Fidel Castro was four hours deep into one of his six-hour speeches. Without pausing he handed the chairman a note which read "8th in from left, 17th row back." Armed police moved in discreetly and arrested the designated man as the speech continued. Afterwards the Cuban President was congratulated on spotting the traitor.

"How did you know?" asked the chairman.

"Simple," Castro replied. "I remembered comrade Lenin's dictum. The enemies of Socialism never sleep."

Break out the bubbly. Until today every penny earned by the average Brit has gone to the Chancellor. From today you get to keep what you earn, having paid off the government's take.

Tax Freedom Day is three days later than last year, and next year it will be later still. The later it gets, the higher our taxes, and the lower our competitiveness and our ability to create new wealth and jobs. The Chancellor doesn't create wealth. He redistributes some and destroys some. He certainly creates jobs, though, with public sector appointments recently outpacing the loss of private sector jobs.

The mediaeval Scots laird took 33 percent of the peasant’s produce after a third went for seed and a third for consumption.

Ane tae saw,
ane tae gnaw,
and ane tae pay the laird withaw.

Our Chancellor takes an even more rapacious 40 percent. Have a good day.

There is interesting news on the population front. First, according to the bi-cerebral shadow minister David Willetts, Britain is now a country of 60 million people. In the small hours of Friday morning, according to official estimates and projections, in a maternity hospital somewhere in the UK, that figure was passed for the first time.

Perhaps the happy parent was one of those 8,000 underage mothers whom the government frets about but cheerfully subsidizes. Anyway, Britain's rise in numbers contrasts with many other European countries like Italy, where populations are shrinking.

But then some of Britain's population rise is due to the fact that people are flocking to live here. Polish plumbers might have given the French a reason to veto the EU Constitution, but Britain is their destination of choice. Perhaps it's because we speak English (that Estuary sound you hear with all those glottal stops is, in fact, a form of English). Many of the newcomers also praise our tolerance. It certainly can't be the climate.

The newcomers from Eastern Europe who applied to work in Britain since the EU expanded last year are mostly keen to work, and take hard-to-fill jobs. They probably like our growth rate, which is about twice that of the Eurozone. And our unemployment rate is less than half that of some of the core EU members. I guess our taxes, which are way higher than they should be or need be, are still more appealing than the higher taxes and deductions taken in many other EU countries.

60 million will take some getting used to. I hope government gets the message, and doesn't spoil the things that make the place attractive.

Three conference attendees squeezed oranges for their morning juice. The economist extracted 2oz of juice from a 4oz orange. The engineer managed 3oz from his. But they both watched enthralled as the government spokesman produced 5oz of juice from his 4oz orange.

The big French vote against the EU constitution is a reassertion of the nationalism that the EU project was designed to temper. Many in France think the constitution too free market and Anglo-Saxon, just as many in Britain think it too dirigiste and centralist. They oppose it for the same reason, though, rejecting the way it would limit the right of their country to choose its own future, and to express what they see as part of its national character.

The French like their high social benefit economic model, while many in Britain view it as untenable amid global competition. The French went along with the surrenders of sovereignty which the EU project entails because they have seen them, until now, as an extension of French influence. It was other countries which had to yield to the French vision. Now, however, in a Europe of 25 members of diverse character, the French see themselves being required to abandon their traditions and embrace alien values. And they have said no.

As one nation reasserted itself, another nation died. This was the nation of Europe, which was to have been given its own President, Foreign Minister and diplomatic service by that new constitution. With the veto of member states diminished, the new nation would have taken unto itself more of the powers they used to exercise. It would have acquired new authority to direct the lives and laws of its members.

The vision which inspired its supporters was of a nation large enough and powerful enough to stand alongside the continental powers of the USA, Russia, China and India. Those nations, however, shared a culture, a history and a common sense of identity which Europeans do not feel. The European peoples do not feel Europe to be a country, and have been lukewarm or hostile to the attempts of a political élite to turn it into a state.

Europe will continue to change, but as a collection of nations instead of a single, powerful new one. Its members will converge on some issues but will go their own way on others. The failed vision was modeled on what nations had done before, whereas the reality of what now emerges in Europe will be of something new, and probably of more value to its members.

