Housing, Regional policy and the Dis-economies of Devolution.

The one thing we shouldn’t be worrying about over the provision of social housing is funding. With interest rates on the floor it is a simple matter to raise the funds required through the issue of 30 year gilts, currently costing less than 3% pa, and transfer those funds on to the Housing Corporation in the form of 30 year mortgages. The Housing Corporation in turn would pass the funds on again over perhaps 25 years to housing associations, local authorities or indeed anyone else wanting to build and rent social housing. This way the capital is fully repaid by the time the gilts mature, and the quarterly repayments can be used partly to pay the interest and partly to invest in a repayment wealth fund. With rents at the levels they currently are it should be easy to make the finance work, and of course any strain would be taken by housing benefit. That in turn will reduce as unemployment falls. Important of course that rents are set at market levels for this to work.

Encouraging private landlords into social housing is just as important. Historically private landlords have avoided social housing like the plague, as they regard the whole system as hopelessly unreliable. I remember once ringing round six different estate agents in Oxford to find private social housing for someone, and every single one of them said ‘no’. Three said it was a matter of company policy, and the others admitted they did not trust the system. And I can see why. Benefits officials tend to shoot first and ask questions later, leaving the claimant unexpectedly stranded, even though there may be nothing wrong with their claim. On top of that we now have the Coalition proposing an end to direct payments. One of the things I remember from my time as Finance Director at PCHA is how much time our housing officers had to spend with tenants just helping them with simple domestic budgeting. Direct payments were often key to getting the rent paid on time.

To overcome this, and hugely to increase private sector investment into social housing, I propose the setting up of a Landlords’ Guarantees Agency. In return for a small commission off the rent, sufficient to fund the agency’s costs, the agency would offer landlords charging a social rent guaranteed payment of that rent, less commission, on the nail in advance every month. The agency would then collect the rent from the tenant which, with all the powers of the state behind it, it would be in a much stronger position to do. The arrangement could also benefit the tenants since if necessary the agency could press the landlord to fulfill his own obligations under the tenancy agreement, such as for maintenance for example. It would provide protection from rogue operators on both sides of the fence.

I also propose the introduction of a flat rate benefit for the homeless. Perhaps at a rate of £100 pw or thereabouts, this would allow people who are entitled to housing benefit but who cannot actually claim it, because there is insufficient social housing available and who therefore quite literally end up on the streets, to take the initiative to sort themselves out. Their ‘demand’ would encourage the charitable or private sector provision of hostels or they could find lodgings, though what they actually do with the money would be entirely up to them. This way the most vulnerable of all in our society would no longer be caught up in the dependency culture the current system creates through having to wait for some bureaucrat to fall out of bed the right side that morning. They can get on with it themselves. The cost would be nothing, as the money is already mandated in the form of housing benefit.

UKIP have quite rightly said that all new housing must be built on brown-field sites, and that the starting point will be to set up a register of where they all are. I was relieved to hear that about one third of these are thought to be in the South East, where presumably most of the homeless are, but it is not something to leave to chance. Essentially the aim must be to build the houses where the brownfield sites are, and then to create the jobs where the houses are. This requires an effective and structural regional policy.

This is not the only reason we need such a policy. Regional imbalance is also an impediment to reducing unemployment, as well as a factor in dealing with devolution and the Barnett formula.

Regional policy has never been successful in this country, and the reason I believe is that it has always been applied to the supply side of the economy. Stimulating the economy, which is essentially a matter of increasing consumer demand, given that investment follows demand, is like trying to move a piece of string lengthways. If you push it (supply side) it will just crumple. To get the whole thing to move you have to pull it (demand side). This became obvious in the late 1980’s. The relatively rapid recovery of the economy in the early eighties was caused by the removal of credit restrictions so that people started to chase up house prices by increasing their mortgage borrowing. When on top of this Nigel Lawson then cut taxes in his 1987 budget people used the extra money to jack up their mortgages even further and the boom just took off. I suspect this memory inspired George Osborne’s Help-to-Buy policy, which indeed has had some success. So it works at the national level; it just remains to apply the same principles at the regional level. It also chimes with UKIP’s policy of lower taxation.

I propose therefore that a second personal allowance be introduced into the income tax system, applied on a local post-code basis and related to local levels of unemployment, and perhaps also to housing availability, by an appropriate formula, so that people living in areas of higher unemployment would pay less tax for a given income than those living in areas of lower unemployment. I am sure this would go down very well in places such as Clacton, Rochester and Margate! It would regenerate local communities from within, which is by far the best way to do it.

