Queues at the state Post Offices and the Stockholm Syndrome

JP Floru is a Westminster Councillor, Senior Research Fellow of the Adam Smith Institute and writer of Heavens on Earth: How to Create Mass Prosperity. Follow JP on Twitter.

The service customers obtain from state-run post offices is often abysmal – a relic of how state services were run in the 1970s. Privatising the state post offices is highly desirable from a taxpayers’ point of view (£103 million subsidy for £61 million trading profit), but politically toxic. This is reflected in the Coalition Agreement: the Royal Mail Group Ltd (which provides universal postal service) will be privatised, but Post Office Ltd (which runs post offices) won’t. However, the political difficulty of privatising the post offices cannot be an excuse for the inept way in which they are run today.

I occasionally have to go to the post office to have packages weighed, etc. For this I’ve used post offices in London (Vauxhall Bridge Road, Charing Cross, and Victoria Street) and Kent (Sittingbourne). Almost every time there is a long queue. I attach a photo of the Vauxhall Bridge post office, taken on Tuesday at 2:55 p.m.  A queue of about 25 people stretched out onto the street and persisted unabated throughout the time I was there (about 40 minutes). And no – it wasn’t Christmas.

JP Floru: Our savers have suffered Cyprus-style raids for years

JP Floru is an author, City of Westminster Councillor, and Senior Research Fellow of the Adam Smith Institute

Inflation, the silent killer of responsible savers, has done far more damage in Britain than the bail-out raid in Cyprus.  Yet there are no runs on the banks and no demonstrations in the streets.  Quite a few politicians even imply that inflation is necessary to create economic growth.  Perhaps they studied at the Zimbabwe School of Economics?

Under the Wise Leadership of Governor Mervyn King, The Bank of England has now overshot the official inflation target forthree years. In any company a CEO who systematically fails his main target would have been sent packing a long time ago. Not so Mervyn King.  He only has to send a letter to the Chancellor explaining what happened; presumably he has a template for it now.  He was also knighted for his efforts.

The persistent attack on savings has been an unmitigated disaster.  As the campaigning group Save Our Savers states: “Over the past four or five years, the UK’s savings environment has become increasingly hostile and unrewarding, to the point where the whole culture of saving is at risk.

 A succession of economic policy initiatives, including 0.5% base rate, QE and Funding for Lending, have aimed to boost the economy and get the banks to lend more. All have failed. The one thing they have managed to achieve, however, is to undermine savings. Low interest rates are making life ever harder for people reliant on their savings. Their spending power is being reduced and their standard of living eroded on a daily basis”.

J P Floru: The poor math skills of marginal MPs against gay marriage

Westminster City Councillor J P Floru is a free marketeer and political commentator. He is also Head of Programmes at the Adam Smith Institute. Follow him on Twitter.

MPs are misguided to believe that the hundreds of letters against gay marriage they received are respresentative of the general feeling in the population.  Rather than preserving their slim majorities, Conservative MPs voting against gay marriage may be setting off the Conservative Party for twenty years in opposition.

Like many other ConHome readers, I have canvassed for the Conservative Party in every British election since 1994. In every election I came across individuals who, on the doorstep, told me that they would never vote Conservative because “the Conservatives introduced Section 28”.  More often than not they were people who had saved some money, who had worked hard, who had taken responsibility for their lives, and who were therefore natural Conservatives. Only in the last two or three elections did that antagonism seem to have gone away. Most under 25s don’t even know what Section 28 was about anymore. But it took… twenty years.

Section 28 was a pointless, hateful, and harmful exercise. Teachers were not allowed to “promote” homosexuality. It was both pointless and hateful, as I doubt that even the most extreme loony-leftie teachers would have been engaged in “promoting” homosexuality in the way reasonable people understand that word. As it was unclear what was meant by “promoting”, most teachers just didn’t dare mention homosexuality at all.  Resulting in young gays being deprived of one of the only sources of credible information about what they were experiencing and trying to come to terms with.  Buried deep into the sky-high suicide rates of young men, are histories of bullying, incomprehension, despair and absence of information --- some of it induced by Section 28.  Section 28 was never actually prosecuted; teachers applied self-censorship.

Where do the stones come from, Lord Heseltine?

