A particularly pathetic argument in favour of the Swansea Lagoon

We have presented to us a particularly stupid argument in favour of the building of the Swansea Lagoon:

A thousand high-value manufacturing jobs are set to be lost in the Midlands because of the government’s continuing failure to decide whether to support tidal lagoon marine power.

Two of GE’s British plants, at Rugby and at Stafford, had been designated to construct the underwater turbines and to provide the complex electrical power systems needed for the pioneering Swansea Bay tidal lagoon and similar marine energy projects around the coast of Britain.

If the government doesn't decide - and quickly - to suck dry the wallets of electricity consumers then these jobs will be lost. All of which is to get the economics of jobs entirely wrong. They are a cost, not a benefit, of doing something.

If we don't build the lagoon then these skilled workers will go and do something else. We will therefore benefit from their output doing that other thing instead of the money sink off the Welsh coast. 

Clearly, some of the things that they might do, as is true of any worker and their labour, are worth doing. The definition of that being that they create more value than the cost of having them done. The Swansea Lagoon does not do so. That's why the power from it will be the most expensive in the country. The various cost benefit analyses of the various forms of this idea all show that it has a negative present value. That means that the cost of doing it is greater than the benefits to be received from having done it. Or, as we can also say, doing it makes us poorer. 

We simply shouldn't be building it therefore. But this then goes on to the labour employed to build it. As even Marx said, the value of labour which produces no value is nothing, negative even. These aren't, therefore, high value jobs, they are negative value jobs. For their output will make us poorer. 

All of which does become clear when we get things the right way around - jobs are a cost of doing something, not a benefit. If we don't want to do the thing in the first place then that's proof that the cost of the jobs to do it isn't worth bearing.

There's a simple enough solution here - government stops doing something

Look not at the precise details here - far too boring to check as they are - but at the general assumption being made. The complaint is that government has screwed up, the solution proffered is not that government should stop screwing up but that it must do so more.

We are really very certain that this is an error:

Michael Gove has said “much, much more” must be done to tackle food waste as it emerged producers are “incentivised” to send their surplus to green energy plants rather than to charities that feed the vulnerable.

Hundreds of thousands of tonnes of food every year is either ploughed back into the ground or sent to animal feed or anaerobic digestion plants because it is cheaper than storing it or transporting it to where it is needed.

We agree that food should go into people. The specific complaint is about the tax breaks (and we've not investigated the truth or not of this contention):

He said: “Food that is in perfect condition is being turned into energy instead of feeding people because the Government gives green energy firms a guaranteed minimum price per unit for what they generate.

“That means they can afford to transport food and in some cases even buy surplus food from farmers, which gives the food producer an incentive to go down that route.

“In contrast, there is no financial incentive or support for a farmer or food producer to store food in an edible state, because that will cost them money, just as it costs money to transport the food to charities.”

The answer, we're told, is that more taxpayers' money should be given to those food charities. Or the farmers, or a new tax break introduced, but government must do something anyway.

The answer is, instead, that government should stop doing something. Stop offering those guaranteed prices to energy from biodigesters. Once we have that level playing field then we'll find the efficient method of dealing with that food. Perhaps it is worth more being ploughed back into the land, perhaps feeding the hungry, possibly even creating the light by which other food can be eaten. Until and unless we have the price system telling us we'll just not know, will we? 

That is, as so often, the correct response to a problem is not that government must do something, but that it must stop doing the damn fool thing it already is.

For Boxing Day a punch or two at Willy Hutton

Will Hutton decides to tell us all how much Bitcoin and the blockchain is going to change our world:

Blockchain is a foundational digital technology that rivals the internet in its potential for transformation. To explain: essentially, “blocks” are segregated, vast bundles of data in permanent communication with each other so that each block knows what the content is in the rest of the chain. However, only the owner of a particular block has the digital key to access it.

So what? First, the blocks are created by “miners”, individual algorithm writers and companies throughout the world (with a dense concentration in China), who want to add a data block to the chain.

Will Hutton is, you will recall, one of those who insists that the world should be planned as Will Hutton thinks it ought to be. Something which would be greatly aided if Will Hutton had the first clue about the world and the technologies which make it up.

Blocks aren't created by miners and individual algorithm writers, there is the one algo defined by the system and miners are confirming a block, not creating it. The blocks are not in communication with each other, they do not know what is in the rest of the chain - absolutely not in the case of earlier blocks knowing what is in later. It's simply a permanent record of all transactions ever undertaken with an independent checking mechanism.

