Written by Dr Madsen Pirie
The enemy of our future prosperity is not the savagery of any spending cuts, says Madsen Pirie, but the hesitancy to do what is needed.
The C-word is out in the open. The Prime Minister previously insisted the debate was between indiscriminate and savage Tory cuts, versus Labour's investment in public services. The Prime Minister uses the term "investment" as we might talk about "investing" in a Mars Bar, which most people would call spending. Now Lord Mandelson has described Labour policy not as big spending, but as wise spending, to be contrasted with Tory "savage cuts".
The Government is trying to pitch the debate as one between cuddly and sensible economies from Labour, versus Tories "salivating about wielding the axe". The debate has changed, however, in that the public now expects cuts and even supports them. Moreover, they trust the Tories to better implement them.
They are correct. Several studies have identified savings to be made without cutting essential services. The James report identified £35bn, the Taxpayers' Alliance and Institute of Directors report pointed to £50bn, and the European Central Bank has said that Britain could save £96bn if its public services could operate with the efficiency achieved in the US, Australia and Japan – and without reducing actual services.
The notion that the public services were simply under-resourced has been tested to destruction by Gordon Brown. The torrent of public money poured their way has not brought commensurate improvements. What it has done is to leave Britain poorly placed (not "best placed") to deal with the global financial crisis, and with an overhang of debt that will stifle future development and growth.
National Debt is over £800bn and heading for £1tn, and far more than that if the cost of baling out the banks is factored in. A Britain saddled with the costs of paying the interest on that, never mind repaying the debt itself, would see its business and industry intolerably burdened, with its ability to generate the jobs and wealth of the future severely handicapped. It is like a ball and chain tied to the economy.
That debt burden can be diminished in two ways. One is to let the economy grow by tax incentives and deregulation. The other is to cut public spending. The first targets must be waste, profligacy and inefficiency. But after that we must ask which services currently provided by government could be better done outside it, and which should not be done at all.
The enemy of our future prosperity is not the savagery of any spending cuts, but the hesitancy of those not prepared to do what is necessary. It is no time to be squeamish.
Published on Telegraph.co.uk here.Read more...
Written by Dr Madsen Pirie
To transform Britain permanently, the next Government should start by taking the lowest paid out of income tax and replacing council tax with a local sales tax
Anyone who supposes that a dozen years of Gordon Brown's vandalism can be put right by tweaking a few policies and running things rather more efficiently is mistaken. The parlous state of Britain requires a jump-shift in policy rather than an improved continuity. Proposals which lie beyond the box of the commonly acceptable might not make for good election manifestos, but they could mend a broken economy and a broken society.
My Adam Smith Institute colleague, Dr Eamonn Butler, detailed in his book, The Rotten State of Britain, how bad things have become, and how the optimistic promises of 1997 failed to bring results. The UK, once a model low tax economy now ranks amongst the heavily taxed ones. The pensions system, then the envy or Europe, now faces an unfillable black hole. Where we were promised "education, education, education," we have lower social mobility and more children leaving school without any meaningful qualifications. In place of the comparatively free society we enjoyed, we now have a society of snoopers, with severe restrictions on our freedom of speech, of assembly, and of the right to peaceful protest.
The counterpart of this critique is a programme of action to set Britain back on the path to prosperity and progress. This week the ASI publishes Zero Base Policy, setting out a shopping list of 33 proposals to put things right.
At the top is tax and the economy. People who earn just over £6,000 pay income tax. This is half the minimum wage and less than a quarter of the average wage. Taxing with one hand means we hand out benefits with the other. There is a word for this: madness. The ASI call is for the low paid to be taken out of income tax altogether, with a threshold for them of £12,000 a year.
Higher up the income scale there is a plethora of rules, qualifications, exemptions and allowances that have doubled to over 10,000 the pages it takes to explain them. The ASI call is for the upper threshold for the 40% rate to be raised in stages to a level at which nobody pays it. This would achieve a single income tax rate of 20%. The government will immediately demand to know what spending cuts will for this, but the answer is that it will pay for itself. More revenue will be raised under the ASI proposals because the tax base will expand massively. Not that there are no savings to be made. Our estimate is that efficiency savings and the cessation of unnecessary programmes could raise at least £100bn.
