A certain amusement about living wage calculations

The Guardian tells us that the “living wage” for West Virginia is $20 an hour or so. This is ludicrous:

Despite Manchin’s insistence on an $11 minimum wage, according to MIT’s living wage calculator, even a $15 minimum wage would only provide a living wage for single West Virginians without children. For a West Virginia family with two working parents and two children, both parents would need to be making at least $20.14 an hour to make ends meet.

That’s $83,782.40 per year for that household of four people, 2 adults and 2 children. The calculation runs:

The living wage model is an alternative measure of basic needs. It is a market-based approach that draws upon geographically specific expenditure data related to a family's likely minimum food, childcare, health insurance, housing, transportation, and other necessities (e.g., clothing, personal care items, etc.) costs. The living wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family's basic needs while also maintaining self-sufficiency.

The living wage model exceeds the poverty level as measured by the poverty thresholds, but it is a modest 'step up,' which accounts for individual and family needs. The living wage model does not include funds for what the public considers the necessities enjoyed by many Americans. It does not incorporate funds for pre-prepared meals or those eaten in restaurants. It does not contain money for leisure time or unpaid vacations or holidays.

Lastly, it does not provide a financial means for planning for the future through savings and investment or for the purchase of capital assets (e.g., provisions for retirement or home purchases). The living wage is the minimum income standard that, if met, draws a fine line between the financial independence of the working poor and the need to seek out public assistance or suffer consistent and severe housing and food insecurity. In light of this fact, the living wage is perhaps better defined as a minimum wage covering necessary costs for persons living in the United States.

The median household income for the US is $68,703 per year. West Virginia is by no means the most expensive state - given property prices it’s pretty cheap in comparison with many others.

That is, this calculation of “a minimum wage covering necessary costs for persons living in the United States” is insane. Good grief, that’s within the top 5% of all global incomes. The idea that 5% of the global population - the US population is about that - should all be in the top 5% of the global income distribution is taking American exceptionalism a step or three too far.

Even the people proposing this as the “minimum income” don’t believe it. For if they did they’d be demanding the stripping away of every rule, regulation and tax that weighs even slightly upon economic growth. For that would be the only way of achieving the desired goal. And, obviously, our friends on the left do not advocate such policies - or lack of them.

The idea of a living wage, as with Adam Smith and the linen shirt, is fine but every calculation of the desired world does require that occasional look out the window at reality. Calling $80k a year the minimum necessary income takes us well beyond Lake Wobegon territory.

It’s even possible to do a small error check. That $83,000 is about £59,000. What portion of The Guardian’s staff is paid that much even in London, a much more expensive place to live? Is The Guardian castigating itself for paying poverty wages? Well then….

Happy birthday Carl Menger!

Carl Menger, the founding thinker of the Austrian School of Economics and pioneer of the concept of marginal utility, was born on this day, 23 February, in 1840. His revolutionary, individual-focused approach to economics influenced many others, including his compatriots Friedrich von Wieser, Eugen von Böhm-Bawerk, Ludwig von Mises and Friedrich Hayek; and his influence still resonates widely today.

Menger studied in Prague and Vienna before becoming a business journalist. In that role, he realized that the teaching of mainstream, ‘classical’ economics did not match the real-life workings of markets. So, in 1867 he began writing a new approach, Principles of Political Economy (1871). By the age of just 33, he had become Chair in Economic Theory at the prestigious University of Vienna.

Menger thought that the classical economists were wrong to focus on whole collections of things, such as the total production of goods, or the total demand for them. This caused them to search vainly for quasi-mechanical statistical linkages (such as ‘equilibrium’) between these totals. He called this methodological collectivism. But statistics, he knew, were mere summaries of events and do not affect each other. Only individual events have consequences. What actually drives economic life, he realised, is how individual people value individual goods, and how they each act upon those values. Economics must therefore start, not from statistics, but from the values and actions of individuals—an approach he called methodological individualism.

A key part of this new method was subjectivism. Many economists thought that the value of a good was objectively measurable — its value was the amount of labour used to produce it. Menger countered that goods have no inherent value in themselves. Value was in the eye of the beholder: individuals formed their own (and differing) valuations of different goods at different times, depending on their specific needs and preferences. We now call this the subjective theory of value.