It's entirely true that this could become very useful. But it's really not what Hutton seems to think it is. Nor is it going to transform healthcare:  

Our health data can be given to the whole chain for it to assess, rather than an individual doctor, and the chain can then assess and price an insurable risk.

The blockchain doesn't process data in the manner Hutton thinks. The only calculation is to ensure that the data is robust and agreed over the chain. No processing of the contained data takes place at all.

Nor will it transform banking:

One of the first casualties could be banking. Already, you can present your card to make a contactless payment in a store, pub or taxi. Cash has become digitised, although the payee wants to know that a bank has validated the creditworthiness of the payer before accepting the transaction.

That is a payment system, not banking. As Brad Delong points out the definition of banking is borrowing short and lending long - if you don't do this whatever it is you're doing isn't banking, if you do it is. Bitcoin and the blockchain don't do maturity transformation - in fact, on a strict interpretation of the system they rule it out.

This being one of the problems about having a world that is planned to work the way the likes of Willy Hutton think it should be planned. Those desiring to do the planning according to their prejudices don't seem to have much knowledge of the system beyond their own prejudices.

The twelve regulations of Christmas - 7 to 12

On the seventh day of Christmas, my true love gave to me…

…seven swans a-swimming

Now your true love has really done it. The British Establishment are very protective of swans. Indeed, up to 1998, killing or injuring a swan was an act of treason, under a law dating back to the twelfth century. Even today, two ancient City guilds, the Worshipful Company of Vintners and the Worshipful Company of Dyers, still own mute swans on the River Thames. The rest are owned by the Crown, but the Royal swans are no longer marked as Crown property—a shrewd move by the Royals, as it has led to all unmarked mute swans on the Thames being regarded as belonging to the Queen.

As for wild swans in other places, they are protected by large volumes of law, just like other wild animals. But in 1983 a 20-year-old Somerset man, Alfred Dines, was jailed for killing swans under a 1592 law introduced by Henry VIII. As the swans were unmarked, they were assumed to be property of the Crown, so injuring them is classed as criminal damage.

Swans are quite assertive and strong animals, so you might have problems keeping them in your garden, and by now the various cries of hens, blackbirds, geese and a partridge will already have alerted the authorities to the unsuitability of your property in terms of animal welfare. So as you and your true love are marched off to the Tower to trace the steps of Anne Boleyn, don’t say you weren’t warned.

On the eighth day of Christmas, my true love gave to me…

…eight maids a-milking

While we are on it, the a-something construction (geese a-laying, maids a-milking, lords a-leaping) goes back to the Germanic origins of English, and is a form of the y-something construction (summer is y-comen in). In German, it takes the ge-something form, as in ist gekommen, meaning ‘has come’. So summer is y-comen in actually means ‘summer has come in’, not ‘summer is coming in’.

A milkmaid is of course a woman who milks cows. She might also prepare dairy products from the milk, such as cream, butter and cheese. But that will land you in all sorts of trouble. Raw cow’s milk, and the cheeses made from it, are delicious, but the legal authorities—always concerned to make us act for our own good—either ban it or want to ban it. In Scotland, sales of raw cows’ milk and cream (along with those from sheep, goats, buffalo and any other species, probably including yaks and camels) was banned in 1983. In 1995, the policy was reviewed but retained. There have been three attempts to extend the ban to the rest of the UK, which have not succeeded—though they have each led to further ‘consumer protection’ rules.

If your true love got the milkmaids in a job lot along with the French Hens, your troubles multiply. Under Regulation 178/2000, each batch of imported dairy products may need a veterinary or public health certificate and various paperwork to show that it comes from the EU or from EU-approved premises. Eight milkmaids and an unspecified number of milk cows will of course be noticed by the neighbours. Expect a visit from the Animal and Plant Health Agency.

On the ninth day of Christmas, my true love gave to me…

…nine ladies dancing

What could be more charming? Lucky you don’t live in Sweden, where ‘spontaneous dancing’ is still illegal, for some bizarre reason, despite promises to abolish it.  Mind you, the UK’s own Criminal Justice and Public Order Act 1994 introduced various penalties for ‘anti-social’ behaviour, particularly outdoor raves. And if you were indeed illicitly raving, the Act undermined your right to silence, allowed the police to take intimate body samples, and extended police stop and search powers.

