On Wednesday 1st July, Richard Lambert, the CBI Director-General, will give the next lecture in Politeia’s Future of Capitalism series. As the UK faces a general election, high public spending and high public debt characterise the economy. The lecture will consider some of the vital questions now at the heart of the policy debate, including:

• the future growth of the UK economy
• the size and role of the state
• the circumstances needed for the future prosperity of UK business
• the implications of the fiscal deficit for the public sector.


The lecture will take place on Wednesday 1st July 2009 at 12.00-1.00pm. If you would like to attend, please email Secretary2@politeia.co.uk.

 

Few people believe that the UK’s healthcare system is working. Recent reports of the maltreatment of the elderly in Portsmouth NHS Trust or the failure of GP after hours care in Cambridgeshire, have heightened fears about the fundamental workings of the system.

Politeia’s next pamphlet, A Premium on Patients? Funding the Future NHS, suggests that the NHS no longer meets its founding aims and compares poorly with other healthcare systems. On a number of measures the NHS has lower success rates, e.g. cancer survival, treating asthma and the incidence of TB. Even the comparative outcomes in health between rich and poor are wider now than when the NHS was founded. .

For the future, the author, Tony Hockley, proposes that reform come through the system of funding. What is now needed is for the system of funding to evolve so that each person receives a per capita sum as a health premium. This would be set around the lowest per capital allocation (around £1,000) and a separate fund would top up using the remainder on the basis of need. The aim would be a system which responds to patients’ needs, rather than to the political calls of the day.

On Wednesday 10th June, Dr Ludger Schuknecht, Senior Adviser in the Directorate General Economics, European Central Bank, gave the lecture Booms, Busts and Fiscal Policy: Where Does the Future Lie? in Politeia's 2009 series, The Future of Capitalism.

Across many countries high private debt and rapidly rising public liabilities characterise the post-boom environment. As western governments prepare to tackle the problems of their economy, Dr Ludger Schuknecht considered the challenges now facing policy makers. In particular, he addressed the important role of fiscal policy and explored such themes as:

• Reducing deficits and debt
• Right-sizing government
• Reforming social security
• Mitigating boom-bust cycles
 

On Monday 18th May, Professor Dennis J. Snower, President of the Kiel Institute for the World Economy in Germany, gave the lecture, The Future of Capitalism: A New Financial Architecture?, in Politeia's 2009 series, The Future of Capitalism.

 

Last October the British government was said to have ‘rescued the world’ by the example of its re-capitalisation of the banking system. But in Politeia’s Monetary Policy in a Free Society, Tim Congdon will argue that the bank re-capitalisation was a disaster. It intensified the deflationary forces and wrecked the British banking system. Since then, the semi-nationalisation of two major banks has created new problems for policy and damaged the international competitiveness of the City of London. Professor Congdon will show that the credit crunch got worse, not better, in the months following the October bank re-capitalisation.

On Tuesday 31st March 2009 Dr Liam Fox MP, Shadow Secretary of State for Defence, gave Politeia's 2009 Spring Address. As his party prepares for the next election, Dr Liam Fox addressed the problems which politicians must confront when in office and singled out the intellectual and cultural trends which often pervade and shape political action. Even relatively trivial trends can shape law and policy, though they may be contrary to the wishes of the electorate. In particular Dr Fox considered how such trends currently shape the defence and security policy of the UK and how they can be changed.
 

As the financial turbulence of the past year and the economic downturn in the UK dominate the policy stage, other areas of domestic policy have been overshadowed. Nonetheless, the UK’s healthcare system remains a priority for most people in Britain. On Monday 9th February Andrew Lansley MP discussed Conservative plans for the future to a full house at Politeia.
Politeia’s 2009 healthcare programme will consider developments in the policy debate in the UK and the detailed proposals for the future. It will also consider developments in healthcare policy in similar western European countries.
 

Over the centuries British charities have played a vital part in helping people through life from their earliest education to coping with sickness and old age. Today Britain’s political leaders insist that they must continue to play an important role.

