Ship Money and National Insurance
Much ink has been spilled over the long term causes of the English Civil War (starting 1642). The Whig school of history has for a long time cited the constitutional infringements conducted by Charles I in his “eleven years tyranny” when he ruled with no parliaments, the most discussed one being ship money.
Ship money was a prerogative tax/rate (so not approved by parliament) which was levied on coastal counties and towns in order to help fund the Navy in times of war. However, not only was Charles collecting this in peace time but he also extended it to all English counties, in 1635. While Charles claimed that it was being used to pay for measures to protect southern England from Barbary Corsairs, much of it was not and was siphoned off into the treasury.
What is surprising, however, is how most opposition to the tax arose after it had been phased out in 1640. The future parliamentarian leadership, in the Grand Remonstrance passed in November 1641, complained about how, despite paying large sums, the piracy problem had not gone away. Despite much drama arising from the issues of ship money during Long Parliament and after, it had not remained a prominent issue at the time and encountered very little opposition. In 1635 only 2.5 per cent of the sum requested failed to come in. Even Oliver Cromwell paid his Ship Money on time. The one notable opposition was the prosecution of John Hampden in 1637, a man who would go on to propose the Grand Remonstrance, who was taken to court and in a moral if not legal victory only lost by seven judges to five. But even then, over 90% of the money was still collected. Collection only ran into problems when Charles decided to wage war on his Scottish subjects in 1639-40 when the amount paid fell quickly to 20%.
So what has this got to do with National Insurance (NI)?
Firstly, they are both claimed to be collected for something they are not. Ship Money was supposed to fund the Navy and national defences against Barbary pirates who were enslaving Englishmen and Women along the coast of southern England. But instead it was mostly used to fund the normal functioning of the government.
Likewise, NI is supposed to be funding primarily our pensions as well as healthcare services through the National Insurance Funds. However, these have been in surplus for over 20 years and their surpluses are growing. As a result, the money is loaned back to the central government meaning that National Insurance is really nothing more than direct revenue to the treasury. National Insurance is not specifically going into your pension pot but is just an income tax under another name, except it is also an exceptionally badly designed one.
Secondly, it is likely to enjoy the same popularity fall when it is eventually removed (please let it be this year). While it would be a stretch to describe ship money as popular, it was nowhere near as unpopular as Long Parliament MPs or Whig historians would have you believe. As they analysed it in retrospect surely it must have been widely unpopular.
I can imagine that we will have a similar situation in the future with national insurance. Currently 53 per cent of people support raising the basic rate of NI to 13% (from current 12%) if it went towards the NHS. Not only would this harm those on the lowest incomes much more than if it was a 1 percentage point rise in income tax (which only gets 43% approval) but again this would still essentially go into the central treasury pot.
NI currently enjoys the relative obscurity and good branding that ship money did before the Long Parliament in 1640 and the Civil War starting in 1642. It has only survived because of its current lack of unpopularity . It either needs to be scrapped or seriously reformed to address the current failures of the system.
As George Monbiot points out, technology will save us
We’re perhaps not quite as gape mouthed in awe as George Monbiot is here on the idea of lab or vat grown food:
It sounds like a miracle, but no great technological leaps were required. In a commercial lab on the outskirts of Helsinki, I watched scientists turn water into food. Through a porthole in a metal tank, I could see a yellow froth churning. It’s a primordial soup of bacteria, taken from the soil and multiplied in the laboratory, using hydrogen extracted from water as its energy source. When the froth was siphoned through a tangle of pipes and squirted on to heated rollers, it turned into a rich yellow flour.
This flour is not yet licensed for sale. But the scientists, working for a company called Solar Foods, were allowed to give me some while filming our documentary Apocalypse Cow. I asked them to make me a pancake: I would be the first person on Earth, beyond the lab staff, to eat such a thing. They set up a frying pan in the lab, mixed the flour with oat milk, and I took my small step for man. It tasted … just like a pancake.