Plagued with a labour market highly regulated by legislation and judicial interventionism, Australia's Liberal Prime Minister Howard is using his first upper house majority to effect an alleged "historic modernisation".

But wage rates will remain subject to minima determined by a new Fair Pay Commission modelled on UK arrangements. FPC appointees won't be allowed to reduce any wage and must make "reasonable and sustainable increases" in the employment-deterring minimum of 58 percent of the median.

Two million (mainly unskilled) Australians want work, but can't legally offer a wage lower than the minimum of $24,000 pa. Getting themselves a job will be hard - but getting themselves social benefits of $10-13,000 pa. will keep welfare spending at record highs. The much-touted welfare to work program will not increase workforce participation.

Employment agreements still have to comply with many legislative requirements, although the unfair dismissals regime will apply to fewer businesses. The "right to strike" is (inexplicably) retained, though it will require a secret ballot. The economically-ignorant industrial tribunal is also retained, with (unclear) jurisdiction over industrial disputes.

All this continued extensive regulation indicates the "modernising" Howard government has lost its way.

Des Moore is Director of the Institute for Private Enterprise.

The Prime Minister introduced his reform agenda saying he didn't know the meaning of defeat, quit, or surrender. Now his back-benchers have responded by buying him a dictionary.

A couple of days ago I enjoyed lunch with Professor Michael Enright of the University of Hong Kong, who's just written a book on the rise of the Pearl River Delta - a region comprising Hong Kong, Macao, and part of Guangdong Province - and was extolling its virtues at the far-and-away economic powerhouse of China.

China is a land of many regions, but the Pearl River Delta is by far the largest economically: with twice the export trade of the Yangtze River Delta region, dominated by Shanghai. Hong Kong grew at the rate of 8% last year. Macao grew at a staggering 28% (and 16% the year before) thanks mostly to its thriving tourism industry (Vegas-style casinos are being built, and the number of hotel rooms will boom from 10,000 to 25,000 in the next three years.

There is lots more going for Hong Kong. Its proximity to Japan, for example, and long historical international links. Now, mainland companies are using Hong Kong as an international jumping-off base, so it's not all inward stuff. It has pushed London into third place for IPOs (new stockmarket floatations).

Rather draw-dropping stuff if you live in this sleepy over-regulated backwater we call Europe. I asked Michael what he felt coming here. He didn't like to say it: but it was obvious that our grubby airports, dismal public transport, and the fact that you can't find anyone still in the office at 5.01pm would shame people in the world's new economic powerhouse. Eurocrats take note.

Tony Blair has attacked Britain's compensation culture. According to Francis Gibb in the Times, the UK prime minister attacked the risk-averse attitude which underpinned much regulation.

"If we start to believe that every possible problem must be avoided at all costs we end up with a mindset that says nothing good should happen in case it leads to something bad. Irrational decisions should not be made through fear of litigation. Rather, there should be a commonsense culture, not a compensation culture." He announced measures to ease regulation and end risk-averse cultures in the science and business communities and the public sector.

The problem is that this is talk. Polls of public and business opinion indicate concern that excessive regulation is hampering both commercial enterprise and daily life. The prime minister echoes that feeling, but the odds are that after his words have grabbed the headlines, it will all disappear into impressive-sounding initiatives which achieve nothing. The last five deregulatory initiatives all left more regulation in place at the end of them.

John Hutton, the Cabinet Office Secretary, will review regulations, an issue that will be a priority of the British EU presidency, Mr Blair said.

Bravely the prime minister identified the problem and threw a review at it. His Chancellor Gordon Brown has talked of a one in, one out rule, under which each new regulation must be matched by the demise of an existing one. As John Guthrie remarks in the FT (subscription), this "will merely create scope to cull archaic statutes regulating mead-brewing."

You cannot deal with regulations by a check list. Each one has its defenders, and for each one reviewed a civil servant will stand up to highlight the risks faced if it is abolished. You have to tackle the culture itself, which is that of a government and bureaucracy which thinks it knows what people should do better than they know themselves, and which wants to spell that out in detail. It wants to leave nothing to their judgment because fundamentally it thinks its own judgment is superior.

The headstone reads: "Here lies the body of a great politician, an honest man, and a stalwart of the Conservative Party." Which is odd, because they don't usually bury three people in the same grave.