These approaches enabled Menger to develop the idea of Marginal Utility (now a central tenet of mainstream economics), solving the classical paradox of why water, a vital commodity, is valued less than diamonds, a largely useless one. He showed that value depends not just on the qualities of the good itself, but on the quantity that is available to us. Water may be vital, but there is generally a lot of it around; only when it is in very short supply (in a desert, for example) do we place great value on it.

Menger’s individualism and subjectivism led him (and Austrian School followers such as Mises and Hayek) to reject interventionism. Economics was an ongoing process of continual adjustment to events, not a machine to be tinkered with. Capitalism, he observed, systematically encourages people to serve others as the means to better their own condition. Government intervention disrupts that collaboration, distorting prices and creating gaps between resources and their most valued applications. Those mismatches then prompt calls for yet more intervention — increasing the economic damage even more.

Eamonn Butler is author of Austrian Economics: A Primer

Driving the road out of lockdown by data, not dates

Victoria Street 

SW1 

“Humphrey.” 

“Yes, Minister?” 

“Why have you dragged me into the office on a Saturday?” 

“The Cabinet Secretary was on last evening.  The PM wants a draft of Monday’s statement to the House to discuss with senior Cabinet ministers by tomorrow morning.” 

“I thought Dom Cummings did that sort of thing.” 

“He left us some time ago, Minister. My understanding is that the PM’s Jack Russell was considered to have rubbed along with him with excessive enthusiasm.” 

“I wondered why I hadn’t seen Dom recently.  Sic transit and all that.” 

“The Sage scientists joined us overnight and we now have a 60 page draft setting out the four steps out of lockdown. Our brief is to be statesmanlike, with no Latin tags or jokes.” 

“I had rather hoped you’d given up jokes for Lent, Humphrey. Caution must be our watchword.” 

“We decided that being ‘led by the science’ is so last year that the PM will now be ‘driven by data, not dates’.  The date for making each step will be determined by four tests: ‘The first is that the vaccine programme runs to schedule. Second, the evidence must show that vaccines are reducing hospital admissions and deaths. Ministers will also be looking at infection rates. Finally, if any new variants emerge that are potentially vaccine-resistant then the easements could be halted.’” 

“Humphrey, I’m no scientist but that looks like only one test to me.  We’ve already told the public that we have so much vaccine supply that we are bringing vaccination dates forward and we know they work.  There’s no chance Sage could know the vaccine resistance of new variants in a couple of weeks or so.  And it’s never black or white.  New variants seem to be partially clobbered by existing vaccines, if not wholly.  So it’s just infection rates.  What are the R numbers, since we are driven by data, which should tell us to speed up, or slow down, the four steps?” 

“My understanding is that the R rate is now also considered rather ‘last year’. Sage knows that infection rates are the only things we can monitor speedily but they are a better indicator anyway than hospital admissions or, sadly, deaths. Sage also knows that they will rise immediately after each step but it would be foolish to set arbitrary benchmarks to measure them against.  So if they are going uppish a bit too much, we will delay the next step, and if they are dropping, we will ignore them.” 

“It is always a joy to behold science in action, Humphrey.” 

“Indeed, Minister. The four steps start with schools and further education colleges all back on March 8th but not universities which were hotbeds of infection last autumn.  Students away from home indulge in all kinds of misbehaviour. ‘Socialising outdoors will be allowed with one person from another household’ so long as they do not play tennis or golf.” 

“Why is that?” 

“Apparently sitting together on a park bench is perfectly safe but walking round a golf course is potentially lethal. Visitors to care homes will be allowed and 30 people at a funeral.” 

“Well that’s good.  My wife incinerates the Sunday roast so we can have all our friends, sorry mourners, round. What’s next?” 

“On March 29th outdoor sports will be perfectly safe again.” 

“What data will drive that?” 

“It will be too soon after March 8th to have any actual data but we will review before the next step on April 12th when ‘the number of people allowed at weddings and funeral wakes will increase to 15.’” 

“30 mourners were allowed five weeks earlier.” 

“Well spotted Minister.  Half the 30 mourners cannot attend the wake. The important thing is that shops, hairdressers, holiday rentals and pretty much anything outdoors can start again the week after Easter. We must avoid the damage done at Christmas.” 

“Good heavens, yes.” 

“The next two steps, on May 17th and June 21st, then liberate pretty much everything except masks and social distancing.” 

“Humphrey, that’s five steps, not four.” 

“Yes, I know but it is less confusing for the public if everything is presented as four items.  The five week intervals between steps are really only four because each then needs a week’s notice.” 