I also advocate the setting up of a chain of Local Community Banks, on the German model but owned by the Bank of England, to take in deposits and lend them on to local small and medium-sized businesses (SME’s). They would not get involved in payment clearing or mortgages in any way and would not therefore replace the clearing banks. But they would allow lending criteria to be skewed in favour of areas of higher unemployment, a sort of localised quantitative easing (QE) if you like, whilst keeping its overall lending book balanced.

These policies would have the effect of creating a much more even level of percentage employment across the land, which in turn would enable average unemployment to be reduced much further before London and the South East trigger inflation. This is essential not only to deal with housing mismatch but also to reduce the deficit. As I have said elsewhere, UKIP can eliminate the deficit entirely by reducing unemployment by between 4 and 5% because for every one percent reduction in unemployment the deficit reduces by between 20 and £25bn. However there are a number of impediments to reducing unemployment this much. The first of course is immigration, but regional policy comes a close second. Both are required, and I would argue also for a big increase in the welfare earnings disregards in order to ‘make work pay’, something Universal Credits does not appear designed to achieve, but that is really a separate subject.

A separate regional policy will enable us to lift regional considerations out of issues such as HS2 and devolution. UKIP has of course committed to abolishing HS2 anyway, but the argument that regional policy is dealt with separately adds further grist to the mill. Devolution is a more interesting matter.

Many of you may remember the old rating system that used to exist in London whereby it was always the poorest boroughs that charged the highest rates. Margaret Thatcher always argued that this was due to their profligate loony-left policies and there may well have been an element of that, but the principle reason surely must have been that they had fewer taxpayers and higher costs. Although there was supposed to have been a redistributive balancing formula, it never seemed to work.

All public expenditure, with the possible exception of transport which is largely user financed, involves a transfer of wealth from rich to poor. Our progressive tax system is based on this principle, as is the principle of allocating expenditure according to need. A moment’s reflection will indicate that this will only work if both taxpayers and recipients are all in the same pot. If you compartmentalise the pot then you are likely to end up with most of the rich in one compartment and most of the poor in another, and the transfer mechanism is broken.

There is also the question of where you locate expensive and scarce facilities. You may not be able to afford to supply one for each pot, or there may be insufficient demand to justify one for each smaller pot. In the case of Aisha King’s cancer treatment the NHS could not afford the required machine at all and he had to go Prague, which was of course private sector and therefore available to anyone across the globe. This is what I call the Dis-economies of Devolution.

Much of the upsurge in popularity for the SNP is I am sure due to the recession; what the medical profession calls a ‘referred pain’. It is illogical to suppose that if you are independent then that somehow gives you access to more funds or that you could use them more efficiently. Almost certainly that is not the case for Scotland, both because I suspect that a disproportionate number of higher-rate taxpayers live south of the border (not an issue that was discussed at all during the referendum campaign as I recall) and because the referendum has now highlighted the fact that Scots receive more public funding per head, about £1,500pa as I recall, than the English.

Devolution means we can no longer allocate expenditure according to need (the management mechanisms necessary to do this are now entirely missing anyway) and it follows we must go for a ‘fair’ equal allocation of funds per head instead. Of course the Scottish government can always add their own layer of taxation to make up the shortfall (which probably will be less than popular!), but what they can’t do is subtract from UK taxation. UKIP is committed to revising the Barnett formula onto this basis, though my proposed tax-based regional policy would go some way towards redressing the balance on an equally fair basis.

Funding the NHS and other public services.

The first and easiest thing to say, as I did in my election address, is that UKIP is the only party able to fund adequately the NHS and other public services on account of the money we will save by coming out of the European Union, by transferring overseas aid to the charitable sector, by imposing a turnover tax on global companies and a number of other measures. Nigel Farage has committed £3bn of this to the NHS, which leaves plenty for other things, including tax cuts. He has also reiterated that we want a publicly owned, publicly funded and in-house managed NHS. I fully endorse both of those statements.

However I want to take a longer term look at the options available with a view to attaining the highest standards of health care in this country, free at the point of delivery for all, whilst at the same time reducing the burden on the taxpayer. UKIP stands for small government and low taxation, so any improvements in management and funding efficiency are a step in the right direction. I shall address issues to do with the way we manage our public services in a future article. In this article I shall concentrate on funding.