Some while ago here I said here that the bold promise of UK Chancellor Gordon Brown to cut civil-service numbers by 70,000 or 100,000 - it depends on how you interpret his baffling statistics - was a load of baloney.

I was right. According to Andrew Taylor (FT 27 May - subscription), official figures just released show that the number of civil servants employed by central government has risen by 13 per cent to 565,000 since 1999.

The so-called Gershon reforms were supposed to make sizeable cuts in the central civil service, and shunt staff out of expensive London to cheaper cities over the rest of the country. It seems that both moves are being resisted. Did anyone expect anything else? Still, it was a good pre-election ruse to outflank the Tories.

Roughly 176,000 East Europeans applied to work in Britain in the 11 months after the expansion of the European Union last year. About 58,000 of these were here already, probably working illegally. Richard Ford (Times) reports that:

Barristers, circus performers and psychiatrists have all arrived in the country and found work since EU enlargement, according to Home Office figures.

(Hey! Circus performers do useful work). Ford continues:

The government report said that the immigrants were making very few demands on public services such as the NHS, benefits system or education. The number applying for benefits was very low, it said, with 1,200 applications for Income support, jobseeker's Allowance or state pension credit in the first 11 months after EU expansion, only 24 of which were allowed to go ahead to the next stage for consideration.

Poland provided over half of the total, with sizeable groups from Lithuania, Slovakia and Latvia. About a quarter went into business and administration, with nearly as many going into the hospitality and catering industries. Immigration Minister Tony McNulty put their contribution to the UK economy at half a billion pounds.

By many standards this is a success story. They take the chance to improve their earnings and their prospects, and we obtain the benefit of their work, their taxes, and their contribution. Most people seem to like them, too. It is one up for Britain that we did not seek to postpone or prevent them from entering once they joined the EU. Some of the EU countries say Britain is un-European and xenophobic, but in hard, practical terms, we have accepted fellow Europeans with more enthusiasm than they have shown. And it is paying off, too.

The good news is that electors in Egypt have voted to establish multi-candidate presidential elections, with 83% saying "Yes" to the proposed constitutional changes.

The bad news is that the voting was marred by some violence, and only 54% of registered electors actually voted. But then six opposition parties, including the Muslim Brotherhood, called for a boycott of the referendum, saying there were still too many obstacles for anyone to challenge President Hosni Mubarak and his ruling National Democratic Party.

Elections in Egypt generally have low turn-outs. There's not much point in voting when you know who's going to win. President Mubarak has ruled Egypt for almost 25 years, and it wasn't exactly a vibrant democracy before then. And opposition groups say that ballot-rigging is rife.

All credit to Mubarak if he does indeed open the way peacefully to more open government - intentionally or not. (He may of course suffer the fate of Soviet leader Mikhail Gorbachev, who for PR reasons talked about opening and restructuring that system, and was both shocked and unable to resist when people took him seriously.) In other parts of the Middle East and Central Asia, it has taken bloody revolt to make (or not make) the change.

On the other hand, would the groups likely to succeed in these countries be any more open to change than the authoritarian leaders they displace? Will it just be a case of replacing secular authoritarians with fundamentalist ones?

The book 'How to Woo' was selling furiously until irate purchasers discovered when they got it home that they had bought volume two of the Hong Kong telephone directory.

For two decades I have queried the meaning of the word sustainable. The concept emerged in the 1972 Stockholm Conference on the Human Environment. The notion became associated with climate change and the creation of IPCC in 1988. And at the 1992 Rio Earth Summit sustainable became a watchword associated with development and led to the notion of Consensus applied to Science. David Henderson says 'sustainable' has been endorsed by governments as a whole but the sense in which it appears in research and policy documents is generally not clear.

In both public and private investment, good projects are hard to find. Investments should be subject to economic Darwinism which weeds out the inefficient. And times change, so that once efficient entities like Marks and Spenser or General Motors pass their sell-by date.

At a recent Cambridge Seminar on the inefficiency of technological lock-in [TLI] my confusion was dispelled. One example of TLI is owning a nearly new machine when a better one becomes available. Repeated questions revealed that in many UK and EU official documents, 'sustainable' means reducing carbon emissions! Imagine the cost of applying this constraint on all economic activity?