“But you are giving them notice now!  And I suppose the only so-called data test has to be announced as four for the same reason?” 

“Indeed, Minister, we must not confuse the public.” 

“Well I think confusing the public is exactly what we are doing.  The hospitality industry cannot conduct all its business outdoors and is being hung out to dry until midsummer’s day allegedly on the grounds of data. But you and I know, Humphrey, that the evidence of last summer gave no indication at all that the hospitality sector was a problem.  Cases dropped then and only rose when schools went back.” 

“Data, Minister, are in the eyes of the beholder.” 

“Does that wrap everything up, Humphrey?” 

“I fear not.  There are a number of things that have proved too difficult to resolve so we are setting up reviews to report back in April.” 

“Four, by any chance?” 

“Indeed, Minister: how long we will need social distancing and face masks, international travel, Covid status certification and safe return of major events.

“Well, there’s no doubt that Covid certification, or passports, will be needed for international travel or that the airline and holiday industries need to know now what will happen this summer so why do we need to faff about on these things for two months?” 

“Well certification is very complex.  We have to agree on the format and ensure they cannot be forged.  Yes, I know we’ve had international health certificates for decades but this is a new age and we have more civil servants to employ. And their domestic use is especially tricky.  Some people having certification and others not that implies exclusion and discrimination – especially if we start denying people employment just because they have refused to be vaccinated.” 

“Humphrey, really, what rot is this? Are you seriously telling me that it is my human right to go round infecting people?” 

“I regret that Sir William Macpherson changed the law in 1998 so it is now a question of what the ‘victim’ perceives. As a white, male, Oxbridge heterosexual (four strikes) person, your perception does not count.  The perception of someone who has denied herself the vaccine, does.”  

“Well I expect common sense will dawn one day.  In the meantime we have this great plan which most people will think jolly sensible.  It has lots of dates and absolutely no data by which progress can be judged.  You cannot expect more common sense than that.” 

“No, indeed not, Minister.” 

John Harris and the transformation of the welfare state

John Harris has one of those we must build back better pieces. We need a new Beveridge plan and all that. We’re fine with that idea of discussing the base structures of the welfare state. We just think there are a few base points that have to be understood about it:

Despite the self-evident caveat that wars and pandemics are very different things, the parallels between the uneasy historical moment that story captures and the current phase of the Covid crisis are obvious. The past 12 months have seen a mixture of unprecedented deaths and huge collective sacrifice. Moreover, as the crisis has gone on, profound social questions that have been rattling around British politics for at least a decade – about poverty, inequality, work, and housing – have roared into the foreground. If some people are asking questions about a return to “normal” and the dashed hopes that would represent, that hardly seems unreasonable.

The first hard fact that we’d call into evidence is one that Polly Toynbee has been complaining about for decades now. Britons wouldn’t mind that Scandinavian all embracing welfare state but we’ve a marked resistance to paying for it. That is, no one really has managed to sustainably increase taxation to more than 36, perhaps 37% of GDP. That seems to be a hard limit to what will be paid for whatever system is put in place. To shout that other places do manage it is just to note that other places are populated by different people.

A second is that those Scandis also have a markedly more free market economy than we do. That’s the balancing item that makes their welfare heavy systems work.

The importance of the funding limitation of that tax share of GDP is that it forces a decision upon a welfare system. It is possible to have a generous but selective system. It’s possibly to have a universal and not generous system. But there’s not enough of everything there to have a generous and also universal system.

We can, for example, fund university for some portion of the age cohort through taxation but not the 50% currently going. We can fund child care for those who really need it but full time for everyone? Not enough cash.

We also need to decide what it is that is to be dealt with:

“want, disease, ignorance, squalor and idleness”

OK, those can be dealt with as we have dealt with them. As Barbara Castle pointed out back in 1959, that sort of destitution didn’t exist even then.

a welfare state that too often both sustains and deepens scarring inequality

Ah, no, inequality is something different. As is that modern measure of poverty, being on less than 60% of median income. From Harris again:

A first step towards a basic income might guarantee that, say, a family of four could count on a minimum of £10,000 a year.

We tend to like the idea of a universal basic income around here. But we keep insisting that the important word there is basic. That family of four on £10,000 would still, by current definitions, be poor. Median household income is £30,000 a year or so. This calculator tells us that £10,000 leaves the family at perhaps the second percentile. That is, 98% of the country gains a higher per capita income and so this is definitively poverty when we define that as less than 60% of median income.