But pancakes are not the intended product. Such flours are likely soon to become the feedstock for almost everything.
That this specific adventure will succeed, well, that’s where we’re less than that awed. That something like this will we’re certain of. As with near every other invention we’ve had over the millennia we’re at about the point where it’s simply going to happen. All those supporting technologies are there and someone is going to crack the roll out of industrial sized applications. There’s very rarely a single point for an invention, rather more a miasma, a cloud, of possibility at this time which someone then crystalises out.
The company itself doesn’t say that this is a genetically modified product and even if this one isn’t then the probability is at least 1 that others occupying the same technological space will be.
Which is interesting, don’t you think? We’ve now one of the arch environmentalists making the same claim we have been for decades. Technology will save us and it’s highly likely to be a GM one too.
No no, that’s OK. No need to pat us on the back for being so perceptive. But we would like you to ascribe a little more weight to what we currently say about the future as a result of our having been, once again, proven correct.
Do drug consumption rooms increase drug consumption?
In today’s Prime Minister’s Questions, SNP MP Tommy Shepphard raised the long-standing campaign from across the political spectrum to pilot overdose prevention sites in the UK. The most pressing need for such a trial exists in places like Glasgow City, where the drug death rate from 2014-2018 was 1227% higher than the 2017 European average. Scotland as a whole has the highest drug death rate in the EU. As the Adam Smith Institute has previously argued, these facilities—which exist in countries like Germany, France, Canada, and Australia—reduce drug-related deaths, alleviate health burdens, decrease syringe litter and engage marginalised populations with drug treatment, healthcare and other services.
The Prime Minister’s response was certainly more encouraging than the previous Government’s attitude. However, he raised the oft-repeated concern that these facilities could increase illicit drug use, echoing previous objections to their introduction. Common sense suggests that very few people would be swayed into cultivating a heroin addiction simply by having access to a place where they were less likely to die from it, but we needn’t rely on assumptions.
Perhaps the only benefit of the UK lagging behind the rest of the developed world in adopting harm reduction approaches to drug policy is that there’s international evidence to test that claim. A 2014 systematic review of 75 articles concluded that “no study found any increase in the total number of local PWID [people who inject drugs], irrespective of the SIS [supervised injection service] studied.”
This is hardly surprising for anyone who has studied the evidence on how wider drug policy affects how many people use drugs: there doesn’t appear to be a strong relationship between the degree of prohibition and levels of use. The Home Office admitted as much in 2014, citing a “lack of any clear correlation between the ‘toughness’ of an approach and levels of drug use”.
More recent studies looking specifically at cannabis have come to similar conclusions. Using data from 38 countries, one study found no statistically significant association between policy liberalization and higher odds of adolescent cannabis use. Another analysis concluded that “available European data suggest...moderate changes in statutory penalties have not been shown to be associated with changes in cannabis use prevalence.” A paper on cannabis decriminalisation in Massachusetts, Connecticut, Rhode Island, Vermont, and Maryland (USA) “did not find any increase in the prevalence of youth cannabis use during the observation period.”
Of course, even if these overdose prevention sites did increase illicit drug use, there would still be a strong case for introducing them. Drug use levels are not the only way to measure harm—and arguably not the most important. If one extra person started using drugs but two people who would have otherwise died from an overdose did not, we’d obviously consider this an overall reduction in harm and suffering. But if the Government’s rationale for holding back life-saving overdose prevention sites is that they may increase drug use, they have nothing to fear. The evidence shows that they don’t.
Comparative advantage is indeed difficult
Comparative advantage is the one non-trivial and non-obvious finding in all the social sciences. That it’s non-obvious is shown by how many otherwise apparently bright and educated people manage to get it wrong.
As here, with reference to the City Corporation’s announcement of how much tax the wholesale finance industry pays. Lots and lots. That haul coming from the manner in which the industry is decently profitable and also from the manner in which it pays rather higher salaries than other Britain based economic endeavours.