By JP Floru.

Lord Heseltine proposes to shift £49 billion from national to local government to encourage investment and growth.  His report No Stones Unturned is a classic tale of “government knows best”: of politicians taking economic decisions about which they know little; and of a belief that local politicians are somehow better suited at this than national ones.  The report further fails to appreciate that the £49 billion came from taxes on healthy companies – which can therefore invest £49 billion less.

According to the report, people think that the UK does not have a strategy for growth.  The veracity of this attack on the government is debatable; it has already been welcomed by the Labour Party.  I, for one, think the spending cuts and the deficit reduction are a good start.  

More to the point is what is understood by a “strategy”. There are two ways of interpreting the word.  Heseltine aims for a government-steered, political can-do attitude; a bit like Roosevelt’s New Deal.  Politicians chair Growth Councils; infrastructure projects are pushed forward; politicians sit around the table with businessmen and tell the latter how they should create growth.  It was tried during the Great Depression in the United States, and in the 1960s and 1970s in Britain – periods which did not exactly illustrate success.

JP Floru: How to win Corby

Crises show the world in black and white. Through despair and chaos, solutions of remarkable simplicity come to the fore. And so it is today. No tax cuts, no jobs. No jobs, no Conservative victory. It’s that simple.

The cards dealt by the voters force us to fight the crisis with measures muddled by LibDems who can’t choose between the Orange Book and Das Kapital. Taxes: we cut a few and raise a few. We say we cut spending but increase state infrastructure projects. We cut welfare but send more welfare abroad. We veto the EU one day and give in on all the other days. Nothing really changes and oh, surprise, economic growth flatlines. And the council flat tenant on an estate in Corby asks us: “But why, WHY, should I vote for you?” And do you know the answer?

Here is one. We just have to say it as it is. Don’t beat about the bush. Don’t invent lofty principles or talk about fairness or society, which means a different thing to every person on this planet. Just tell the voters in Corby: “We will cut tax for companies, so they can create jobs. You will find a job, and won’t have to rely on state hand-outs”. It is true, it works, and it’s that easy.

While we’re at it we may wish to provide some information of what the others are up to. “Labour wants to take your job away, and make you welfare dependent instead. Labour will tax companies more, and your job will disappear to China and India. Labour will use that money to spend more on bureaucrats who will regulate you, and on state projects which are nothing but expensive and wasteful white elephants”.

Hammer away at this remarkably simple message day after day. Look the voter in the eyes and infuse him with the fire of a better future for him and his children.

Just tell is as it is. And Corby will be won. And Bolsover will be won. And the North will be won. And Britain will be won.

J P Floru: Growth does not equal spendthrift government

With the election of Francois Hollande Keynesian folly is back to the fore.  Down here, socialists continue to hoodwink the long-suffering population into believing that the government’s spending cuts cause the continuation of the economic crisis.  BBC journalists repeat it as if it is mere fact.  Those profiting from state profligacy in Greece shout it while throwing petrol bombs.  Only Britain keeps its course – for now.

Keynes famously believed that in times of crisis government should stimulate demand by greater spending in things like infrastructure.  This would land wages into people’s pockets; who would in turn spend it and further fire up the economy.  The folly lies in that such spending needs to be paid for through taxes, money printing, or debt (deficit-spending). The first destroys private sector jobs; the second creates inflation which is a silent tax and therefore destroys private sector jobs; and the third pushes the bucket to the next generation which will therefore achieve lower growth. 

Increased state spending to create growth is the Great Smoke and Mirror Theory of 20th century economics.  The growth it creates is entirely illusory: public sector expansion at the expense of the private sector; and growth today at the expense of our children’s.  Not that Keynes cared: “In the long term, we’re all dead”, he cynically quipped.

JP Floru: State queues? Privatise the lot!

By JP Floru.

When the state runs a queue, it goes wrong - and queues are inherent to state monopolies. It’s not just the Border Agency at Heathrow – have you been in a post office queue recently? And have you ever been in the queue to enter Parliament? I used to work for an MP, and whenever we organised an event which was open to the public we had to tell people to arrive 45 minutes in advance “to be on the safe side”. 

