Citizens Against Government Waste is a US non-party, non-partisan group dedicated to identifying and eliminating waste. They have a tough job. Pork-barrel politics is built into the US system. Congressmen and Senators win projects for their own districts or states, usually by tacking them onto other bills. It brings home money and jobs, and gives grateful residents a reason to re-elect their representatives. Of course, it all comes at taxpayers' expense.

Step forward the CAGW. Their site is worth a visit. A skim through it feels like reading the pages of a gothic horror novel. They have a Pork Advisory System to alert citizens on the spending atmosphere in Washington, and a wastewatcher newsletter to draw attention to waste and abuse in government programs, policies, and events that might otherwise go unnoticed. And they choose a Porker of the Month to identify the most wasteful representatives.

It was last year that UK Chancellor Gordon Brown repented for his public jobs spree and pledged to cut 84,150 Whitehall posts by 2008. Now Brendan Carlin, Telegraph political correspondent, points to news that civil service jobs are up by 44,000 while the public sector as a whole has 650,000 extra staff. Obtained under the Freedom of Information Act, the figures show that

Despite Mr Brown's claims in this year's Budget that 12,500 posts were being cut by the end of 2004/5, not one arm of government had yet sacked anyone, with thousands of staff being reallocated to other areas, the paper claimed.

The Treasury's case it that the increases are from 1997 figures, and that it has reduced numbers since 2004 levels. However, given Mr Brown's known preference for redefinition, analysts allege that the 'jobs' which disappeared have been replaced by new 'posts.' I personally know one official whose job was indeed 'saved,' and who was instantly re-engaged in another 'post.'

The one maxim which guides is that it is easier to create public sector jobs than to remove them. Even Lady Thatcher, the toughest of the tough, was only able to reduce public sector numbers by transferring whole functions to the private sector. Gordon Brown, less creditably, has found the only way to lower public costs is to transfer whole liabilities off-budget.

We will not get the real figures until Mr Brown has long left the Treasury, given the skill at obfuscation and redefinition which has developed. But it begins to look as though those skeptical that the cuts would be delivered might have the best of it.

Part of Tony Blair's response to the London bombing incidents was entirely predictable. He called in various 'leaders' of the 'Muslim community' to chat about it, then set up a 'taskforce'. One of those invited, Kishwer Falkner (a LibDem peer, pictured) was not impressed. It was the "usual suspects" in the Muslim establishment, she reported: a knight or two, half a dozen peers, Muslim MPs.

One of the MPs, at least, pointed out that Muslims were not a homogeneous group, and told Blair that any such set of 'leaders' trying to 'solve the problems of religion and alienation' was doomed to fail. But within the hour, the Prime Minister told them all he was setting it up anyway. The Big Conversation just got bigger. Falkner goes on:

What is needed now is not a quick-fix taskforce, with well-meaning Establishment figures embarked on a road-show around the country to have our own "conversation" with young Muslims.

There's a case, she says, for a genuine, long-term investigation of why some communities in the UK are so segregated that they don't even share the common language, far less shared values; of why religion is being distorted to such devastating effect; and how we can square diversity with harmony.

But of course the important thing for governments - particularly this government - is to be seen to be doing something whenever any problem arises. Call everyone in. Set up a commission. Whether any of all this highly visible and 'inclusive' spinning actually does anything useful seems to be of far lesser importance to them. Sad.

Britain's government is making millions by encouraging people to call expensive 0870 numbers - which can cost twice as much as a national-rate call - when they need help.

The Daily Telegraph reported that the Driving Standards Agency made £1.5m from this device last year, while the Driver and Vehicle Licensing Agency made £1.3m. The Home Office, even the police, the Environment Agency, the Land Registry, and dozens of other government bodies use the 0870 numbers.

But opposition to these numbers is growing. People were outraged when an 0870 number was used as the helpline for people enquiring about the recent London bombings: though the authorities said this was actually the best mechanism to handle the many hundreds of calls that came in. The Department of Health banned family doctors from using income-generating numbers this year, though it still uses one for its NHS Response Unit.

However, it’s remarkable that the public should be charged for calling to get information to which they are entitled anyway, and which they pay for through taxation. Well, maybe not so remarkable. Just another stealth tax.

The public sector has become so big that it now overshadows everything else in public debate. Take the debate on choice.

In most parts of the economy, people have choices, not just among physical things like soap or shoes, but for services like phone or TV packages. So the public sector's 'universal service' - that is, take it or leave it – now looks decidedly dowdy, which is why politicians have started to talk about giving people choice in public services too.

Great. But then opponents complain that to give people a choice, you need 'spare capacity' - two hospitals or schools where before you needed only one. Isn't that hugely wasteful duplication?

Er, no. Look at supermarkets. There is plenty of choice, but very little wasted capacity. Competition, and the threat of unsatisfied customers leaving, means supermarkets are run very efficiently, with far less waste than our no-choice public services.

'Spare capacity' works at the margin. In a competitive world, new small enterprises can start up (and shut down) at any time, depending on the local demand. New lines can be tested, and abandoned if they don't appeal. The state, of course, only thinks in megalith terms. Public servants believe that to give people choice you need to build yet another giant school or hospital alongside the existing one, leaving both half-used. Daft.

The distressing thing is the amount of intellectual energy they put into debating such garbage. It was a constant, carping theme among the mandarins at the Audit Commission lecture last week. Why don't they just stand aside and let the market deliver public services? Then they would see just how much wasted capacity' that has been under their noses.

Last week I met Stephen Goldsmith, former mayor of Indianapolis, who's just produced a book called Governing by Network.

His thesis is that government needs to do fewer things itself, and use networks to deliver its services. That is because the services it delivers must be tailored to the individual if they are to work. Governments are not good at the complexity this implies.

Government had no problem when welfare was just a benefit cheque, says Goldsmith. But welfare cheques don't get people off welfare. So the US turned instead to a work-based system - trying to help needy people by re-integrating them back into the workforce. That means building a whole variety of services around each individual - not just the job itself, but childcare, transport, and much else.

In a dynamic world, government is too static for that job. It thinks about inputs, when it should focus on outputs - outputs that can be provided in a huge variety of ways using competing or collaborating providers. Today's technology makes that sort of network provision feasible, since information can now be shared quickly and cheaply across wide arrays of different provider groups.

"We have horizontal problems, but hierarchical government," concludes Goldsmith. His solution? "Government needs to do fewer things itself, and use networks to deliver today's very complex services." And that's from someone who actually made it work.

A number of Westminster meetings I've been to recently made me realize how large is the army of state supplicants. With the public-sector spending spree unabated, and with the private sector struggling to shoulder the burden, the government hired another 72,000 people last year, so that about one in five of us (5.8m) are now public servants.

But many more live off the state too. There are of course the millions of pensioners and welfare recipients, living on state benefits.

But there is more. Much of the energy of private firms is now focused on picking up government outsourcing or building contracts, so much money is the public sector awash with. Westminster is full of firms who should be championing choice, enterprise and competition, but instead fawn over ministers like mediaeval courtiers. Though we should be demolishing the Big Government house, the discussion is confined to changing the décor.

