We do think this is an interesting test of a polity
Preston, where they’ve gone all local and town hall driven, is quite the fashion in left wing circles these days. We’re not entirely convinced by municipal socialism ourselves even as we agree that it’s likely to be vastly better than any national application of the same ideas. In a review of a book about it The Guardian tells us that:
In all of which the fundamental question is, does it work? Does the patent good sense of the idea get befouled by unintended consequences and unexpected pitfalls? If the Cleveland and Mondragon experiments are so great, why are they not more widely applied? Because of the hostility of financial elites or for more basic reasons?
Here, Paint Your Town Red could do more. It tells us that “in the past five years, Preston council and its partners have almost tripled their spending in the local economy, from £38m to £111m”. Good, but there’s limited detail as to how it has played out across the city. There’s a shortage of voices from satisfied citizens, as opposed to the officials and businesses most likely to approve of the model. Criticisms – that it could lead to a sort of local protectionism, for example – are rather vaguely addressed, and the source of these critiques not identified by name.
Too often, there is a tone of wishful thinking and special pleading, of talking up initiatives that in some cases seem tentative and insubstantial.
Quite so.
Like everyone else we have our moral certainties, our visions of the good world to come. We are, however, hard core pragmatists. If something works to make the folks in general out there - out here- better off then we’re generally for it. If it doesn’t then we’re not. Thus the hard test of any economic polity is whether it achieves this task. Does the Preston model do so? We don’t know yet, do we?
This is also one of the reasons that we’re so keen upon markets. Because it is only when many things are tried, each having to face that hard test, that we find out which of them do achieve that laudable goal.
Another way of putting this is that we’re absolutely fine with what Preston is trying. On the grounds that experiments are desirable because we gain knowledge from them. This does though come with a significant proviso - those experiments which turn out not to work do need to be replaced with other attempts to get things right, don’t they?
Can we trust Public Health England?
Victoria Street,
London SW1
“Good morning Humphrey. There’s something in my in-tray claiming that we will cure the national obesity problem by having every item, on the menu of every chain of cafés, restaurants and take-aways, show its calorie count.”
“Yes, I’m sorry about that, Minister. It’s Public Health England again.”
“I realise that but it’s obviously a daft idea, so why didn’t you kick it out?”
“I did advise them of the precariousness of their argument but as we have arranged the interment of almost all their other ideas, its senior enthusiast is clinging onto this one. He claims their proposals will make the country so healthy we will not need a National Health Service. It would save us £100 billion a year. The Treasury think that is brilliant. They might even give us the money for reforming Adult Social Care for which, as you know Minister, we have a ready-to-roll plan.”
“Poppycock. I read in the papers that this ready-to-roll plan, which I haven’t seen, has cross-party agreement too, except that’s news to the other parties. But what’s that got to do with putting calories on menus?”
“Apparently, it will result in a new slim Britain, remove eating disorders, sort out mental health and save the NHS £6.1 billion, all by itself.”
“Humphrey, you are unusually satirical this morning. Would you like to give me the name of this fantasist?”
“I regret that our Code does not permit me to do that. In my view, we should, on this occasion, allow common sense to bow before conviction. In any case, it reflects well on our moral compass that the government is tackling obesity.”
“Maybe. What is the evidence that this will make a measurable difference?”
“You have put your finger on the very point I raised with my Public Health colleague. He told me it is all very complicated. Obesity is best considered not just as a state of excess of body fat or body mass index above an arbitrary cut-off, but as the disease process, of excess body fat accumulation that has interacting (epi-) genetic and environmental causes and multiple pathological consequences.”
“You took the words right out of my mouth, Humphrey. How about breaking this into identifiable groups of people we can help?”
“Of course, Minister. Obesity has many faces. Our primary concern is with children who have no problem with obesity today but will most probably remain obese as they grow up – and, indeed out. They will then be prone to diabetes, Covid, heart conditions and other disorders. They will die young.”
“Dying young must save money for both the NHS and Adult Social Care. The Treasury should be glad. Have you though of free cigarettes for obese children?”
“Minister, I did not hear that. We are talking of human lives. That said, my colleague failed to convince me that calories on menus would make the slightest difference to childhood obesity. The parents will see the menus, not young children, though maybe teenagers will, but the rot has set in by then. Parents indulging their children with eating out or phoned-for deliveries regard them as occasional treats – not opportunities to make them eat food they dislike.”