Suppose we are barking up the wrong tree? Review of current science [Fred Singer] says

The added forcing from increased solar radiation reaching the earth's surface has contributed nearly 10 times as much energy as greenhouse changes! When compared to the overall greenhouse forcing since pre-industrial times, it's four times larger. If increases in solar radiation reaching the earth's surface in the last 20 years are 10 times greater than that from carbon dioxide, and four times greater than the greenhouse gas changes in the last 150 years, which is more important? Don't forget that it is accepted in climate science that the warming of the early 20th century, about 0.4 degrees C, is due largely to solar changes...So the recent changes in received solar energy should have exerted a tremendous influence on temperature!

Imposing carbon reduction constraints on the world's economic activity is likely to be unfortunate TLI which will cost us all dearly.

Kyoto is unwise in light of current knowledge. Perhaps the celebrated David Bellamy, about to be replaced as president of Plantlife International, and the Royal Society of Wildlife Trusts because he refuses to believe that global warming is man-made, should be reinstated?

Tory leader Michael Howard asked a rhetorical question of Prime Minister Tony Blair at Parliamentary Question Time. Given the importance of school discipline, he asked, shouldn't headteachers be given full authority?

At present, when a violent or disruptive pupil is removed by a headteacher, there are avenues of appeal to local authority tribunals and even to the law courts. These bodies lack detailed knowledge of what goes on in a school, or of how discipline and morale work. Often the parents in the case back the errant child rather than the teachers. Sometimes the appeal is upheld and the guilty party cocks a snook at authority.

It seems obvious that a body's authority is diminished when another appeal body is placed above it with power to reverse its decisions. When a headteacher's ruling can be overturned, his or her authority is weakened, and the code of discipline and chain of command within a school is disrupted.

A similar effect has taken place in British law. The addition of a European Court with powers to overturn the decisions of British courts has undermined their authority, and therefore their status. Once the Law Lords had the final say; now they are subject to rulings from Europe.

Britain's decision to place itself under the European Court of Human Rights had a similar effect. Lawbreakers who are dealt with by every process of UK law can now have their sentences overturned by alleging that their human rights were violated.

In a litigious culture, we may reach the stage where every punishment meted out by a classroom teacher or a parade-ground sergeant can be appealed all the way up to the United Nations. The alternative might be to reinforce authority within some activities by restricting the right to appeal beyond them. Schools might be an obvious candidate.

Is EU regulation past the high-water mark? It's encouraging, ASI author Keith Boyfield told our seminar on deregulation this week, that all important EU legislative proposals are to be screened for their impact on competitiveness. EU Commissioners seem keen to axe regulations and look at voluntary or other arrangements.

And the Commission says it will move to stop national governments 'gold plating' its directives (a practice at which the UK excels).

A third hopeful sign, said Boyfield, is EU expansion:

Having only just liberated themselves from unwelcome state intrusion in their business and personal lives, the last thing that Poland, the Czech Republic, Hungary or Slovakia want is a raft of EU regulatory measures forced on them by Franco-German social democrat politicians.

Indeed, we might even see "regulatory competition" along the lines of tax competition. Financial services might re-locate to Malta – light regulation, not too many annoying civil servants, and even those struggle to implement the EU rulebook. The latest EU scorecard reveals that Malta has failed to implement a total of 617 directives. It's even sunnier than London or Edinburgh. Sounds like the place to be.

Many of the pundits say we are headed for an economic downturn. It is important to recognize the different stages.
Recession is when your neighbour loses his job.
Depression is when you lose your job.
Recovery is when Gordon Brown loses his job.

Differences in economic performance are widening between Europe, Asia and the United States, says the Organization for Economic Cooperation and Development (OECD). Brian Childs (International Herald Tribune) reports that Jean-Philippe Cotis, OECD chief economist, has recommended the European Central Bank should cut rates from 2 to 1.5%.

The recommendation came as the OECD cut its growth forecast for the economy of the 12-member euro region to 1.2 percent for this year, down from a forecast of 1.9 percent in December. The OECD said that it expected growth of no more than 2 percent in 2006.

This compares with US growth forecast at 3.3% and China's at 9%. Their estimate for the UK was revised down to 2.4% (the Chancellor's figure is 3.5%). Gary Duncan (Times) quotes Capital Economics predicting that when taxes increase to meet the shortfall, UK growth will be hit even more.