Perhaps business is indeed selling government the rope which will eventually hang it. I would guess that a growing half the population now owes most of its living to big government, and has a venal interest in voting to make it bigger, at the expense of the diminishing half. Not a way to run a polity.

This week, 50,000 shareholders in Railtrack - the privatized track and stations company which UK Trade Secretary Stephen Byers forced into administration in October 2001 - take the government to the High Court. They aim to prove that Railtrack did not die by natural causes, but was murdered.

The privatized rail industry remained dependent on government money. The burden of the government's own new regulations didn't help. Eventually, Byers said enough was enough. But that, say shareholders, wasn't an act of desperation: it was premeditated.

And they've uncovered a blizzard of memos to support their case. Transport officials were debating 'radical options' including re-nationalization, as far back as February 2001. In July, one Treasury adviser wrote to another about needing a 'trigger' to push the company into administration. In August, Byers's adviser Dan Corry wrote that the Transport Secretary was 'very attracted' by the idea. In September a 10 Downing Street adviser wrote of his fear that rail regulator Tom Winsor could thwart the plan. In October, Byers pulled the plug on Railtrack and told Winsor that he'd be legislated out of office if he interfered.

Early on, this government realized they didn't need to go to the expense of buying back privatized industry to control it. They could do that through regulation. With Railtrack, they went a step further by bankrupting and replacing it their own state alternative. 50,000 Railtrack shareholders say that was plain theft. They may well be proved right.

You can make the public sector look a lot smaller if you just define its activities as 'private'. For example, when the UK Chancellor Gordon Brown got private consortia to put up the cash to build new state hospitals, he did just that. And he fought a long battle with the Office of National Statistics (headed by a man with the unfortunate name of Cook, as in books) to make them accept this sleight-of-hand.

Now the ONS is getting its own back. For a few years now, the government has encouraged 'city academies'. These take state-supported students, but are sponsored and run independently by philanthropic investors. When one, in Middlesborough, got into financial difficulties with £1.5m debts, the government bailed it out.

Whereupon the ONS said that if the government was going to underwrite the debts of city academies, they could no longer be considered independent and had to be re-classified as - well, quangos, basically, like the ONS itself. So out goes the city academies' independence, in come all the rules and regulations that government the finance and operation of public bodies.

Of course, that would kill a pet policy stone dead, so the government will find some way round it. But isn't it bizarre that the government statistics nerds apparently have the power to turn private into public at the stroke of a definition?

The Royal College of Nursing - Britain's professional body for nurses - is reported as saying that more and more nurses are being forced to give up on the National Health Service because they cannot afford housing.

If any sensible employer were short of a vital pool of skilled people, it would simply offer more pay. But the state is not a sensible employer. So instead, we have seen an endless train of elaborate schemes from Deputy Prime Minister John Prescott - trying to subsidize homes for 'key workers' or force lenders into state-backed 'part ownership' deals. Not enough to solve the problem, but enough to complicate and mess up the housing market.

I appreciate the problem. People are very keen to teach at our local school in Cambridge - until they look at house prices. Then they realize that a teacher's salary won't buy them much. We'd love to pay them more - but of course all that stuff is decided nationally by state bureaucrats.

If the government wants more or better workers in its health or education businesses, it has to pay more or better workers where local conditions dictate. Of course, the unions want to force their mock-egalitarian ideals of equal pay for all on them, so resist it. And, of course, the government is (always) short of money. But if it cut out some unnecessary quangos, fired some useless administrators, and allowed choice and competition to reign in public services, that would suddenly become less of a problem.

No sooner do you kill off one regulation - after the latest 'cull' you can now buy methylated spirits on a Sunday (though not much else has changed) – than more appear.

Now advertisements have gone up across the UK alerting all chiropodists, dietitians, occupational therapists, paramedics and speech therapists that they have to be registered with the Health Professions Council, under pain of a £5000 fine.

This regulator was set up under the 2001 Health Professions Order (that's the kind of thing that just goes through Parliament on the nod with lots of other junk), though I've not seen anything from them before, so I guess it's taken them four years to get going. But they list 60 staff on their website, so it's not exactly an inexpensive quango.

No doubt all qualified medical personnel, like arts therapists (yes, that's another one) and orthotists all welcome this measure, despite the paperwork it involves. After all, it ensures patients are cared for by qualified staff (assuming they bother to check the register).

Well, it might. What professional regulation certainly does, as Milton Friedman and Simon Kuznets explained in their book, Income from Independent Professional Practice, is to keep out the competition and raise fees.

The European Commission has opened a formal investigation of the British Government's plans to sell the Tote, the state-run monopoly bookmaker, in a sweetheart deal. Racing, a consortium representing various parts of the horseracing industry, would get the Tote for perhaps half its market value, and the right to exploit its monopoly on pool betting for seven more years.

The Adam Smith Institute referred this plan to the Commission some months ago, saying that while privatization was welcomed, this insider stitch-up with the racing industry (which isn't exactly short of a bob or two) amounted to a straight theft of the taxpayers' property.

The "in-depth" inquiry will be announced soon in the EU's Official Journal. Competition Commissioner Neelie Kroes commented “I fully support the British Government’s objective of opening up the UK gambling market. But I am not convinced that ... selling the Tote to the Racing consortium well below market value, is necessary or proportionate to achieving this objective."

Quite. It's unjust, it diverts cash from poor taxpayers to rich racehorse industry bosses, and leaves other betting firms unable to compete. Doesn't sound as if it needs much of an "in-depth" inquiry to me.

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.

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

The London-based think-tank Civitas has produced a series of detailed voter briefings asking whether things like additional NHS spending, or the current policies on crime and welfare-to-work are actually working.

They are pretty well balanced: on welfare-to-work, for example, the conclusion is yes, it has worked a bit, but the tax needed to fund it has reduced work incentives for those already in a job. They are also very detailed, with lots of useful facts and figures. Worth a look.

A restrained cheer went up from some UK businesspeople and others when Chancellor Gordon Brown, in his March Budget, announced that 35 regulatory agencies would be reduced to just nine. But not many people noticed that the same Budget created three new quangos too. Not surprising: you weren't meant to notice it.

But then it got worse. A mere week later, Education Secretary Ruth Kelly published a White Paper on skills, proposing the establishment of 25 new sector skills councils, reporting to a sector skills development agency and the Learning and Skills Council.

Then before the month was out, celebrity chef Jamie Oliver had caused such a public fuss about school meals that Kelly added another new quango, the School Food Trust.

All in all, I figure that we now have more quangos than we started with. And this is why we are living in a "quango polity", says Dan Lewis in Whitehall & Westminster World (subscription only). Politicians' tendency to shunt off every problem to some new "expert" boards and committees is so strong that you really have to be ruthless if you are to keep their numbers in check at all. Not to mention the number of civil-servants they employ and the generous salaries paid to their members and directors.

The fatuous arguments about sums not adding up in the spending plans of Britain's electioneering parties makes me think there is an important factor in the whole argument about public spending which is being ignored.