“Well, that disposes of the main group. What is the next segment?”
“Now we are into thin people who merely think they are fat: those, mostly teenage girls and young women, with eating disorders. This is really a mental health problem. We actually need to get them to eat more. It has been reported that calorie information on menus will be downright dangerous for those with anorexia or other eating disorders.”
“Of course, obesity is often itself an eating disorder and parents of teenage girls know that rational argument is no help. Have Public Health England researched the impact of this on those with eating disorders?”
“Er, no. As you say, the indications are negative. Furthermore, some research in America showed ‘a slight increase in calorie intake, attributable to increased purchases of higher-calorie entrées.’ So listing the calories is likely to be counterproductive for two of the most critical sectors. Minister, I don’t understand the mind of Public Health England either.”
“As I understand them, Humphrey, these new regulations only apply to non-packaged food and soft drinks purveyed by large businesses, i.e. those employing more than 250 people. So if you put gin in the tonic, there’s no need to mention the calories.”
“We do not wish to upset people. You will notice that the bottom of the press release says that people do not have to have calorie information on their menus if they say they do not want it: ‘people who may find viewing calorie information more difficult may be able to avoid this information in certain situations when eating out.’”
“So the people who most need this information won’t get it? Brilliant that. The overweight people I know are mostly middle-aged or older and know they have a problem. They try dieting and fail. Some, in the spring, are determined to lose weight to get into their swimming costumes, succeed and then put it back on later in the year. Are they the problem we are trying to solve?”
“Not really. The category, to which you refer, is the weight-watcher group. They may not be as slim year-round as Public Health England would wish, but they are more likely to be interested in calories. So Public Health England is targeting them as a willing audience, even though they pose no problem for the NHS. That’s just the way Public Health England does things.”
“Quite correct, Minister. There is, if I may say so, a certain logic in applying the same regulations to unpackaged as packaged foods and drinks.”
“That seems reasonable but we’ve not been putting calorie content on packaging for very long. Quaintly called “energy values” have only been required since 2016. The question is whether, in those five years, anyone has shown that that information has reduced obesity.”
“No. One Loughborough study reviewed 15 projects but they were not really reliable for this purpose for three reasons: there was a lot of variation, calories were expressed as PACE and the research was under laboratory conditions where respondents had to read and consider the PACE data. ‘PACE’, by the way, stands for Physical Activity Calorie Equivalent. As people do not understand what calories mean, ‘the study added labels to food packaging explaining that you would need to run for example 13 minutes after drinking a 330ml can of fizzy drink; 22 minutes after eating a standard size chocolate bar; and 42 minutes after eating a shop-bought chicken and bacon sandwich.’”
“So by just adding calorie data, we are not giving consumers anything they can relate to? Great. If you stopped shoppers coming out of Tesco and asked them about the calorie counts of the packages they have just bought, they wouldn’t have a clue what you were talking about?”
“I have to admit that you have just expressed the kernel of the difficulty. And no doubt, Minister, you are about to point out that if we cannot show it works on packaged foods, there is no reason to believe it will work on unpackaged?”
“Indeed I am, Humphrey. I’m all for indulging Public Health England but there are limits. I gather they haven’t even done a trial run to measure effects in some part of the country that is relatively obese.”
“The USA is just about the only country in the world that now puts calories on menus and they have done the little research there is. Inter alia, there are no indications these listings make any difference and the calories shown are often wildly incorrect, partly because of the practical difficulties of portion control. ‘Worse, the food items with the lowest reported calories — the so-called healthiest — were the most likely to be incorrect.’”
“Humphrey. Is Public Health England right to focus on calories. I know losing weight means fewer calories but, from a broader health perspective, that could be misleading. I read the other day that “Different foods can impact your hormones, hunger, feelings of fullness, and metabolism differently, regardless of the number of calories they contain. Thus, when it comes to your health, not all calories are created equal.”
“Need you ask, Minister. They have been busy with another bright idea. Public Health England has spawned a new quango to take care of all this: “The Office for Health Promotion.” Public Health England will be left to take care of all matters that do not promote English health. I am not sure what those are, whether they need doing by Whitehall or, indeed, at all.”
“Humphrey, this government is driven by the science. Where is the science?”
“We are also action oriented, Minister. We need to act now to stem this tide of obesity. We were too slow to react to the pandemic. We must not be too slow on obesity. Our justification is that 79% of those responding to our 2020 consultation agreed with putting calories on menus.”
