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The Independent: Royal Mail faces threat of VAT charges on business contracts

Written by David Prosser

Royal Mail already faces opposition to its VAT exemption within the UK, with bodies such as the Adam Smith Institute, the free-market think tank, calling for its abolition.

"The Post Office is uniquely exempt from paying VAT on its services, as its would-be competitors have to," Madsen Pirie, the president of the Adam Smith Institute, said last month. "This means that a rival has to be 15 per cent more efficient to compete effectively – most markets are won or lost on much smaller percentage margins than that."

In theory, Royal Mail could be forced to introduce VAT charges from January, when the tax rate returns to 17.5 per cent from the 15 per cent concessionary rate introduced by Alistair Darling, the Chancellor of the Exchequer, on a temporary basis a year ago as the UK slipped into recession.

Published in The Independent here.

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Telegraph.co.uk: The BBC: Auntie or Floozy?

Written by Dr Madsen Pirie

Nobody calls the BBC "Auntie" any more. "Auntie" was an affectionate name for someone who might have been a trifle prim and stuffy at times, but who was basically reliable and behaved herself with decorum. "Auntie" was not the type of person who stayed in Las Vegas hotels, clocked up taxi rides at £200 a time, or who went to town on expensive lunches and dinners.

The revelations concerning the expenses charged by top BBC executives are but the latest in a series of blunders and scandals that seem to beset the corporation. Its image was badly dented by disclosures that it encouraged quiz show callers to make costly calls even after the prizes had already been awarded. Nor was it helped by its handling of the prank calls by Jonathan Ross and Russell Brand, by disclosures that it had made a documentary seem more significant by altering its chronology, or by misrepresenting an apparent row involving Queen Elizabeth.

The bloated expense claims will be taken by the BBC's critics as further evidence that it cannot be trusted to handle the cash it receives from taxpayers with any sense of responsibility, and that ways of funding it alternative to the licence fee must be found. Certainly some of the claims raise eyebrows. The BBC's top executives average over £200,000 per year in pay, with many of them earning more than the Prime Minister, yet some of them still find time to claim 70p parking meter charges. And some of their expense claims bear witness to a lifestyle that most of their licence-fee payers can only envy.

Most people struggle with public transport, making the best they can of buses and trains, yet two BBC personnel between them clocked up over £10,000 on taxi bills over a three month period. The BBC defends this, saying that taxis are "more convenient and cost-effective" than public transport. Most people would agree with this, though unable themselves to spend public money on satisfying that convenience.

The claims may not be as exotic as some claimed by MPs, but the same principle is at stake. The public does not like to see those funded by taxpayers living it up while ordinary people have to struggle to get by. It is seen as a bad indicator when a business organization allows bloated expense claims by its personnel, and the same is true of the BBC. Coming after revelations over the huge sums they pay their celebrities, the public is beginning to think that their money is being passed around in buckets. Greater accountability and alternative methods of funding have just moved higher up the agenda.

Published on Telegraph.co.uk here.

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Telegraph.co.uk: Don't bad mouth 19th-century liberals, Yvette, they'd do a better job of eradicating poverty

Written by Ed West

Because as Eamonn Butler points out in The Rotten State of Britain, 39 per cent of the population receive one or more of the 40 state benefits, up from 24 per cent in 1997. Butler writes: “It’s a huge cash roundabout. Millions of us pay taxes into this system, only to get it back again (minus administrative expenses) in benefits. To manage it, the Department of Work and Pensions employs 130,000 benefits staff, while HM Revenue & Custom has another 8,000 working on tax credits alone."

Publisded on Telegraph.co.uk here.

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Telegraph.co.uk: Labour's worst crime wasn't Iraq – it was welfare

Written by Ed West

Labour’s worst crime wasn’t Iraq, it was welfare. In his excellent The Rotten State of Britain, Eamonn Butler records that the turning point for Labour came on 27 July 1998, “when Frank Field, the Minister of State for welfare reform, was reshuffled into oblivion. Blair had asked the veteran anti-poverty campaigner to ‘think the unthinkable’ on welfare reform. He did: he wanted an attack on benefit fraud, tighter controls on incapacity benefit, and the end of the perverse incentives that he thought created a dependent, work-shy underclass. But his proposals were by then far too radical for an administration that had already settled comfortably into power and did not want to frighten its own left wing."

Published in on Telegraph.co.uk here.

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Daily Mail: Sugar has forgotten his own small business roots

Written by Harry Phibbs 

In his report for the Adam Smith Institute, entitled Credit Crunch: The Anatomy of a Crisis, John Redwood uses the analogy of a car journey to describe what happened. After 2001 the Government went on a borrowing splurge itself and caused the same to happen in the private sector. 'It was an era of off-balance-sheet financing for Government and of the multiplication of wild instruments for gearing in the private sector. It was as if driving a car a breakneck speed could suddenly become safe because they were on straight and empty piece of road,' he wrote.