The highly unpopular Council Tax should be replaced by local sales taxes and locally set business rates, with local budgets requiring electoral approval before they take effect.
Civil liberties are not so far gone that they cannot be saved. We call for a one-year Judicial Commission to review them (in public) and make recommendations. Meanwhile, terror laws should be limited to suspected terrorism, and public surveillance restricted to police and security services only.
The chance for the biggest difference lies in education. It could be the 'council house sales' of the next government if it gives parents the right to spend the state educational allowance at any school which is non-selective and charges no additional fees. This is the highly successful Swedish model which so rapidly gained mass support that its opponents abandoned plans to repeal it. It must also be made much easier to start and run new schools, so they can proliferate rapidly as they did in Sweden.
Narcotics remains a controversial area, but it is not controversial to say that current policies have failed. The calls for 'tougher action' are calls to do more of what we already know does not work. Addictive narcotics should be medicalized, made available for free consumption at high street clinics subject to medical examination and supervision. Recreational drugs should simply be legalized, subject to restrictions on their production and sale. These simple measures would eliminate a large proportion of UK crimes, and curb the violence of drug gang turf wars.
There are more radical proposals in the ASI shopping list, but right at the end is a call for MPs of English constituencies to constitute the English Parliament, meeting in the Palace of Westminster, choosing a First Minister, and exercising the same powers as those of the Scottish Assembly.
The ASI list is innovative and far-reaching, but it does offer a chance to undo the damage inflicted over the years, and to transform Britain permanently. We do not expect all of them in the first term of the next government, but a start could and should be made.
Published on conservativehome here.Read more...
Of all the right-of-centre think tanks the libertarian-leaning Adam Smith Institute has always been a bit more spikey and willing to push the envelope than rival think tanks in Westminster wonk-land.
In economics the ASI was the mid-wife of Thatcher’s privatisation strategies which were exported around the world (the separate consulting arm spun-off from the institute advises foreign governments worldwide to this day). In the last decade it has (to little avail) been putting the case for not just lower taxes, but flatter and simpler taxes. Until now the wider libertarian social agenda was seemingly off limits and left to the various pressure groups and single-issue campaigns.
Madsen Pirie has never dodged the drugs liberalisation question in the past but the ASI has never pushed the policy until now. Madsen Pirie told Guido he felt that the “war on drugs" approach had now been tested to destruction and that the political environment was more “convivial" to drug liberalisation. Guido asked him “Do you mean that because we have a former self-confessed coke-head in the White House and a former stoner heading for Downing Street we might see change?" Diplomatically he replied “Well, it is fair to say, this generation of ministers will be more familiar with the issues."
Zero Base Policy has 32 other manifesto recommendations…
UPDATE : Claudia Rubin from the Release campaign says
the last significant drug policy measure in the UK was implemented by Margaret Thatcher with the introduction of the needle exchange programme and it is fitting therefore that the ASI should be taking this view. Were he to become Prime Minister next year, David Cameron could mark 40 years of the failure of prohibition by doing something really necessary and sensible.
Phillip Oppenheim, a former Conservative Treasury minister in charge of Customs says in an interview out today that in office he tried to push government policy in a progressive direction. There is nothing progressive about locking people up for smoking weed…
Published on Order Order here.Read more...
The Adam Smith Institute has an important new report out, Zero Base Policy, by their President, Dr Madsen Pirie, outlining a radical agenda for the next Government. Scroll down to page 17 for the section on local government. It includes proposals for the Council Tax (which only raises a fifth of what local government spends) to be replaced by a Sales Tax. "Those who have lived in or viisted the United States have seen how smoothly it has worked there," says Pirie. Not many cross state boundaries to pay a lower Sales Tax. To the extent they might do so more in Britain, as a smaller country, that "would spur local authorities to keep the sales tax low."