However, recent changes to the law and the Charities Act of 2006 may now hinder the good work and even threaten charities’ survival. In particular there is concern about the framework of regulation and the absence of a clear system, which could lead to a legal ‘no man’s land’ filled by politicians and regulators.

Politeia’s recent lecture, Who Decides the Law on Charities – Parliament or the Regulator? addressed the changes in law and regulation and the way they operate, the implications for Britain’s charities and the proper line to be drawn between them and the Government’s official regulator, the Charity Commission.
 

Governments now resort increasingly to regulation as an instrument of policy: Politeia’s 2008 series will examine the role and implications of regulation. Like the other instruments of policy such as tax and public spending, some regulation
may be necessary and efficient, some unnecessary and damaging. However, unlike tax and public spending, regulation
prompts far less political or public attention and debate.
  read more...

With mounting unemployment in the UK, the welfare state is under ever greater pressure. But it is ill-fitted to meet the rising demands created by recession. Politeia’s new pamphlet Banking Benefit: Welfare Accounts for the Individual, explains that a fresh direction is needed so people can own their benefits and have greater incentive to work and save.

The authors, Professor Dennis Snower, the President of the Kiel Institute for the World Economy, and his colleague, Alessio Brown, explain that the welfare system is inefficient, unresponsive and without the mechanisms needed to change itself or change behaviour.

The authors propose a system of individual welfare accounts. People would ‘own’ the funds that finance their benefits and have the incentive not to waste them. There would be separate accounts for unemployment, education and training, health and retirement. The authors show how the transition to the new system would work and provide examples of the figures involved.

It is with much sorrow that we have learnt of Lord George's death on Saturday 18th April

The US Government bail out of Freddie Mac and Fannie Mae raises fresh questions about the UK system of financial regulation. Is the framework sound or are further controls needed?

In Banking on Stability: A framework for economic success, Edward George, the Bank of England's former Governor, explains how the system works and the problems now facing it. The move from tight controls to a market approach in recent decades has benefited both individuals and the country's economy.

Lord George assesses the recent turbulence against a background of economic slowdown, comparatively low interest rates and the banks' search for higher yield. There is reason for confidence in the future. Meanwhile, the market is best placed to learn, and apply, any lessons.

Banking on Stability: A framework for economic success is available online http://www.politeia.co.uk/Portals/0/BankingonStability.pdf">

As the UK faces an uncertain New Year with recession threatening the economy, the Government still contends that the problems come from overseas. Yet Politeia's New Year Message makes clear that many of them are of our own making.

Norman Lamont, the former Chancellor of the Exchequer, and Vito Tanzi, the influential economist who directed the IMF's fiscal affairs department, make clear that the crisis has its origins in the failings of government as well as those of the international system.

As for the package to meet the crisis, neither Lamont nor Tanzi is confident that the fiscal stimulus measures on which the Prime Minister and his Chancellor pin many hopes will work. Instead what is needed is to strengthen the banks, restore the credit markets and ensure that the right regulation is introduced for transparency and to remove perverse incentives.

  read more...

The banking crisis has put the UK Government under pressure to introduce greater regulation. There are growing demands for a new global framework under the IMF. But, as Vito Tanzi, the IMF’s former Director of Fiscal Affairs warns, regulations are complex tools and must be used with care.

In Regulating for the New Economic Order: The Good, the Bad and the Damaging Professor Tanzi considers the role of regulation, the many forms used by governments today and the consequences it can have. He explains that regulation is an economic tool like tax and spending and like them can be either good and necessary, or bad, inefficient and damaging.

Professor Tanzi warns that the Government should exercise restraint in introducing new regulations. He proposes a set of clear principles and practical steps to guide its course.

Regulating for the New Economic Order: The Good, the Bad and the Damaging is available online http://www.politeia.co.uk/Portals/0/RegulatingfortheNewEconomicOrder.pdf">