Douglas Mason

Today (13 December) marks 20 years since the death of Douglas Mason, the prolific Adam Smith Institute author, who proposed to replace council ‘rates’ (a local property tax) with a per-capita charge for local services — which was immediately dubbed the ‘poll tax’.

Everyone accepted that the ‘rates’ had to go: they were fixed in arbitrary and unfair ways, and only a tiny minority paid them, giving the majority an incentive to press for higher council spending. Several inquiries had proposed other options, such as local sales or income taxes, but none found favour. Eventually Mason’s idea was adopted, but without many of the safeguards he proposed, which made it unpopular and a focus for discontent.

Most of Mason’s other ideas were much more successful. In A Home for Enterprise, he proposed that, given the illiberalism of the new China, the UK should give right of abode to Hong Kong residents. It was after his death, but eventually the Cameron government accepted this important humanitarian principle. In Time to Call Time, he reviewed the evidence for more liberal licencing laws, another policy that was subsequently adopted. In Sunday, Sunday he made the same case for Sunday trading. In Privatising the Posts, he advocated Royal Mail privatisation, which again occurred later. And his case for privatising the Forestry Commission, Wood for the Trees, was thwarted only when a group of celebrities (who plainly did not understand the policy) objected.

Mason’s talent was to take an issue, be it regulation or taxation and state control, explain its history, review its problems, explain how state and political involvement made things worse, show how non-government solutions would be better, then put forward a range of options, complete with practical ways of implementing them. Often he was well ahead of public opinion, but in many cases, as with licensing and Sunday trading, opinion eventually caught up with him.

Douglas Calder Mason was born in Dunfermline and went (like the ASI co-founders Madsen Pirie and Eamonn Butler) to the University of St Andrews. A science fiction addict, he amassed what was perhaps the UK’s largest collection of Sci-Fi anthologies such as Analog and Astounding, many going back to the first issue. He also loved and sold antiquarian books. In 1990 he collapsed outside Parliament, where he worked, and was given a cancer diagnosis with ‘months, not years’ to live. But he lived another 14 years, continuing to write, lecture and travel until his death in 2004.

You go Angela, you go girl!

Apparently Angela Rayner is going to do something sensible about Britain’s housing woes:

Labour bid to ‘bulldoze’ the Home Counties

How excellent. That Green Belt around London - there are other versions around other cities and areas too - means that it is impossible to build houses in the most valuable area to build houses in the country. This is an obvious nonsense. The very definition of wealth creation is moving an asset from a lower valued - say, golf course, parking lot or green field - to a higher valued one - say, underneath a house. So, given that we like being richer, wealthier, we should do that.

We have a law against doing that, the Town and Country Planning Act 1947. Specifically and deliberately enacted to stop people doing exactly that wealth creation. The underlying reasoning was that if those rolling acres got built upon then the proles might have decent housing that proles would like to live in, where proles would like to live. Of course that cannot be allowed now - only the haute bourgeois should be allowed such a freedom.

So, good.

Then the not so good:

Labour has been accused of seeking to bulldoze through the Home Counties as Angela Rayner prepares to unveil the biggest overhaul of planning rules in a generation.

The Housing Secretary will on Thursday unveil a new National Planning Policy Framework (NPPF) intended to pave the way for thousands of estates across the South East.

Ms Rayner’s proposals – which will include building on the green belt around major cities such as London – are expected to go even further than a draft version of the framework, which had proposed building 69,000 houses a year in the South East.

Because maintaining the national planning will retain exactly the basic problem here, the national control of planning. The answer is simply to not have planning control at that national level. Blow up the TCPA and successors. Proper blow up - kablooie.

People should be allowed to build houses where they think people would like to live. Further, the houses built should be of whatever type the builders think people would like to live in. At whatever density that is and so on. At which point market forces will very quickly zero in on the production of housing of the type, location, size and greenery of what people do wish to live in.

The only complaint we’ve got about Ms. Rayner threatening to concrete over the Home Counties is that she’s not, in fact, threatening to allow people to do that. She should.