It is unlikely that your true love would have provided you with nine lap dancers, but under the Policing and Crime Act 2009, if you wanted to share the gift with a few friends, you would have to apply for a licence as a ‘sexual entertainment venue’. That would cost you a lot of money and would probably be refused (with no right of appeal) as there is a ‘nil limit’ on new premises opening. In Scotland, ‘sexual entertainment venues’ are covered, rather bizarrely, under the Air Weapons and Licensing (Scotland) Act 2015.

For dancing you need music, of course, and that could be a ‘statutory nuisance’ under the Environmental Protection Act 1990. The local council could serve you an abatement notice, and give you a spot fine if you ignore it, confiscate your sound system—or even prosecute you, with a potential £1,000 fine. Probably better to tell the ladies just to sit quietly somewhere.

On the tenth day of Christmas, my true love gave to me…

…ten lords a-leaping

Some people say that the ten lords a-leaping in the song actually stand for the Ten Commandments. But by the time you have already dealt with the animal welfare officers, the council noise abatement department, and the EU regulations on dairy imports, you will be all too aware that you have to obey far more than ten commandments these days.

In fact the EU has passed over two-thirds of a million pages of law since its inception in 1957. Roughly a quarter of those are still in force, which means that there are roughly 170,000 pages of EU rules and regulations you have to obey. More than half of those have come in during the last decade, so the pace is accelerating. Put all those pages end to end and it would be longer than a marathon and would take an average person about four hours just to run from one end to the other. If you had to read them all, it would take somewhat longer.

With around 800 people sitting in the House of Lords—eight times the size of the US Senate, in a country with a fifth of the population—ten of them leaping off would hardly be noticed, though it would save taxpayers £3,000 in attendance allowances and a bit more in expenses. No doubt the Lords would not spare the likes of Lord Henley, Baroness Buscombe, Lord Duncan and Lord Gardiner, who are all ministers and who are needed to gold-plate and enforce all those 170,000 pages…

On the eleventh day of Christmas, my true love gave to me…

…eleven pipers piping

Perhaps your true love has sent you some ex-army pipers, since the Ministry of Defence has cut back on military bands in order to save its budget. But with eleven pipers and nine dancing ladies, you now have the makings of a fair-sized marching band yourself. And you are already in breach of the law, because you should have informed the police six days ago that these folk intended to march up and down. The police can change your intended route, limit the time you can march, and stop other people from attending the spectacle. They can even ban your march outright.

Indeed, under the Public Order Act of 1986, your pipers do not even have to be marching to get you into trouble. If a chief of police believes that you are intending an assembly near to any historic building or site, they can stop you. Or move you on for causing a breach of the peace. If your true love’s gift marches in a public park or square, the local authority may well turn up, waving the by-laws by which they can regulate or stop it.

If you live in Northern Ireland you have particular problems, as marches there are strictly controlled—though attempts to ban them entirely caused even more trouble than the marches themselves.

On the twelfth day of Christmas, my true love gave to me…

…twelve drummers drumming

The final batch of your true love’s 364 different gifts has now arrived, and are probably proving just as noisy as the geese, swans, cows, pipers, lords and other livestock. The house might be getting a little crowded by now, but luckily (or perhaps for you, unluckily), there are regulations to deal with that. The 1985 Housing Act covers the number of people you can have per room, the amount of space they must have, and so on. Officials can of course enter your property to check. Well, I say your property, but after dealing with so many police and officials, you are probably thinking that you do not have many rights over it. You would not be wrong. Enjoy the rest of the year, and keep away from trouble—though they only way to do that is probably to sit in a darkened room, or perhaps leave the country, as many entrepreneurial people who resent the petty regulations of petty officials have already done.

Bah, Humbug!

Given the day and the season of course we should be discussing the ickle ones, the children. Preferably without succumbing to Herod's appreciation of the subject. 

However, this latest report is not quite as we're told

Children from poor families are far more likely to end up in hospital A&E departments or need emergency treatment for conditions such as asthma and diabetes, according to shocking figures revealing the consequences of poverty in Britain.

In findings that senior doctors said showed the “devastating impact” of deprivation on child health, the nation’s poorest teenagers were found to be almost 70% more likely to appear in A&E than their less deprived counterparts.