The main efficiency problem with all our public services is that they are monopolies. No monopoly has any incentive to be efficient unless it is underfunded, in which case shortages develop. These can take the form of prolonged waiting times, hasty attention or, in our schools, large class sizes. You can only achieve both sufficiency and efficiency at the same time in an open competitive market. That is an economic truism. A quick look at supermarkets will illustrate what I mean. Whilst not everyone likes the impersonal nature of supermarkets, I don’t think many will dispute their high standards or value for money. When you go to a supermarket you don’t have to make an appointment, book or stand in a queue (except at the checkout perhaps); you can drive straight in and park, find what you want already waiting for you on the shelves, and on the odd occasion where this is not so you can drive a few miles down the road to another one where it will be.

It is important to understand that such a situation would drive a Treasury mandarin mad, because of course in the public sector he would regard it as over-provision and thus a waste of taxpayers’ money. Competition only really kicks in when supply exceeds demand, because that is when customers truly have a choice. It’s no good trying to reproduce this in the public sector because you could never produce a wide enough range of customer choice. In the private sector, when a new product market develops, such as for mobile phones for example, the first supplier into that market makes huge profits. However those profits attract other entrants until the level of supply rises to and overtakes the level of demand. From then on weaker suppliers are likely to find the going much tougher and may not survive.

Privatisation only works where whole new marketplaces are created, involving multiple suppliers and multiple customers all interacting with each other. That is what happened with the public utilities in the 1980’s with huge improvements in efficiency, as anyone who can remember previously having to wait weeks for a new phone line from the old GPO can confirm. Whereas if you try to outsource a service from a monopoly you will just end up with an outsourced monopoly, which will be as tempted to profiteer as any other monopoly. Just look at what happened to the court interpreters for example. The Ministry of Justice outsourced the provision of interpreters to a single private agency, presumably thinking that the cheap price they achieved was a reflection of their purchasing power. In practice the new agency simply reduced the fees it paid to the interpreters, until eventually the interpreters decided it was no longer worth the candle and simply stopped working. As a result the supply of interpreters dried up and the courts were left in chaos. Much the same sort of thing happened with security at the Olympic Games, where eventually the Army had to step in to fill the gap.

Outsourcing is used effectively in the private sector, as for example where a company outsources its IT department, but this only works because the person purchasing the service is also the person receiving it. They can then see immediately if quality of service is failing and react to it, ultimately if necessary by cancelling the contract for breach of its provisions. In the public sector this does not work because the person receiving the service, you and me, has no relationship with the person commissioning it. The feedback loop is entirely missing. Not only that, workers tend to have much greater loyalty and are much more likely to go the extra mile where they feel they are part of an organisation that people respect and need.

So where does this leave health, education, legal aid, care and support for the elderly, child care and a host of other such services? Are we doomed to having to put up with inefficient monopolies for ever?

I don’t think so. An open competitive market inevitably will produce higher standards and better value for money, and people are often prepared to pay for that. You only have to look at the survival of independent schools to see it. The question is can we likewise encourage the private sector to compete and grow alongside public services such as the NHS without directly impinging on them, but do so in a way where the private sector alternative is also free at the point of delivery?

Further, can we do this so that the patient or other user can make an affordable choice, available to all without exception, between the sectors without requiring bureaucratic approval? The pitfalls were clearly demonstrated in the case recently of little Aisha King and his brain tumour, where his parents could only find the treatment he needed in the private sector. Yet it took a huge amount of political pushing and shoving to get the NHS to pay for it.

I believe the answer to this is yes. I envisage the issue to everyone of a national credit card which can be used to pay for ‘public’ services from the private sector. The use of a credit card effectively makes the service free at the point of delivery. These services would be approved in principle, and suppliers would most likely most easily be accessible through a comparison website, which would check credentials and assess reputations on an ongoing basis. It would preferably act on a ‘blacklist’ basis so as to minimise barriers to entry, unlike the ‘whitelist’ approach, requiring expensive prequalification, favoured by New Labour and the European Union, which has quite the opposite effect and encourages profiteering.

So you slap all your purchases onto your credit card, without limit, and the government, as the credit card agency, pays them without question. However, come the end of the tax year, when hopefully you are back home fully recovered, the taxman will look at how much you have spent on your credit card, will do your tax assessment in the normal way, put the two together, apply a means test and then charge your affordable share of the cost back to you through the tax system, which for most people would mean an adjustment to their PAYE code. This is in fact just an adaptation of the old voucher system which has been mooted since the 1950’s, updated to use modern technology.