The advantage of a long queue is that you have a long time to observe the behaviour of the state employees busying themselves in not coping with customers. The slow motion movements. The chatting with colleagues. The usual unfriendliness to queuers. The stickling for details and procedure. The eyes averted from the long, long queue. The non-plussed, business-as-usual look on the civil servants' faces. The sudden disappearances of staff for three, five, ten minutes at a time. The endless tidying of desks before the next queuer is called.

Why are state queues so slow? Because inefficiency and waste comes with state monopolies. You, the customer, matter for nothing. Whether the staff perform is irrelevant. They receive a state salary – probably for life. Because it is a monopoly, you have no alternative, you cannot choose the more efficient point of entry; there is only one way in. Interestingly, post office queues are shorter at post office branches which are run privately.

Perhaps the most important reason why the state can’t cope with queues is that staff have an incentive not to cope. How else can they legitimise their staffing levels? It was telling that the immediate explanation for excessive border control queues was that there were staff shortages. The unions said so, and promised us even longer queues.

JP Floru: Rationing is the result of our communist water policy

By JP Floru.

Did you know that only about 39% of households in England and Wales have a water meter? Everybody else pays a fixed sum, irrespective of the amount of water used. Are we surprised that the demand for water exceeds the supply? Why bother closing the tab? It’s a free for all for the happy many.

Water companies may be privately owned, but the government is firmly in command. The water price cap is set by Ofwat, a government agency whose board members are appointed by the Secretary of State. Theoretically, price capping is the next best option to full free market competition: companies are incentivised to become more efficient as it allows them to keep a greater percentage of the receipts. In reality, efficiency is entirely overshadowed by the subjective setting of the water price cap by Ofwat. The price cap level makes or breaks.

The water price capping is determined by a raft of factors and special interest groups. The economic factors are guesswork at best. It is very difficult to predict future rainfall or future costs. There are no private market examples to compare it with. The price capping is therefore highly subjective. Water companies, environmental groups, the Environmental Agency, the European Union, and, last but not least, politicians, are all influencing the water price cap.

Why is water so cheap? Ofwat’s remit is specifically to keep water prices “fair” – whatever that may mean. Increasing the water price is certainly not attractive politically. The decision not to impose water meters upon every household reeks of political calculation, too: which politician would risk enraging 65% of households?

Instead of encouraging individual responsibility through generalised metering, state rationing is being introduced. All over the country people will hose their plants at night; fearful of the neighbour peaking over the fence. I wonder: will evidence of snooping be available under the Freedom of Information Act? Will we be able to inspect our file just like the Stasi victims? Families who pay for water per unit won’t be allowed to fill their toddlers’ paddling pool because others have been splashing out for years.

JP Floru: Our craving for pasties shows our hunger for growth

By JP Floru.

It has nothing to do with Cameron riding horses or Osborne being the 18th Baronet of Ballintaylor and Ballylemon. Labour front men and women were and are from privileged backgrounds too: Blair was a boarder at the independent Fettes College; Harriet Harman has been called “a public school educated minor aristocrat”; Ed Balls went to public school. Even those not born into it soon developed a taste: remember Two Jags Prescott and his liking for croquet? Most Labour MPs are at least middle class. Why then the sudden clamour for heads? Is the country out of bread, like France in 1789?

Sort of. There is no growth. Because, whether antique aristocrats like it or not: it’s all about money. “Bankers”, “wealthy foreigners”, “owners of mansions”, “aristocrats”, “non-pasty-eaters”: they are all synonyms for “the rich”. Even "Londoners" or "people in the South East" are now seen as "well-off" by many. Never mind that there is a lot of cross-pollination: these are the people who have been identified by the many as the few who have too much.

“The rich” are the ones who have been identified as the class of people which can, and therefore should, pay up so we can continue spending on the NHS and welfare as if nothing happened. Because that is what we are doing: the so-called savage cuts only bring us back to spending levels which were thought totally acceptable five years ago. The national debt is not going down: its increase is being reduced.

J P Floru: Winning a majority with good policies for drivers

Responding to ConservativeHome's Majority page, J P Floru suggests that policies for drivers should be at the heart of the next Tory election.