Rather than the Government collecting VAT and giving grants to councils. VAT would be cut, or scrapped, and replaced with a Sales Tax. The Sales Tax would be cheaper to collect and better reflect ability to pay than the Council Tax.
The report says to restore local democracy there is a requirement "to remove the detailed directives by which national government dictates most of the activities of local government."
Would people notice the amount they are paying with a Sales Tax? They certainly notice the Council Tax. The report proposes a referendum on the annual budget for each council.
What do you think?
Published on conservativehome here.Read more...
Written by Dr Madsen Pirie
UK drug policy is a spectacular failure. Decriminalisation is the only way forward
The Adam Smith Institute today urges the next government to rethink policy from first principles. Its book, Zero Base Policy, will nowhere be more controversial than on narcotics. It suggests that Britain's drug policy is "one of the most spectacular failures in history. Dozens of initiatives spread over many decades have left Britain with more addiction, more drug use, more drug-related crime, and more drug-induced health problems."
Dealing with drugs costs money. The Department of Health and the Strategy Unit put the costs of drug use at £15bn-£20bn per year. Although ministers and police officers have uttered tough phrases such as "zero tolerance", drug crime has steadily increased, not diminished. When a policy achieves the opposite of what was intended, rarely is more of it needed.
The ASI urges a different approach, recognising that addicts need medical help, not punishment. Many who could be helped medically avoid seeking it because drug-taking is illegal. When drugs were decriminalised in Portugal, drug addicts chose to undertake treatment.
Drug addiction should be viewed as a medical problem. Doctors and nurses, rather than police, should handle it. There should be high-street clinics, staffed by medical personnel, where addicts can receive supplies to be consumed on the premises. Subject to medical examination and counselling, they should receive a free supply to use within the building. The medical examination required as a condition of supply would enable monitoring of their health, and counselling could help dependent users to better control the adverse physical effects of drug use.
Such a policy would eliminate the crime associated with hard drugs such as heroin. Users who currently fund their habit by criminal behaviour would not need to, since the supply would be free, costing the state very little.
This would work for some narcotics, but not recreational drugs. Addicts might take their fix of heroin in a clinic, but not social users of recreational drugs. Few people would want to enter a high-street clinic to take an ecstasy tablet – this is something used in clubs. Similarly, few people would want to snort a line of cocaine in clinical and antiseptic conditions. Neither would people want to smoke cannabis in a clinic. They would shun the medical conditions envisaged for supervised use. The cafes in the Netherlands in which cannabis use is tolerated are rather more social and relaxed than medical clinics.
The policy that could succeed would be to medicalise hard drugs, and to legalise the production and sale of recreational drugs such as ecstasy, cocaine and cannabis. They would no more be without controls than alcohol and tobacco are without controls, but no longer criminal.
The street price would collapse without the need for illegal supply. Quality could be controlled and subject to regulation and labelling. Advice could be given on packages warning of associated dangers, and alerting users to the early signs of adverse health effects.
Would their use increase? Many people choose not to smoke, even though they could. They rate the costs and health hazards of smoking higher than any pleasure it brings, and most people are moderate drinkers, even though binge drinking is legal. The same could be true of drugs.
Drugs are currently out of control and widely available. Without illegality, the criminal culture they sustain would disappear, creating a far preferable situation.
Published on guardian.co.uk here.Read more...
Written by Christopher Hope
Eamonn Butler, the director of think tank the Adam Smith Institute, said: “It is obvious that the boom in CCTV cameras is not making us the slightest bit safer.
“There is no evidence that it saves us from gun or knife crime, or for that matter that it stops terrorists – many terrorists are only too glad to advertise their evil deeds."
“Nor are cameras much good in getting convictions. Evidence from them is only allowed in court if the images are securely stored and handled, so that there is no possibility that they have been tampered with."
Published on Telegraph.co.uk here.Read more...