So everyone would pay something. Even people on benefits would pay a pound or two, because this is necessary to ensure a proper ‘value-for-money’ purchase decision. Benefits would be treated as income for the purposes of the means test and the charges deducted from future benefit payments as necessary. It is this decision which drives efficiency and quality, and prevents waste and over-usage. Past attempts at giving users choice have concentrated on quality only, which doesn’t work because you cannot all use the ‘best’ supplier! The system would not of course work for security and other establishment services as they have to be imposed rather than chosen.

Alongside this I envisage the setting up of a dedicated wealth fund for the NHS and wider health service, perhaps to the tune of £30bn or so and perhaps called the National Health Fund (NHF), by issuing 30 year gilt-edged securities, currently costing less than 3% pa. The more astute of you will have noticed the heavy working capital requirement of the credit card system, but in addition to that the NHS itself and many hospitals within it are desperately in need of recapitalisation, there are new medical schools and nursing colleges to build and PFI contracts to buy out. I envisage investing about half this sum with a range of City asset managers so that over 30 years it is likely to produce a surplus sufficient to repay the loan in full and all the interest thereon, leaving the other half to spend.

It may take some time for confidence and supply to build up, and the means-test rates could start quite high initially to ensure an orderly introduction. This would encourage users to take out insurance against the retrospective charges, which means both that insurers cannot interfere in the treatment and that the premiums themselves are in effect means-tested. By about year fifteen the charges should be producing additional income well in excess of £10bn a year. As users migrate voluntarily across from the NHS its budget could be reduced, and not all of that money need be transferred to the fund since the fund will be receiving the charges via HMRC as well. The excess can be used to fund other public services and reduce taxes.

I envisage that the NHF will be managed by the Department of Health subject to the restriction that any shortfall in the funds required for redemption must be made up progressively after year fifteen from the additional income. I also envisage that similar funds be set up for other public services such as education, care and support for the elderly, child care and legal aid. Once education is put onto the credit card system it would bring to an end finally the toxic social divide that still exists between state and independent schools. Although the most famous schools might decide not to accept the card, I am sure the majority of independent schools would do so as it would both secure the collection of fees and bring greater stability to the pupil population, since if a parent were to fall on hard times mid school career no one would know except the taxman. All parents no matter how poor could thence choose an independent school for their child if they so wished.

Those on the left may be worried that this will produce a two-tier system, or that the profit motive will undermine quality of service and accessibility. I believe these worries are unfounded. A two-tier system is only a problem where demand exceeds supply, whereas the whole point of this system is that we get away from shortages and restrictions on access, promoting a free choice for all between the two sectors. Furthermore there is a difference between profiting (good) and profiteering (bad). Profit can only be made in an open competitive market if you satisfy your customers. Why does it matter if a supplier makes a profit if they are providing better value for money? Whereas profiteering occurs where supply is restricted. Indeed the Treasury is profiteering all the time by cutting expenditure which in turn undermines quality of service. It is time to bring that to an end.

Greece, the Eurozone and World Trade

It would be easy and tempting for UKIP’ers to look smugly at the renewed chaos unfolding in Greece and say ‘I told you so’. Easy but unhelpful. Although small, Greece is still an export market for us, and if Greece crashes out of the Eurozone that would create massive contagion which would badly affect the whole of Europe including the UK. In any case I am sure we all wish the Greeks greater success for the future.

So what would we do in their situation? To answer that we must first remind ourselves of why all the Mediterranean Eurozone countries are so determined to keep using the euro. It’s not just the War and history of invasion, it is also that all of these countries are incorrigibly corrupt. Their citizens no longer trust their own politicians and so turn to the European Union as a mechanism to counter this. So it’s no use telling them to ditch the euro. They might still do that, but only out of sheer desperation.

There are two quite separate parts to the Greek, and other Mediterranean country, economic crises: they have a fiscal deficit on government taxes and expenditure, and they have a balance of payments deficit on external trade . The former causes the more immediate challenge, and hence gets the attention of the EU, ECB and IMF ‘troika’, but the external trade deficit is just as, if not more, debilitating in the long run. It is the external deficit I want to examine in this article, as we have a very similar problem.