So, we’ve got something in which Britain has that comparative advantage. We’re better at this than other things. Or, to aid in understanding, we’re less bad at this than we are at other things - for the real lesson of comparative advantage is that we should all be doing what we’re least bad at and swapping the resultant higher production.
At which point we’re told this:
Henry Parkes, senior economist at the Institute for Public Policy Research, said the report suggested the UK economy is “overly hooked on the finance sector”, however, and needs to “diversify”.
Eh? We’ve found what we’re least bad at therefore we should do less of it? We should deliberately go off and do more of what we’re worse at?
Yes, obviously, comparative advantage is difficult but can’t we at least hope that senior economists manage to grasp the basics of the concept? Apparently not but that does rather colour whatever else the IPPR has to say about economics, doesn’t it?
What's it got to do with you, Matey?
We find it difficult to understand this mindset:
Senior executives in the UK’s top 100 companies took just 33 hours to be paid more than the typical worker’s annual salary, according to data that unions say should be a “source of national shame”.
Well, OK, perhaps not all that difficult. We’re aware that jealousy is a constant in human affairs. But why is what consenting adults do with their own property a matter for shame in the slightest?
Such senior executives are the employees of the shareholders in those companies. The shareholders own the things after all - that being the definition of both ownership and shareholding. If people decide that their employees should be well paid then why is that a matter of shame? Why, even, is it a matter for the TUC to comment upon?
There are a number of subsidiary arguments of course, efficiency wages, the rarity of the required skills, punishing work weeks and all that. But the base and root question here is what’s it got to do with you, Matey?
We cannot cure old age
The 2019 Conservative manifesto committed to building “a cross-party consensus to bring forward an answer that solves the problem, commands the widest possible support, and stands the test of time. That consensus will consider a range of options but one condition we do make is that nobody needing care should be forced to sell their home to pay for it.” (p.17) Such a policy is constructive if a bit thin on specifics. It follows Norman Lamb’s proposal to take the NHS and social care out of politics, something Mrs May had rejected for three years. Progress. We must get away from each party tarring and feathering each other’s proposal as a “dementia tax” or “death tax” or some such. Any strategy for the NHS or adult social care needs to survive changes of government.
In 2011, the government rejected the independent Dilnot Commission report and has produced no Green Paper since. Ironically, the main objection to the Norman Lamb proposal has been that it would take too long. This paper shows how cross-party consensus could be achieved and a Green Paper (for England) published within three months.
Adult social care, unlike the NHS, currently assumes funding by those who need it, with local authorities paying for what they cannot afford. Today’s basic problem is that local authorities cannot afford to do so either. According to the BBC Reality Check, in 2015, 30% of those needing help received none, family and friends helped 37%, 12% paid some or all and 21% were helped by local councils. In 2015-2016, 57% of the 1.8m requests (28% from 18-64 year olds and 72% from those older) were rejected.
The Ministry of Housing, Communities & Local Government (MHCLG) “alongside the council tax precept, gave local authorities an additional £0.4bn in 2016/17, £2.3bn in 2017/18 and £3.4bn in 2018/19, and will give an additional £3.9bn in 2019/20. These temporary grants made up 8.9% of adult social care spending in 2018/19.” But as they were temporary grants, the ability of councils to plan ahead was limited. In any case they were far too small.