Tim Worstall

Non-Dom Non-Sense

Scrapping the non-dom tax regime, only to fudge its replacement, is an economically senseless, political move. Such a move, initiated by the previous government, ignored the available evidence and will only accelerate the exodus of wealthy individuals from the UK. By definition, globally mobile, remittance basis non-doms don’t have anywhere near the level of ‘life inertia’ which barely anchors the domiciled wealthy to our shores. Emigration to Switzerland – with its favourable forfeit system – or Italy – with its €200,000 flat fee – is a very real option, particularly for the richest non-doms.

And yes, it’s not just about tax – from top class universities to the City of London, the UK has abundant natural advantages which will always have their lustre. But crime is high, public services are on their knees, and with an already high tax burden, the scrapping of the non-dom regime could push people over the edge.

This is bad news for the country, particularly given that millionaires who up-sticks will no longer have investment home-bias to the UK. We’ll have less productivity enhancing investment, job-creating spending, and wealthy tax contributors (the average non-dom pays £120,000 in income tax p.a). It seems odd that the government would bite the hand that feeds it, particularly as non-dom tax receipts hit record highs, already generating £8.9 billion a year. Government estimates that the changes will raise £3.2bn in extra revenue, of course account little for the change in behaviour that the policy seems almost actively seeking to engender.

The most harmful single aspect of the Government’s changes appears to be the imposition of inheritance tax on the worldwide assets of non-doms, for as long as 10 years after they have left the country. In a survey by Oxford Economics, this was cited by 80% of non-doms and 57% of their advisors as the main reason for considering relocation. For a government which had the sense to rule out an exit tax on the capital gains of wealthy people leaving the UK, it seems strange that they are willing to implement the ultimate exit tax – one on death – which is referenced as the biggest reason to get out of the country before April 2025 and will no doubt discourage new inward HNW migration. The prize? A supposed £430 million boost in tax revenue to squander on bat tunnels.

Shelter is shrieking too much about homelessness

As we’ve been known to point out before Britain certainly has problems but some are rather over-egged, shrieked about too much. At which point Shelter’s latest hysteria:

Soaring private rents, rising evictions and a chronic lack of affordable social housing have led to homelessness in England increasing by 14%, research from Shelter reveals.

The charity described its latest figures as “shocking” and “astounding”. They are contained in a report that estimates that on any given night more than 354,000 people in England are homeless, which is one in 160 people. That includes 161,500 children.

Shelter said the figure had risen by 44,500 people (14%), from one in 182 people, in just one year.

We are unconvinced. There is a number for people who are homeless, those sleeping rough:

About 3,900 people are sleeping rough on any given night, a 10% increase.

Near all of whom are suffering from significant mental health or addiction problems, usually multiply. This is not, in fact, a housing issue, it’s one about Care in the Community more than anything else.

But back to housing itself. As we’ve remarked before what Shelter is counting is the number who would be homeless - really, actually - it it were not for the welfare state we’ve already set up to make sure that people are not - really, actually - homeless.

Now please note here, this is not our example, this is the one Shelter uses in its own press release from which, obviously, The Guardian article is written:

Shelter said people were often experiencing homelessness for the first time in their lives.

It gave the example of Sally, 43, who is living in temporary accommodation in Dorset with her 14-year-old-daughter. Sally was evicted and spent eight hours on the street before getting a hotel room.

They are now in an unsuitable one-bedroom flat that is noisy and scary, she said.

8 hours, eh? Unsuitable you say? We say that’s pretty damn good for government action. In fact, we’d say that’s really very good indeed. And yet this is the exemplar of the horrors that the charity wants to use?

Of course, we’d all agree that British housing needs sorting out. More of it and cheaper - with the obviously joyous point that more will mean cheaper - is something we ourselves demand. But that problem of families being turned into homeless waifs to sleep on the streets does, rather, seem to have been solved already. 8 hours you say? One bedroom flat? Gosh.#

Tim Worstall

F. A. Hayek's "The Pretence of Knowledge" Lecture: A Critical Examination of Economic Knowledge

Fifty years ago today, the great economist and political philosopher F. A. Hayek was awarded the Nobel Prize in Economic Science. He used it as the opportunity to deliver a blistering lecture on ‘The Pretence of Knowledge’ — arguing that economists knew far less than they thought they knew, and that it was very cheeky of them to call economics a ‘science’ at all.