The UK’s balance of external payments is now running at a deficit of over 5% GDP and getting worse. And that during a recession! You would normally expect your external payments to move into surplus during a recession as imports fall. In theory if you have a deficit the need to fund that deficit creates a need to purchase foreign currency, which in turn devalues sterling. That in turn makes our currency more competitive and so help to boost exports and reduce imports, thereby re-balancing our external trade automatically. In theory. In practice capital flows have grown and overwhelmed trading flows, and as the French economist, Thomas Piketty, pointed out recently, capital to GDP ratios continue to increase across the world.

Greece of course can’t do this anyway as they have in effect a fixed exchange rate by using the euro. Part of the idea behind austerity was that costs would fall thereby achieving an ‘internal devaluation’, but whilst costs in Greece have fallen substantially over the past five years it has not led to any regeneration in the economy. In fact perversely it has simply led to Greece’s debts becoming a higher proportion of GDP as GDP has fallen, whilst unemployment has continued to rise.

It was Adam Smith who originally observed that the wealth of a nation is the product of its labour. So if you want your country to get richer (and generate higher tax revenues) you must get unemployment down as low as possible without triggering inflation. Yanis Varoufakis, the new Greek finance minister seems to have remembered this whereas the troika have not, and is now coming up against the sort of block-headed intransigence from the European Union we in the UK know so well. Even under the most primitive of jurisdictions, if new evidence comes to light you reopen the case. The failure of austerity clearly constitutes new evidence, yet Wolfgang Schrauble, Germany’s finance minister has simply said that the new Syriza government is bound by the contractual terms of Greece’s E245bn bail-in, and that “Elections change nothing. There are rules”. We can only wish Mr. Varoufakis the best of luck with that one.

But even suppose Greece does manage to secure terms for a debt restructuring and recovery, that is not going to change their external imbalance. Indeed it will make it worse as more imports are sucked in. So we need to look for a new solution to the problem of trade imbalances both for within the Eurozone and across the rest of the world as well. There are now massive trade imbalances around the whole world, not least between China and the United States. Further the old GATT/WTO rounds of trade talks aimed at reducing trading tariffs so as to promote world trade generally have ground to a halt for some time now, since such talks have little chance of success if they start from a position of imbalance.

The Bretton Woods conference, master-minded by John Maynard Keynes after the second world war, aimed at creating stability in world trade through a system of fixed exchange rates. It held for a couple of decades before collapsing because different countries experienced different rates of inflation. Britain in particular, due to a succession of weak Labour governments and the Heath government pursuing inflationary policies for political reasons, experienced a whole series of ‘runs on the pound’, and made the collapse of manufacturing in this country inevitable. Eventually we floated the pound in 1971 and a new international regime of floating exchange rates followed, with mixed success. However it can undoubtedly be said that Britain’s exit from the ERM in 1992, coinciding as it did with a time of high unemployment, which meant that the inflationary effects of devaluation were absorbed, laid the foundation for ten years of solid economic growth. So strong in fact that it took Gordon Brown quite a while to ruin it!

Thomas Piketty’s research is very relevant here, and while in my opinion he rather loses the plot when drawing conclusions from it, the value of his book, Capital in the 21st Century, lies in that research. The continued increase in capital to GDP ratios means that we cannot allow things to continue unchanged. The imbalances will only get worse as international capital flows increase. The irony is that the solution lies in precisely the very thing that successive rounds of GATT/WTO talks have been trying to reduce; import tariffs.

It has always been recognised that the danger of import tariffs lies in the fact that they can become competitive and create trade wars. However if you set up a successor Bretton Woods regime under which only deficit countries were allowed to set import tariffs, and the IMF were to set limits for each country according to the size of their deficit, then that would not happen. It could be applied separately to Greece as the new regime would be currency-independent. That would create a partial devaluation for Greece in that it would promote import substitution, though of course it would do nothing for exports. But it would also provide an additional fiscal revenue stream which can be used to stimulate the economy and reduce unemployment.

In a world where the environment is under threat, the continued expansion of world trade in itself must be questioned. I would venture that it is the balance of trade that matters far more than the volume of it. Of course world trade gives consumers much greater choice, and it allows small countries with limited resources of their own to join in. But ultimately Adam Smith was right. It is the product of your labour that makes you rich, what today we call ‘adding value’, and a country that only exports natural resources will return to poverty when those resources run out.