Capital’s analysis warns that "payback time" has arrived after the Government's spending drive and heavy borrowing. "It looks very likely that taxes will rise in the next year or two," it says, arguing that the resulting period of tighter fiscal policy could knock a full percentage point off the economy's annual pace of growth.

It doesn't have to be like this. If the Eurozone economies will start to free up their labour markets, lower the costs of setting up business, and cut taxes, their growth rates would probably head skywards. Similarly, if the UK Chancellor would stop spending other people's money on his public sector, the UK figures would shoot up. The trouble is that if you rob Peter to pay Paul, you'll get Paul's vote. And if he outnumbers Peter, you'll get elected. But it should surprise no-one if Peter decides to quit work or to emigrate. The world owes no-one a comfortable living for nothing, however big their majority.

In today’s Guardian, Stacy Mitchell, from the Washington DC-based Institute for Self Reliance is urging Britain to ban large-scale retailers from the UK’s high streets and edge-of-town locations, and has the Guardian pledging to "fight back" against the "domination" of large scale retailers in favour of local shops and producers.

She cites the exponential growth of large scale retail in the US and the disparity in retail space between the US and UK. Americans enjoy, on average, 38 feet of retail space whereas we Brits have a mere 7 square feet per person which is the cause, according to research carried out by the Mckinsey Global Institute, entitled Driving Productivity Growth in the UK Economy of rip-off Britain. It ain't that complicated: the limited supply of retail space pushes up the price of goods. This is why stuff is cheaper in the US, and also why we are willing to sit on a plane over the Atlantic for seven hours to do our Christmas shopping.

Following revision of Planning Policy Guidance Note 6 in 1993 the Government makes it almost impossible to build out-of-town retail sites, and the anti-development lobby has built on this to convince politicians that out of-town development is the primary cause of town-centre decline. Economic growth is considered to be static, and town centres unable adapt to out-of town competition. Research disproves these widely held beliefs, yet central government planners fail to recognize the damaging impact town centre protectionism has on the price of goods.

It might be OK for wealthy, educated, presumably middleclass Ms. Mitchell to preach to the Champagne-drinking Guardian reading masses that we should abandon retail and return to ye olde medieval days of buying our fruit off carts, but tell the working class mother on a sink estate that she will no longer be able to buy her children £5 jeans from Asda.

This week's EU paper Opening the door to Development asserts that the EU is the world's most open market for poor countries. This may be true, but the EU has for decades operated a system of preferential quotas and duties for the poor countries on its favoured list. This has not lifted those countries out of poverty, nor will it.

Countries such as China, India and Thailand are rapidly becoming richer through the route of diversification and trade, while those which have remained dependent on a protected market for a single main export are not.

There is a debate between the free traders, who basically want us to end subsidies and open our markets, and the NGO-led call for a system of quotas and guaranteed prices to sustain industries in approved countries. This is essentially a division between those who think markets bring the best outcomes, and those who prefer central planning, trying to achieve a planned and programmed result which they deem 'fair.'

Carl Mortished (Times) points out that NGOs are urging us to allow some poor producers, often inefficient ones, to have protected markets and prices, but not others. This is the essence of 'fair trade.'

For Oxfam, fair trade really means fair subsidy, a rigged market in which the poorest get more for their produce or a bigger share of the market than their weak position might otherwise command. It sounds nice and the EU obliges with a fiendishly complex system of trade preferences to regulate which poor countries get the sweetest deals.

A more accurate name for it would be 'managed poverty,' because it seeks to sustain existing producers in its favoured poor countries. Free trade, by contrast, offers opportunities to new and unknown producers in other poor countries to become richer by selling us their goods more cheaply.

As the free traders are winning the argument, and the EU itself moves to renegotiate its past agreements in favour of wider access, the NGOs raise strident voices against it. As with markets everywhere, the outcome of free trade is unpredictable. Some existing producers will lose their position to new ones elsewhere. But it is the countries that have seized opportunities and traded which have grown richer. Instead of maintaining a few clients in a secure poverty, we should be extending those opportunities to others.

I asked the librarian if they had the Chancellor's economic forecast. She told me it was filed under BROWN, and it was beyond BELIEF.

If you're going to sin, sin against God, not the bureaucracy. God will forgive you but the bureaucracy won't.