Which is what we mean about having to decide. Do we want to make sure everyone, as of right, no questions, has some base amount? Or, do we want to beat inequality? Because we can’t do both, not within that limit of how much tax Britons seem to be willing to pay.

We can only have a generous but selective system or a universal and meagre one. A point which we all do have to understand if we are to have this discussion about the transformation of the welfare state. We’ve a budget constraint and no, we can’t have it all.

An insistence that we can have, just as an example, a basic income which is also 60% of median is to make the “and a pony” mistake.

Reasons for optimism - medicine

With a pandemic putting much of the world into lockdowns or quarantine, it might seem counterfactual for anyone to be optimistic about the future of diseases and the medical responses to them. Modern travel gives diseases that mutate and cross the species barrier from animals to humans the ability to spread rapidly, but modern medicine increases the speed and range of our responses to them. The development and testing of several vaccines against the coronavirus achieved within a single year a process that has usually taken 5 - 10 years. Humankind will emerge from the pandemic far better equipped to deal with new diseases when they appear than it was before. It has coped with Ebola, SARS, H5N1 bird flu, and MERS camel flu, and AIDS is no longer the death sentence it once was.

Of the diseases that ravaged previous populations, smallpox has been rendered extinct by vaccination, tuberculosis is treatable, and polio is on the verge of extinction in the wild. Even the ancient enemy, malaria, is within range as a variety of methods to combat it is being developed, and its extinction by mid-century looks very likely.

Heart disease used to be the big feared killer, but many cases of it are now treatable by drug therapy, angioplasty or bypass operations. This has led to various cancers taking its place as more people survive it. Cancers are increasingly more treatable than before, and it is likely that nanotechnology will give medicine the edge by locating cancer cells much earlier in the body, and targeting individual cancer cells to destroy them.

The resources and effort going into the early detection and treatment of the different forms of dementia and their reversal suggest that before long we will have a range of procedures to halt and reverse the build-up of the plaques and other conditions that induce it.

The principal cause for optimism about medicine in the future derives from work being done at the genetic level. Gene therapy and gene editing have brought the possibility of disabling or editing genes associated with inherited diseases, and even of editing genes to confer immunity against subsequent life-threatening conditions. Much of this type of procedure can be done in the womb, so the child will be born with the advantages it brings. Gene therapy might even offer ways of slowing down the process of ageing.

Despite the pandemic, medicine is continuing to advance at an increasing range, extending our ability to cope with the conditions that nature sends our way. To those who say the world will never be the same again, the best response is that this is correct. It will be better.

Let's not get silly about trade and Brexit

A report that we might be getting into a trade war:

The import of European mineral water and several food products into Britain could be restricted under retaliatory measures being considered by ministers over Brussels' refusal to end its blockade on UK shellfish.

The Telegraph can disclose that ministers are looking at proposals dubbed "Water Wars" which could see the UK end a number of continuity arrangements it has agreed with the EU.

Senior Government sources pointed to potential restrictions on the import of mineral water and seed potatoes, the latter of which the EU has secured a temporary agreement on until the end of June.

In a warning shot to Brussels, a Government source said: “There is thought being given to where we can leverage in other areas. We have continuity arrangements... we can stop these which means they won’t be able to sell their produce here.”

This is not just silly it is insane.

The value of trade is that we get to consume those lovely things made better, cheaper, faster, by Johnny Foreigner. Exports are merely the work we do to be able to afford them.

So, J. Foreigner decides not to eat our shellfish. Oh Well, Oh Dear, they are now without our lovely shellfish. To turn around and insist that therefore we will punish ourselves by not having their mineral water, or their seed potatoes, is that more than silly it is insane. Why are we punishing ourselves for their actions in denying themselves?

As the late, great, Joan Robinson pointed out:

Even if your trading partner dumps rocks into his harbor to obstruct arriving cargo ships, you do not make yourself better off by dumping rocks into your own harbor.

Do we want seed potatoes? Given that we like growing potatoes the answer is yes, obviously we do. So, why would we ban ourselves from gaining our seed potatoes from the best supplier? That Mr. Foreigner is barred from eating our shellfish is an entire irrelevance to the truth of this proposition and therefore an irrelevance to the decision.