Estimates of Local Authority costs are consistently around £20bn towards adult social care in 2016-17 but according to the NAO, the public purse was also responsible for £34bn and £120bn for “Incapacity, disability and injury benefits” and “total health spending” respectively The last figure lies within the NHS costs and implies that two thirds of the NHS budget is devoted to care, not cure. This is clearly debatable but, with NHS bed occupancy at over £1,000 per treatment day and £300 per recovery day, compared with £70-80 per day in an LGA funded care home, limiting the NHS to cure would release serious money for care being provided by local authorities. Delayed discharges from hospital is a well-known problem that has received some attention and improvement, e.g. through the Better Care Fund arising from NICE guidance in 2015, although this could be seen as excessively bureaucratic. In 2016, the NAO estimated the annual England and Wales cost at £0.8bn. Of course the problem has been created by the cuts in adult care funding reducing the adult care beds available. Over half of all hospital beds were occupied by those aged over 65 but no records appear to exist to distinguish between those where cure is feasible and those simply requiring care. Given the huge disparity in costs per bed, this is the key question any strategic review needs to consider, namely how to limit the NHS to “cure” and provide the resources for local authorities to deal with “care”, and, indeed, how the two should be distinguished.
It has been argued that, due to their overlap, the NHS and adult social care should be integrated. The trouble is that NHS England is already five times as big as it should be. As and when NHS England is reduced to manageable units (the size of NHS Scotland say), that could be considered. Meanwhile integration might be considered for Northern Ireland and then Wales.
Finally, the current funding arrangement has taxpayers’ money doled out by the Ministry of Housing (MHCLG) whilst policy and strategy are allegedly set by the Department of Health and Social Care (DHSC). This makes no sense and adds to the perception that the NHS is favoured at the expense of adult social care to the disbenefit of both. So, what is to be done?
The Dilnot, and other such committees, have been made up of experts: not the politicians who have to live with what is agreed. The three main (English) parties need to feel they own the result.
The three party leaders du jour should agree a one-per-party triumvirate to resolve, i.e. take out of party-politics, adult care strategy, future funding formulae and the role of the DHSC. It should also have a neutral chairperson and handful of expert advisors.
Since this is similar to the Liberal Democrats’ own proposals, it is hard to see how they could refuse. A Plan B will be required if Labour does.
On the day of the announcement, the terms of reference (“Who pays?”) should be published and the door opened (for two weeks only) for proposals of 1,000 words, or less, to add to the Dilnot and other proposals already being considered.
Party leaders should be able to replace their representatives where they wish so to do.
The committee should list solutions they consider feasible and score them against (weighted) criteria such as cost.
By the end of month two, preliminary conclusions (green paper) should be published.
By the end of month three: a Government White Paper—acceptable in principle to the three parties, but capable of fine-tuning by Parliament—should be published.
Simples!
Recycling and carbon emissions
One of the things which significantly irritates is how the general fashion is unable to connect the dots. Here the specific example is the idea that recycling is good as a method of reducing carbon emissions. It isn’t:
Oxfam has calculated that carbon emissions produced by the world’s wealthiest 10% are equivalent to those of the poorest half. Today, we publish new research showing that the average Brit will emit more carbon in first two weeks of 2020 than the citizens of seven African nations emit in an entire year.
The good news is that there are increasing signs that the public is ready to act. As many as four in five Britons said they are likely to take one of a number of actions this year to reduce their carbon footprint. More than two-thirds (68%) said they were likely to use energy-efficient products or utility providers and 79% of people said they were likely to recycle more.
Of course, we understand how the position is reached. It is a general assumption that reducing carbon emissions is a good idea. It is equally generally thought that recycling is a good idea. But that does not mean, as is asserted there, that recycling reduces carbon emissions.
Goodly portions of recycling cost more than the landfill of old and the creation of new from virgin materials. That greater expense is evidence pure and simple that more resources are required to recycle than to not do so. One obvious resource that more may - note, may - be needed of is energy. Recycling can therefore increase, not reduce, emissions.
That is, it isn’t true that this general ragbag of all the things people think are nice produce the desired or even claimed outcome. It is necessary to be specific about the outcomes of specific policies, not just assume that if it’s fashionable the outcome will be as desired.
As we've been known to say about property rights
A report from Liberia, about the spread of palm oil plantations. There are good things to say about this of course. Useful economic development in that poor benighted country, a lifting of at least some of the pressure on those Malaysian and Indonesian areas that home pongo pongo and all that. And yet there’s a problem:
Several miles farther on, past endless rows of carefully cultivated palm trees, it’s a slogan that bears little relation to reality. Gbenee Town is a small huddle of huts surrounded by a plantation more than six times the size of London’s Richmond Park.
