The Pin Factory Blog

It’s time to say goodbye to the ASI office after a wonderful few weeks. I have to say thanks to all the guys in the office for being so friendly and welcoming. I’ve learnt a lot and really hope to keep contributing to the ASI blog in the future. 

It’s definitely worth bearing in mind the value of the work the ASI do. Just a quick scan of the top stories from the last few days are enough to remind you how important it is to keep making the case for liberty, property rights and voluntary exchange – the introduction of ID cards for foreign nationals, calls for stronger international regulation of the financial services sector and the future of public service broadcasting to name but a few.

In these somewhat economically uncertain times it is all the more important to point out the value of free markets and the pitfalls of excessive government regulation - in particular of knee-jerk reactions against the so-called ‘excesses’ of capitalism. Something tells me things might get worse before they get better.

Good luck!

Pause in the street for a cigarette today and you could find yourself approached by one of a team of stop smoking officers employed to roam the capital. Under plans for a ‘hard hitting’ approach smokers will be approached at bus stops, betting shops and shopping centres and offered a carbon monoxide test to ‘shock’ them into signing up for a stopping smoking service. The plans come on the back of a similar scheme for fat-busting nurses to patrol the streets of Scotland armed with measuring tapes and equipment to test blood pressure.

We all know that smoking is a filthy, expensive and deadly habit - we are told as much by the health warnings emblazoned across our cigarette packets. And we are quite aware that eating fatty foods and drinking too much is not the best way to ensure that you are around to see your great grandchildren. Smoking, drinking and eating too much are choices – choices that we should be free to make.

The approach increasingly adopted by the state - harassing, shaming and persecuting those who do not conform to the puritanical lifestyle that they espouse is designed explicitly with stigmatisation in mind. Government sponsored campaigns increasingly portray smokers and drinkers as unattractive or morally corrupt. But, shaming us into believing that certain choices we make are dirty or abnormal is nothing less than state-sanctioned bullying. And there is nothing attractive or moral about bullies.

More conference news – the Lib Dems have vowed to tackle much-needed police reform.

Proposals aim at some very welcome decentralisation – scrapping central targets and providing for directly elected police authorities, which can define local priorities, set budgets and vary taxes where necessary. Whether the plans are ‘radical’ or not is subject to debate. All three of the main parties are starting to at least talk the talk of decentralization.

The moves do put the Lib Dems one step ahead of the Labour government who, for all their talk of localization, look set to retain their grip on policing – setting national standards and using the powers in the Police Reform Act 2002 to specify practice and impose solutions on local police authorities. The Conservatives seem to have the clearest sense of what a decentralized system would look like with proposals for locally elected police commissioners and the abolition of the National Plan. 

Ian Johnston, head of the Police Superintendent’s Association, has been making headlines over the past few days with his admission that the quality of service provided by the police is negligible. Indeed, public confidence in the police is extremely low – not helped by the perception that crime is getting worse or the unnecessary sideshow provided by Sir Ian Blair and Tarique Ghaffur. It is heartening then to see some kind of consensus emerging over the need to modernize, decentralize and make the police force more accountable to the people that they serve.

News just in from the Lib Dem conference – the party is planning to give income tax breaks to the healthy. Under the proposals, Local Health Boards would be set up with powers to cut taxes for those who gain 'points' by attending regular cancer screenings and take part in physical activities. Activities would be logged via a swipe card system and points redeemed against proposed local income tax bills. Direct incentives would be backed up by penalties for failing to turn up to GP appointments.

At first glance the proposals appear to contain some sound principles – in particular the attempt to break the Stalinist grip Whitehall has over the health service by establishing directly elected Local Health Boards who would be "free to commission services from a range of providers to secure improved quality of care and value for money". The explicit incentives to get patients to take more responsibility for their healthcare would also bring a welcome shift in patient attitudes towards their health.

Last week I discussed Clegg’s proposals for directly elected health boards pointing out that a market based health system would provide a form of democracy far superior to that of merely voting every four years for a health board. 

Similarly, proposals to recreate the incentives of a market based insurance system beg the question – if insurance companies have been so effective in incentivising healthy living why try to merely recreate these incentives? Why not just switch to the superior model? An insurance system would put the purchasing of health services firmly into the hands of the patient - simultaneously breaking the government monopoly on healthcare delivery, while providing patients with incentives to live healthy lifestyles. Clearly the Lib Dems believe that markets work – why not put those beliefs in to practice?

...but misses the point about markets.

At an event hosted by the think tank Reform, Nick Clegg became the first of the three leading parties to commit to allowing patients to top-up their healthcare.

‘I'm a liberal. We cannot continue to deny people the right to top up their care’ he announced.

Good – as Tom has written here, preventing patients from topping up their NHS care privately is immoral, impractical, incoherent and (quite possibly) illegal.

However, the Lib Dem leader also rejected plans to move towards an insurance-based health system. Under Reform’s proposals patients would receive a healthcare premium of £2000 per year, which they would then us to purchase health insurance from a range of Health Protection Providers.

He also backed away from the idea of forcing Primary Care Trusts to compete with one another, instead advocating the option of creating local, electorally accountable PCTs with responsibility for the residents under their care. Such a move would, he maintained, remove some of the control that that Department of Health has on the NHS. The state would, however, continue to play a role in the distributing resources, setting standards and altering patient premiums to reward GPs who work in deprived areas.