The award came, after all, in the mid-1970s, a decade marked by considerable economic turbulence, including oil price shocks, stagflation and unemployment. That was the legacy of twenty-five years of centralised ‘economic planning’ and Keynesian policies that saw government intervention as the way to manage the upswings and downswings of economic cycles. (The trouble was that politicians found it much easier to do the spending bit than the cutting-back bit.) 

I remember Hayek telling me that the success of an economy was probably inversely proportional to the number of economists it had. And when the professional wisdom of the greater majority was as wrong as it was, that should come as no surprise.

His Nobel lecture ‘The Pretence of Knowledge’ searingly critiques the assumptions underpinning economic planning and highlights the limitations of knowledge in the context of complex economies. 

At the heart of his argument is the idea that knowledge is scattered, partial, fleeting and often mistaken. So how are central planners to deal with that? And there is just so much information in a modern economy — millions of buyers, millions of sellers, millions of products and processes and distribution chains that are local and national and international — all of which is relevant to how things turn out. No single individual or institution, observed Hayek, could ever possess all the information needed to make fully informed economic decisions for a whole society. Rather, the relevant information is dispersed among countless individuals, each with their own unique and focused insights and knowledge of their personal values and circumstances. It is this diverse spread of information that feeds the market economy and steers production to the goods and services that people want; not what planners might think they want.

To Hayek, the problem of creating a rational economic order was not the planners’ focus on steering production and distribution. It was a problem of knowledge — what should be produced and to whom it should be distributed. That is a problem that markets solve minute by minute, across the world, and very efficiently. No government planner could compete with that.

Hayek warned that economists’ and politicians’ belief in their ability to control economic outcomes is a dangerous illusion. They neither understand the details of how economic life works, nor can they predict it (as genuine scientists might predict the natural world). Their ‘pretence of knowledge’ makes them overconfident of their powers to manipulate economic systems, resulting all too often in unwelcome and unanticipated results. Their interventions (such as wage and price controls) disrupt market signals, leading to gluts and shortages, waste and inefficiency. 

Hayek was in no doubt too that the assumption of the supposed experts that they can dictate the best course of action for society could lead to increasing authoritarianism as decision making shifts from individuals to the authorities. The threat to individual freedom is obvious. 

As contemporary politicians expand government into more and more corners of our lives, Hayek’s warning from 1974 becomes increasingly important. To put it simply, economists and politicians must realise the limits to their knowledge — and should have a lot more humility about that fact.

The Thames Water problem is wholly caused by OfWat

As we all know there’s a considerable call for more regulation of the English water companies. Even, a call for considerably more regulation of the English water companies. What all too few are willing to acknowledge is that it’s the current regulation of the English water companies causing at least one of the problems.

So, Thames Water requires refinancing. Ho hum, the sort of thing that does happen in capitalism. The sort of thing that is dealt well with by capitalism - need more capital, who you gonna call? The capitalists, obviously.

But even The Guardian has noted the problem here:

Investors have also expressed interest in taking a new stake in the business, which is needed to secure its finances in the longer term. However, they are still trying to find out what terms they might win from the beleaguered company, the UK government and the water regulator, Ofwat, if they provide billions of new equity funding.

As we’ve pointed out before OfWat is sitting there, opposable digits in fundament and mind in neutral:

That’s from OfWat, the regulator.

Until prices, therefore cashflows, for the next 5 year period are known there is no possibility of even examining, let alone solving, the financial structure. Therefore no solution is possible until that publication date. Everything said before that date is pure vapidity.

Which does give us an interesting insight into Thames Water’s problems, no? Capitalism and markets might well be able to solve this problem if it weren’t for having to wait for the bureaucracy….

The expected publication date is Dec 19th. Nothing can or will be done until then.

Of course, something useful could be done. A phone call along the lines of “Thumbs out, Mateys, and publish” would bring forward the ability to create a solution. But that would be to ask a bureaucracy to actually aid in solving a problem caused by that very bureaucracy. That’s not how this brave new world of mission oriented - with strict conditionality - high investment governance works, is it?

