Adam Smith Institute

Peter Luff MP, head of the House of Commission Business and Enterprise Committee, was our guest at a Power Lunch in Westminster yesterday. Round the table we had a number of regulators, lobbyists and businesspeople, mainly from the telecoms, mail, and energy sectors, so it made for a wide-ranging discussion.

Luff's topic was how far we might streamline the workings of the Department for Business, Enterprise and Regulatory Reform. Quite a bit, I would say. Rather a lot of its work involves simply replicating what private agencies do already. It seems to delight in devising all kinds of taxpayer-supported special schemes for this sector or that, this activity or that, as the political wind blows. It would be much better off standing out of the sun and letting businesses grow under the light of lower taxes and lighter regulation.

One topic that did come up at the discussion was the independent review of postal services that is currently underway. This could be quite radical in its findings. There is certainly a strong case for privatizing the Royal Mail, as we explained in our report Privatization - Reviving the Momentum. Indeed, with many other national mail carriers now in private hands, and with the growth of private carriers in the UK, the case is getting stronger. The political problem, of course, has always been what to do with rural post offices. Privatization brings transparency, and transparency is the enemy of the sort of cross-subsidies that keep rural post offices open today.

On the other hand, many of the rural post offices have gone already. More banking, benefits, licensing and other traditional post office functions are now done online. So maybe the problem is getting smaller. And maybe the question of whether some rural village really needs a post office or not should be up to the local authorities – not a decision made by some distant bureaucrat in London.
 

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Freedom Week is a one week free seminar for thirty students about the principles of a free society based on the free market and individual liberty. It is taught by eminent academics and supported by the main UK free market think tanks.

Freedom Week 2008 will take place at Sidney Sussex College, Cambridge, from 7 to 11 July 2008. To apply, please email to This e-mail address is being protected from spambots, you need JavaScript enabled to view it and include:

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The absolute deadline for applications is 3 June 2008. Please apply asap.
Hope to see you in Cambridge! 

We had the April meeting of our next generation group this week at our offices in Westminster. The guest speaker was Phil Booth (pictured), the national co-ordinator of the influential NO2ID campaign.

Sticking to the strict 10-minute time limit, Phil took us on a whistle stop tour of the database state, making clear the important point that it's not just about having another piece of plastic in your wallet. The real problem is the massive and intrusive identity database that will back up the ID cards and further shift power away from the citizen and to the state.

That's bad enough on civil liberties grounds, but when you consider the government's record with data security and IT projects, the possibilities are horrifying. Moreover, even the government admits the minimum cost of the project will be £5.8 billion! That's a lot of money for something which won't stop criminals or terrorists, or prevent fraud or illegal immigration, or do any of the things the government claims.

The event was very well attended and made for an excellent evening. Anyone interested in attending future next generation meetings should click here to sign up the email list or click here to join our Facebook group.

Lord Razzall, the LibDem spokesman on business in the Lords, came in for an Adam Smith Institute Power Lunch this week. He's unusual among parliamentarians - a legislator who believes there is too much legislation. Quite so. Every year there are about thirty or more bills in the Queen's Speech. Ministers reckon it's a macho thing to get their department's pet bill on the agenda, and people think they are weak if they don't manage it. We've had nearly thirty bills on industry and employment issues in just a decade. Have they made us better governed - or safer, healthier, better educated? I think not.

And we're over-regulated too. Most regulation is actually home based, only a minority comes from the EU. But once UK lawyers get their hands on it, asking governments to define exactly what particular rules mean and when they will apply, the rule-book gets fatter and fatter. Like us, the LibDems propose sunset legislation on regulations - they fade out unless specifically renewed each year. But we have other ideas too, as readers of our report on regulation will know.

However, that sunset policy may come up against the fact that House of Commons scrutiny of bills and regulations is inadequate. Thanks to timetables and guillotines - and the vast queue of bills all jostling for time - measures like the competition bill have gone through the House of Commons without being properly looked at. Asking parliamentarians to stay up until midnight to vote on regulations (there are just so many of them) might be asking a lot.