“Humphrey, you know perfectly well that one can expect a similar response to any other “nil cost” consultation. Try asking people if they would like to be better off. WE are just virtue signalling, and you know it.”
“Minister, it is not for me to be judgmental.”
“Apart from costs for food retailers, I don’t suppose this will do any harm. The real harm, Humphrey, arises from believing Public Health England’s claims that it will resolve the obesity problem. That is nonsense.”
So what is the correct response to a market corner?
Liam Halligan picks up on the Social Market Foundation report into the lack of competition in the British economy. In which he says that:
While this is a valuable SMF report, I’d say it misses a trick – by failing to mention the residential construction industry. The housebuilding sector now has “all the characteristics of an oligopoly”, according to a 2016 House of Lords report. Prior to the 2008 financial crisis, SME builders accounted for almost 70pc of all homes built. Such firms, once they are granted planning permission, build houses relatively quickly to aid their cash flow, helping to ease our chronic housing shortage.
That share has since fallen to about 40pc, after countless SMEs were wiped out after the Lehman collapse, with over-mighty “volume” builders becoming far more dominant. These huge developers hoover up the vast majority of planning permissions and then sit on them, building out very slowly to keep house prices high in many areas, making more money overall by reaping huge margins on a smaller number of units.
Faced with scant competition, big incumbent developers are producing far too many small, shoddily built homes. The “contrived scarcity” at the heart of their business model is putting home ownership out of reach for a rising share of young families. Until such vested interest are faced down, any number of “planning reforms” (another batch was announced in the latest Queen’s speech) won’t fix our broken housing market.
We don’t agree. Housebuilding isn’t concentrated enough for that to be a viable technique. Yes, we know about oligopolistic competition and all that but you really don’t need that many market players for it to be unviable. Our analysis of why the large housebuilders are gaining a greater portion of supply would concentrate on how difficult it is to gain planning permission these days. The more bureaucracy there is then the greater the ability of those with scale - and thus armies to fight the bureaucrats - to secure those few permissions being granted.
However, let’s take it as being true. This is what is known as a market corner. Owning enough of the supply so as to change the price. As the Hunt Brothers tried to do with silver and innumerable others have tried in various markets over the centuries. The answer to a market corner always being the same - to flood the market with supply. Which is exactly what happened to the Hunts and they all went bust. As always does happen to market corners when supply can react to those artificially heightened prices.
If the major housebuilders are cornering the market in planning permissions - the claim being made - then the solution is to flood the market with planning permissions. That is, planning reforms are exactly the solution to this particular identification of the breaking of the housing market.
Issue enough planning permissions that no one can afford to own enough to control the price. There, we’re done.
At which point, some advice. This landbanking idea as the source of our housing woes. This is an idea that Polly Toynbee has been behind for at least a decade. As rational adults we do know that Polly is that necessary butt end of the compass pointing to valid economic ideas. That she believes it is proof that it is wrong. Our task is only ever to work out why this is so in this particular instance.
Here that’s pretty simple. The claim is that the capitalist speculators have a corner on the market for planning permissions. The answer to market corners is expansion of supply beyond the ability of the capitalist speculators to control. Given that planning permissions are things created at the flick of the bureaucrats’ pens this seems a simple enough thing to do with a reform to the planning system.
You know, issue more planning permissions.
Caroline Lucas always reminds us of Baldrick
Not, we hasten to point out, on the basis of personal hygiene or cooking ability but on that of a surfeit of cunning plans. Every such plan having some great gaping hole between reality and its achievement.
Take this being recommended in a letter to The Guardian:
To fill this gap, the Green New Deal Group is calling for the chancellor, Rishi Sunak, to unveil a new market-leading “green recovery bond” Isa this summer, to keep his March budget promise of an NS&I green bond. Our research shows that this, like the pensioner bonds of 2015, could raise tens of billions of pounds and, as a first step to creating jobs in every constituency, that could be spent on employing a massive multi-skilled carbon army to make all the UK’s 30m buildings energy efficient. Meeting the official UK government target of net zero emissions by 2050 will require making up to 20,000 properties a week energy efficient for the next 30 years.
We have actually read the full plan and variants of it that have appeared over the years. The hole is, well, who pays back the bond?