John O Whitney in The Trust Factor ­ Liberating Profits and Restoring Corporate Vitality claims that a lack of trust within organizations and between organizations and their customers consumes up to half of a company's profits. The corollary therefore is that potentially trusting/trusted organizations could double their profitability/productivity.

To my mind, too much of government is based on mistrust, particularly under the current administration. Instead of letting doctors, teachers, nurses, policemen get on with the job, bureaucratic targets have become the basis of control. The process is king, rather than the skills and expertise of the frontline workforce. Is it any wonder that performance falls short when people are denied the opportunity to make decisions on the basis of the situation in front of them at that instant?

If Whitney is right, we could we get the same level of public service for half the current tax take! Even on a less optimistic view, there is no doubt we could get a lot more performance for a lot less cost.

I have spent part of the past 18 months in correspondence with the National Audit Office, the Public Accounts Committee, the House of Commons Public Administration Committee and Treasury Select Committee, the Office of National Statistics and various politicians on two questions:

1. Are there any cost control systems in place in the public sector? Apart from the MOD the answer seems to be no.

2. How effective are the current financial controls? While these do exist, an NAO report casts some doubt on their excellence.

I have been working on cost-effectiveness issues for thirty years, and my conclusion from all this is that the government has no effective control of its costs. (The Treasury Select Committee even tell me - in writing - that they have no time to consider such matters!)

If politicians are to fulfill their pledges to reduce waste and divert expenditure to more effective uses, they need to implement cost control systems. That will reduce costs and produce a marked improvement in operational effectiveness. This is not an agenda of "cuts" - just economic good sense.

The cost of running the UK government machine rose by £1b last year according to Treasury figures. A million might seem pretty small beer these days. It corresponds to a 7% increase, or four times the rate of inflation.

The depressing feature is that it contrasts sharply with savings in government costs identified and announced. The Taxpayers' Alliance sees £81b of waste to be trimmed. The Conservatives spotted £35b, and even the government’s own enquiry revealed £21b which they duly promised to cut.

Gary Duncan reports that the departments controlled by the Chancellor rose by an even higher 10%, attributed by the Treasury to the costs of merging Customs with Inland Revenue, and bringing in child tax credit. Mergers in private firms are usually accompanied by savings rather than increased costs, however, and other departments lacked even that excuse.

…its figures showed steep rises in running costs in other departments, with increases of more than 30 per cent at the Department for Environment, Food and Rural Affairs, and the Department for Culture, Media and Sport. Costs at the Cabinet Office, which supports the Prime Minister's work at 10 Downing Street rose 16 per cent.

The rise of 6,000 in Civil Service posts in the first quarter of last year contrasts with Treasury plans for a cut of 100,000 Whitehall posts, as well as cost savings of 2.5% a year, rather than a 7% increase. In the early days of his Chancellorship, listeners would have hailed announcements of cuts and savings as a breakthrough to offer better value for taxpayers.

In fact his announcement was treated with scorn and general skepticism, which the latest figures suggest was not misplaced.

Jad Adams has exposed in the London Times the background to decisions by the Local Government Ombudsman.

A case that I recently took to the Ombudsman involved a change in a planning order. He ruled that changes were completely beyond his powers, despite the Council having admitted in writing to me that the change was of critical importance to me. The Planning Officer wrote apologizing that "you were not made aware of this critical change to the application" and that "you were not given the opportunity to express your concern (with regard to the provision of fences and the protection of your privacy)".

Amazingly, the Ombudsman eventually ruled in favour of the Council on the purely technical grounds that he had no power to challenge the discretion of Planning Officers over changes to planning applications.

Have you ever heard such nonsense? My constituency MP is trying to persuade the Minister to amend the legislation to allow the Ombudsman to deal with changes in planning applications. Cynic that I am, it does not make me very hopeful.

Jad Adams points out that while the Ombudsman's office is staffed with so many ex-local government officials, it is not surprising that they find in favour of complainants in only 1.6% of cases. Like medics they close ranks; unlike economists (such as me), who publicly and healthily disagree, sometimes violently!

After eight years as Hong Kong's government boss, and ten days of ignoring the rumours, Tung Chee-hwa has finally resigned. Good riddance.

Officially he's stepping down for health reasons, but everyone knows that Beijing was getting fed up with him, just as the people of Hong Kong were. A shipping tycoon, he didn't have the political experience to move quickly on things like the 1997 financial meltdown or the SARS crisis. And he just hasn't let Hong Kong liberalize as fast as it wants to - and needs to, given the new development opportunities to be serviced in China.

Things might be a bit better under his deputy, who takes over. Donald Tsang is a Harvard-educated career administrator. He'll have to call an election within six months, though. And that doesn't mean that the residents of Hong Kong all get to vote. Beijing will hand-pick the candidates, and the only electors will be a 800-strong Beijing-controlled committee.

In economic terms, China is tearing away. It will be the world's biggest economy by 2040. It should be mature enough now to bring in real democracy in Hong Kong - and elsewhere, for that matter. Then its growth would be even faster.

Governments are periodically keen to deal with the regional inequalities in the UK. Basically, a huge chunk of Britain's jobs and economy are in the south-east of England, near the capital. Government policies to readdress this have been of limited long-term success.

Here in Westminster, many of the office blocks are taken up by civil servants. A small number of civil servants need to be near central government, such as people working on policy who need to interact with Ministers. But for the vast majority of jobs, it wouldn't matter if they were in Liverpool, Aberdeen, Wigan, Stoke-on-Trent, Sheffield, Gwent, Grimethorpe, or Grimsby. Telephone, internet and videoconferencing would ensure they could keep in good contact with London.

Moving out most civil service jobs from London would promote economic development in the rest of the country, and it would help relieve pressure off London's property prices. Such a move would reduce the cost of government, as the offices would be cheaper and the civil servants would not need to receive a London weighting to cover the expensive cost of living in the capital.

The government has been doing this in a minor way. Now it should go the full hog.

The FT’s New Delhi bureau chief, Edward Luce, paints a depressing picture of India’s failure to reform its "chronically unaccountable bureaucracy." [FT by subscription] Much was expected of Manmohan Singh’s new government, which made public administration reform a priority. Luce tells us why.

There was no point, it was argued, in increasing spending on priorities such as health and education – services for which Indian voters were crying out – until it could be ensured the money would reach the beneficiaries (as opposed to being pocketed by the bureaucracy).

In fact taxpayers' money is now coming thick and fast, on defence and social projects, as well as a promise to double the health and education budgets. But Luce tells us that "when it comes to the indispensable reforms - making civil servants sackable and setting up an effective anti-corruption system – there is little sign of action."

The reason may be that India’s economy is still growing at 6.5% this year, independently of government, so there is some cause for satisfaction and a temptation to postpone difficult decisions. The real reason might be that too many of the key players are already aboard the gravy train and don’t want it stopped. Public Choice Theory leads us to expect no less, but the story Luce tells is bleak.

A third of state school teachers are absent on any given day, according to a recent survey. The same applies to the country’s primary health clinics, which are more often empty than staffed. Parents and patients alike are powerless.

