meaning of today's mot du jour. I mean, of course, the concentration of CO2 in the atmosphere. Being astute people, you might observe that no one has suggested CO2 to be anything other than a naturally occurring gas and you would be right. It is a very clever sleight of hand, you see, we can recognise CO2 as a natural product while implying that some CO2 is unnatural because of the way it is produced. Let me illustrate what I mean.

Whenever I breath out, from the shallow depth of lung remaining after a lifetime of smoking cigars and cigarettes, I produce a tiny little bit of CO2. It results from a process I cannot control. It is approved, ecologically sound, harmless, natural CO2. How do I know that it has all these qualities? Because St Al of Gore and the IPCC have not told me to stop the process. Whenever a peasant farmer in Eastern Europe burns logs to heat the family home in winter he produces a little bit of CO2. This is also approved and harmless because no embargo is planned by the great and good. The same applies to camp fires, vegetarian barbecues, flights by government ministers to international climate conferences and St Al's home. You see the way the process works, if it is not on the list of things we should not do it is natural.

We are told we must worry about the amount of CO2 in the atmosphere. But we must not worry about any CO2 which is produced naturally, only about the unnatural bit. The oceans can pump it out by the giga-tonne but that's fine, carbonate rocks can deteriorate and release it but that's fine, animals and humans can exhale it but that's fine, humans can produce it in every manner known before the start of the industrial revolution but that's fine. They are all natural processes. What is left, and therefore what is unnatural, is human production of CO2 by industrial processes.

I find this a curious concept because I cannot understand how man's discovery of fire as something which benefits his existence is different in principle from his invention of the internal combustion engine. To my simple mind they are both the result of humans using their brains and their physical skills to make their lives more comfortable.

For all I know there was a time when all birds laid their eggs on the ground, as some still do, rather than building nests. Every living twig a bird takes to form its nest removes a little bit of CO2-absorbing material. That material can be replaced within a few weeks or months but in the meantime the bird has changed the CO2 balance. The great and good will tell us that that's fine because it is natural. But it wasn't natural in the days before it happened. I can picture the outrage of the crows at the sight of a cheeky little robin stealing twigs: "What on earth do you think you're doing? Lay your eggs on the ground like the rest of us, you are an unnatural pervert." Except that the crows would not have said that, they are far to sensible, they would have taken one look and said "thank you Mr Robin, what a terrific idea, we'll do that now."

We are told that CO2 from every source other than human industrial activity is natural whereas CO2 from such activity is "anthropogenic" or, in the tabloids, "man-made". To describe it as anthropogenic (or, indeed, man-made) is to state a truism because anthropogenic means man-made. It is the contrast with "natural" which catches my eye. Why call CO2 emitted by the oceans as "natural" rather than "emitted by the oceans"? The only reason can be to give it a quality to distinguish it from other sources of the gas and it follows that sources which are not described as "natural" must be "unnatural".

Since when has the seeking of physical comfort by human beings been unnatural?

Silly question.

Since the start of the industrial revolution. St Al tells us so.

What's wrong with drinking and driving?

In my younger days I occasionally drove whilst drunk. The most extreme example was on a cold winter's night following a thoroughly enjoyable curry in the company of old friends. A few pints were taken before dinner, a few bottles of wine with dinner and a lot of port thereafter. I stood dutifully in central London waiting for a taxi but more than an hour passed with no joy. My bladder was telling me I had to go home, my freezing hands and feet were telling me I had to go home and my brain was telling me the taxi option was not likely to bear fruit. So I walked to the carpark at my work place and drove home. Getting out of the car I fell over and was able to make it to the front door only in carefully planned and determined steps. Had I been caught my licence would have been revoked for at least a year, a thought which passed through my head when a police car pulled alongside me at a set of traffic lights during the three mile journey. Not only was I not caught, but I got home and did no one any harm. Since then I have not driven when I thought I might be over the limit.

Ah yes, you will say, I did no harm on that occasion but I could have done. And a valid point you would be making. But just how weighty is your point?

The argument for a strict anti drink-drive law is that it has two effects, it takes dangerous drivers off the road and it sends a warning of serious consequences for anyone tempted to drive after consuming alcohol. Leaving aside the curious phenomenon that many of those who argue strongest for the deterrent effect of this law decry suggestions that prison sentences have a deterrent effect, I want to look at the alleged danger.

Because I do common sense rather than statistics, it seems to me that a dangerous driver is one who drives dangerously. If someone is driving perfectly safely I can see no compelling reason for him losing his licence simply because he might drive even more safely when sober. "But it dulls your reactions" say the supporters of the law. No doubt it does, but so does tiredness. "But it distracts your attention". Maybe it does, but so do arguing with a passenger, singing along to the radio, eating a pork pie, adjusting the air conditioning and a thousand other things we might do lawfully while driving.

