Cameron’s revolution

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There is little to be garnered from David Cameron’s interview with Fraser Nelson of the Spectator. However, despite his deafening silence on policy of late, the excellent Fraser Nelson does pursue two interesting lines of discussion that elicit rather telling responses.

Firstly, Cameron claims that: “the sort of tax system that I believe in is one that’s effective in raising revenue — rather than one that is trying to make a particular point". Thus, the Conservative's are not going to soak the rich without just cause. The problem is that with all matters political, the truth is easily manipulated – thus, this is no insurance at all. The principal reason the rich should not be taxed at a higher rate than others is that it is morally wrong to do so. A Conservative government should drop the 50% rate and institute a flat tax for this reason alone.

This point is connected to his second interesting utterance:

There is an easy radicalism, whereby you take the latest idea that comes out of the Institute of Economic Affairs or wherever and just say, “well, that’s it",’ he says. ‘Proper radicalism is thinking through how you are going to get from A to B to C to D. I think that’s what we’re doing.’

As we all know, the IEA releases many excellent reports every year that should and could be turned into government policy in whole or in part. It might be easy radicalism, but it is at least innovative policy as distinct from New Labour. The problem with Cameron’s position is inability to stand up and state whether or not he in fact radical. He alludes to the fact that we should tacitly accept that he would get to “D" in the end, but a position is so unprincipled is not worthy of respect and hardly worth getting excited about.

Cameron's thoughtful revolution is no revolution at all. The state of the nation demands cool hard policies, yet Cameron is still coasting on autopilot. Victory is not watching Brown crash and burn, but instead to come to the country with the policies upon which this country can thrive.

Michael Moore's capitalism

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One critic declared that the value of Capitalism: A Love Story was not in the moviemaking, but in its message that hits you in the gut and makes you angry. This film did not make me angry, but it did punch me in the gut. The people in that theater with me, including Moore, were not bad people. They just seem to all have consumed a lethal dose of Kool-Aid.

Michael W. Covel 'Michael Moore Kills Capitalism with Kool-Aid' Mises.org

Harman and prostitution

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I see that Harriet Harman, the UK's minister for women's affairs, thinks that Governor Schwarzenegger should close down the website PunterNet, which is based in California but posts reviews on UK prostitutes.

PunterNet must be delighted with this publicity. At least they are sensibly out of Ms Harman's grasp over in Sacramento. But the worrying thing about that is what she would say – and do – if the site were based in Britain. No doubt any website that offended her metropolitan middle-class sensibilities would be facing the axe. You can forget free speech when politicians have attitudes like that.

Ms Harman is already seeking to make it illegal to pay for sex, under the guise of preventing coercion (her legislative proposal talks about prostitutes 'controlled by another person' – though not even the cops have much idea of what that 'controlled' is supposed to mean). And she praised a police raid on a Birmingham massage parlour which 'freed' nineteen 'trafficked women' (it did nothing of the sort: it just nicked women who had come freely, if not always legally, from Eastern Europe to work in a wealthier country).

Now where people are sold into any trade against their will, we should move to stop it. But the small number of such cases are no reason to squeeze prostitutes out of a living because Ms Harman considers the activity immoral. Yes, prostitutes travel – it used to be to the next town, now, thanks to Ryanair, its the next country – to go where the money is better, and to protect their future employability (as Gary Becker puts it, their human capital) against tut-tutting neighbours and relatives. But where prostitution is a voluntary bargain, why should the state intervene? There may be issues of public health, but those are better fixed when prostitution is out in the open, than when it is forced underground.

The excellent book Prohibitions from the Institute of Economic Affairs points out that prostitution should, properly, be regarded as a caring profession, like nursing. There are many people who, for one reason or another, have no sex partner. If that leads to a voluntary agreement to exchange sex for cash, then both parties benefit. Ms Harman objects that this is 'exploitation of women'. Well, I had a look at PunterNet. Yes, I'm sure, in the shadowlands of prostitution today, the agencies take about half the fee. But even then, at anything up to £500 an hour, I'm pretty sure it's not the women who are being exploited.

Dr Butler's book The Rotten State of Britain is now in paperback.