We would, of course, like to know why this is happening. Further, to do something about it if only we could work out what.

However poverty has an impact on a range of other issues such as education, housing and continuity of healthcare,” he said. “We agree with the authors of this report when they say the most vulnerable children are being let down by health services and we back their calls for policymakers to focus on narrowing the inequalities gap. They can do this by reversing cuts to universal credit which actually leave the majority of families claiming this benefit worse off, and by the restoration of national targets to reduce child poverty, backed by a national child poverty strategy.”

The what probably not being that. For as we're continually being told, child poverty is rising in the UK. This is using the modern definition of relative poverty of course. Thus it is a measure of inequality - and it's not really true that inequality is rising in any significant manner. It fell during the recession, as it always does in a recession, and has been rising back to pre-recession levels since. Deprivation, as in absolute poverty, isn't a feature of British society even as it is true that some have less than others.

But the capping reason this isn't the solution comes from the report itself:

While, overall, emergency (or unplanned) hospital admissions have increased slightly (by 9 per cent between 2005/6 and 2015/16), the gap between the most and least deprived groups has narrowed.

Even as all the other things being complained about are, by the claimed measures, increasing, this inequality, that of emergency health care admissions, is falling. Thus the inequality of health care admissions cannot be caused by the widening inequalities being complained of elsewhere.

We should be more charitable on this day of course. But then we are in fact being charitable. For we too would prefer that the children are not ill, that parents are not consumed with worry as they wait for that emergency care. Which means that we do in fact have to identify what is causing this rather than leaping for polite society's explanation for all, economic inequality.

Bah, Humbug! 

The twelve regulations of Christmas - 1 to 6

On the first day of Christmas, my true love gave to me…

…a partridge in a pear tree.

Until quite recently, the convention was that a ‘day’ ended, not at midnight as we reckon today, but at sundown. And that was when the next day started. So the first day of Christmas actually started at sundown on Christmas Eve—literally the ‘evening’ at the start of Christmas Day. That is why, in many countries, people open their presents at this time.

But as to the gift itself…

At least your true love started on a positive note. You haven’t needed a game licence to deal in game since 2007 in England & Wales and 2011 in Scotland and Northern Ireland. So let’s hear it for deregulation. If you want to hunt game, though, there are plenty of rules. You can only shoot game birds in the specified season, and you can’t shoot some waterfowl about the high water line. The internal diameter of the shotgun can’t be more than 1.75 inches, can’t be automatic, and can’t have a light or night shooting sight.

As for the pear tree, your true love has not done you any favours. If it’s big enough to provide a home to a partridge, it’s quite likely to have a Tree Preservation Order slapped on it by the local council. Then you face a fine of up to £20,000 if you cut it down, uproot it, top or lop it, or generally damage it in any way. Unless the local Tree Officer gives you consent, of course. And if they do let you cut it down, they’ll probably insist that you plant another one right away.

The trick it to stop thinking of your garden as your property.

On the second day of Christmas, my true love gave to me…
…two turtle doves

The turtle dove or gets its genus name Streptopelia from the ancient Greek word streptos, meaning collar. It has a black and white patch on its neck, giving rise to the name. It is not actually what people call a collared dove, though it is related.

Despite the association of doves and love, these birds are regarded as a pest, their generally disgusting habits making them likely to spread disease. Don’t think you can just go out and (pun intended) collar a couple, as they are protected under the Wildlife and Countryside Act 1981. And that is an enormous document of legalese that is impossible for most people even to read. Moreover, if you want to know how it applies to these particular birds, it will take you some time to get through to the right person at the Department of Environment, Food and Rural Affairs, which is several thousand bureaucrats strong. 

You can of course put nets or spikes on your roof and window ledges to stop them (the birds, not the bureaucrats) settling there, but that is regulated under the Animal Welfare Act 2006. If you put up a net and doves get trapped in it, you could face prosecution. In fact the Wildlife and Countryside Act 1981 makes it illegal to kill or injure any wild bird, or interfere with its nest or eggs—unless they are specifically excepted. Even then, you can only kill them if there is no alternative and they are a demonstrable risk to health and safety (merely damaging your house not count). Better get professional advice though—various animal welfare groups have gone to court to claim that these pests do little harm. Still, it all makes work for pest controllers and lawyers.