Tim Worstall

How to Re-Start Growth

Sensational ideas on re-igniting growth from US economist Tyler Goodspeed yesterday, at the Ralph Harris Memorial Lecture in Westminster.

The late Ralph Harris was the first Director-General of the Institute of Economic Affairs, a modest man who forced himself to be outgoing to spread the message about markets, build up an impressive think-tank, and importantly, to encourage young liberal-minded activists (like me, Madsen Pire, and many others). Tyler is one of the most gifted young economic historians with two PhDs, several books, and a spell in the White House to back up what he says.

All the factors of production in the UK are compromised, he explained. Take Land. Clement Atlee’s decision in 1947 to create no-build “green belts” round our cities choked off our urban production; and other 1947 planning restrictions are still killing productivity today. Then Capital. Our capital markets aren’t supporting startups and small businesses enough, because tighter liquidity regulations mean it’s safer to lend to the government than to business. Labour. We have very high marginal taxes, that cut in at much lower incomes than, say, the US. It’s a massive disincentive to work. And Energy. Because we are committed to banning fracking and phasing down gas, we find ourselves importing energy and energy sources — at great cost — from the US and other places.

It’s impossible to have much in the way of production when your main factors of production are squeezed like this, by government bans and regulations. (I would add another, Entrepreneurship which has also been stifled by high taxes and other costs on smaller businesses.) And things have got worse since the financial crash of 2007-8. The trend of growth was upward in the US and UK until then. The US took a hit, then resumed its upward growth. The UK flatlined. It’s pretty obvious why: our taxes rose, and our regulations got even more crushing.

So, what to do? First, says Tyler, we need a Policymaker Hippocratic Oath. First, do no harm — in this case, to the productive system of the nation. Second, remember that people are policy. If you have bureaucrats like the suits in the Bank of England and Whitehall, you’re going to get policy that suits the suits, not the productive public (which ties in with something Liz Truss says: that the bureaucracy controls policy these days, and ministers find themselves just mouthpieces for what the blob decides). Third, we need the politicians at the very top to understand the importance of productivity and markets for growth, people with genuine ideological conviction.

If only our mushy, all-thing-to-all-people political class produced such people!

To remind: No one - at all - measures life expectancy by place of birth

We’ve pointed this out a number of times before. No one - absolutely no one at all - measures life expectancy by place of birth:

It is a league table that no one wants to top. For the first time in 20 years, Blackpool, a once-glamorous seaside resort, this week overtook Glasgow to have the lowest average male life expectancy in the UK.

Men born in Blackpool will now live until just after their 73rd birthday on average, according to the Office for National Statistics (ONS) study, six years less than the average in the rest of England.

The figures highlighted an uncomfortable truism about modern life in Britain: wealth brings health and poverty kills, in what the ONS called a “clear” north-south divide.

The first paragraph could well be correct. The second is not. Yea even the ONS is wrong on this:

The 10 highest local area male life expectancies at birth were all located in the south of England; the 10 lowest were in Scotland, in the north of England and in Wales.

We do not measure lifespan by place of birth. We measure life span by place of death.

To give a personal example, as and when - hopefully long delayed - the Grim Reaper comes for me I will contribute to life span figures for a small town in the Alentejo, in Portugal. Not my place of birth (Torquay), my place of upbringing (Bath, relevant for any measures about Sure Start, primary school and all that) or any of the other places I’ve lived (the US a couple of times, Italy, Russia and so on). Now, yes, I’m probably more mobile than most over life so far. But it’s still vital to grasp this point.

At the level of detail the ONS is reporting there are some 400 (-ish) local areas in the UK. What is being measured is age of death of a person then registered against the one of those local areas that death happened in. OK, useful number. Interesting to know. But what it is not is the expected lifespan of someone born in that local area.