Admiral Hyman G Rickover

Steve Forbes backed flat tax in his US bid. Now Jack Anderson in Forbes Newsletters chronicles the spread of the idea.

Apologies to Copernicus and the rest, the world is flat. At least, the tax world. Flat-tax momentum is the big fiscal-policy story of the year in much of Europe, with potential fallout in the U.S….By lowering the rate and implementing a flat tax, these [European] states are counter-intuitively increasing their total tax revenues through better compliance and economic expansion.

Even the UK Liberal Democrats are anxious not to let a popular idea go by without paying it lip-service.

The party's Treasury spokesman Vince Cable has indicated they may also consider proposals for flat-rate tax.

Mr Cable clarified how his party would approach the flat rate tax idea.

What people on the right tend to mean is replacing income tax with a flat-rate tax - we wouldn't want to go down that road.

He is probably in favour of fish, too, provided they don't swim, or have fins and a tail.

A Freudian slip is when you say one thing and mean your mother

The Times' education editor Tony Halpin tells how Prof David Jesson (York) has tracked the progress of 28,000 children who scored highest in English and Maths at age 11 (about the top 5 percent). About 11,800 went on to selective grammar schools or high achievement comprehensives, and 16,500 went on to lower quality schools.

Professor Jesson found that success rates declined in line with the numbers of bright children in a school, and dipped sharply when there were fewer than five. Where 20 pupils from the most able 5 per cent were clustered together in a year group, each achieved an average of nearly seven GCSE passes at A* and A grade last year. But where there was just one child from this group in a school, he or she passed fewer than four GCSEs at these grades.

This backs up the intuitive view that bright children encourage each other. At grammar schools competition and co-operation sit happily together. Children try to out-score each other, but often help their friends with homework and discus their work with their rivals. If our concern is to bring out the potential in every child, putting bright children to spur each other on seems an obvious way to set about it.

But there are those who argue that selective schools 'cream off' the talented children, leaving other schools without their beneficial effect. This outlook seems to treat bright children as some kind of scarce national resource to be shared out equally and fairly, without regard to what it does to their own development. It might even be counter-productive, not only holding back the bright ones, but making the other children aware of their academic shortcomings, when they might otherwise have happily applied themselves to more vocational skills.

The study suggests that academic work is like sport, in that its participants achieve more when alongside a high-achieving peer group. If we want the best and brightest to benefit themselves and their communities, we should put them together.

Britain's Tax Freedom Day falls on 31 May this year. That means that you work for the Inland Revenue for five solid months of the year. Only then do you start working for yourself. In fact, you must work three days longer for the tax collector than you did in 2004. And five days more than you did in 2003.

In historical terms, these are big annual increases. How did they happen? Chancellor Gordon Brown's skill at stealth taxation has a lot to do with it. Last year, National Insurance (supposedly a state insurance plan but in fact just another tax) went up to pay for a huge surge in National Health Service spending. And there are 65 other stealth taxes too.

And where does it all go? Well, government spending has been growing much faster than inflation - from £333 billion in 1997 to £450 billion today - a cash rise of a third since Labour came to power.

The NHS budget has grown faster than any - up from £33bn in 1996/97 to £76bn this year (and that's just England). But even on the government's figures, nearly half of the extra cash just vanishes into higher cost: funding rose 8% in 2003, but output rose only 4.1%. NHS productivity is falling, says the Office of National Statistics. As evidenced by the fact that the rise in the number of new administrators exceeds the rise in doctors and nurses.

If high taxes don't get better performance out of a rusty government sector, they certainly choke off economic growth. A 2001 OECD study showed that countries with 50% tax ratios have output around 13% lower than ones with just 30% taxes. High taxes simply reduce the incentive for people to work.

Tax has become so complicated - and so stealthy - that people just don't know how much tax they really pay. Tax Freedom Day shows in stark terms how much. An average taxpayer, not a super-rich taxpayer, spends five months enslaved to the Chancellor. Surely it is time for the tax serfs to break free?

On Tuesday (24 May) at 6.30pm, the authors of our Roadmap to Reform report on Deregulation, Tim Ambler and Keith Boyfield, will lead off a Westminster seminar aimed at charting the way forward for politicians.