Another area that our discussion alighted on was the future of the Business and Regulatory Reform department. The LibDems argued that the old DTI should be broken up, with most of the business promotion stuff being put into the Foreign Office, and most of the consumer protection side being done elsewhere. I agree that this makes sense. Dare one say that officials have sometimes promoted business at the expense of consumers? Several of our experts round the table though that the regulators certainly had - with bills rising at the same time that utilities' share prices began to soar.

Maybe the LibDems have a point - there is a lot wrong in politics. But there's just as much wrong with the system by which politics operates. If only we could get them to trust the market.

Libdem MP Phil Willis was our guest at a Power Lunch this week. As Chair of the Innovations, Universities and Skills Select Committee, he chose to raise the question whether labour (small L that is) was a global commodity or a national asset.

Many politicians think about skills in terms of producing the future skills that Britain will need. But Willis takes the view that we should be producing the skills that the world will need. I think that's a fair point. We live in what my colleague Madsen Pirie in an ASI report called a 'people economy' where your best productive asset is people and their brains and skills - and people are much more mobile than land or factories or machines. So we should think globally about them. Every knows that 600,000 people have migrated to the UK, mostly from Eastern Europe, and joined the workforce in the last year or so. But then there are more than four million Brits working abroad. We get around – and that's quite right.

We don't need to be self-sufficient in skills any more than we need to be self-sufficient in bananas. We can buy skills from the world, and they can buy ours. We're talking about building four new nuclear power plants – but the expertise to build them won't come from the UK alone, they will come from Japan and lots of other places which have the right people with the right skills.

I guess the policy conclusions are first, that we need to develop skills for the global marketplace, not just the skills that we think we need here and now. And second, if we are going to get all these skilled people to come to the UK and undertake the work that we can't do ourselves, we have to make the UK an attractive place to live. That means a relaxed, open, tolerant society, with good public services and low taxation. Unfortunately (as any non-dom will tell you) the present government seems to lack the skills to produce that happy prospect. Back to school for them.

Freedom Week director, Jean-Paul Floru, was guest of honour at the ASI's launch of Madsen Pirie new book, "Freedom 101."  The book is a refutation of 101 "common errors," many in daily currency.  In his opening speech Jean-Paul praised the scholarship and commitment which had made the ASI so influential over the years.

Madsen then explained how the book and its title had come about.  He said that not only was 101 the designation for US university introduction courses, but was also the number of the room in Orwell's "1984" where people encountered whatever they feared most.  In this case it was what left-wingers feared most – the truth.  The reason why each error was refuted in 300 words, Madsen explained, was that this length occupied a computer screen without scrolling.  He told how a predecessor called "The Book" had similarly been designed to fit neatly into the back pocket of jeans.  Ideas were important, but so was marketing.

The hope was, said Madsen, that people would use "Freedom 101" to reinforce their own views and to undermine those of others.  He concluded by welcoming suggestions for further common errors for a possible "Freedom 202."  

The book will be available from this weekend on Amazon at £5.95, and will at some stage be available to download from the ASI site.

Just a reminder that we are launching Madsen Pirie's new book, Freedom 101, tomorrow at a TNG drinks reception here in our Westminster office. Freedom 101 is a compilation of all 101 articles in our 'Common Error' series. JP Floru (pictured left), the founder and organizer of Freedom Week, will be speaking at the launch. 

Join us from 6-8pm for pink champagne, a selection of ales, and gourmet sandwiches, RSVP to This e-mail address is being protected from spambots, you need JavaScript enabled to view it or Steve on 020 7222 4995. 

The ASI's Next Generation group hit the ground running with its first reception of 2008. It was first Tuesday time, and Nigel Evans, MP (Con) for Ribble Valley was the guest of honour. There was a good crowd, probably attracted more by the speaker than the wine of the month (Wilga Tree shiraz-cabernet).

After the members had sampled the gourmet sandwiches, it was time for the 10-minute presentation. Evans spoke to the title "Between now and the next election." Like the ASI's Madsen Pirie, he seems to have concluded that this will happen in 2010 as the parliamentary term runs out. His theme is that the case must be made relentlessly that individual enterprise can create wealth far more than government can, and that a growing economy can both fund public services and also take a lower proportion of the nation's earnings. He referred to examples of when this had been done.