It is partly because India is a democracy that civil service reform is so difficult to achieve - many of the coalition partners wish to protect their stake in the status quo. Democracy is not a problem for China, India’s chief rival in the Asian growth stakes, but they, too, have a bureaucracy seeking to maintain its advantages and retarding progress. One route to reform elsewhere has been to transfer whole functions of government to the private sector, exposing them to choice and competition. It could work in India or China if either had the resolution to do it.

This sounds really parochial, but it could be the start of something big. The Borough Council in Swindon, west of London on Brunel's famous rail line, is set to become the first local authority to outsource its service management to another. The Council will pay £3.6 million to Kent County Council in a three-year deal to improve the effectiveness of its zero-star social services department.

One of the problems in local government, and the reason why Britain's Council Tax is so high, is that they too often insist on doing everything themselves. You have four or five little places all running useless and inefficient payroll systems, for example, when they really ought to capture the benefits of scale and just get one of their number - or an outside contractor - to run it for all of them. But officials fear it is shameful to acknowledge that some other council might be better at running things than they are.

So this is a welcome trend. Let's hope that efficient local authorities will market their services to others; and that inefficient authorities will be brave enough to buy in their help. Then some of our most dire public services might just be improved.

Britain’s Conservatives have identified savings of £35b in Civil Service costs, reports David Cracknell. They appointed financial expert David James to see where cuts can be made. He recommends chopping £1.6b off the Home Office budget by adopting an Australian system of immigration quotas.

James also identifies big savings in health (£7.9b), education and skills (£5.6b), defence (£4.6b) and local government (£4.4b). An estimated 235,000 Civil Service jobs would disappear. Labour says that this will mean service cuts. One of their tactics has been to translate the savings into average service cuts in each electoral district, claiming that "this will mean the loss of 157 school places in your own constituency," which plays big in the local media.

Anyone who has seen Whitehall from the inside can identify waste. The Adam Smith Institute used to run an Economy in Government competition with prizes for the winning suggestions; and Civil Servants featured prominently among the winners. The Thatcher governments found that the most effective way of cutting costs was to move whole areas of responsibility into the private sector. Industries which had made losses for decades were privatized and revitalized once outside the domain of government.

The problem with 'government saving' is that every programme has its defenders, and government soon becomes exhausted with the meagre gains achieved after epic struggles. The Adam Smith Institute plans a different approach. It will appoint a team of political and business experts to do the exercise using zero based budgeting. Instead of starting with the status quo and looking to reduce costs, they will start at zero and ask what government should be doing, and how it might do it efficiently. Their proposals will feature a government much more efficient, and very much smaller.

Unfortunately for the Tories, this will report after the next election, and too late to help them.

"Some people will forever be chasing the chimera of better government. This shields them from the idea that the only option is less government."

- Prof. Peter Gordon, University of Southern California (via Samizdata.net)

The pre-budget report - PBR - is the son of the "autumn statement", a graphic description of the autumn statement for 1982, when Mrs Thatcher came in from No 10 on the night before publication and read a few riot acts. I was present indeed and at one stage was nominated as the person who would go with her to write the document. Be that as it may, it all went off all right. At that stage the autumn statement was in fact a relatively unpolitical and modest document. It simply set out the statutory half yearly economic statement and the forward spending plans for the fiscal year ahead - necessary for organisations like health and education to make the best of their money - while leaving to the budget proper measures which were effectively implementable in the short term. The autumn statement was short and pretty effective, but still and rightly, boring.

However this idea from 1982 has now twenty years on become a real monster. It's no longer short, but it is even more boring. It runs to around 250 pages. It has all sorts of good ideas in it, but very few people will ever read them. To have it likened to an election manifesto is actually a kiss of death; nobody reads manifestos and come to that nobody believes them either. The PBR has become simply an ego trip for Gordon Brown and another manifestation of his taking over of other ministers business.

So what matters in it? Well of course the numbers - not the fruity civil service type words but the economic forecast and the real figures for e.g. fiscal prospects and productivity. And the numbers aren't too encouraging. We skate along the edge of more money spent inevitably looking for tax rises in the future, unless God or productivity or something comes to the rescue. "Luck be a lady tonight" goes the song in Guys and Dolls. Gordon Brown must be looking to that. He's given us his marker.

Sir Peter Kemp is a former senior civil servant.

If there are any economists out there who would like to do a cost-benefit analysis of state visits, I'd like to hear from them. Right now in London we're enjoying the visit of Roh Moo-hyun, the President of the Republic of Korea. But for those of us living and working in Westminster it is a nightmare. Our Power Lunch yesterday with Michael Grade (Chairman of the state broadcasting monopoly, the BBC) started 20 minutes late because nobody could get through the ranks of toy soldiers lining the carriage route. Last week we had much the same problems due to the state opening of Parliament.

The terrorism threat has of course made things much worse. Twenty years ago, the streets were barred off to traffic maybe half an hour before the bigwig arrived... Now the place is shut down for half a day. Helicopters, dogs, armed police, concrete barriers are all brought in and then, eventually (remember, we're talking overtime rates here), taken out again. That alone is a big cost. But what about the cost of disruption to businesses in the centre of London? And those who work in other capitals now shoulder a similar burden.

On the other hand, I guess a state visit helps open trade, show political solidarity, maybe even bring in tourists. But you could do all that at the Queen's castle in the little town of Windsor - with much less economic disruption being caused. I'd be interested to see an analysis.

The UK parliament has voted to outlaw hunting with dogs. It did so by invoking the Parliament Act of 1911 (amended 1949). Normally a bill becomes law when it secures the approval of Commons and Lords and receives the Royal assent. The Parliament Act allows the Commons to have its will even against the opposition of the Lords. The lower House can invoke the 1911 Act to make its laws take effect, allowing the Lords to delay it by only a year.

Judicial review has not hitherto been part of British constitutional law. The principle has been that Parliament is sovereign, and since 1911 this has effectively meant the House of Commons. However, judges have chafed at this supreme power, and have encroached upon it by a series of rulings over the past 30 years. The late Lord Denning was a leading exponent of the view that judges should protect people from the unchallenged power of Parliament. Following his lead, recent judgments have begun to question the legality of parliamentary decisions. The addition of EU laws and recognition of European human rights have added impetus to this. Judges have sought the authority to rule Acts of Parliament illegal, just as the US Supreme Court can rule new US laws illegal.

The judges have looked not only to the language of the law, as in the US, but to the words spoken in Parliament by the government ministers who introduced it. They have sought to make the intention thus established have priority over the actual words used. The legality of the anti-hunting bill has been challenged because of the use of the Parliament Act. The language of 1911 makes it clear that it was intended for high matters of constitutional law, and not as a convenience to bring something into effect ahead of an election. The judges might well decide that the use of the 1911 Act, and therefore the law itself, is illegal.

Aside from the issue of hunting itself, it has left people in Britain wondering whether unelected judges should be able to strike down the will of the people's representatives. Since we did not put judicial review into our (uncodified) constitution, people wonder if judges should be able to put it there themselves.