In Britain however there is a further way we can improve our competitiveness. By setting up a Sovereign Wealth Fund to hedge the National Debt. As you may have seen in my election address, I have castigated the Coalition for overlooking this. But what I did not say there is that funds nowadays are invested globally. It follows that a substantial proportion of the wealth fund would be invested overseas, which would involve the selling of sterling, which in turn would make it more competitive. The Chinese have always had a high propensity to save, and it was by investing in US Treasury bonds that their export boom and consequent high rate of economic growth was created. We can do the same.

Threats to and nature of our Free Society.

Several events recently have caused me to reflect upon the nature of our free society and the way it is under threat from various quarters, including of course from our membership of the European Union. For example Lord Freud’s attempts to address the serious issue of finding work for the disabled, the assassinations at Charlie Hebdo, the phenomenon of internet trolling, the private members bill to make permanent a commitment to spend 0.7% of taxpayers’ money on overseas aid; and there is also Lord Leveson’s recommendations on privacy to consider.

The French have now suffered for over two centuries from Napoleonic Law, a highly proscriptive form of law which says in effect that you cannot do anything unless the law explicitly permits it. It is a form of law that has spread widely across the continent and which now forms the principle mind-set pervading the European Union. Different nationalities react to it in different ways, so for example the Germans meekly do whatever they are told, whereas the French invariably try to do the opposite.

Either way it is now being imposed on us through European Law. It’s effect is to treat adults like children which, as we all remember from the old adage, means that sooner or later they all start behaving like children. Even the most fleeting glance across the Channel will confirm what I mean, whether it be at the sight of farmers tipping lorry-loads of tomatoes on motorways, or the nature of the cartoons in Charlie Hebdo. I base the latter observation on Christopher Booker’s recent article in the Sunday Telegraph in which he reports that most cartoons the magazine publishes contain little or no satirical content whatsoever. Instead they use ‘freedom of speech’ to justify the publication of purely gratuitous provocation at any passing figure of authority, like teenagers pushing their boundaries to see what they can get away with.

English and Scottish law on the other hand approaches matters from the other end of the spectrum, saying that you are trusted to exercise adult moral responsibility except in regard to certain activities which must be proscribed in the interests of maintaining public order. As a result we have been brought up to exercise moral responsibility voluntarily using our own individual discretion, and because most of us do so it works.

European Law is toxic to our British concept of a free society. If we become infected with it our culture will perish and we will all end up behaving like the French. Once gone it will be almost impossible to revive, as it is was accumulated over generations. It is one of the most powerful reasons to leave the European Union.

I suggest that the core principle here is not ‘freedom of speech’ but the ‘pursuit of truth’. As a result we expect our cartoons to make a serious point, albeit at the expense of passing figures of authority. Of course freedom of speech is essential to enable us to pursue the truth, but unfortunately it doesn’t follow that the reverse is true. Freedom of speech does not necessarily require the pursuit of truth. Freedom of speech is therefore a means to an end rather that an end in itself. It lies very much in that part of the domain of morality which we in UKIP, as British libertarians, leave to the discretion of the individual.

To us ‘small government’ means not only a small fiscal public sector and consequent low taxation but also restricting the scope of the law to what is necessary to maintain public order and to provide essential public services. I would myself say that the law is there to protect us from harm or loss at the hands of third parties and in our dealings with second parties, but it is not there to protect us from our own choices in life, provided of course we do not cause harm or loss to others in the process, and nor is it there to coerce us into patterns of behaviour which are purely of convenience to the state.

The value judgements of the majority often conflict. If you ask everyone if they want lower taxes they will say yes. But if at the same time you ask whether more should be spent on public services they will again say yes! I call these value judgement conflicts ‘technical issues’, the technicality here being that you cannot vote for two and two to equal five. It is theoretically the role of representative government, our MPs in Parliament, to sort out these technicalities on our behalf, though it is a moot point whether many of them are up to the task. What it does do is make the case for a written constitution in which the scope of the law is limited, as well as support UKIP’s commitment to greater use of referenda.

Anyway, how do we deal with the subject of causing offence when cartoons, or remarks such as Lord Freud’s, do have a serious content? I suggest that in such cases the pursuit of truth should always prevail, since that is the core value upon which our entire civilisation is based. If anyone is offended in the process then tough. We all get offended at times. It is not fatal and we should just deal with it as and when it occurs.