Come along now people we’ve known this about trade for centuries now - it’s the imports that are the point. So why is anyone even dreaming of making this mistake?

Student unions should have nothing to do with policing speech

Universities are struggling to protect freedom of speech in the face of overzealous demands from a small but vocal mob of student activists.

These activists seek to sterilise life on campus. They have been particularly successful at toxifying student politics. Student unions now concentrate on a narrow “social justice” virtue-signalling political agenda focused on tackling alleged “structural oppression” against minority groups.

Universities have a legal and moral duty to ensure that the freedom crucial to maintaining an atmosphere of discovery and debate are not buried under successive “safe space,” “inclusion,” and “liberation” policies.

It is encouraging, therefore, that the Government has set out a new set of proposals to protect free speech on campus — several of which were advocated in the recent Adam Smith Institute report, State of the Unions.

The greater legal protections for students and academics who have been penalised or removed for exercising their freedom of speech will make universities think twice about following the braying mob. After all, it has always been their policy to go down the path of least resistance.

The inclusion of student unions in the legal obligation to preserve freedom of speech should also be welcomed. Student unions pose the greatest threat to open debate on campus. Filled with puritanical ideologues, they pursue regressive bans on speech, dress, and even hand gestures. Examples of ridiculous student union bans, such as those on sombreros, are widespread.

While these latest steps are welcome, threats to freedom of speech on campus are unlikely to disappear. The Government must go further in enforcing free expression protection and disempowering censorious student unions.

The new rules mean that student unions will likely cease explicit ‘no-platforming’ of speakers. But the risk remains that they will impose substantial bureaucratic hurdles, such as requiring a student society to provide two months notice or pay security costs for a controversial speaker. These barriers are de facto censorship: relatively few student societies have the organisational capacity and monetary resources necessary to overcome these barriers.

Just this month Durham University Students’ Union decided that it would vet all “high-risk” speakers who wish to speak both on and off campus. If a speaker is deemed ‘controversial’ by the SU, then 4 weeks’ notice must be given, they may have to provide their speech in advance for approval, and if approved the SU may insist on adding additional speakers to provide “balance.” The SU’s definition of a high risk is someone who has “links to any person or groups connected with controversy.”

A recent paper on free speech produced by a number of student union officers and a lobbyist advocated the same approach. A risk assessment should investigate “the potential for the speaker’s presence on campus to cause harassment, alarm or distress to members of the student body.”

“The student union,” they said “also has a duty to think about how it can promote equality and minimise tension and prejudice between different groups on campus - and even where it facilitates events and debate, must consider the potential impact on students who may feel vilified or marginalised by the views expressed."

Of course lots of groups now claim that any criticism makes them ‘feel vilified and marginalised,’ so the SU officials propose that then a whole range of restrictions are applied, as in Durham. It will be necessary for the Free Speech Champion and the Office for Students to be highly vigilant against these tactics.

To prevent continuing attempts at censorship student unions should have nothing to do with controlling free speech on campus. SUs are completely unrepresentative institutions, elected by on average around just one-in-ten students, as the recent ASI report revealed. Most students regard the political activists who control SUs with absolute contempt. The free speech crisis on campus will only be effectively tackled once the wider problem of taxpayer-funded compulsory student unions is addressed.

In his introduction to the free speech proposals Gavin Williamson state that “some students’ unions have been granted inappropriate levels of control over which speakers can visit and how student societies can operate”. He is absolutely right. The appropriate level of control is zero.

Max Young is an Edinburgh University student who has served as Deputy Editor of 1828.org.uk and Free Market Conservatives. He is the co-author of the ASI’s report, State of the Unions.

Another thing about Mariana Mazzucato

That we disagree with near everything Mariana Mazzucato puts forward is not exactly a surprise to anyone. Her basic idea that government could and should direct the economy if only government were better at directing the economy fails, to us, on the grounds of how is government going to be better at directing the economy? Nowhere has really given us, nowhen, evidence that it can be after all.

But in more detail:

She is particularly critical of overseas takeovers that 'often come from foreign public institutions'. She regards this as 'hypocritical' in that 'we hear all this talk in the UK of needing more private sector and less state, then we sell if off to foreign states.'

We’d not want to make entirely too much of this point but it’s not as silly as she makes it sound.

When government runs something in the territory it is the government of it is subject to political as well as economic pressures. When government runs something in the territory of some other government it is subject only to those economic pressures.