On the third day of Christmas, my true love gave to me…
…three French Hens

Faverolles are a French fancy chicken breed, originally raised for meat and eggs—though now generally raised only for exhibition, because of its extravagant beard and muffs and general absurdity. They are large chickens—the Poultry Club of Great Britain ordains that British Faverolles cocks weigh 4.08–4.98 kg (9–11 lb).

If the birds were imported the birds from France, your true love could be in a lot of trouble. To transport livestock for journeys over 65 kilometres, she would need a valid transporter authorisation and valid certificates of competence for any drivers and handlers involved. To get that, they have to be trained in things like loading and handling the animals, watering and feeding them, and what journey times and rest periods are allowed or not allowed. If the journey took amore than eight hours, she would also need valid approval certificates for the vehicle itself, and the containers used, as well as contingency plans for emergencies. It might even be necessary for the vehicle to have satnav and a tracking system that records the journey. Plus sensors to monitor the temperature of the animal compartment, equipment to keep it warm, a warning system to alert the driver if it becomes too hot or cold, and a ventilation system with a minium airflow of nominal capacity of 60 cubic metres per hour per kilo Newton of payload that can operate independently of the vehicle engine for at least four hours. Also, it has to be approved to transport the precise species—no shoving your French Hens in a cattle truck and hoping.

The regulators do not seem particularly bothered about the comfort of the driver, but they are minutely concerned about the animals. That might be why French Hens are so darn expensive…

On the fourth day of Christmas, my true love gave to me…
…four Calling Birds

The modern version of the song refers to calling birds, but not long ago it spoke of colly birds. Even those who remember this old version were probably unaware that colly bird was an archaic term for blackbird, which is probably why the line has elided into calling birds.  

Though blackbirds are very common, they are protected by the law, as are their nests and eggs. To be sure you are treating your true love’s gift properly, you had better read the Wildlife and Countryside Act 1981, and the various amendments made to it under the Countryside and Rights of Way Act 2000 and the Natural Environment and Rural Communities Act 2006. None of them are short documents, but it all makes work for the people who draft parliamentary measures. 

If they really are calling birds and produce a sweet song, then you might want to put them on show to the public or enter them in a competition. Unfortunately it is an offence to show wild birds at a competition, or (just to be on the safe side) in premises in which a competition is being held. So maybe they are not much use to you, but unless they are native songbirds, you would be committing another offence. Indeed, if police suspect you are, they can ask a Justice of the Peace to grant a warrant to enter your premises and collect evidence. If they find it, you could be looking at a fine up to £5,000 or six months in the slammer. For each bird (that’s 20 grand). But at least they will confiscate the birds, which might come as a relief.

On the fifth day of Christmas, my true love gave to me…
…five gold rings

Is your true love’s obsession with wildfowl finally fading? Probably not, because it is likely that the five gold rings actually refers to a goldspink (an archaic word for goldfinch) or possibly the yellowy rings round the neck of a pheasant. And since all your true love’s other gifts over the first week are birds, that’s at least plausible.

Still, supposing the gold rings were the real thing, your true love’s gift is still deeply nested in regulation. Nine carat gold must be an alloy of at least 375 parts per thousand precious metal, and assuming the ring is over a gram in weight (gold is heavy, after all), it must be checked by an independent Assay Office and duly hallmarked. Traders in precious metals also need to display a Dealer’s Notice, which explains what the hallmark means, in a prominent position in their shop. 

And don’t think of using the gold rings to pay all the handlers, hauliers and animal welfare experts you will need to look after your growing aviary. Under legislation designed (they say) to combat ‘morally repugnant’ tax avoidance, employees can no longer be paid in gold. Note the word avoidance. Avoiding tax—arranging your affairs to pay less tax than you otherwise might—is perfectly legal. It is evading tax—lying about your affairs, such as your income, in order to pay less tax—that is illegal. But now we have a law to make the legal illegal because it is immoral. A lot of people argue that capitalism is immoral, so you can see where this creative legal thinking is taking us.

On the sixth day of Christmas, my true love gave to me…
…six geese a-laying

Well, at least these geese are obviously alive, so there is no worry about whether they have been shot out of season. Like other wildfowl, Canada Geese can be shot only from 1 September to 31 January above the high water mark of ordinary spring tides, and up to 20 February below the high water mark of ordinary spring tides. If you are shooting and don’t realise it is an extraordinary spring tide, you could be in even more of a pickle than your goose meat. 