Today's Financial Times reports that the government is looking favourably at Linux and other open source software:

[The] Office of Government Commerce, which is charged with promoting efficiency and value for money, says in a report published today that open-source software is "a viable desktop alternative for the majority of government users" and "can generate significant savings"... "If commercial companies and other governments are taking it seriously, then so must we."

Linux offers a way of cutting costs for government computing, so taxpayers especially should welcome the OGC's report. Linux is not ideal for every computer user yet - for example, it doesn't run many computer games. But in terms of office software and the ability to connect to databases and the internet, it can offer much better value than Windows. There is a growing consensus that it is more secure than Windows, too. It thus right that the government is looking at Linux as a serious option.

I've been reading the journal, written in 1811, of a traveller in Britain, Louis Simond. Originally French, but having spent most of his life in America, Simond was an experienced and perceptive commentator on British customs, manners, and institutions.

Here he is, after two years touring the country, "waiting only for a change of wind to go on board the ship which is to carry us away, for ever perhaps," reflecting on what he has found:

If I was asked, at this moment, for a summary opinion of what I have seen in England, I might probably say, that its political institutions present a detail of corrupt practices, - of profusion, - and of personal ambition, under the mask of public-spirit very carelessly put on, more disgusting than I should have expected...

No change there, then.

Many people have written pieces about the notion that the government has of cutting the size of the public services - based on Gershon's report on public sector efficiency, and followed up by David James. Currently analysts say that Brown's "golden rule" is threatened anyway, even on the assumption that the savings can be delivered.

The detail of how the government intends to implement cost savings is pretty obscure in the 2004 Spending Review. There's a good deal of smoke and mirrors involved in reclassification of jobs, confusion over treatment of relocations, and possible privatisations, even before we come to real savings.

This doesn't mean that savings can't be made; of course they can. Computers for instance are an area in which the government has had notably bad episodes. (And so do others - look at the Sainsbury's disaster). But it is essential that cost-savings are made without the the services that people really value deteriorating. But there is a lot of wishful thinking from the government here.

The civil servant with the job of making savings, John Oughton, is relatively junior against the serried ranks of Permanent Secretaries and Union General Secretaries. Government Ministers may well be very happy in principle with the notion of cutting staff and saving money, but equally they don't want to do it when it hurts the services they are responsible for, and finds them up on the Today programme the next morning.

Government waste, whether in education, health, police, armed forces or the civil service, should be trimmed - and Mrs Thatcher did it. But the trouble is that often one person's waste (or "nannying") is another person's good service. Cutting costs, and thus producing or at least restraining tax increases are fine. But in this day and age we actually want both tax restraint and improved services. Beyond hoping for better economic growth than expected, that's a dilemma that the government seems wary of getting to grips with.

The British government plans to sell the Tote, the state-run bookmaking operation. But it is only allowing one customer to bid - a new 'Racing Trust' that has been specially created for the purpose.

Worse, this privileged buyer will enjoy the fruits of a seven-year monopoly on pool betting, not to mention all the strategically-placed kiosks that the Tote has at racecourse stands, bars, restaurants, and hospitality boxes (other bookmakers have to pay to stand out in the rain). And a network of around 475 licensed betting shops throughout the country.

That lot should be worth around £500m, say City analysts. But the Racing Trust says it can only afford around £150m. So it seems that taxpayers are facing a £350m rip-off.

That's all right, we're told, because the money will go 'into Racing'. Yeah, but Racing is booming right now, with more fixtures than ever before, and in any case, it is dominated by rich men who for the most part don't even live in the UK. We're just exporting taxpayers' cash to Dubai and the Bahamas.

I love privatization, but we've still asked the European Commission to block this sale as anti-competitive and an abuse of state aid. The Tote should be stripped of its monopoly privileges, and sold to the highest bidder in a free and open auction - not this cosy stitch-up with the Racing interests.

No apology is needed for revisiting yet again that perpetually fascinating subject, PFI. It stays with us.

It's interesting to think that some 20 years ago Michael Heseltine produced the first PFI idea (although it wasn't called that then), to finance and build the as it turns out very successful QE2 Conference Centre in Westminster. The Treasury opposed this on principle (misrepresentation of public spend). It was about ten years later that the Treasury discovered they'd got it wrong, or so they thought, and PFI wasn't such a bad egg at all; indeed when times were strapped, and looking at it narrowly, the notion of keeping spending off the balance sheet, and at the same time seeking better to engage private sector management and expertise not to be found in the public sector, all seemed a good idea.

And of course so it was. But it risks going awry. "Keeping things off the balance sheet" has got near to getting out of hand; the recent budget red book notes that in the current financial year some £4 billion of signed deals exist, not sufficiently accounted for, or indeed not accounted for at all, in the Chancellor’s views of his borrowing requirements. Getting private sector expertise has to be right, but the deal has to be done correctly, both from the point of view of the private sector contractor and the public sector purchaser - and here things haven't always gone right, especially in the IT realm. And there have been other factors at work - for instance the Trade Unions and similar who see this as a back door to what they call privatisation. And lack of expertise, particularly on the public purchaser side.

But if and when it works, which in many cases it certainly does, it is the right way forward. There will always be mistakes, but when it works it works well. And when it doesn't, it's not clear that conventional means would have done better. PFI stays but it's still got rough edges and it needs constant care and attention.

There are some pretty daft reports in the papers about the idea of hiking top Civil Service pay up by 100% or something like that. True or not, this is misconceived apparently heavily resting it seems on comparability with the private sector. Pay ought to be all about recruitment, retention and motivation and of course affordability. None of these point to the need for a big hike.

Comparability between private sector jobs has forced up private sector pay, bonuses and all that. That doesn't mean that Civil Servants should automatically be equally regarded in the pay scale. The top dogs in the civil service, after all, seem to have protected themselves really pretty well - even the failures. Their pensions are excellent. Ditto honours.

The consultants advising the civil service seem to live in a world of their own: when they have little understanding of the organizations they deal with, they go for comparisons. But comparisons are a wretched way of setting pay. There used to be, and I hope there still is, a thing called the public sector discount - sometimes put to as much as 60%, where people who wanted to serve the public sector were quite content to do it for lower salaries than elsewhere.

And they do it well. If the supply starts to dry up, and there is no present evidence of this, then perhaps ministers will have to look at other issues like pay, but not only pay and not yet.

Meanwhile the consultants and the head of the civil service Sir Andrew Turnbull should go away and think hard about this sort of blindness to market forces. The real market looks at people down the line so that we can get decent services from the lower paid people and from the specialists and managers, and the real achievers. That is no reason to hike pay generally for all the top dogs.

According to the Daily Mirror newspaper, civil servants at the Ministry of Defence in London are no longer allowed to help themselves to free tea and biscuits during meetings. They will now only get a cup of tea if the meeting goes on for longer than two hours. (Though that might provide an incentive to make all meetings last two hours.)

Much as I think that Britain would be better off if half its civil servants were sent home on full pay, this strikes me as an appalling way to treat your staff. No private-sector manager would institute silly rules like this. On the contrary, private managers are keen to treat their staff with respect and give them all the human touches - like tea and biscuits occasionally - because they know that personnel are their most important asset.