For example, back when the British government did run the British electricity supply system what the workers were going to get paid was something decided - often enough - at Cabinet level. For union pressure, political pressure, made it so. Wages were politically decided. Or, another example, the nationalised steel industry. Famously, Callaghan was finally convinced that Steel plants needed to be of a certain size - economies of scale. So, the industry would and should be consolidated. At which point the political decision to award half of the one consolidated plant each to Scotland and Wales was taken. Meaning two sub-economic plants for political reasons.

When the French government - just as a speculative example - runs British power stations that domestic, British, political pressure doesn’t apply to the government decisions. No Briton does vote for the French government after all. So, decisions are taken on a more hard-headed economic basis.

Of course, part of the distaste for privatisation itself, let alone to foreign state actors, is that politics is taken out of the decisions making process. Even as we applaud that taking out, others insist that it should remain - that’s part of the base difference of opinion.

But foreign state economic actors are going to be, at the very least, freer of those contradictory domestic political pressures. Which is what makes for the greater economic efficiency of them. Precisely, that is, that foreign state actors think of shareholder, rather than stakeholder, primacy is what makes them desirable.

People aren't thinking about these recovery bonds

The latest suggestion is that there’s a huge great big pile of saved money just sitting around doing nothing. So, why not issue bonds and the government can get on with spending that money on useful stuff:

Starmer’s plan for British Recovery Bonds to encourage those savings to be invested securely in local communities, jobs and businesses looks like a far better substitute.

Households have indeed saved £125 billion so why not?

The mistake is to think that this £125 billion is currently doing nothing. Some portion of household savings will be under the mattress and that is indeed doing nothing. But then we don’t record as savings what is under the mattress, we don’t in fact know how much is there. Our records are of what is in banks. And banks do not just shovel money into the vault and leave it there. That’s just not how banking works.

Instead that money is lent out.

Yes, we can all shout that banks just create money when they lend and they don’t actually lend out deposits. But by 4.30 every afternoon they must finance their lending. If this were not so then no bank could ever go bust as a result of a bank run and we know they can therefore it must be true that a bank must finance a loan. Deposits finance lending even if the financing comes after the lending.

Thus that £125 billion in bank accounts is already being used.

The proposal is therefore not to mobilise the savings because they are already mobilised. It is, rather, to change the manner in which they are mobilised.

Some will say that government spending the money on lovely local things will be better than fructification in the pockets of the populace. We don’t think so and we do have - given the usual examples of how carefully government does spend money - reality on our side.

The idea that such savings are currently not being deployed depends upon the idea that there are those vaults of unused money. It ain’t so - Scrooge McDuck is a cartoon, a jest, not a guide to public policy.

Recovery bonds will change what those savings finance but that’s all. And the argument to be won is that the new deployment will be better than the old - a difficult task we insist. The idea that those mountains of cash are currently doing nothing is just Disney economics and that might be the way to run the Magic Kingdom but it’s of as much relevance to real life as a duck in a sailor suit.

MI5 reports PM ensures closer Cabinet working

Downing Street 

SW1 

“Good morning, Humphrey.” 

“Good morning, Prime Minister.” 

“What’s that lorry doing outside?” 

“It’s delivering another chair for the Cabinet room. You will now have 23 round the table, Prime Minister, as well as those who sit around the walls.” 

“Golly, it’s getting a bit squashed.” 

“We refer to it as ‘working more closely’.  It also provides more opportunity for the streamlining of government you have long promoted.  There will be more heads to roll, Prime Minister.” 

“I wondered why Michael was looking a bit peevish when I saw him on my run this morning.” 

“I thought I should forewarn his staff last evening. The trouble seems to have originated because Mr Gove considered Lord Frost to have lost out to Monsieur Barnier in the Treaty negotiations and to be responsible for the mess that has followed. Given your promotion of our chief negotiator to the House or Lords, that was considered to verge on the disloyal.” 

“Well actually, Michael is probably right about that.  I remember saying that the Northern Ireland protocol would only affect goods intended for onward transit to the south. Goods staying in the north would just be waved through.  Now it turns out that everything is buggered up.” 

“Yes indeed, Prime Minister, but Lord Frost had to placate the Brussels view that the UK could not be trusted to distinguish one from the other.  Monsieur Barnier says they are only doing this to protect the Good Friday Agreement.” 