Given the eighteen, mostly wild, animals that your true love has already pushed on you already, you might well be tempted to shoot the geese, but if you are wise, you will read a very large quantity of legislation first. Geese both fly and can cause damage, so you might hope that an angry farmer in the vicinity will shoot them for you. However, bird enthusiasts argue that most birds cause no harm to agricultural interests, and if the damage is minor, nobody should take any action against them. If the geese are seriously damaging, the farmer would be obliged to try non-lethal methods first, such as scaring them away or putting nets over the crops.

Of course, geese normally lay eggs (five or six to a nest) in March, April or May. So police or animal welfare officers (not to mention other animal groups that have special powers under the legislation) might well want to enquire of you what you or your true love did to them in order to get them laying at this unseasonal time of year. Better have a good answer, or they’ll be off to a JP for a warrant.

Time for the US to legalise drugs

When drug addiction, and the overdoses flowing from it, is a minority sport then interesting conversations can be had about the conflicts between civil liberty and protecting people from their own demons. When the problem has become sufficiently large to be affecting the expected lifespans of the nation then government really does have to do something.

That something being legalise the stuff:

America's worsening opioid crisis has caused life expectancy to fall for the second year running for the first time in more than half a century.

The average life expectancy in the US is now 78.6 years - down by 0.1 years, figures from the National Center for Health Statistics (NCHS) found.

It is the first consecutive drop in life expectancy since 1962-63 and surpasses the previous one-year dip in 1993 at the height of the Aids epidemic.

America's opioid addiction crisis - caused by the over-prescription of opioid based painkillers - has been blamed for the trend. 

The addiction sees patients turning to heroin and other substances when their doctors stops issuing prescription medication.

Synthetic opioids such as fentanyl, which has flooded the US drugs market and is 100 times more powerful than heroin, are thought to be behind the dramatic increase in overdoses among heroin users. 

How we got here isn't important as compared to what we do now. For what's killing people is not the desire to get blitzed - whether caused by over-prescription of opioids, inequality, the terrors of neoliberalism or anything else - but the illegality of the drugs themselves.

Heroin itself rarely kills. Pharmaceutically pure that is, in measured doses. The two most common, by far, causes of overdoses are those coming back to it after a layoff, dosing as before and having lost much of their tolerance, and variable doses in the material itself.

Modern chemistry has made this very much worse with synthetics like fentanyl. It's hugely cheaper and also very much stronger. More, the gap between a dose that produces a high and one that kills is very much smaller. Some to much "heroin" is now cut with such synthetics, making a dose even more of a lottery than it has traditionally been.

As we say, this is now enough of a problem that something really must be done. We've tried half a century of prosecuting, persecuting, those who simply wish to get high and as we can see that doesn't work. Legalisation - no, not decriminalisation, full legalisation - is the only viable answer.

For it is the variability of the dose that is killing people. Only when brands appear with controlled and known dosages will the deaths stop. Thus we want to have such legal brands.

Sure, profits will be made from this. But then profits are being made from the current system too. It's just that with the high being legal we've a system to prosecute those who kill their customers. And no, shouting that we've already got a system of prosecuting drug dealers doesn't work. For the current system quite obviously doesn't work, does it?  

There is also that civil liberty argument to consider. We are sovereign over our own bodies so why shouldn't we be allowed to get high in the manner of our choosing? Government's job is therefore, as far as it has one at all, to regulate to encourage safety, no more.

Wait, what? You mean higher taxes mean people have less money?

It's true that - up to that Laffer Curve point - higher taxes mean that the government has more money to spend on what it wishes. But equally obviously this also means that people themselves have less money to spend as they wish. A part of the ineluctable logic that all too few manage to grasp.

Fortunately The Guardian is here to inform us all:

The news that local authorities will now be able to raise council tax by up to 5.99% next year will be welcomed by many in local government – but risks pushing many people who find it hard to make ends meet further into debt.

Well, yes, that's the way it works. If we re-slice the pie so that the people with all the guns get a larger slice then those of us being taxed will have a smaller one. This should be obvious even if all too many don't grasp it.

But the problem is worse. For in our taxation of the richer among us we're pretty much at that Laffer Curve point. Sure, we can argue about whether the income tax take peaks at 40%, 43%, 47% and so on but all the experience (our own experience with the 50% rate, academic research by Diamond and Saez and so on) tells us that when we look at taxes upon income (so, adding NI and so on) then we are at least around about that peak.