When I've had meetings in government Departments I've been staggered by the number of top brass who feel they should join in. Again, no private business would throw so much expensive staff time into meetings - meetings are kept as small as they need to be and people report back to their colleagues. Frankly, if the time of civil servants was properly managed like that, you could afford the odd Darjeeling and plate of ginger snaps without worrying.

The Association of Consultant Architects has written an open letter to Katrine Sporle, chief executive of the Planning Inspectorate, suggesting five emergency measures to deal with the government's self-inflicted crisis which has caused the Planning Inspectorate to be overwhelmed with appeals.

Targeted to be decided 80 percent within 16 weeks, written appeals are already taking over a year, partly because performance targets have led to a rise in 'quickie' refusals but exacerbated by the government's unprovoked decision last year to reduce from six to three months the period during which appeals can be made.

The ACA suggests:

• immediate reversion to six months
  
• recognition in the performance statistics when applicant and local planning authority agree an extension of time
  
• encouraging inspectors to announce their decisions on site or on closing a hearing/inquiry and briefer decision letters
  
• encouraging inspectors to award costs without applications having to be made and allowing such awards in written appeals
  
• introducing mediation for suitable cases, allowing mediators to add to the limited numbers of inspectors available.

Sporle has responded positively, admitting to the crisis and that meetings are being held with the Office of the Deputy Prime Minister to address it. Appreciating the Association's 'constructive suggestions' she makes the point that the Planning Inspectorate as a delivery agency does not set policy and, having invited ACA's planning group chairman Andy Rogers to attend a meeting with the Office of the Deputy Prime Minister, she encourages his support for the measures set out in the ACA letter, though with reservations about the need to maintain quality control and so 'Inspectors should not be pressured into quick decisions' and noting that there is no legislative basis for costs awards for written appeals 'at present'.

It used to be quite simple. Government needed things done. Private companies would bid for contracts to do it. The competition was fair and open. The best and cheapest would win.

But now, Britain's burgeoning public sector has spawned scores of quangos. And these bodies have started tendering - to the same government departments that sponsor them and give them their core funding - against private companies for these same contracts.

It's a moot point whether a competition can ever be 'open' when one side is actually part of the organization that is making the choice. But it certainly cannot be 'fair' when one side gets core funding from the state. For then it does not need to put its overhead costs into a bid. And knows the government will underwrite any losses it makes. So there's no surprise that private suppliers are finding they can't win today's tender contests.

For the sponsoring department, this is great, because you can tell the Treasury you are saving money on contractors - even though you are doling out millions to the quangos behind the scenes. And since, in desperation, the private companies are rushing to form consortia with the quangos that win all the work, you can proudly boast how you have advanced the 'public-private partnership' agenda too.

But: fair and open? Best and cheapest? I don't think so.

The Social Affairs Unit has a new publication out today: How to Maximise Your Expenses: Advice to new Members of the European Parliament.

"Funny? For sure, but read it and weep," says Samizdata.net.

The UK government has no idea how to finance local government. Only about 25% of it is raised locally (versus 62% in the US, and 66% in France and Germany).

Suggestions were floated in the last two weeks that Council Tax (on the value of homes) might be dramatically increased, especially on high value property. As Alister Heath points out in The Business, this would amount to a 1% property tax introduced by stealth. Having taken as much of your income as they can get away with, they now turn their attention to your assets. Few things are more destructive of growth and wealth creation than the depletion capital pools by taxation.

Heath revealingly points out that UK property taxes are already among the highest in the developed world. He quotes OECD figures which put property-related taxes at 4.42% of the UK's GDP in 2001. Comparable figures were only 3.05% in the US, 3.09% in France, 2.7% in Australia, and only 0.84% in Germany.

The ideas floated attracted such hostility that the government kicked them into touch until after the next election. The Adam Smith Institute's proposal (PDF) is to refashion the VAT which the national government collects on most goods and services (but not food) into a local government sales tax. It has the advantage that it is easily collected via cash registers, and does not suddenly impose huge bills which people have not planned for and cannot afford.

Our paper on the subject deals with some of the potential plus and minus points. Like many ASI policy ideas, it might have to wait a little before it is eagerly taken up by both parties, but the take-up rate is accelerating!

Education blogger Brian Micklethwait is rather skeptical of government attempts to solve problems by appointing 'tsars'. On the appointment of a Bullying Tsar, he writes:

There is something especially absurd about the idea of a Bullying Tsar. This is reminiscent of Lenin's classic solution to the problem of bureaucracy in early revolutionary Russia: he appointed a committee to look into it.

Is the appointment of Tsars just a government attempt look like it is dealing with problems it can't solve? Or is it a way of cutting through the bureaucratic mess it has got itself into?

Do readers have any evidence that any of the government's Tsars have been a success?

Gordon Brown's headline-grabbing proposed cuts in the civil service will not phase the hardened denizens of Whitehall. Anthony Jay and Jonathan Lynn - the authors of Yes, Minister and Yes, Prime Minister - showed exactly what Sir Humphrey Appleby's response would be in this amusing memo in The Daily Telegraph a couple of months back.

You have to admire Gordon Brown. All today's headlines are about the 'cuts in the civil service' which he announced yesterday.

A superb smokescreen. Whatever the real 'cuts' figure is (anything between 70,000 and 100,000 -- it depends on your definition) the fact is that the public payroll has grown by 500,000 since 1997. Previous 'cuts' have not stopped it growing. And yesterday's controversial 'cuts' are in fact coming from recruitment freezes, early retirement, a little redeployment. It's a drop in the ocean.

The Chancellor must be proud of his smokescreen. Behind it, the reality is that public spending will rise 4.2% a year (against an inflation figure of just 1.6%). That's a huge real increase. I'm sure the 'Five-A-Day Officers', 'Walking Officers' and 'Outreach Workers' exposed in our report Costing Jobs, have little to fear.

Brown has presided over the biggest spending splurge since the 1950s. It isn't working. The NHS budget is up 37%, but output is up only 5%. Everyone at the sharp end of public service delivery complains about the weight of 'targets' and paperwork from the centre.

We can cut taxes and improve services at the same time - by getting politicians out of the delivery of things like health, education, and transport. Give the money direct to the users, and let them choose. Allow new providers to spring up. Turn state monopolies into non-state competitive markets. Then we can really start to talk about downsizing the state.

Britain's utilities, transport, and mail companies don't just have government regulators to deal with. The current government has also created bodies to represent consumers -- with statutory powers. They include Energywatch, WaterVoice, PostWatch, the Rail Passenger Council... And these new bureaucracies are sprawling.

PostWatch, for example, employs 120 full-time staff, three times more than the official regulator, Postcomm. The 290-strong Energywatch gets £11.5m of taxpayers' money each year, roughly a third of the regulator Ofgem's budget.

But do we need them? Privatized companies are far more sensitive to their customers' needs and views than their nationalized predecessors. There's plenty of consumer law to protect folk who think they're getting a bad deal.

If these bodies really think they are representing the public, then they should be paid by public subscription, not from subsidies forcibly taken from taxpayers. Then we would see just how much of a role there is for them -- and just how much more efficiently they could run themselves.