We thus end up with three types of offence, the first being where it incites criminal behaviour, and should therefore itself be a criminal offence; the second being purely gratuitous provocation which although it does not in itself cause any harm or loss to others I unhesitatingly condemn as immoral; and the third the by-product of the pursuit of truth, which I defend.

So where do internet trolls fit into this picture? Of course if they cause actual harm or loss to those they bully, including self-harm or worse, then that is a crime in itself and the question of causing offence is superseded. But suppose the same abuse is directed at another and did not have those results, is that immoral but lying outside the scope of the law? I would suggest so. The disincentive lies in the fact that the troller cannot tell how his target will react. Repetitive abuse could be prosecuted as harassment. It follows that all trolls must be identifiable so that they can be held to account.

As an atheist I am free to base my moral values on the assessment of consequences, whereas all religions, so far as I know, take a predetermined approach, saying that it is always right to do this and always wrong to do that, which of course has the advantages of clarity and enforceability. In theory this should result in conflict, but strangely in practice it rarely does. This is probably because those who drew up the original religious codes did exactly the same thing, and were acting in an environment where the rule of law for the protection of the people was virtually unknown. Clarity and enforceability were central to success. The same situation prevails today in poorer parts of the world, which must be one of the main strengths of Islam.

In this country however our modern systems of justice take over the tasks of providing clarity and enforceability. This highlights the role of uncertainty in the pursuit of moral truth, just as Heisenberg’s Uncertainty Principle highlights the role of uncertainty in the pursuit of natural truth. The individual facing a moral decision will usually be in a far better position to assess the likely consequences of their action, which will depend as much on circumstance as on the nature of the act itself. The future is always inherently uncertain, and a generalised law cannot possible predict or take into account all the possible sets of circumstances that can arise.

In other words the law can ‘get it wrong’. The true value of our free society therefore lies in the opportunity it gives us as individuals to ‘get it right’ more often. Moreover, even when the results of our actions have become apparent, we will still never know what the results of any alternative courses of action open to us would have been. Think of the SAS in Gibraltar for example; whether to take out the IRA terrorists who might be about to set off a bomb in a crowded place, or definitely avoid causing the deaths of those terrorists. Both results are morally wrong, but it is impossible to know what they are at the time of decision, or indeed both of them ever. On the spot judgement is crucial to reducing the risks involved.

A further dimension arises in a multicultural society where many different moral codes are used. This situation likewise argues for the law to be kept to the lowest common denominator consistent with maintaining public order.

In examining the nature of the pursuit of truth, can we learn anything from the transition from ‘classical physics’ to ‘modern physics’. Modern physics does not replace classical physics; it merely says that when you go beyond a certain boundary of experience, such as matter moving close to the speed of light or the interaction of subatomic particles/waves, then the classical laws break down and you have to think again and find a deeper, more general theory. Might not we be facing a similar transition in morality where modern life throws up situations which lie well beyond the limits of classical experience?

This all argues for as much flexibility as possible; not a virtue of the European Union. I was delighted to see that Parliament has now approved the use of genetic modification to combat mitochondrial disease. Critics pointed to the risks involved, but you can never eliminate risk altogether. Life is about managing risk, not eliminating it, and clearly in this case the risks of not intervening greatly outweigh those of doing so.

The management of risk also affects the use of preventive law. Strictly speaking any intervention to prevent a crime is an act of prejudice and we therefore have to be very careful how we allow it. The principal role of the police is to bring to justice those who have committed crimes, not to prevent them in the first place. If you gave the police carte blanche to prevent crime you would end up with a police state, as well as intolerable pressure on and impossible expectations of the police themselves. We appear to have such a situation already with social workers and child adoption. It’s not fair on our public servants apart from anything else. What I do expect from the police is that they maintain a high degree of vigilance; that they intervene where they have clear evidence that a crime is imminent or in progress; and that they bring criminals to justice as efficiently as possible.

Does deterrence work? This is impossible to measure as you cannot count the number of crimes that have been deterred. Common sense and personal experience tells us that it does work for the vast majority of law abiding citizens, but may have less effect on those who have already crossed the Rubicon into criminality. What we do with criminal offenders is a whole new subject, but much depends on the wealth of the country. A poor society has little option but to administer capital or corporal punishment, whereas a richer one can afford more rehabilitation. It is necessary also to distinguish between the verdict and the sentence. Thus with drug use I would advise it remains a criminal offence (the verdict) but that sentencing should be directed at rehabilitation. The apparent confluence of verdict and sentence under Sharia Law is I am sure one of the chief sources of confusion between the communities.