In 2007 they saw they had 'overdone the easy credit binge.' So they 'slammed on the brakes' and we crashed. Then last year they poured money into the banking system but stopped the banks lending it out, as though they were 'seeking to drive a car by putting your foot to the floor on the accelerator while still keeping the other foot on the brake.'

Published in the Daily Mail here.

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The Times: A curious case of pass (the blame for) the parcel

Written by Martin Waller

What substance is so toxic and dangerous to any who come into contact with it in the workplace that, under The Chemicals (Hazard Information and Packaging) Regulations 1993, it must be accompanied by a five-page product safety data sheet? This warns that “prolonged skin contact may defat and dry skin leading to possible irritation and dermatitis", that eye contact must be treated instantly with cold water, skin contact ditto, mouth contact ditto, if swallowed take medical advice, and gloves and safety glasses should be worn. Spent nuclear waste? Distilled bleach? Er, no, and I am indebted to the Adam Smith Institute for this — Blu-Tack.

Published in the Times here.

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Telegraph.co.uk: From paedophilia to speeding, bureaucrats need a sense of proportion over the risks

Written by Dr Eamonn Butler

The Government is overcautious about the risks not just from paedophiles but from all aspects of modern life.

Watford Borough Council’s decision to ban parents from the playground in case they are paedophiles are another case of the Bully State gone mad. We’ve seen it in the past week with the Independent Safeguarding Authority (whose .gov web address shows it to be anything but independent), telling piano teachers and others that they ought to get CRB checks, or parents might ask why not.

So now we are living in a Britain where all adults are presumed to be paedophiles unless they can prove themselves otherwise. It’s the precautionary principle gone mad. If you can’t prove something safe, you have to treat it as dangerous. That thinking also gave us the EU's Reach directive, which prescribed in-depth tests on "hazardous chemicals" – such as salt – before they could be licensed for our use.

Why do bureaucrats act like this? Because there is no upside for them. A business person will take a risk because the chance of failure is balanced by the chance of making a fortune. Civil servants aren’t rewarded with fortunes when their decisions go right, but they are sidelined or barred from promotion when they go wrong. So they focus on stopping the downside, not boosting the upside.

That is why we are being softened up for a 20mph speed limit in towns, particularly near schools. Yes, pedestrians are much less likely to be killed at this speed than 30mph. But today we have a third of the child road deaths that we had in 1922, when the national speed limit was 20mph. Why? Because parents warn their kids about traffic. They remove their kids from the risk. What the bureaucrats want to do is to remove the risk from the kids.

But we take risks for a reason. There are benefits too. With a 0mph limit you could eliminate road accidents entirely. But at huge cost to the community.

Why does Network Rail spend billions on train safety systems? Because train crashes are spectacular news, while car crashes aren’t. In 2007 about 24 people were killed on the railways, including pedestrians at level crossings. Nearly 3,000 died on the roads, but that’s less obvious.

Seat belts are another celebrated case. Strapped into their cars (which are advertised for their safety), drivers feel safe. So they drive more riskily, and more pedestrians are killed and injured. We’d be better installing a huge spike in the middle of each steering wheel. Accidents would plummet.

We take risks for a reason. Life would be impossible without it. The idea of a risk-free world is futile. And unless we – parents, children, drivers, and everyone – are exposed to risk, we will never learn to cope with it.

Published on Telegraph.co.uk here.

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Telegraph.co.uk: Lord Stern is wrong: giving up meat is no way to save the planet

Written by Dr Madsen Pirie 

Lord Stern, whose 2006 report set out the consequences and costs of various levels of global warming, has now called for humans to stop eating meat. His reasoning is that our farm animals, especially cows and pigs, expel methane, which is 23 times more potent than CO2 as a greenhouse gas, making meat-production account for 18 percent of all carbon emissions. He says that it will become as socially unacceptable to eat meat as it is to drink and drive.

The proposal is not surprising, since it is but the latest in a series of proposed behavioural changes which are claimed to be essential to the planet's survival. People have been told they must eat locally-sourced food, abandon their cars for public transport, and drastically cut their air travel, among many other 'essential' changes. Giving up meat is only another step on the 'live more simply' road.

At the heart of the environmental lobby lies an unease at progress and change, and a veneration of a calmer, slower lifestyle. It goes hand in hand with a disregard for the material goods which extend choices in the rich nations, and even for the economic growth which offers the poorer ones a ladder out of subsistence. Although 'saving the planet' is advanced as the reason why these lifestyle changes must be implemented, it sometimes seems as if the simpler life is an end in itself, and that global warming is a convenient excuse to force acceptance of it.