Ambler and Boyfield identify three major sources of regulation - the EU, Whitehall, and the regulators themselves. And they see three ways of tackling each - stemming the flow of new regulations, reducing those which exist, and having more sensible enforcement centred on risks not rulebooks.

In areas well covered by EU regulation, they say, existing UK regulation should be presumed unnecessary and phased out. And we should find the overall cost of regulation, and then set targets to reduce it. Regulators who cut or simplify regulations should be rewarded. Small businesses should have to deal with only one person for tax and one inspector for all other regulation, and should be compensated for form-filling – all of which might induce officials to make regulation easier and less bureaucratic.

Responsible business conduct is more likely to be achieved by a few general rules and the marketplace, than by thousands of pages of detailed instructions, say Ambler and Boyfield. Should be a refreshing event, so contact steve@adamsmith.org if you would like to come.

The old farmer on his deathbed beckoned his wife over. "Mavis," he gasped. "You were with me through the Great Depression. You were by my side through the war. You were there beside me through the droughts and the landslides. And now you're here at my deathbed. You know, I’m beginning to think you're bad luck."

The UK Chancellor has announced plans to help first-time home buyers. Government will pay up to half the cost of their home, allowing them to buy back its share over time. He told the Observer newspaper:

It means that people who couldn't afford the full price of a home can afford the partial price, and they can gradually ramp up their stake - it's putting home ownership within the reach of thousands of people who would not be able to do so.

It will do more than that, of course. Government will put taxpayers’ money towards purchase by first-time buyers, and buyers will put in some of their own money. More money will enter the market to boost the demand, but without a matching increase in supply. That means higher prices. The real need is to free up the market in housing by allowing homes to be built where people want them.

The new policy might suit the Treasury's objectives by encouraging people to borrow more and keep the economy in apparent boom, but it will push up house prices, taking them further beyond the reach of the next round of first-time buyers. It will also put more people in thrall to the government, which might also suit their objectives.

Europe's leaders are 'in profound denial about the grim realities of theglobal marketplace' says businessman and Channel 4 chairman Luke Johnson. While the Chinese work 24-7 to build the modern miracle of China, the EU busies itself trying to stop the Brits working more than 48 hours a week, even if they want to.

China is huge. And super-competitive. For 15 years, its economy has grown 2-3 times faster than the UK's. There has never been such an economic transformation: it has lifted 250m people out of poverty and turned them into economically active competitors for us. It is hard to see what industries we will be left to compete in:

Hamstrung by preposterous regulations, high taxes, a burdensome welfare system and anti-business legislation, how on earth are we to retain our standard of living?

But EU leaders, rather than unshackling our entrepreneurs to stand up against this onslaught, do the opposite. 'They have lost the plot,' says Johnson. 'They are dangerously deluded.'

Like companies going broke, countries slide into recession at first slowly - then violently quickly...I recommend readers to prepare themselves for a rough ride.

In the desk of every chief executive office (second drawer down on the left) sits a brown envelope. When things go badly wrong and there seems to be no way forward for the company, the CEO calls in the other directors and solemnly takes out that envelope. It is marked "Plan B."

The EU constitution requires the assent of all 25 members to be ratified, though in practice it might survive, as previous agreements have, the temporary dissent of a small nation or two. If any of the big countries or founder members of the EU refuse to endorse it, an impasse will be reached. This might happen if France or the Netherlands reject it next week, or if others do so later.

At some point the EU opens the drawer and finds amid general consternation that there is no brown envelope. No Plan B. Indeed, José Manuel Barroso, the commission president, has said that there is none. There is talk of a secret plan if France narrowly rejects the constitution next Sunday. Leaked details suggest that an emergency statement might be issued.

The statement would insist that the constitution, the blueprint for the EU's political future, lives on and that ratification must continue.

This, however, is not a Plan B. It is a commitment to proceed with Plan A even though it has failed. Fortified so long by talk of inevitable progress towards ever closer union, the European Commission cannot conceive of anything else.

Others can, though. A majority in Britain, and several among the northern states and newer members, lean more towards an association grouped together for mutual advantage, lowering barriers to trade and competition because it suits them, but shying away from grandiose dreams of a new super-power to stand against the US as a political, military and economic unit.