On July 4th, I was at a party in Washington DC to celebrate America's Independence Day. You might find it odd for me, a Brit, to be celebrating one of our former colonies beating us. But those of us who think the British government taxes and bosses us too much can't help but sympathise with the Americans.

The words of the Declaration of Independence are some of the most profoundly moral, memorable and courageous words ever written. It gives me a shiver down my spine every time I read it. Many politicians believe that rights are given the state – such as through the proposed EU constitution's Charter of Fundamental Rights. But as America's Declaration points out, it's for government to recognise rights, not 'create' them.

For years, governments have promised us a 'bonfire of red tape' and yet the number of quangos - quasi-autonomous non-government organizations - just grows and grows. The Scottish Executive, for example, announced their intention to light the touch-paper a few years ago. But now, Scotland's taxpayers have discovered that their quango bill has risen by £137 million since 1999. Indeed, the £346 million spent on quangos is edging up to the unbelievable £400 million being wasted on building a new Scottish Parliament building in Edinburgh.

Those amazing job descriptions proliferate. In the Times of June 16th, Robbie Millen quotes a passage in the Islington South Newsletter about SureStart. Millen writes:

I was encouraged to learn from the Early Excellence Co-ordinator for Islington South SureStart that "we have a Family Support Team including: an Outreach Worker, Stay and Play Co-ordinator, Childminding Network Co-ordinator, Community Child Psychologist, Speech and Language Therapist, Outreach Teacher, Movement Playleader and (my favourite) Vision Inclusion Worker.

Sir Peter Gershon thinks he can save £15bn by making Britain's civil service more efficient. David James, the business troubleshooter who is advising the Conservatives, says this is 'decidedly unambitious'.

James is right. Sure, we can save at least 5% (that's £1bn) on the government's IT budget just by sorting out the appalling messes it has created. Certainly, government procurement is disastrous, which is why it gets sold so much duff kit. Making that more professional would save an awful lot. There are certainly efficiencies to be had.

But then, be honest. Do we really need a lot of what Whitehall does at all? The Department of Trade's budget soars, but has business benefitted? No: all that's happened is that even more EU regulations are being 'goldplated'. What does the Department for Rural Affairs actually do? Couldn't we do without the Education Department and just give the money direct to school head teachers? And if we did, wouldn't it be better spent?

If we couldn't ditch 10% of what the state does without noticing the difference (and that's a saving of £50bn-odd) I would be astonished.

It's official: the civil service are not even very good at running their own offices.

On the basis of £300m savings made when the Inland Revenue and Customs offices were given over to private management, the National Audit Office says that other government departments could similarly save hundreds of millions of pounds by getting outside contractors to refurbish and manage their accommodation. (Source: Financial Times)

And think how much more we'd save if we actually contracted out the actual work of the civil service too!

Governor Schwarzenegger is reported by John Fund of the Wall Street Journal to favour a part-time legislature in Sacramento. The governor says that "Spending so much time in Sacramento, without anything to do; then out of that comes strange bills." He could be referring to rogue proposals to regulate the size of children's backpacks, control the amount of water a dishwasher can use, or prohibit the declawing of exotic cats. Indeed, the Legislature is about to debate whether to incorporate feng shui, the Chinese art of spiritual harmony, into state building codes.

Only three other states, Michigan, New York & Pennsylvania have full-time state legislators, and California only since 1966. The new governor has proved able to mobilize popular support to push through his reforms, and persuade interest groups to negotiate changes. If he were to press for part-timers, it would cut not only the cost of government, but the cost of its impact on the citizens and businesses of the state. It could be a popular item.

The Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), an activist group in America, has condemned the use of supermarket loyalty cards due to their intrusion into personal lives. Yet it seems to me that loyalty cards are not very worrying. As Declan McCullagh notes, "Nobody is forcing shoppers to sign up to discount cards; they do it because the perceived benefits outweigh the perceived costs." Information surrendered typically concerns the number people in the household, the number of children, the typical weekly spend on groceries etc. I am happy for a supermarket to have this information: it helps the supermarket tell me about products I am likely to be interested in.

Rather than worrying about businesses using data in order to make their shopping experience more tailored to individual customers, we should be worrying about the number of civil servants allowed to snoop on their fellow citizens. According to the Foundation for Information Policy Research police and other officials are making around a million requests for access to data held by net and telephone companies each year. Customs and Excise have 200 staff authorised to use the snooping authority and had sought access 35000 times in the last year. The Inland Revenue accessing such data a further 11700 times in the last year. Do we allow too much snooping, or is it important for fighting crime?

The government plans fundamental reform of the constitution, with an end to the office of Lord Chancellor (going back, in its present form to a statute of Henvy VIII in 1540), and the replacement of the Law Lords with a Supreme Court. But can institutions - especially those so fundamental to the rule of law and the rights of citizens - really be torn down and built up again like some piece of civil engineering? Or do institutions have to grow naturally and be carefully cultivated over a long time? Lord Rees-Mogg, former editor of The Times, asks these questions in a thoughtful article on the changes.

The singer Billy Bragg's idea for House of Lords reform - party lists reflecting the percentage vote in general elections - is better than the mass quango we are heading for, but it's a highly 'political' system that still gives too much power to party bosses.

The trouble with a list system is that the party whips who draw up the lists would want to choose only party hacks. So the House of Lords would lose all those able but independent-minded people from the worlds of art, literature, broadcasting, sport or public administration. People like Lord Winston, or Melvyn Bragg, or Lord MacLaurin -- even Lord Archer. People who have got real experience outside the closed world of politics, and who can make a really useful (did I mention Lloyd-Webber?) contribution to the decision-making of the nation.

So instead of dividing the Lords according to the share of votes cast, let's give the politicos a shock. Divide it on the number of people actually voting -- with the 'stay at home' vote represented by true independents of experience and calibre. Given the rising public disdain for politicians and how fed up people are with elections, who knows - the free minds might soon end up in the majority!

The UK Government announced details of its Pension Protection Fund, and it
is to charge a flat fee on funds instead of working like a traditional insurance scheme and charging a premium based on the risk posed; and all pension benefits will be insured by the same monopoly provider, a statutory body. We already require companies to have Public Liability Insurance. Instead of creating the Pension Protection Fund, the Government should extend this principle to require pension schemes to insure some of the benefits they provide using the private market.

Collectivists like 'voice' as the system for improving society. We get a say. We should all be forced to go to state schools, but we can say what we think in public meetings. Local politicians, instead of us individually, should decide the company that collects our rubbish, but we can attend surgeries and express a view.

I am not a fan of 'voice'. It only works effectively when there is also the option of 'exit'. In other words, giving your opinion only really works if you can move your custom elsewhere. If you complain about waiting lists in the NHS, not very much happens. As a GP said to me recently, "It's the NHS. You've just got to take what you're given."

Where there is only 'voice', we are told that we have to wait our turn. We are told to take into account the requirements of other consumers. We are told to be grateful for what we have.

'Exit' is much better than 'voice'. This is because market forces work. Public sector altruism doesn't. As Adam Smith said: "Public services are never better performed than when their reward comes in consequence of their being performed, and is proportional to the diligence employed in performing them."