People invest in these new bonds, that’s fine. The money raised is then spent upon retrofitting UK housing to be carbon compliant - their phrasing, not ours. Well, we’re not sure about the need for this or the desirability of firehosing money at the problem but still, OK. Government guarantees the bonds and the interest rate is perhaps 1%. Just for the sake of the argument, we’ll all run with that.
OK, what then?
One example given is that heat pumps need to be installed in every house and dwelling. From other reports recently we hear that this will cost perhaps £15,000 per dwelling. This strikes us as violating the Stern Review’s injunction that the cure should not be more expensive than the problem but again, let’s simply run with the logic being employed.
Money is raised by government guaranteed bonds to install heat pumps. So, who pays back the bond?
This is not mentioned anywhere in any of the varied reports and proposals.
We can see two alternatives here. The householder never does pay back the price of the heat pump. It’s a free giftie from all of us out here to everyone that possesses - and it will be the owner of the housing that gains from £15,000 being spent upon it - a dwelling. Perhaps this is what is required but if this is so then no new bond is necessary. This is straight and flat out government spending and can and should be dealt with in the normal manner. Government taxes to spend, or government borrows to spend, or government prints money to spend, but no new financing method is necessary in the slightest.
Alternatively, the householder has to pay back the price of the heat pump, plus installation, so that the bonds can be serviced and investors receive their money back plus interest. What is the method by which this is going to be done? It seems a fairly important part of the investment case to us. After all, as Greensill and Gupta are currently showing, paying back money can be more difficult than borrowing it.
Further, if there is some clever scheme by which that multitude of small payment streams - the monthly slice of that £15,000 spread over the years and decades - can be both collected and enforced then what is it? And if we’ve got one then why is this special form of bond required? If 1% green bonds are what the market will fall for, given that we’ve got a repayment mechanism, then why not just general issuance instead of this special form?
This is indeed Baldrick in all his glory. A superficially pleasing idea that fails at the most important point. Bond issuance, the important part of the plan is how does the money come back to the investors? In all the “work” that has been done on this scheme there is not one single mention of this rather important point.
Is the carbon compliance a gift to householders? Or is there a householder repayment system? In either case there’s no need for these special bonds, is there?
At which point a question to the Green New Deal. What is the repayment mechanism?
We have asked this question of the one group member that we do talk to to be met with the insistence that of course our correspondent had absolutely nothing at all to do with this idea. Possibly wisely.
The Sutton Trust proves Hayek right once again
Hayek’s narrow point was that the economy is large enough, complex enough and even chaotic to the point that it simply is not possible for the centre to gain the information necessary to plan it in any detail. The Sutton Trust neatly widens the application of this thought for us:
Universities’ positive discrimination measures risk descending into a farce as new research reveals that almost half of students flagged as “disadvantaged” are in fact well-off.
Russell Group institutions could be handing out lower A-level offers to the wrong students because one of the main measures of deprivation is “conceptually flawed”, according to a new report.
Conceptually flawed seems a bit strong to us. The report itself agrees that some proxy is going to be used to measure disadvantage. They just differ over which one it should be. However the (Pearson) correlations for their preferred measures are only 0.69, 0.56 and 0.47. These being measures that are not widely and freely available. The information that is correlates only to 0.22 and 0.17 levels.
Mathematics doesn’t, quite and exactly, work this way but to translate into useful colloquial, the statement is that “Our preferred measure is only entirely wrong between half and one third of the time and the one used is mostly useless.”
We might think that the planning of society should be based upon something more accurate than this. Or, given that Hayek was and is correct, reality is a complicated place, we shouldn’t be planning given the impossibility of acquiring the information to do so.
We’re reminded of Sir John Cowperthwaite’s refusal to collect GDP statistics for Hong Kong on the basis that some damn fool will only try to do something with them.
Some other method of admission thus seems sensible. How about one or more academics from the institution meets the would be student and then asks themselves “Would I like to teach this person?”
After all, those trying to answer that question are the presumed to be intelligent and clever of our society. What could go wrong?
Or even, if the presumed to be intelligent and clever of our society have been using a measure which is so flawed then what value this idea of technocracy, that the clever and intelligent should be planning our lives for us?
We are unconvinced that the WHO is the solution
Of the varied organisations that have burnished their reputations in the recent pandemic unpleasantness we’d not include the WHO in our list. That capitalism and markets hodgepodge that is the pharmaceutical industry, yes, the development of multiple vaccines in record time does impress. Certain governments have done well at certain parts of their tasks - financing Big Pharma to get on with it being among them. But the WHO, no, not so much.