In that alternative brown envelope are plans for a rollback of EU regulations, and for a reclamation of judicial powers by member states. While the members will consult and try to co-operate on foreign policy, there will be no EU embassies or European armies. Members will set their own tax policies, and will not be subject to a social model economy which limits enterprise and growth.

The Plan B Europe will almost certainly be richer and more competitive in a global economy. Its members will be directed more by their citizens than by unelected bureaucrats and judges in Brussels. It will probably be a more vibrant, more successful place than Plan A Europe. Either way, we might soon find out.

There was a devout economic forecaster who tried to live each day as if it were his last. Eventually he got it right.

To see a B17 bomber in flight is an awsome sight. But the legendary World War II 'Flying Fortress' will be conspicuously absent from the Memorial Day ceremonies at the American military cemetery near Cambridge next weekend.

The reason, according to a report by Peter Amond (Telegraph) is a new European regulation that categorizes the B17 as an airliner, raising its insurance premium five times. It is ironic that the plane flown by many of the 5,124 Americans interred in the cemetery is now grounded, not by the Luftwaffe, but by EU insurance rules. Ironic, and rather sad.

And shockingly typical. Because Britain is, as usual, enforcing the new EU rule with the full might of its Department of Transport - while France, of course, is not. So if you want to see one of these huge, magnificent planes actually flying, you have to head to France. Their last surviving B17, called the 'Pink Lady', is flying as normal.

Paul Ormerod is a strikingly original thinker, among whose best known works was Butterfly Economics. His latest book, Why Most Things Fail (Faber, £12.99), explores the similarities in economics and evolutionary biology, looking at failure in particular. Most things fail, and progress comes about through selective extinction. Many biological mutations are sufficiently damaging to prevent survival; it is the same with economic innovations. One difference is that in biology the organism dies with its mutation, whereas in economics the entrepreneur can try again.

Ormerod notes the prevalence, indeed the ubiquity, of economic failure, and how short-lived is success. Most of the successful firms do not last. He opts for punctuated evolution, in which there are periods of rapid innovation and churn, corresponding to periods of rapid biological change. The more we experiment and innovate, the higher are the chances that some ideas will win through. We need to understand failure because it happens – to individuals, companies and governments.

The book has been extensively reviewed, including those in the New Statesman, Times, Telegraph, Independent, and Prospect Magazine.

The employment inspector asked the farmer about pay and conditions. "Well," he said, "Harry milks the cows for £200 a week plus room and board. Mary looks after the chickens and the housework for £150 a week with room and board. Then there's the half-wit, who works sixty hours a week and gets around £30 a week with room and board." "Aha!" said the inspector. "I'd like to talk to him." "You are," said the farmer.

Fifteen district councillors and about 70 council staff from Wyre Forest, Kidderminster, attended a two-day "equalities and diversity" course this month. There, Richard Savill (Telegraph) tells us, they learned not to say "shipshape and Bristol fashion" because it referred originally to black slaves. In fact it referred to Bristol’s reputation for well-appointed ships.

They were also told not to use "nitty gritty" because it also referred to transported slaves, though the Random House Historical Dictionary of American Slang records its first example from 1956. It is used to mean "basic essentials."

Public money is being spent like water on this kind of thing. Equalities officers and diversity co-ordinators grace the public jobs pages with generous salaries and benefits. It might well be counter-productive. People who have no wish to give unintended offence will take reasonable care over their terminology, but it is taken to extravagant and silly lengths which invite ridicule. I doubt if any black people at all regard either of the above expressions as insulting.

People who put out this nonsense, including those who object on 'multi-cultural' grounds to school nativity plays at Christmas, or public carol concerts, do no favours to minorities, most of whom are happy to have their children and themselves enjoy such festivals. The idea that we must examine every word and every action lest it could be taken by someone somewhere as offensive is itself offensive. This is just zealotry, and risks arousing resentment to the very groups in whose name it claims to speak but does not.

America's 2002 Sarbanes-Oxley Act, now entering its first year of enforcement, was supposed to stop the next Enron or WorldCom. It won't of course. What it will do is impose annual costs of $35bn on US companies.

Sarbanes-Oxley is a one-size-fits-all rulebook dictating the structure of boards, the duties of corporate officers, and financial control systems. Sure, it may help make accounting more transparent, protect whistleblowers, and expose insider deals. Yet whil