For people move around during their lives. Few move country quite as much as I have done but there’s always a certain amount of internal migration. And the lower we go in our area measurement the greater will be that migration rate. It’s almost certainly true that the vast majority of deaths in the UK happen to someone born in the UK. This becomes less so when looking at the constituent nations, less again when looking at county, lower again at this local area and who, really, thinks that anything more than a distinct minority dies in the same council ward they were born into?

The importance of this is that without knowing the rates of internal migration - which we do not know - we cannot now ascribe conditions at birth to length of lifespan. Sure, sure, we all agree there will be influences. Obviously. But our expected lifespan numbers are a proxy for this. And a proxy that does not work at the more detailed levels of population study. Therefore we cannot use the more detailed numbers for smaller geographical areas as guides to policy.

Anyone who now tries to say that we’ve got to do something about babbies in Blackpool is not just wrong they’re ignorant. Because the information we’ve got doesn’t tell us anything about babbies in Blackpool. It tells us the age people in Blackpool die at, but it’s “people in Blackpool” not “people born in Blackpool”. Those two are only the same if there’s no migration at all across local authority boundaries in and or around Blackpool. Something that simply is not true.

Yes, yes, statistics are nice to know and all that. But before we use them to do anything we need to know exactly what is being measured. Expected lifespan statistics are the age at which people die in a particular location. Not, not at all, the age at which someone born there is going to die. We simply do not have, in any shape or form, statistics relating lifespan and place of birth at any detailed geographic level.

Tim Worstall

Shining a Light: Why Britain Needs a Public Works Register

In an era where private companies routinely provide detailed financial disclosures to their shareholders, the British government's approach to transparency remains stubbornly outdated. Each year, hundreds of billions of pounds flow through government coffers, yet British citizens – the true shareholders of our public institutions – have remarkably little insight into how their money is being used. While the government’s recent promises to focus on "value for money" sound appealing, without genuine transparency, such commitments amount to little more than political rhetoric.

The opacity of government operations creates a perfect environment for inefficiency and waste to flourish. Information about public sector projects and procurement is currently scattered across departments, buried in obscure reports, or simply unavailable to the public altogether. This fragmentation of information doesn't just frustrate taxpayers trying to understand how their money is being spent – it actively hampers parliamentary oversight, prevents meaningful media scrutiny, and makes it nearly impossible for researchers to identify patterns of wasteful spending.

The solution to this challenge lies in embracing the digital age: Britain needs a comprehensive Public Works Register. This would be more than just another government database; it would serve as a searchable, real-time window into the operations of our public sector. By leveraging the newly boosted authority of the centre of digital government at DSIT as a coordinating department, with oversight from the announced Office for Value for Money (OVfM) at the Treasury, we could create a powerful tool for accountability that transforms how citizens interact with their government. More importantly, it would make these two bodies actually have something to do that serves the country rather than just one political party’s design. 

The beauty of this proposal lies in its practicality. Much of the necessary infrastructure already exists. The Government Digital Service has already demonstrated some ability to build user-friendly platforms for citizens and civil servants. Dashboards were proving useful in tracking government delivery and Starmer has said that he wants tracking of targets – so let's expand beyond this. Departments already collect vast amounts of data about their operations, spending, and outcomes – they simply aren't required to make this information accessible to the public in a meaningful way. What's missing isn't technical capability but political will.

The New Zealand Infrastructure Commission has implemented a dashboard of its own. Using Tabluea’s API, it tracks 6,058 projects from commission to completion, setting overall project deadlines broken down into different stages. Users are able to filter the projects by the Ministry undertaking the works, the type of project, and where in the country it is. The British government could very easily copy such a system.

Critics might argue that creating such a system would be costly or place an undue burden on civil servants already busy with delivering a new programme for the government. However, this argument misses a crucial point: most of the required data is already being collected for internal purposes or for bodies like the Public Accounts Committee. It’s just fragmented. That means accountability is fragmented. The real change would be in making this information accessible and standardised. Furthermore, the potential efficiency gains from reduced waste and eliminated duplication would likely far outweigh any implementation costs. Citizens, researchers, private sector firms looking to supply into government, the media, and politicians in Parliament would all benefit from simply knowing what’s going on, what’s being spent in detail on what, and how it’s going in terms of delivery.