Which means that if we're to increase the tax take as a percentage of the economy, the thing being demanded, then we're going to have to tax the poorer among us. The very people who don't have much to start with and who are really going to miss that marginal income.

This isn't the collective view here, not formally at least, but it does inform that general view. The very argument in favour of a smaller state is that, around and about where we are - even with a substantially smaller state than we already have - we have to tax the poor to pay for it all. Which isn't what we think we should be doing at all. 

We have a great deal of sympathy with the idea that the richer should be paying. But that does mean cutting the State to the size that can be paid for only by the rich.

Not, to repeat, a formal or official point, nor even a precise and exact one, but one underpinning a general view all the same. 

Solidarity isn't socialism and socialism isn't solidarity

Of all the dreadful syllogisms that could be used Owen Jones has picked a right stinker here:

Thatcherism – or neoliberalism, whichever you want to call it – tried to bulldoze every last remnant of solidarity we felt – and it failed. “We have to move this country in a new direction,” Margaret Thatcher declared after her first election triumph, “to change the way we look at things, to create a wholly new attitude of mind.”

I wonder how she would feel reading a new survey by the European commissionasking EU citizens whether, by 2030, they would prefer a society that gave more importance to solidarity or to individualism. She would undoubtedly be heartened to find that Britain comes joint top of the individualism league table. But she would probably be dispirited to read that only 29% favoured individualism, with a solid 52% hoping for more solidarity.

That doesn’t mean there aren’t formidable challenges to building socialism in modern Britain.

We are not straining this point, he really does mean it:

As a dogma, this form of individualism is a formidable obstacle to socialism.

Neoliberalism, Thatcherism, right wing baby eating, call it what you will, is not opposed to collectivism in any manner whatsoever. It's simply a difference in who decides upon the cooperation. Is it, in the form Jones is advocating, something imposed by the Commissars? Or is it something arising out of the actions of free people? 

David Cameron did have one thing right, there is society it's just not the government. As did St Maggie, the no society part should be fully quoted along with the there are individuals and families and.... All of which is a calling back to Burke's point about the little platoons.

We humans do cooperate, a market economy is exactly such solidarity. The farmer, miller and baker are all cooperating to provide our bread. The competition part is in who they decide to cooperate with to do so. So too is solidarity encapsulated in the pub quiz team, that voluntary nature and funding of the lifeboats, doing the shopping for the elderly neighbour and the existence of the Boy Scouts.

You know, the sorts of things that millions of us do every day? Even Friendly Societies, mutual insurance companies and all the rest. They're solidarity and they're not socialism of this form that Jones is defining, where it has to be something done by government? 

 

Tinkering with defence

The House of Commons Defence Select Committee published its report “Gambling on ‘Efficiency’: Defence Acquisition and Procurement" on 14th December.  It notes that the MoD is trying to live well beyond its means and doubts that the future efficiencies promised by the MoD to narrow the gap will be realized.  So far, so correct.  The report makes ten recommendations, sensible in themselves perhaps, but none resolve the strategic issues.

The ten recommendations can be summarized as:

  1. The MoD should provide us the criteria to assess the effectiveness of “Defence Equipment and Support” (DE&S) which is currently seen as failing.
  2. The Chief Executive of DE&S left after two years.  An interim should be appointed urgently and the proposed appointee interviewed by the Select Committee.

  3. The MoD should review its efficiency plans and contingencies.

  4. The MoD should publish an ‘efficiency tracker’ which would detail when, where and how efficiencies are to be made, together with risks and contingency plans.

  5. The role of Single Source Regulations Office (SSRO) to ensure the MoD’s contractors make enough money (currently >10%) when procurement is not made competitively on the open market: the SSRO’s scope should be extended to government-to-government contracts and any single source contracts, save in exceptional circumstances.

  6. The SSRO must also be given similar powers to those of other regulators.

  7. To serve as a fully-fledged regulator, rather than just as a unit to assist the MoD, its personnel must be chosen, and its funds provided, independently of the MoD. Proposed appointees to the Chair and the Chief Executive positions should be interviewed by the Select Committee.

  8. Those updating the defence industrial policy should consider adopting a broader definition of ‘value for money’ that incorporates the impact of major defence projects on local economies, skills and employment levels.