The townspeople say that the benefits of the plantation’s expansion have passed them by and they have been duped by a government that took the land they were living off and gave it to foreign investors.
The base problem being that these people didn’t own the land. The government could therefore assign it as the government wished. The solution has already - for the future at least - been enacted:
The Land Rights Act, which was passed last year, is key to that effort. It gives communities ownership of ancestral lands, allowing them to make demands of firms that want to exploit it.
Quite so, people who won things get to say what is done with those things. Both the definition and point of ownership. Something worth recalling when people here start to demand that land ownership should be in the hands of the state, eh? When that happens we will only be the occupiers, at Whitehall’s whim, rather than the owners of our own fate.
As we’ve been noting over the years private property rights are the foundation of that freedom from the whims of the state and its governors.
Reasons for government not to do things
Here’s an arm, the list is as long as that and longer. But a crucial component of that list is that government isn’t very good at doing things. As this example shows:
A false claim to the NHS is the only way to avoid a fine
Filling out a form about free NHS prescriptions the wrong way can lead to a fine. As has in fact happened here. It is also not possible to fill out the form correctly:
You are the latest of a number of readers to have fallen victim to indefensible bureaucratic turpitude. Six years after universal credit was introduced, there is still no corresponding box on many NHS forms. The NHS Business Services Authority (NHSBSA) website – responsible for verifying eligibility for free NHS treatment – instructs dental and pharmacy staff to ensure that universal-credit claimants tick the allowance box until the form is updated. Patients who are not informed or, like you, are unwilling to sign a false claim, face fines of up to £100 plus the treatment or prescription charge. Another £50 is added if they don’t pay within 28 days, hence your latest bill.
This is the health care system that is the very Wonder of the World. It cannot furnish the correct box to tick given a six year head start.
This is the point at which we’re all supposed to invoke Kafka but there is no malice here. Just the incompetence of any large bureaucratic machine. Which is, of course, why we shouldn’t use large bureaucratic machines to run our lives.
65 million people simply cannot be run from the centre. Therefore we should not be trying, should we?
If not HS2 then what?
A claim is being made - as we’ve been noting ourselves - that HS2 isn’t worth the candle. So, what instead?
HS2 is a super turkey. Let’s invest in northern rail instead
That is not the correct answer. For it is to make the claim that there is some pot of money which should be spent upon transport. Or that there is some pot of money that government should be spending. Upon something or other.
Neither of which is true. We have a long list of things that the resources of the nation can be spent upon. That list being, quite literally, everything. Money is after all fungible, it’s something that can be devoted to any end.
That a specific transport idea isn’t worth doing - as HS2 isn’t - does not then mean that some other transport project must be done. Or even that anything to be done by government should be done as a substitute. Once we kill one allocation of resources off we need to go back to the beginning again and think through all of the alternative uses of that money, those resources. Then see which one comes top of our new list.
Which could be northern rail. Might be protecting the lesser wagtail (if such a thing exists, creating it if not). Or boosting education, a decent movie about punk rock or a memorial to the Unknown Taxpayer. Or whatever the heck 65 million individuals might decide they’d like to spend their own money upon.
The best manner of deciding between these alternatives is to leave the price fructifying in the pockets of the populace. For it is indeed true that some forms of collective action justify picking those pockets. But each and every such proposal must pass that test of justification. That the wallets have been vacuumed for some other purpose which we now abandon doesn’t mean that some other form of government - or transport - spending now passes that justificatory test.
That government shouldn’t be doing HS2 is entirely true but that doesn’t mean that government must be doing something else. Our default option must always be that if government shouldn’t be doing this one thing then government should be doing nothing with this money. Even, not having the money at all.