Car drivers feel under threat, constantly. Yet their complaints fall upon deaf ears. When was the last time you heard a politician say “And now, we are going to introduce measures for drivers”? There is a vast constituency out there. Its votes are there for the taking. Car use is vast and popular. According to the RAC Foundation, car use per person has grown for half a century. Car use has increased most in low income households – owning a car is part and parcel of aspiration. In 2010 64% of all trips were made by car; 22% on foot; 7% by bus; 3% by rail, and 2% by bicycle.

And how does the government treat the people’s most popular mode of transport? The UK has one of the lowest motorway densities of Western Europe (and their population densities are usually lower than the UK’s). By way of length of motorway per capita, only Norway, Poland and Turkey have less. Taxes and duties account for 60% of the price of unleaded petrol – the highest in the European Union. People choose transport by weighing up the alternatives. For decades public policy has favoured public transport and cycling – yet when given the choice, people opt for the car. Why is there such a disjoint between what the people want and what the politicians are willing to give?

There are a number of reasons why drivers’ interests often come last in politicians’ priorities. There is the safety argument: most other road users are seen as more vulnerable. It is difficult to plead for an increase in the speed limit when a lady in the back stands up and tells us that her daughter was killed by a car. Yet based on that logic, we should abolish all driving. If transport came to a standstill, it would become incredibly safe. An ideal situation…which nobody wants.

JP Floru: We should gold-strip EU legislation retrospectively

By JP Floru.

More than one year ago Business Secretary Vince Cable announced an end to the practice of “gold-plating” of EU Directives. Sadly this does nothing to reverse the gold-plating of the past. According to Open Europe, the acquis communautaire – that is the total body of EU legislation - is now 170,000 pages long. 100,000 of those pages came into existence in the last ten years. If we retroactively reduced gold-plating, the impact and resulting growth would be much greater than what is currently planned. And it wouldn’t cost the Treasury a penny.

It is unclear who coined the word gold-plating with regards to Whitehall’s practice of adding extra regulations to the tsunami of Directives from Brussels. In his book The Great Deception, Christopher Booker describes how he exposed the practice in his 1992 Telegraph Article “Who’s that lurking behind the Brussels book of rules?”. John Major became so alarmed by what was first dubbed “Bookerism” that he appointed no less than Michael Heseltine to head his deregulation offensive. “Who better for hacking back the jungle”, Major said at his party conference in Brighton. “Come on Michael, out with your club, on with your loin cloth, swing into action”. Deregulation was one of Major’s flagship policies. In the next four years not a single regulation implementing a Directive was changed.

European Directives are not precise enough to be implemented directly into domestic law. They therefore require additional national legislation. It is widely known that in certain EU countries both implementation of, and adherence to the law is taken with a big pinch of salt. In Britain, we do the opposite. With uncharacteristic Teutonic Zeal, Whitehall adds to and refines EU Directives – thereby adding and refining the burden of regulation on free enterprise to a very unique British Standard. This is extra scary for two reasons. Firstly, the Directives themselves are often insufficiently scrutinised and are sometimes approved unread at the Council of Ministers. Secondly, there is insufficient scrutiny of Statutory Instruments, by which civil servants and ministers add regulations surplus to EU requirements.

J P Floru: George W. Bush's autobiography: Debunking the left's myths

I started reading the book with the prejudices I wasn’t aware I had. Halfway through Chapter 2 I was already moaning that there were too many easy jokes but not a grain of philosophical substance. And suddenly there it was, on page 38, in George W.’s folksy twang:

“My (…) convictions: The free market provided the fairest way to allocate resources. Lower taxes rewarded hard work and risk taking, which spurred job creation. Eliminating barriers to trade created new export markets for American producers and more choices for our consumers. Government should respect its constitutional limits and give people the freedom to live their lives”.

This is what every centre-right politician, the world over, believes in (or ought to). So far, so good – it confirmed what George W. seemed to be about during the presidential elections in 2000: a Man of Small Government. As such he differed strongly from Al Gore, who told the viewers during the televised debates how his big government would change their lives. He wagged his finger while saying it and probably lost 100,000 votes every time he did it.

Before the 2000 election, Bush promised that he would not do any nation building, and that his emphasis would be domestic. Both this and his promise of small government went out of the window on the 11^th of September 2001. He freely admits the former, but does not address the latter: when he left office he had overseen the biggest federal budget expansion since Roosevelt seven decades earlier.