 

Lord Turner attacks independent financial advisers

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FSA proposals could halve the IFA industry, leaving only the rich able to afford investment advice

Lord Turner of Makebelieve is at it again. His Financial Services Authority (FSA) is introducing new rules for Independent Financial Advisors (IFAs) that will probably drive half of the 20,000 or so IFAs out of business by 2012. The requirements of the FSA's new Retail Distribution Review (RDR) will make life impossible for the smaller IFAs, many of whom are on the breadline now.

Ironically, the FSA is supposed to protect the consumer from biased financial advice and yet the RDR will drive all but the wealthy into the arms of the same big banks who are responsible for most consumer complaints. 59% of these complaints are about banks as against 3% complaining about IFAs. Once again the FSA is seeking to destroy the UK financial services sector rather than improve it.

The FSA is failing effectively to regulate the big banks and driving more consumer business into their arms. Not, of course, that advice from your friendly banker is ever biased.

Hat-tip to Simon Mansell who has the whole chapter and verse. He can be contacted through his website here.

You can also sign a petition deploring the FSA proposals at the Downing Street website.

New UK nuclear build?

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Events over the last few days have dented the prospects for UK new nuclear-build.

In Germany, the success of the CDU/CSU and FDP coalition has been welcomed by the markets. The shares of both E.On and RWE have rallied in the expectation that Germany’s controversial nuclear phase-out policy will be abolished – thereby massively boosting their free cash flow.  Such a reversal does not mean that new nuclear-build will be undertaken in Germany.

It would mean, though, that both companies, along with EnBW and Vattenfall, could extend the lives of their nuclear plants whose capacity exceeds 20,000 MW. Furthermore, both E.On and RWE may well undertake investment at their existing nuclear plants to boost output. Against this background, their interest in participating in UK new nuclear-build may wane. And, in E.On’s case, with net debt of c£40 billion, reducing capex – rather than increasing it – is the compelling priority.

The UK Government’s new nuclear-build hopes also centre around EdF, which is 84% owned by the French Government. EdF has just confirmed the appointment of a new Chairman, Henri Proglio, who has spent most of his career at Veolia Environnement: he will now be top of DECC’s must-meet list. Central to his new responsibilities will be the reduction of EdF’s burgeoning net debt, which presumably will involve reversing some of the ambitious international expansion of late. The sale of some UK electricity distribution assets is anticipated.

Consequently, EdF’s hitherto robust commitment to new nuclear-build in the UK may erode. After all, it will not yield any revenues until 2018 at the earliest. Add to that, the more general weakness of oil and gas prices – at least compared with the boom times in 2007/08 when new nuclear-build interest peaked – and it is no surprise that the UK new nuclear-build programme is wobbling.

Is this unduly pessimistic?

The state of radio in Denmark

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In a country where freedom of speech has become the most important cause, commercial radio is increasingly impossible because of the concession costs the radio companies have to pay to the state.

The largest commercial radio station in Denmark “Radio 100 FM" owned by Talpa Radio Denmark. However, it is now seeking bankruptcy protection, after running large deficits over the last couple of years. The main reason is due to the fees it has to pay to the Danish state. Talpa Radio isn’t the first Radio to go out of business in Denmark, in 2005 Sky Radio had to stop their transmissions and in 2008 TV2 Radio, owned by the largest semi commercial TV operator in Denmark had to shut down as well. Just recently 100 FM was awarded “Radio station of the year" at the Radiodays conference in Copenhagen, nonetheless being the best just wasn’t enough.

The Danish minister of Culture now says that the Danish government will try and help 100 FM as much as it can, because as “she is much focused on keeping competition alive in the Radio market". It seems though that government policy is actually what kills the Radio stations, as like in the UK, free market radio competition is far from a reality.

The Danish Broadcasting Corporation (DR) dominates 4 out of 6 national FM channels and has recently finished building a new concert hall and headquarter buildings with a total budget overdraft of more than 1.4 billion Kr. (app. 170 million GBP).

Competition? I don’t think so!

Repeal the Human Rights Act

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Due to the Human Rights Act, the revisionist interpretation of the European Court has influenced British courts and thereby altered the traditional British notion of freedom and human rights. Repealing the Human Rights Act and replacing it with a British Bill of Rights based on classic civil and political rights and freedoms would counter the influence of the Court’s activism at the domestic level. Moreover, it would send a clear signal to the Court that the UK is no longer willing to accept the Court’s usurpation of powers that rightly belong to national parliaments nor the erosion and dilution of the freedoms included in the Convention. It is not unlikely that other nations would follow suit forcing the Court to change its course or lose its legitimacy.