“That’s balderdash.  There’s nothing in the Good Friday Agreement about customs because Brexit was not even on the horizon when we agreed it.” 

“You are, as ever Prime Minister, absolutely right but we do not want to embarrass the EU by pointing out the obvious. In a negotiation, it is very important to maintain good relations.” 

“Be that as it may, if Ursula can break it, so can we. Bear in mind, Humphrey, forsan et haec olim meminisse iuvabit. I asked Michael to sort out the Northern Ireland Protocol.” 

“Well that’s my point.  Brussels likes Lord Frost but they do not, and I am sorry to say this, have much affection for Mr Gove.  They regard him as ‘difficult’.” 

“Are you telling me the same thing applies to all the other cock-ups? We cannot export fish to the EU but they can catch the same fish in our waters and send it to us with no documentation.  We cannot send our pigs to the EU so East Anglia is over-run with pigs they cannot afford to butcher.  Furthermore, China has banned EU pigs so they are now sending them all over to us with no let or hindrance. We gave the EU six months to adjust to British import paperwork with no reciprocal agreement – I could go on. In absentia lucis, Humphrey, as you well know, Tenebrae vincunt.” 

“Please don’t remind me, Prime Minister. You are simply underlining the reasons why Brussels has asked to deal with Lord Frost rather than Mr Gove. You have been urging us to improve our relations with our largest customer and this is an important step in that direction.” 

“Humphrey.  That’s all very well but being the errand boy to Brussels does not really justify a Cabinet seat.” 

“We have thought of that, Prime Minister. We will announce that Lord Frost will “also be in charge of dealing with post-Brexit trade problems as well as overseeing domestic reform to “maximise” the opportunities of having left the EU.’”

“Does that make him Secretary of State for Trade as well? And Foreign Secretary?” 

“I have had a word with her Permanent Secretary, and I gather Ms Truss will be delighted to have the benefit of Lord Frost’s wisdom and guidance. Mr Raab likewise.” 

“Just as well we have lots of other things for Michael to do.” 

“Yes indeed, Prime Minister. Our media announcement will say Mr Gove ‘will continue to be in charge of civil service reform and liaising with the devolved administrations. The prime minister has put him in charge of a committee to address NHS waiting times, backlogs in the courts and other effects of the pandemic on public services.’” 

“Humphrey, you must be joking. We already have Secretaries of State for Scotland, Wales and Northern Ireland and they’re twiddling their thumbs because the devolved administrations of those nations are dedicated to keeping them in the dark.  This month, Edinburgh has come up with a plan for adult social care, which is more than we’ve been able to do, and they did not even ask for our advice.”

“Indeed.  And it will add 20% to the social care bill which, doubtless, they will expect us to finance.” 

“Well actually, Humphrey, they say social care provides ‘estimated financial value to Scotland’s economy of £3.4 billion’ or presumably £4 billion after the 20%.  In other words, it isn’t a cost at all but an income, so they won’t be asking us for a contribution.” 

“Sometimes I am glad I am not an economist. And before you ask, his Permanent Secretary assures me that Mr Hancock will appreciate Mr Gove’s chairmanship of the committee to address NHS waiting times.  He had been considering leaving that to Sir Simon Stevens but he does not want Sir Simon to take the credit when it should be all hands to the pump.” 

“I suppose you are going to tell me, Humphrey, that Mr Buckland, the Chancellor, Mr Kwarteng and all the other Cabinet ministers involved in this committee are equally pleased?” 

“’Equally’ is indeed the mot juste. You really have devised a brilliant plan.  The new Cabinet will not have 23 members at all – just you, Mr Gove and Lord Frost.  All the others will be redundant.  And almost all of their civil servants can go with them.  If I may say so, Prime Minister, you are a genius.” 

“Humphrey, you are too kind. Alea iacta est. Thank you.” 

The next day

“I’m sorry Prime Minister but the media have got the wrong end of the stick. They have the impression, extraordinary as it may seem, that Lord Frost lost all those points in the negotiations and Mr Gove is the hard man trying to correct them.”

“Extraordinary!”

“We must justify Lord Frost’s appointment to the Cabinet by making it clear that he is the hard man and Mr Gove is the softy.”

“Isn’t that ‘spin’. Humphrey?”

“No Prime Minister. It is realpolitik. And Lord Frost does indeed talk a hard game which adds a little verisimilitude.”

“Oh very well, Humphrey, but you’d better get Michael to back it up.”