Trade unions and many claiming to favour equality do not like 'exit'. They want to deny poor people the ability to make choices about their public services. Rich people can of course pay twice, but poor people do not have their option. The less well off in our society need 'exit' more than anyone else.

Critics have long argued that Tony Blair's government is tossed around on the sea of public opinion because it does not have any ideological compass. That's almost bearable when it's just the economy shipping water. We can re-float the economy. But it's deeply worrying when it is the rule of law that is sinking.

Alasdair Palmer in the Sunday Telegraph shares my outrage that the UK Home Secretary David Blunkett has decided to amend the system - introduced by his own government - whereby prisoners can be released early provided they agree to wear an electronic tag.

He's amending it to ensure that one specific person, Maxine Carr, stays in jail. She was the partner of child-killer Ian Huntley. Although she did try to cover up for him, she was not involved in his murders, and is reckoned to pose no threat to the public.

But her release would pose a threat to the politicians. The murders were a high-profile case, and our politicians want to show how tough they can be on high-profile offenders. Likewise their demands to 'rationalize' the rules on ex-convicts sitting in the House of Lords, which they want to make retrospective, so that just one high-profile offender - Lord (Jeffrey) Archer would be slung out.

I'm afraid our politicians have no feeling at all for the rule of law, something which took us many centuries, and tens of thousands of unpleasant deaths to establish. And when they distort the law to use it against inconvenient individuals, those of us who number among their inconvenient critics should indeed be afraid.

More than four-fifths of employees have called in with pretended sickness just to have a day off. And 66% of those who lied did not feel any guilt. That was the finding of a poll by Manchester employment lawyers Peninsula, reported in the papers this week.

Not surprisingly, all the subsequent comment centred around how unreliable and lazy British workers obviously are. But that's misleading.

Absenteeism is - by far - at its worst in the public sector, where staff take an average of 10.1 days sick leave per year. This compares to just 6.7 days in the private sector. (One local authority in the South of England puts up with 17 working days lost per employee.)

Overall, public-sector staff absence costs Britain a staggering £3.6 billion a year.

At the other end of the scale, self-employed folk, or those working in small businesses take hardly any time off at all. Why? Because they have to earn their own living, they have greater enthusiasm for and commitment to their work, they are better managed, and they are not surrounded by fleets of under-occupied colleagues who can cover for them.

Perhaps our swelling public sector could learn something from this simple management principle, contract all its work out to small enterprises, and save us all some wasted money?

The UK government announced two weekend initiatives. School headteachers will be able to inflict £100 fines on parents who take their children on holiday in term time, which some do to take advantage of low-season prices. Traffic wardens in cities will be able to levy on-the-spot £60 fines on motorists who turn right when they are not supposed to, or stop within a yellow painted intersection box.

Both of these save a lot of time on courts, not to mention prosecution, defence, judge and jury. The state is empowering civilians to decide guilt and impose penalties. There is no reason to suppose it will stop there. Perhaps people could be empowered to levy £100 fines on those who willfully smoke in public places? People might be far less ready to consume unhealthy food and drink in the street if they knew they could be subject to an instant £50 penalty. And one way to tackle the growing obesity problem which threatens to impose so many costs on all of us might be to subject overweight people to on-the-spot fines of £10 for each pound above the recommended safe limit.

But why stop there? Shouldn't parents be empowered to fine headteachers for failing to give their child a decent education? And why not let motorists fine transport officials for failing to provide an adequate road system? Or parents to levy instant fines on conservationists who willfully thwart by-pass schemes which could make the historic centres of towns and villages both safer and pleasanter?

A report in the London Times points out that new EU rules against age discrimination could eliminate many of the benefits given to reward long service. Young people could claim they were not old enough to qualify. Out might go the traditional gold watch, the admission into extra medical and other benefits, and even the party to celebrate 25 years of service.

The EU is guilty here only of carelessness: it is the gold-plating of EU rules which causes problems like these. While other EU members do not enforce the ones they do not like, British bureaucrats do it zealously. Even casual or sloppily worded directives are imposed rigorously. It derives partly from UK respect for the rule of law (apart from taxation and speeding, that is). This makes the burdens fall selectively heavily on Britain.

The intention was to prevent discrimination against older workers, but the first effect might be to outlaw any positive benefits they receive. Employers' groups are advising them to withdraw such privileges.

I always thought gold watches were over-rated. They are often handed out at retirement, just when the employee no longer needs to check the time. The civil service does it much better, handing out a £2 lump of bronze instead, and calling it a CBE. I hope that the honours system will be exempted from the new rules. Along with pantomimes, it amuses and brightens the early days of a new year.

The house designs were ready for approval, but the planning officer had one last point. Where I had red pantiles there had to be blue slates. I didn't like blue slates, and felt red clay tiles fitted the design better. No, I was told. Blue slate gives a much better vista with the next house. The next house was some way away, and only from half-way up a tree 500 yards away could one see 'a vista' through the obscuring foliage. Furthermore, I added, most of the houses in the village had red pantiles. No, came the reply, blue slate was called for.

I found that the planning officer did not have the power to require blue slate. I wrote back indicating this, and saying that this was a question of taste. Since it was my house and my money, it was going to be my taste. Back came a letter. True, she did not have the power to insist, but she 'strongly recommended' blue slate. I wonder how many people even question the powers which government has conferred upon these pocket Hitlers to interfere in such detail in our lives. Had it not been for a chance remark by my builder, I doubt if I would have checked up.

Surely we can devise a better system, preferably one which does not have local authorities snooping with helicopters to detect 'unauthorised' conservatories? We could start with a presumption of the right to develop your own property, perhaps, and use case law to build up a precedent of what counts as abuse. We could admit that our present planning and zoning laws are a mess.

By the way, the red pantiles, when they went up, looked superb.

The UK used to be the most attractive economy for EU foreign investment, easily first in foreign direct investment. Now it isn't.

It used to be a low tax economy. Now taxes are rising faster than in any EU country.

It used to have the most successful private pensions sector in Europe, bigger than all the other countries' private pensions investments put together. Now that's being killed by the UK Chancellor's £5 billion-a-year raid on the pension funds. So there are now more pensioners in poverty than 1997.

We're creating jobs - but in the public sector. The 350,000 new public-sector jobs we have created consume wealth, they don't produce it.

There have been at least 60 'stealth' tax rises since 1997. The average household in Britain pays £4000 more in tax than six years ago. That means working an extra week every year, just for the Chancellor. After tax, Britons have suffered the first fall in take-home pay in 20 years.

Taxes yielded £360 billion when this government took office. Now it's up to £500 billion. Yet despite all the spending, half of us think that health and transport are worse than in 1997.

Meanwhile, people earning £40,000 a year find themselves eligible for social benefits; doctors, teachers and small businesses spend more time filling in forms than ever before.

Am I just being cantankerous, or is this all a bit of a mess?

Looking out towards Horseguard's Parade from the London venue where we were holding an Adam Smith breakfast briefing on energy policy the other day, I commented to one of our guests how hideous were the anti-ter