  9. The new defence industrial policy should emphasise the importance of a regular drumbeat of activity to sustain a successful and high-skilled work force and to maintain the UK’s sovereign capabilities. It should also look at the types and quantity of defence equipment that are currently sourced externally, with a view to identifying where such equipment could be sourced domestically.

  10. The Government should commit to spend at least 2% of the defence budget on science and technology.

There are key strategic issues lying behind this report including: how the MoD can live within its means; how the MoD will deliver the efficiencies it claims it will make by cutting the tail and not the teeth of the armed forces and their essential suppliers; how to get better bangs for the bucks by sourcing from the competitive market, without decimating the UK’s defence industry needed for national security; and how to stop senior officers and civil servants commissioning distant future contracts which will be unaffordable when the bills roll in and they themselves have moved on.

To what extent do the Select Committee’s recommendations address those issues?

The first two are practical housekeeping for the DE&S.  Interviewing the sole nominated candidate is a bit late in the process.  The MoD will simply “take note” of any concerns.  Better to establish consensus sooner with the MoD and headhunter.

I am no prophet but I am willing to bet that the MoD will conclude its review of its own plans (recommendation 3) by finding them wholly admirable.  It would be better to have them exposed to the light of day, independently assessed and (recommendation 4) tracked.

Recommendations 5 – 7 concern the SSRO which is an extraordinary beast designed, it would seem, to featherbed the British defence industry at the expense of the taxpayer and more or less guarantee the MoD will overspend its budget.  These recommendations exacerbate the problem but do contain a valuable kernel.  Within the SSRO is the Investment Approvals Committee (IAC) whose role is to challenge non-competitive procurement.  If it worked, it would make a sizeable dent in the MoD’s overspend. The reality is, as the Select Committee points out, that the MoD has rendered it entirely ineffective.  For example, on all 14 occasions (out of a total of 166 decisions made between January 2015 – September 2017) where the IAC challenged the decisions to make non-competitive contracts, they were told it was too late as commitments had already been made (those interested should read the full report Improving value for money in non-competitive procurement of defence equipment produced by the National Audit Office in October).

The solution is not to give SSRO powers similar to unspecified regulators, some of whom are less than effective, but to transfer the IAC to the Treasury and make its pre-agreement to bespoke procurement mandatory.

“Value for money” (recommendations 8 and 9) should mean the impact on cost/effectiveness of our armed forces. Watering it down to incorporate “the impact of major defence projects on local economies, skills and employment levels” would mean, for example, that the UK production of rifles was good value for money, even though they did not work, if it provided employment in Huddersfield. Most soldiers would be able to express an opinion on that.  The Select Committee’s intent could be met by requiring the IAC to take the wider UK economic considerations into account.

Finally, recommendation 10, which may well be a good idea, is not relevant to the topic of the paper.

In conclusion, the strategic issues do need to be addressed head on. There are a few points that the government could start with:

  • It is already policy, albeit not implemented, to use the competitive market for procurement wherever possible. More could be done to focus resources on lower cost, but more often used. armed forces such as the infantry which are engaged almost every year. Only one non-ballistic submarine, by contrast, has seen action in the last 70 years. 
  • The MoD should publish the efficiencies it claims it will make, open them to criticism and, as the Select Committee suggests, progress each year against that plan.
  • Inter-service rivalry contributes to the commissioning of what might be considered vanity projects.  There is a belief, correct or otherwise, that the army is down-sized as a result. We need a fully independent (of the MoD) IAC. The spending options and their relative values for money should be transparent, at least to the Select Committee. The UK defence industry has to be brought up to world standards so that it can win competitively.  Featherbedding only worsens its long-term prospects.
  • Senior officers and civil servants do not intentionally over-commit the future. The problem is partly that the commissioners are each deeply engaged in their own projects and the MoD does not seem capable of scheduling and adding up the likely year-by-year total bill for the ten or even twenty years ahead. As responsibility moves over that time period and new options arise, specifications keep changing. Anyone who has had a house built knows how expensive it is to change specifications. The IAC’s role should be expanded to monitor the overall management of these future commitments and, in conjunction with the NAO occasionally, report annually to the Treasury, the MoD and the Select Committee.

Defence procurement has been a mess since the MoD was founded in 1947. Numerous consultants have advised numerous changes but the fundamental strategic issues have remained much the same. Last week’s Select Committee report is welcome but it does not go far enough.