Security concerns on certain projects could be addressed through careful system design. Not all government information needs to be public – sensitive data related to national security or personal privacy can remain protected while still allowing unprecedented access to information about how public money is spent and what results it achieves.

The timing for such a reform could not be better. Labour's emphasis on value for money provides a natural opening to push for greater transparency. The recent establishment of the Office for Value for Money, combined with existing digital infrastructure and expertise within government, makes implementation more feasible than ever before, and so too does the development of recent AI products and software adoption and diffusion across government. 

What's needed now is sustained pressure to make it happen.

The technical implementation would require several key elements working in concert. The system would need standardised reporting protocols across all government departments, integration with existing government systems, and a mix of automated and manual data collection methods. Non-Executive Directors across departments could be given responsibility for data accuracy, while a cross-departmental verification team within DSIT and the OVfM could ensure consistency and reliability.

But the true value of a Public Works Register would extend far beyond simple transparency. By making government operations more visible, we would create natural pressures for better project management and more efficient use of resources. Departments would be incentivised to demonstrate value for money when their activities are open to public scrutiny. The availability of comprehensive data would support evidence-based policy making and enable researchers to identify best practices across government.

Moreover, this transparency would foster innovation. When government data is made accessible, developers, researchers, and civil society organisations can build tools and conduct analyses that further enhance public understanding and oversight. The private sector has long understood that sunlight is the best disinfectant – it's time for the government to embrace the same principle.

The contrast with the current system could not be starker. Today, citizens trying to understand government spending must navigate a labyrinth of departmental websites, freedom of information requests, and dense financial reports. A Public Works Register would transform this landscape, offering a single, comprehensive view of government activities that any citizen could access and understand.

If you’re a firm that has government contracts there is a clear win too, instead of waiting on personal relationships with civil servants to know what’s happening you’d know what’s delayed across a department. Your credit risk and political risk would be decreased, too many firms looking at the state of government finances know the risk of arbitrary cancellation of projects that happen at fiscal events in government. An early heads-up means better planning and more efficient resourcing. More realism, fewer corrections. With the government taking up an increasing amount of economic activity, this is more and more important. 

Let's be blunt here. This is basic stuff. Knowing what the government is working on, all in one place, line by line itemisation, delivery schedules, all of us citizens are able to know if civil servants or partner firms are falling behind. Everyone is able to see if the Government and the party in power has been honest with the electorate over its promises and its ability to deliver. 

For those serious about government accountability and efficiency, supporting a Public Works Register should be an obvious choice. The technology exists. The infrastructure exists. The only question is whether there's political will to shine a light on government spending. In an age where citizens expect and deserve transparency from their institutions, it's time for the government to step into the light.

As Torsten Bell doesn’t quite say, we should be more like the US

We assume that this is not mentioned out of embarrassment for Torsten is of course far too bright not to have noted it.

If talent and opportunity were equally distributed, the average winner would come from a middle income background. The reality? The average laureate grew up in a household just below the top 10%. More than 50% come from the top 5%. Dads of laureates are likely to be business owners, doctors or engineers (not politicians, sorry kids).

So either talent is hugely unequally distributed, concentrated among richer families, or opportunity is. It’s the latter. Reinforcing the case that a more equal sharing of opportunity would mean more scientific progress, the authors show that cities that have more intergenerational mobility produce more laureates.

Seems a reasonable explanation to us. We can imagine that the leisure to ponder the world was something in short supply when all hours had to be worked just to survive. But that sorting mechanism, is there a way to do it so that it is the brains and talent of this generation - not the hangover of the last - which determines? From the paper:

Access to opportunity doubled from 1901–2023, but remains highly unequal. Barriers are higher for women, but lower for Americans.

So, the problem being complained of is a smaller problem in the United States. Therefore, in order to make the problem smaller we should become more like the United States. Say, government at 28% of the economy not 45%, that might leave more room for talent to rise without bureaucratic stifling? We say that as just one of the differences. But it is still true - we are told this is a problem, we are also told of the place that has done more than others to solve it. Therefore, obviously, we must all become more like the US in order to keep solving the problem.

Tim Worstall