Yet certain of the international Great and the Good have a suggestion for us:
Helen Clark, former prime minister of New Zealand, and Ellen Johnson Sirleaf, former President of Liberia, are co-chairs of the Independent Panel for Pandemic Preparedness and Response
Their suggestion is that more of our resources should be put under the control of the international Great and the Good:
The WHO must be strengthened and given more financial independence based on fully unearmarked resources and increased member state fees. Among other WHO reforms, the position of the director general should be restricted to a single seven-year term.
More funding is required. A new international pandemic financing facility would mobilise up to $10bn (£7bn) each year for preparedness, with the ability to disburse $50–$100bn at short notice in the event of a pandemic declaration.
Many will offer as a solution - regardless of the problem - that more cash should be sent to people like us. Given recent performance at the WHO this doesn’t sound like all that good an idea. We remain to be convinced that posting more money to incompetence is the way to improve the world.
This is not a mistake, this is the point
We have long been in favour of radical change in the British planning system. To the point of repeatedly calling for its entire destruction. Not wholly and entirely as mere rhetorical exaggeration either. Still, the current changes proposed are a significant step in the right direction. One way we can prove this is by looking at who is complaining:
The moves were described as an “utter disaster” by the Lancashire, Liverpool city region and Greater Manchester branch of the CPRE charity, which lobbies to protect the countryside.
“We will see a lot more houses on greenfield land and in areas of outstanding natural beauty,” said Debra McConnell, the chair of the branch. “The people in the north of England need these green spaces for their wellbeing.”
People actually living where it’s beautiful doesn’t sound like all that much of a problem to us.
The CPRE also warned the bill, which will largely apply only in England, ran counter to the proposed environmental bill and would “take us back to a deregulated dark age of development”.
That deregulated dark age of the 1930s was the last time Britain actually built housing at the same speed as household formation rates. Sounds like a good idea to us. The housing often being built in those ribbon developments in the South that people now fight to buy into. Housing that people want to live in, where they want to live. We tend to think this is the point rather than a mistake.
It fears most of the new homes are unlikely to be low-cost or affordable.
Issuing lots more planning permissions will make planning permissions cost less. Given that the planning permission is between lots of and the majority of the price of a house this is a good way to provide low cost and affordable housing.
The Nimbys are protesting - something is being done right.
And then there’s this:
The councils body the Local Government Information Unit said the changes would “leave local government with the political liability on planning whilst depriving them … of the powers to manage it effectively”.
Well, yes, our collective problem is rather that local government hasn’t been managing this effectively for around and about an entire lifetime. Ever since the management powers were first granted in fact. About time we change a system that hasn’t worked for 70 years, isn’t it?
Making bonsai cabinets
Cabinetry is not what it was. Today’s cabinets turn up in flat packs, and too many pieces do not fit together. The Prime Minister du jour hopes the veneer will mask the cracks and the poor quality of the timber. The current Cabinet numbers 26 and the new Shadow Cabinet 33. Jesus Christ in AD 29 and David Cameron in AD 2012 may not have had much in common but both their Cabinets numbered 12. Research indicates that the most effective size of a public corporation board is just under 10 and, surprisingly, the average actual size is 9.2.
The size of Cabinet really depends on how the Prime Minister wants to use it. If its purpose is to debate and, through that, decide policy and what the government wants to achieve, then 12 is as good a number as any. If, however, these matters are decided elsewhere, then they may be tested in cabinet but its role is really to be the audience. To applaud, the more the merrier. The extent to which Margaret Thatcher welcomed debate in cabinet is itself debatable but the fact is that her second cabinet numbered 22, the same as her first.
Tony Blair, renowned for sofa decision-making, got through 48 cabinet ministers during his 10 years in office, but many of those were the same people in different roles and others just had short stays. The total cabinet at any one time numbered about 25 – perhaps more of an audience than a debating group.
Running a government may or may not compare with running a large corporation. Some corporations are larger than some governments and employ more people. The key governance distinction in business is between executive and non-executive directors, the latter being there, in essence, to keep the former honest. In democracies, that role falls to parliament; Cabinet is essentially executive. On that basis, one has to question whether the non-executive members of the current Cabinet should be members at all.