– Jacob Mchangama 'A UK Bill of Rights should be the first step in a human rights (counter)-revolution' ConservativeHome

Bismarck beats Beveridge

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The Euro Health Consumer Index (ECHI) 2009 was released this week, and got lots of media coverage in the UK because it ranked the NHS 14th out of 33 countries and said the British health service was let down by waiting lists and "uneven quality performance". Only 4 counties in the EU15 (Western Europe, roughly speaking) got lower scores – Italy, Spain, Greece and Portugal.

The report is full of interesting information, but one point (on p9) particularly interested me. In their words, "Bismarck Beats Beveridge – yet again!" To explain:

Bismarck healthcare systems are "based on social insurance, where there is a multitude of insurance organizations... who are organisationally independent of healthcare providers." They are named after Otto von Bismarck, who founded the German welfare state.

Beveridge systems are "systems where financing and provision are handled within one organisational system, i.e. financing bodies and providers are wholly or partially within one organization." They are named after Wiliam Beveridge, who founded the British welfare state.

Anyway, the point the reports makes is that, "Looking at the results of the EHCI 2006 – 2009, it is very hard to avoid noticing that the top consists of dedicated Bismarck countries, with the small-population and therefore more easily managed Beveridge systems of the Nordic countries squeezing in. Large Beveridge systems seem to have difficulties at attaining really excellent levels of customer value."

The following list shows the rankings of Western European healthcare systems according to their 2009 score. The Bismarck countries are in bold:

(1) Holland, (2) Denmark, (3) Iceland, (4) Austria, (5) Switzerland, (6) Germany, (7) France, (8) Sweden, (9) Luxembourg, (10) Norway, (11) Belgium, (12) Finland, (13) Ireland, (14) UK, (15) Italy, (16) Spain, (17) Greece, (18) Portugal.

Clearly there is something in what the authors of the ECHI say. They suggest two points which could explain the comparative underperformance of Beveridge systems:

(1) Managing organizations of this size (the NHS employees 1.5m staff) requires management skills which just don't exist in the public sector. (I'd say they are extremely rare in the private sector too.)

(2) The primary loyalty in Beveridge organizations tends to be to politicians and other top decision-makers, rather than patients.

Adopting a competitive social insurance system like Holland's would be a huge step forward for the UK, even if – in an ideal world – I would prefer something based on medical savings accounts. You can read more about it here, in our excellent 2002 report NHS Reform: towards consensus?

"Go" Orders: Guilty without charge

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During the Labour party conference Home Secretary Alan Johnson revealed yet another reason to boot the party out at the next election.

Renewing Labour’s pledge to ‘clampdown on crime’ (read: creating more punishments and bureaucracy under the pretence of ‘action’), he has unveiled plans to bar alleged wife beaters from their homes through the Domestic Violence Protection Order. “Go" Orders can be placed on suspects, banning them from their homes for up to two weeks, while allowing victims of abuse time to consider legal action.

Apparently, this has been dreamt up to close a ‘loophole’ in legislation whereby the Police can only ‘protect’ a victim of domestic violence if a suspect has been charged with a crime. This ‘loophole’ sounds horribly similar to the long-standing practice in the UK of no-one having their liberty infringed upon without sufficient evidence to suggest it is in the public interest to do so.

If the police cannot prove a crime has been committed and an alleged suspect has not been charged, let alone convicted of an act, then that suspect has every right to be treated as a law-abiding citizen. It is inevitable that some of those banned from their own home will be guiltless and that some people affected by this order will not have charges brought against them. These people would be seriously wronged by such measure.

The breaking of a “Go" Order could land you in the magistrates for Contempt of Court and risking imprisonment. In practise, Johnson is stating that someone who has not even been charged with a crime could face a spell in jail, simply for breaking an order that was imposed without evidence and without justification.

Whilst in power New Labour has continually undermined a major right in the UK legal system: the presumption of the accused’s innocence until proven guilty. They have treated those yet to be tried as convicts through the use of Control Orders and treated those proven innocent as guilty through the retention of details on the DNA database. They are now seeking to treat as guilty those who are yet to be even charged with a crime.