What troubles me in particular is that there is no single standard of driver. Some people pay good attention to the road, anticipate potential hazards ahead, keep to a speed suitable for the circumstances, always know how close the vehicles behind them are and do all the other things which form a very good and safe driver. Others press the pedals, hope for the best and have absolutely no clue what is going on around them. Someone in the first category might well be a safer driver after five pints of cider than everyone in the second category, yet he runs the risk of a serious penalty despite doing no one any harm. It is a very curious state of affairs.

At heart this law is designed to be preventative. Criminal laws do not always require harm to have been done before a penalty is justified, if they did, all attempts to commit crimes would go unrecognised and I doubt that many would think an attempt to kill should only be prosecuted if the attempt were successful. This law is not, however, in the same category as attempting to kill, burgle or assault because those crimes require acts to be done which are intended to achieve a harmful result. The only justification for a mandatory disqualification for drinking and driving is that the potential risk from driving after consuming alcohol is so great that it justifies the penalty in all cases (I know there are exceptional circumstances in which disqualification is not imposed, but driving safely is not one).

Making drinking and driving an offense can be likened to health and safety laws, the sensible ones of which (such as that which allows a restaurant to be prosecuted if its kitchen has rats) impose a penalty because the potential harm is great and the cost of compliance is not. There will always be anomalous instances, such as the driver who is tanked to the gills but still perfectly safe, but extreme examples are no basis for any law. Laws like this must look at the average driver and form a view of the effect drink will have on him. But that does not provide an explanation for removing for at least one year the driving licence of a driver who is over the limit but has done no harm. By all means fine him and put points on his licence, but removing that licence for a year makes no sense if he has done no harm.

Who is responsible for teaching children?

I start from what I believe is an indisputable principle, namely that parents are responsible (in the causative sense) for creating children and, therefore, they are responsible (in the legal and social sense) for bringing-up those children.

We all know that some parents are simply not up to the task of rearing children and that others encounter difficulties they do not have the capacity to overcome without help. Society must make a choice between upholding the sanctity of parental responsibility and intervening, by compulsion if necessary, to try to cure or alleviate problems. In past generations it was the grandparents, aunts and uncles, or village elders who would step in to fill the void and such interventions still happen very often. Where there is no other option the organs of the State have residual powers including, in extreme cases, forced removal of children and their placing for adoption. The role of the State should always, in my opinion, be one of last resort. That does not mean there is no place for experienced nurses or social workers to give advice to an expectant mother where the signs are that she might not be able to cope when the baby arrives, but it does mean that compulsory intervention should be limited to situations in which there is both a real problem and a real chance that the State can make things better.

It is noticeable, however, that the growth of State services over the last 50 years has led to many believing that the State is primarily responsible for certain aspects of rearing children. I believe this to be a fundamental misconception, a misconception seen most vividly in the field of education. If you were to ask 100 people in the street who is responsible for educating children I guess a majority would say the State. This is not so, parents are responsible for educating their children just as they are for housing, feeding and clothing them.

The State's proper involvement in education is two-fold. First, in its capacity as the mechanism through which we seek to maintain certain standards, the State has a role in laying-down a minimum standard for education. In this role its position is the same as in law enforcement, we have certain collective standards which the law upholds (not to kill, not to steal, not to assault and so on) and the State enforces these standards by prosecuting and punishing offenders. Giving children a basic education is another standard which we adopt collectively because accumulated wisdom tells us it is beneficial for all. The only collective mechanism through which we can enforce that standard is the State, so the State must have the power to step in where children are not being educated to a proper standard.

The second role of the State is to provide schooling but in this respect the proper role of the State is limited. Where parents can provide education at home (either themselves or by the use of tutors) there can be no objection to them doing so provided the standard of that education does not fall below the national minimum standard. Similarly, where parents pay for their children to attend privately run schools the State's only role is as enforcer of a national minimum standard. It must be accepted that the vast majority of parents cannot afford private education for their children and do not have the means or the time to educate their children at home, so we all pay taxes and we delegate to the State the role of providing formal education. It must always be borne in mind, however, that the State is simply acting as delegate, it does not provide schools because it has an innate duty to do so, it provides them because we pay an element of our taxes in order to pay for that service. The mere fact that the State provides the vast majority of school in the UK does not give it primary responsibility for education, that duty rests first last and always on parents.

To suggest, as is done regularly by dinosaurs of the political left, that parents should not be allowed to pay for their children's education or to teach their children at home it to say that the State bears primary responsibility for children. This relegates parents to the role of servants of the State. Government is always at its best when it is reminded constantly, and with penalties for recalcitrance, that it is the servant of the people.