The verdict on his speech was that it was superb, brief, but making valid points succinctly. Mr Evans stayed after his address and managed to meet and chat with most of the members there. It was a great start to the year. Bookmark the next on: Tuesday March 4th.

We have an interesting event coming up tomorrow, an evening seminar on 'The Future of Immigration'. Our guest speakers will be Philippe Legrain, the UK's leading advocate of open immigration and author of Immigrants: Your Country Needs Them, and Damian Green MP, the Conservative Immigration spokesman.

Immigration is a difficult subject – one I sometimes feel conflicted about myself. The free-marketeer in me thinks we should encourage the free movement of labour, just as we strongly advocate the free movement of goods, services and capital. If someone wants to come to this country to work and contribute, then surely we should welcome them. The economic benefits of immigration are pretty clear and there is no doubt that immigrants usefully fill many gaps in the UK labour market. Where would the tourist industry, for instance, be without foreign workers? In the global context, there is another important benefit to immigration: remittances. The amount of money sent back to developing countries by people working the rich world now dwarfs government aid – and unlike aid it goes straight into the hands of individuals, where it can make a real difference.

Of course, there are serious arguments in the other direction as well, and they are hard to ignore. There is little doubt, for example, that mass immigration has heightened racial tensions in some parts of the UK, and contributed to the ghetto-ization of many big towns and cities. Furthermore, in a country where public services are government-controlled and incapable of reacting to demand, large numbers of immigrants can put them under immense strain. There are other legitimate concerns too.

These are the kinds of issues that will be discussed on Thursday, and I have no doubt the debate will be lively. The seminar, which is being held in our offices at 23 Great Smith Street, Westminster, kicks off at 6.30pm (doors open at 6), with drinks to be served at 7.30pm. If any of you would like to come, please email Steve at This e-mail address is being protected from spambots, you need JavaScript enabled to view it or call 020 7222 4995.

Digby, Lord Jones – formerly director-general of the CBI and now Minister of State for Trade and Investment – was our Power Lunch guest this week. He spoke very candidly and engagingly about his role as a GOAT (government of all the talents) and sparked some fascinating discussion around the table. What really shone through was the clarity of his ministerial remit (to promote the British brand overseas), and his enthusiasm for and expertise in getting the job done. That always seems to be a rare quality in politicians, but then, I suppose, Digby Jones is not really a politician anyway. He may have taken the government whip, but he has not joined the Labour Party.

It made me wonder whether there might be some mileage in appointing more government ministers – or even secretaries of state – who are not MPs. US cabinet members are typically far more qualified for their positions than their British counterparts. The US Treasury Secretary, for instance, usually comes from a financial rather than political background – and this is surely a good thing. Thinking really radically, couldn't we directly elect Prime Ministers, have them appoint top quality cabinets, and turn Parliament into a US-style legislature, with its own agenda and powerful committees to grill government ministers? Well, perhaps not, but there may be something in the idea. I'm probably just getting carried away with US election fever...

Barbara Young, Chief Executive of the Environment Agency, was our guest at a Power Lunch in Westminster this week. She's had a difficult few months dealing with the physical and political results of widespread flooding in the UK – two major inundations in just a few months.

By any standard, the floods were unusually bad - maybe a one in a hundred years event. Though the worry is that they might get more frequent due to climate change. But one in a hundred years events do occur (roughly every hundred years or so, in fact) and you can't necessarily say that they herald a change. A hurricane just a few years back devastated New Orleans, and everyone started talking about climate change. But even in the 1960s, forecasters knew that a hurricane of a certain strength and a certain trajectory would do that. There were plenty of hurricanes over the next forty years, but only one got lucky. A sign of climate change? Hardly. And don't forget that a hurricane devastated Galveston a century earlier.

But if things really are changing, we are in a mess. One of the things that made the floods so devastating was that nobody seems able to take charge. The water companies control the pipes and sewers. Local authorities are in charge of logistics. The Environment Agency has other functions. When there is a national emergency, we could use smoother and more co-ordinated systems.

Meanwhile, the 55,000 flooded houses that are being refurbished after the floods are being restored to - their original condition. Why don't the insurers use it as an opportunity to flood-proof them while they're about it? Maybe it's because Barbara Young's government colleagues have regulated them all senseless.