J P Floru: The Falklands are small fry compared to Antarctica

The Falklands are small fry compared to Antarctica. Antarctica hides vast mineral deposits under its icy carpet and its continental shelf. Emotional and human interest keeps the Falklands in the news, while far more important Antarctica is quietly forgotten in the UK. This is strange, as we have the oldest claim on its territory. At present, Antarctica belongs to nobody, even though seven countries claim parts of it. The claims of Britain, Chile and Argentina overlap and include the most hospitable part of it: the Antarctic Peninsula.

Both Argentina and Chile have been increasing their military and civilian presence in the Antarctic Peninsula for many years; while Britain has been decreasing its presence and has been cutting back on the Royal Navy. And yet, militarising Antarctica is expressly forbidden by Article 1 of the Antarctic Treaty 1959, of which Argentina is a co-signatory. President Cristina de Kirchner, who is currently accusing the UK of militarising the Falklands, stated in July 2008 that she was keen on militarising Antarctica. Two months ago the Argentinian Air Force bought Russian helicopters for use in Antarctica.

Under the terms of the Antarctic Treaty, all territorial claims remain frozen. The whole of Antarctica is to be used as a continent for scientific research. In the light of the increasing scramble for fossil fuels and minerals this position is untenable in the medium to long term. At some point the seven claimants are bound to reach some sort of agreement. Both Argentina and Chile are trying to manipulate the future by encouraging babies to be born at their bases: establishing a native population would help their claim under international law. Children in Chile and Argentina are taught in school that they own Antarctica. Chilean and Argentinian maps show the Antarctic Peninsula as their territory.

JP Floru: The inequality debate has shown Ed Miliband to be a relic of our socialist past

JP Floru is the Director of Programmes at the Adam Smith Institute.

Government should stop overruling its peoples’ choices. That is what the current assault on capitalism is about. After all, what is capitalism, but the millions of decisions people make every day? We are all capitalists: when we buy a pint of milk; when we earn a salary for going to work; when we sell our used car. All these different acts create the price system and the free market. This spontaneous order is called capitalism. Every one of our 62 million individuals decides on the basis of their own information. These 62 million individual minds are infinitely better suited to dealing with reality than one single government mind is. This is why the market succeeds, while government action usually fails. Centralised government simply does not have all the information the 62 million have: this is FA Hayek’s famous Knowledge Problem. When the state acts, the unwanted side-effects become the main effect. 

Market success benefits everybody; it is the source of the advance of civilisation itself. The only responsible action a government can take is to leave people free to deal with reality as they see fit. It can tweak at the corners, to provide for the few of us who cannot cope with daily life, or to provide the legal certainty necessary for the market to operate (e.g. a legal system, and the protection of property rights) – but when it tries to protect people against themselves it is basically saying: “You are too stupid to take care of yourself. Big Brother knows what’s good for you!”. When the state spends 52% of GDP we are way beyond tweaking.

JP Floru: Why both the left and the right should do nothing about inequality

J P Floru is the Director of Programmes at the Adam Smith Institute.

Based on empirical evidence, abandoning inequality policies could be desirable for both the left and the right.  Doing nothing about inequality could become mainstream and middle-of-the-road ; precisely where all parties want to be. 

Why the left should abandon inequality policies

The attraction for Mr. Milliband consists of the fact that empirical evidence shows that equality can best be promoted by… doing absolutely nothing about it.  Labour introduced substantial measures to fight inequality during the thirteen years it was in power.  The result was the opposite: inequality increased.  In fact, in 2007/8, inequality was higher than at any time since records began in 1961.  Inequality also increased under Thatcher, in line with international trends (though not as high as under Labour).  Under John Major, inequality declined.

It is worthwhile pointing out that inequality as measured by the Gini Coefficient is a typical left-wing way of seeing the world – I am using it here as it is a measure which the left understands.  Those on the right generally believe poverty is absolute, not relative.  One is poor because one has no food and or no roof and or no clothes – not because your neighbour has a Rolls Royce and you haven’t.  Thatcher would typically say that under her policies everybody was better off, including the poor.