Current Cabinet numbers exclude Larry, “Chief Mouser to the Cabinet Office of the United Kingdom of Great Britain and Northern Ireland”. Appointed in 2011, he must now be nearing retirement. The office predates any others in cabinet: the first was appointed by Cardinal Wolsey c. 1515. Larry may be the longest serving member of the Cabinet Office but he does not attend Cabinet meetings, or usefully if he does. His role is specific: catching and eliminating rats. The Chief Whip has much the same role; valuable as it is he should not need, normally, to attend Cabinet. Likewise, the Attorney General, Leaders of the Lords and Commons and the Chairman of the governing party. At present, this seat is taken by Amanda Milling. It is not clear why she gets the seat rather than her Co-Chair (Ben Elliot) who has held that appointment longer. Those changes would reduce the current Cabinet from 26 to 21.
Then we have two specialist ministers: Alok Sharma, President of COP26 and Lord Frost, minister for annoying the EU. In the same way as the Financial Secretary, Steve Barclay, and indeed anyone else whose specialist expertise is needed, they should be summoned when their particular expertise is needed. We are now at 18.
The final cull should be the number of departments represented. It is a matter of political philosophy whether the UK government tries to do too much. If it attempted less, would it do better? The pandemic has distorted this picture. Some departments do little beyond divvying up the money HM Treasury provides between those who will actually do something. The Department of Housing, Communities and Local Government is a case in point. The work and the spending are almost entirely undertaken by local authorities. Yes, some policy is needed but that does not need thousands of civil servants and a Planning Inspectorate devoted to overturning local democracy. Merge it with the Department for Transport to which similar comments apply.
Much the same also applies to the Department for Culture, Media and Sport. Yes, we need some regulations in this area but we have plenty of Regulators, supposedly independent of government, for that. Merge it with the Department believed to be for Education which has similar Regulators and disbursement activity.
The final departmental shrinkages should be applied to those for Scotland, Wales and Northern Ireland. Since devolution, they have been little more than liaison offices doing, in the cases of Scotland and Northern Ireland, more harm than good. Michael Gove will in future be operating from Glasgow for half his time and, as Minister for Everything Else, he is a busy man. The Westminster government failed to involve Ulster politicians in resolving the border problem, and now the revision of the Protocol. Surprise, surprise, we now have trouble. My great-grandfather when he was deputy head of the Royal Irish Constabulary used to say he had more troubles with London than with the Irish warring factions back in 1900. Some things don’t change. We do have a Minister for the Union, one Boris Johnson, but he cannot show his face in Scotland. We need to replace the three current Secretaries of State with a separate Minister for the Union who understands that the role is to provide glue, not quasi-colonial supervision.
We are now down to 14 and that seems as good a number as any. It would be wearisome and unnecessary to review the composition of the 33 member Shadow Cabinet in like manner because the operative word is “shadow”. The whole point of the concept is that the number and roles of its members should match those of the actual Cabinet, i.e. 14 in this analysis. Each should monitor and challenge his or her opposite number.
Any trained craftsperson knows that cabinets should be made from hard, well matured timber. The Chinese Cabinet (the “Politburo Standing Committee”) has only between five and eleven, currently seven, members. Their average age is over 60. By contrast, the average age of Johnson’s 2019 Cabinet was 48. Governing a country where no opposition is allowed may be easier, but one has to be impressed by the quality, steadiness and effectiveness of Chinese government, something that is by no means true of all non-democratic countries.
Ultimately the quality of a Cabinet depends on the skill of its maker. Margaret Thatcher is regarded by many as a great Prime Minister who revivified the UK, unblocked the economy and hand-bagged the EU. Her record with her Cabinets, however, was more mixed. John Major was not exactly supported by the “bastards”. His long and hard negotiation with the other EU leaders in Maastricht to extract the UK from the “Social Chapter” was a personal triumph. At the end they gave him a round of applause but his Cabinet gave him no credit for it.
Coming to the present day, most people would consider Johnson’s cabinet-making skills, ignoring their policies and peccadillos, superior to Starmer’s. His success as London mayor, without any qualification for the job, must be down to that. Sir Keir Starmer is clearly a fine lawyer but was not so clearly a great CEO for the Crown Prosecution Service (CPS) from 2008 to 2013.