In some cases there is a clear statistical relationship between harm and preventive laws, such as with speed limits and drink driving regulations for example or with crowd control. So I can accept them in such circumstances. The situation becomes more confused though when you consider that there is a much wider range of possible causes for any crash, such as the inexperience, medical condition or emotional state of the driver, and that speeding and drink-driving are commonplace without incident. Harsher sentencing for actually causing harm or loss can be an alternative to regulation.

Likewise we must always remember that the law of diminishing returns applies. You can no more eliminate risk than achieve the speed of light. The cost or energy required to do so is infinite, so we must accept that a line must be drawn somewhere short of it. I feel much more comfortable with a line that respects the judgement of the individual, even though occasionally mistakes will be made. The same sort of thing happens with food sell-by dates. The level of waste resulting from over-tight labelling is mind-boggling across all income levels. At our house we hardly ever throw out food, making good use of the freezer both before and after meals. I wonder if any research has been done on the sensitivity of food poisoning to sell-by date?

As I write, reports are coming in (as yet unchecked) of a UKIP NEC decision to impose stunning in abattoirs, thereby contravening the religious beliefs certainly of the Jewish community and possibly of the Muslim community as well. This seems to me to contradict both our philosophy on the nature of a free society and UKIP’s own manifesto commitment to allow greater use of local referenda. Such referenda will only work if they add to existing law on a local bye-law basis, as clearly we cannot allow them to overturn the law of the land or we would end up with anarchy. So it follows that national law should remain restricted and silent on issues of social and religious conscience. Local referenda could then be used in those parts of the country that do wish to require stunning, without thereby creating any conflict with national law. There is no need for uniformity across the land on such matters. Surely the whole point of local government is that it allows different communities to be different. The NEC have got this one the wrong way round.

We have also approached the issue of overseas aid on this basis, so this new policy is inconsistent with that as well. By no stretch of the imagination could overseas aid be described as essential to the maintenance of public order within the UK! It is virtually a contradiction in terms; a ‘reductio ad absurdum’. A further reason to leave overseas aid to the charitable sector is that there is very little national interest in it; it is almost entirely a matter of social conscience. Thus UKIP’s objection to spending public money on overseas aid is based on principle as well as being a matter of sound public housekeeping. John Stuart Mill must be turning in his grave at the sight of the LibDems proposing a permanent commitment to 0.7% of GDP spent from public funds on overseas aid. Such a policy is neither Liberal nor is it Democratic!

Either way it now leaves UKIP as the only valid inheritor of the Whig political tradition in this country. We are certainly not ‘right-wing’. This term comes from the French Revolution to describe the Bourgeoisie, who sat on the right side of the new National Assembly and who believed that inequality was part of the natural order of things and should be left alone. UKIP on the other hand supports the minimum wage and the provision of decent public services and of a reliable welfare system based on the safety net principle. One could argue in fact that UKIP now lies to the left of both the Conservatives, on account of their failure to protect those in greatest need, and Labour, on account of its continued support of the European Union, and hence of immigration, thereby undermining both our living standards and employment prospects and pushing up our rents.

So the question of where you draw the line between the law and individual freedom, including freedom of speech, is a tricky one, but I do conclude that it is a matter of maintaining public order rather than one of free speech. After all other freedoms are restricted in the name of public order, so why not self-expression? The question must arise therefore “Should we re-introduce laws against blasphemy”, applied equally to all faiths of course, and perhaps extended to internet trolling, if a strong statistical correlation between blasphemy and public disorder can be established? A true libertarian would surely say “yes”, though the exact wording would be critical. The defining words ‘gratuitous’, ‘derogatory’ and ‘provocative’ spring to mind. However at present it would be difficult to show that there is sufficient frequency of blasphemy in the UK to establish the necessary strong statistical correlation here. Almost all the instances to date have been perpetrated on the continent, which perhaps only goes to show that our own responsibility-inducing free society so far is standing up well to the Napoleonic onslaught.

Finally, what about Leveson? Applying my principle that the pursuit of truth takes precedence over freedom of speech, surely the obvious thing is to ‘do the experiment’. In other words enact his recommendations on a temporary basis by including a provision that the Act will automatically dissolve after say fifteen years. At that point we can then take a much better informed decision on whether to extend them.