Of course, what Clegg misses is the fact that, if left to the market, patients, rather than being given a chance to vote just once every few years for a Local Health Board, would vote every time they made a decision on where and in what form to purchase their healthcare. A real market in healthcare would give patients the right to choose and switch providers, thus driving up standards, increasing innovation in healthcare delivery and empowering patients - benefiting the many and not just the noisy few.

As if the first day back at school wasn’t bad enough, children starting secondary school in England this week will be the first to be legally required to stay in education until they are 17. Next year, the mandatory school leaving age will rise again to 18 for next year's secondary school starters, with the aim of getting more young people into further education.

And while those filtering through the school gates in Scotland can look forward to leaving the clutches of the education system at 16, they may now find themselves restricted from enjoying a drink in the confines of their own home until they are 21. Under new proposals, under 21s in Scotland will be barred from buying alcohol from supermarkets and off-licenses in order to stem the binge-drinking epidemic sweeping the nation.

The state would argue that these measures will prevent youngsters from falling into a life of booze-fuelled crime – a noble aim. But, why is it simply not enough to advertise the benefits of staying in school or the dangers of alcohol and leave young adults to choose? Indeed, the moves appear to be symptomatic of a wider belief that young people do not have the capacity to make informed and sensible choices. It is these young people that are then chastised for lacking personal responsibility. If the state wants young people to shoulder their responsibilities then it stands to reason that they must be given the chance to learn to exercise them. And that includes making decisions that might not necessarily be in their best interests and learning from them.

And, another thought (or three). First, if schools were forced to compete to attract pupils (as they would do under proposals to adopt a model of school choice in the UK) maybe they would do more to try to keep them there? Second, blaming cheap supermarket booze for our social ills ignores the deeper cultural issues that make British drinkers more susceptible to drinking too much. Countries with far less restrictive attitudes to alcohol tend to have fewer problems with youth alcohol abuse. Third, perhaps legislators need to consider that it is the existence of the welfare state that has promoted low levels of aspiration and personal responsibility among young people leading both to school dropouts and the existence of a binge-drinking culture?

Shadow Health Secretary Andrew Lansley unveiled his public health agenda at an event with centre-right think-tank Reform this morning. Key amongst his proposals was introducing a separate budget for public health, more evidence-based practice and the appointment of local directors of public health.

He also acknowledged the role that individuals must take in their own health with the mantra ‘No Excuses, No Nannying’. Building on Cameron’s earlier comments around the “moral neutrality" of society, the Conservative approach to healthcare would be to ask us (or at least ‘nudge’ us) to take more responsibility for our lifestyle choices.

Putting aside the debate over whether how much we eat and how little we move has anything to do with the state, we are left with the question whether, in a taxpayer funded system, any amount of ‘nudging’ can galvanise patients into taking more responsibility for their health? Indeed, a system that makes no direct link between what a patient pays in and how much they get out is one that will, perhaps inevitably, promote irresponsible attitudes on the part of individuals.

One way to encourage more responsibility would be to roll out individual budgets on a wider scale, giving patients a sense of ownership over their health and well-being by allowing them to manage and control their healthcare spending. This, I am told, is something that Mr Lansley is very keen on.

But, with the cost-pressures mounting on the health service perhaps we need to start thinking about radically different approaches to the way that healthcare is delivered and funded? To this end, medical savings accounts could be a model well worth considering. By placing money spent on medical services directly in the hands of the consumer patients are encouraged to become more actively involved in their own health. And, both by making preventative expenses eligible for coverage and by allowing people to keep the money they don’t use, medical savings accounts contain an in-built mechanism that promotes public health without the need for government regulation and interference. ‘No Excuses, No Nannying’ required.

This week The Guardian reported on the new environmental campaign to get us to recognise our ‘water footprint’ – in other words, we are now being asked to factor into everything we consume the amount of water it would have taken to produce.

Water, it seems, is the new frontier in environmental campaigning. The WWF this week released a report entitled, UK Water Footprint: the impact of the UK's food and fibre consumption on global water resources. The report, timed to coincide with World Water week, highlights that:

[W]hile each person in the UK drinks, hoses, flushes and washes their way through around 150 litres of mains water a day, we consume about 30 times as much in 'virtual' water used to produce the food we eat and the clothes we wear. This is equivalent to about 58 bathtubs full of water for each of us, every single day.

Apparently the UK is the world’s sixth largest importer of water. This, it is claimed, is affecting drier areas of the world where water resources are either already stressed or very likely to become so in the near future. As such, we are now being asked to factor in our water footprint to our daily shop. Businesses are likewise being urged to evaluate their water footprints and take steps to reduce water consumption.

Needless to say, a much simpler solution would be to treat water supplies as an economic good, by making water demand less independent of users' willingness to pay for it. Of course, this may entail the privatization of water supplies in developing countries, something which has inevitably faced hostile opposition – despite its proven, and often dramatic benefits.

Whatever the solution, it is clear that the growing trend towards protectionism in the name of environmentalism is set to continue. If shoppers are now asked to consider ‘water footprints’ alongside the ubiquitous air miles, green bean growers in Kenya will only be the poorer for it.