For example, he claimed to have sorted it: “The prosecution service is strong; focused and capable of excellent standards of delivery. It is time now to build on that secure platform and to embed the public prosecution service at the heart of delivering criminal justice in the 21st century.“ This was not quite the conclusion of the Commons Home Affairs Select Committee in October 2018: “While recorded crimes have risen by 32% in the last three years, the number of charges or summons has decreased by 26% and the number of arrests is also down.” In fairness we should also note that amongst his successor’s claims was “A new Poor Performance Policy was introduced” [sic, p.11].
In short, whatever skills the Cabinet-maker brings to the task, the Cabinet should be small, about half the present size, made of well-seasoned timber, do what it is supposed to do and not rely on veneer.
Back when we were talking about payday loans we said this would happen
There was a time when activism highlighted the disaster of high interest payday loans and doorstep lending. As we and others pointed out this is simply an inherently expensive thing to do:
Competition seems to limit payday lenders’ profits as well as their prices. This study and this study found that risk-adjusted returns at publicly traded payday loan companies were comparable to other financial firms. An FDIC study using payday store-level data concluded “that fixed operating costs and loan loss rates do justify a large part of the high APRs charged.”
Is a 36 Percent Interest Cap in Order?
Even though payday loan fees seem competitive, many reformers have advocated price caps. The Center for Responsible Lending (CRL), a nonprofit created by a credit union and a staunch foe of payday lending, has recommended capping annual rates at 36 percent “to spring the (debt) trap.” The CRL is technically correct, but only because a 36 percent cap eliminates payday loans altogether. If payday lenders earn normal profits when they charge $15 per $100 per two weeks, as the evidence suggests, they must surely lose money at $1.38 per $100 (equivalent to a 36 percent APR.) In fact, Pew Charitable Trusts (p. 20) notes that storefront payday lenders “are not found” in states with a 36 percent cap, and researchers treat a 36 percent cap as an outright ban.
That’s the American experience but limitations were placed on what could be charged here and Wonga and others left the business. Provident Financial is now also leaving. From those who demanded this change we now get a new insistence:
I continue to have little regard for the business model of financiers like Provident Financial. But there is a problem now they and Wonga have left the market, and that is in some people accessing credit at all.
It is vital that those on low income with low or no savings have access to credit.
Small sum and short term credit is simply an expensive thing to provide. Parts of Goodwill in the US tried to do it on an entirely non-profit basis and had to charge 200% APR just to balance those books.
But this is how the activist gravy train works. Demand the abolition of short term small sum credit then once achieved, demand the creation of a small sum short term credit industry.
A little advice on what we think would make a better world. Why not come up with the solution first? Create the better system then compete the old out of business instead of using the law to ban. On the basis that people might really need the goods or services on offer. Depriving people of what they need is not quite the way to do things now, is it?
Labour's salvation will be Burkean conservatism
There is a certain amusement in watching the British left thrash about in trying to reinvent the reason for their gaining power. John Harris here is perceptive about which parts of activism are making a difference:
Whenever we are on the road for the Guardian’s video series Anywhere but Westminster, we now make a point of focusing on the sources of hope we have found in places as diverse as Grimsby, Walsall, Stoke-on-Trent and inner-city Edinburgh: the kind of local initiatives and projects that sit apart from the state, and are often run by energised, inspirational women. As romantic as it may sound, these things look to me like the modern equivalents of the miners’ institutes, friendly societies and working-class self-help organisations that were the wellspring of the early labour movement and the party it eventually spawned.
They are also the modern equivalents of Burke’s little platoons, the people who make society work. The lesson perhaps being that what was spawned, that national party, wasn’t quite the point. Rather, the little platoons having the freedom to do their thing is.
To attempt to bring them anywhere near formal politics would be a difficult business, made even harder by the fact that many of the people involved, understandably, have little interest in such things.
Well, quite. The task of a national party, if it is the little platoons that do the good work, is to ensure that the national system leaves the room for the little platoons to do their good work. That is, a free and liberal - classically liberal - society that doesn’t just leave people to get on with it but allows the room for people to get on with things. The national party’s job becoming to insist that the nation has to get out of the way and let the people do their thing.
All of which is a most conservative political philosophy and one we’d be most interested to see revive in the Britain of today. After all, given the Conservative Party of the current era there does seem to be a gap available there. We think it’s unlikely that this idea will catch on but if the free and liberal society comes with “Labour Party” splashed on the masthead well, so be it. It’s the result that matters, not who claims credit for it.