Lord Stern, whose 2006 report set out the consequences and costs of various levels of global warming, has now called for humans to stop eating meat. His reasoning is that our farm animals, especially cows and pigs, expel methane, which is 23 times more potent than CO2 as a greenhouse gas, making meat-production account for 18 percent of all carbon emissions. He says that it will become as socially unacceptable to eat meat as it is to drink and drive.

The proposal is not surprising, since it is but the latest in a series of proposed behavioural changes which are claimed to be essential to the planet's survival. People have been told they must eat locally-sourced food, abandon their cars for public transport, and drastically cut their air travel, among many other 'essential' changes. Giving up meat is only another step on the 'live more simply' road.

If we give up animal husbandry and eat the vegetarian diet Lord Stern advocates, it would be one devoid of milk, cheese and butter, and the world would have to get along without leather for its shoes or jackets, or wool for its clothes. This is not going to happen, any more than the other 'essential' changes.

What will happen instead will be new technologies that solve the problems without behavioural change. There will be emission-free transport, cleanly-produced energy, and minimal-impact production. Human ingenuity and resourcefulness are quite capable of achieving this, and can even be accelerated by suitable incentives.

It is highly likely that animals will be genetically engineered to emit less methane, and highly unlikely that human beings will give up a large part of their diet. The one is easy to do; the other is probably impossible, as well as undesirable. Some in the environmental lobby oppose this kind of technological change precisely because it will make behavioural change unnecessary. It will enable people to live as they want to live, rather than as others think they should live.

But technology will win, and the constricted lifestyles advocated by Lord Stern and others will lose. A look at human development suggests which course is the more likely.

Published on Telegraph.co.uk here.

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Scotland on Sunday: The Budget will be a fiction on a scale of its own

Not only has the basic rate since fallen to 20 per cent, but the amount of our income we get to keep has also risen to a 36-year high. Tax Freedom Day, which is the day you stop working for the government and get to keep your salary, came on 14 May this year, 135 days into the year. But this marked the lowest contribution made by taxpayers to government expenditure since 1973, another period of economic turmoil.

However, the Adam Smith Institute, which calculates where Tax Freedom Day falls each year, warned that if the government had raised taxes to take account of the money we owe, this year's Tax Freedom Day would have been postponed until 25 June. From the taxpayers' perspective, this would be the longest they would have had to work for the government in any year since records began in the 1960s.

The only one to come near was 1982, when taxpayers only stopped working to pay for government expenditure on 20 June, a time when the economy was similarly recovering after two years of recession and trying to pay off huge debts.

Published in the Scotland on Sunday here.

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Telegraph.co.uk: Competition in postal delivery is the solution

Written by Dr Madsen Pirie

Customers must be offered an alternative to the service which has been constantly interrupted by unofficial action, and which now threatens them with a total stoppage.

The impending mail strike makes it clear how near-monopoly services seem to breed dinosaur unions. The ability to shut down a service ups the ante for the unions. In services where there is a competitive market, customers can turn to other suppliers. Lord Mandelson rightly points out that a mail strike now will turn customers to alternative communications technologies, customers who will probably not return.

Some will turn to other mail deliverers, rather than other technologies, but the problem here is that the Royal Mail does the end delivery, the so-called 'last mile.' Other firms such as the Dutch-owned TNT, use Royal Mail postmen and women for the final delivery through letterboxes. This means that the Communication Workers Union (CWU) has the power to shut down the service totally, giving it a massive industrial muscle it has shown itself quite prepared to use.

One reason why this state of affairs has continued is that the Post Office is uniquely exempt from paying VAT on its services, as its would-be competitors have to. This means that a rival has to be 15 percent (and soon 20 percent) more efficient to compete effectively. Most markets are won or lost on much smaller percentage margins than that. TNT has a case pending before the European Court protesting the unfairness and calling for a level playing field. Until then, though, it is effectively priced out.

The strike is about modernization, as postal services have to streamline to take on the challenge of electronic communication. The government and management know that more efficient and automated practices must come if mail delivery is to survive.

It would be a good move now for the VAT rule to be changed, putting a level playing field into place for postal services. This would give firms like TNT the chance to set up end delivery and keep the mail services running despite the CWU shutdown. This would give the customers an alternative to the service which has been constantly interrupted by unofficial action, and which now threatens them with a total stoppage.

The CWU has been intransigent and antiquated because it has the power to be so. If alternative delivery systems were in place for customers to turn to, the union would soon change its behaviour. The time has come for government to rescue its citizens from the grip of an over-mighty union by opening up the field to firms which can compete on an equal basis.

Published on Telegraph.co.uk here.

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